Reforestation funds rerouted to other uses<\/p>\n
By Sylvia Gratia MN<\/p>\n
JAKARTA (JP): The government has raised trillions of rupiah in
\nreforestation funds to finance the country's reforestation
\nprojects, but much of the money has been rerouted to other uses.<\/p>\n
The idea behind the reforestation fund, introduced in the
\nearly 1990s, is clear and simple: it is for reforestation and
\nforest rehabilitation efforts. But in reality, most of the funds
\nraised are not used for this purpose.<\/p>\n
The director general of reforestation and land rehabilitation,
\nHarsono, said only 10 percent of Indonesia's reforestation funds
\nraised from timber companies was used for the reforestation
\nprogram.<\/p>\n
"Most reforestation funds are used to finance the development
\nof industrial timber estates rather than for reforestation and
\nland rehabilitation activities."<\/p>\n
He said funds used for reforestation efforts amounted to Rp
\n200 billion per year, while Rp 1.6 trillion per year was
\nallocated for the development of timber estates.<\/p>\n
But Harsono said the use of the reforestation fund for the
\ndevelopment of industrial estates was not against the initial
\npurpose of the fund.<\/p>\n
"Using reforestation funds to finance timber estates is not a
\nproblem because the funds go back to the forests."<\/p>\n
One could argue the logic for such a statement, but it does
\nnot address the controversy surrounding the use of funds for non-
\nforestry activities.<\/p>\n
The use of the fund for non-reforestation activities has
\nbecame a hot topic among environmentalists and non-governmental
\norganizations (NGOs), especially since the resignation of former
\npresident Soeharto.<\/p>\n
Many environmental and NGO leaders have raised concerns over
\nthe misuse of reforestation funds as mandated by Soeharto.<\/p>\n
Newly appointed Minister of Forestry and Plantations Muslimin
\nNasution said earlier this month that the use of reforestation
\nfunds to finance businesses owned by former president Soeharto's
\nfamily and cronies was currently being investigated.<\/p>\n
He said his ministry and the Ministry of Finance were working
\ntogether to ascertain whether there was malfeasance in the use of
\nRp 1.67 trillion (US$150 million) of the reforestation funds.<\/p>\n
The reforestation fund is a mandatory fee imposed by the
\ngovernment on forest concessionaires to ensure that forests are
\nmanaged in an environmentally sustainable manner. The size of the
\nfee depends on the volume and type of timber felled.<\/p>\n
In 1996, the government collected Rp 880 billion in
\nreforestation funds. This year, it is expected to total Rp 747
\nbillion.<\/p>\n
Starting April 1, the reforestation funds are accounted for in
\nthe state budget as non-tax receipts. Previously, the funds were
\ntransferred into the Ministry of Forestry's account. The
\nallocation and use of the funds were governed by presidential
\ndecree.<\/p>\n
During his tenure in power, former president Soeharto issued
\nseveral decrees ordering the minister of forestry to allocate
\nreforestation funds to various projects run by his family members
\nand cronies which were not related to forestry development.<\/p>\n
In 1996, Soeharto asked the ministry to set aside part of the
\ninterest from the fund mostly deposited in state banks for state
\naircraft manufacturer PT IPTN, which was then chaired by B.J.
\nHabibie, who is now Indonesia's President.<\/p>\n
According to the Supreme Audit Agency (BPK), IPTN received Rp
\n400 billion from the fund, the money later being converted into
\nthe government's stake in the aircraft company.<\/p>\n
Seven environmental groups filed a lawsuit against Soeharto in
\n1995 in the State Administrative Court regarding the IPTN
\nallocation. The presiding judge turned down the suit, however,
\narguing that the court had no jurisdiction over the issue.<\/p>\n
In 1997, Soeharto instructed the Ministry of Forestry to set
\naside Rp 250 billion from the reforestation fund to help PT Kiani
\nLestari, a company owned by his close friend Mohamad "Bob" Hasan,
\nfor its pulp and paper factory in East Kalimantan.<\/p>\n
Urea pill fertilizer manufacturer PT Ario Seto Wijoyo, a
\ncompany owned by Soeharto's grandson Ari Sigit Hardjojudanto,
\nalso obtained about Rp 80 billion from the fund.<\/p>\n
Other Soeharto decrees allocated Rp 100 billion of the fund
\nfor poverty alleviation and Rp 23 billion to purchase shares of a
\nprivate jet development company linked to IPTN.<\/p>\n
In 1995, Soeharto ordered the ministry to set aside Rp 527.2
\nbillion from the reforestation fund's bank interest to finance
\nthe creation of new rice fields in Central Kalimantan.<\/p>\n
The one million-hectare rice cultivation area was developed by
\nclearing swamps that overlapped the territory of several
\nconcessionaires.<\/p>\n
The ministry's secretary-general, Oetomo, admitted that the
\norder to allocate reforestation funds to those projects came
\ndirectly from the state secretary through presidential decrees.<\/p>\n
"There were no ministerial decrees regulating loans from the
\nreforestation funds. The loans given to those projects were based
\non presidential decrees," Oetomo said.<\/p>\n
According to Ministerial Decree No. 57\/1995, the equity
\ncapital of a joint-venture industrial timber estate must consist
\nof government shares derived from the reforestation fund (14
\npercent), private capital (21 percent), interest-free loans from
\nthe reforestation fund (32.5 percent) and loans at commercial
\nrates from the reforestation fund.<\/p>\n
The loans from the reforestation fund with commercial interest
\ncan only be obtained after a minimum 67.5 percent of the area
\ntargeted for a timber estate has been deemed well-developed.<\/p>\n
The ruling, however, has been abused by several timber
\ncompanies linked to Soeharto.<\/p>\n
BPKP has questioned a Rp 144 billion loan from the
\nreforestation fund to PT Menara Hutan Buana (MHB), a timber
\nestate owned by Soeharto's half-brother Probosutedjo.<\/p>\n
It alleged that MHB marked up the project to get more funding
\nfrom the ministry. The company said it had developed 68,000
\nhectares of its project, but only 27,000 hectares were developed
\nin reality, it said.<\/p>\n
In all, 18 cases of possible malfeasance have been noted by
\nBPK in its audit reports.<\/p>\n
Muslimin is now quickly moving to disclose and end cases in
\nwhich reforestation funds are misused.<\/p>\n
Former minister of environment Emil Salim suggested Muslimin
\nestablish an independent team, consisting of "clean" ministry
\nofficials, officials of the Attorney General's Office and
\nenvironmental NGOs, to investigate misuse of reforestation funds.<\/p>\n
"It will be very difficult to find the truth if Muslimin only
\nrelies on his officials since there is rampant collusive
\npractices in the ministry," Emil said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/reforestation-funds-rerouted-to-other-uses-1447893297",
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