Apkindo maintains export restrictions on plywood

Apkindo maintains export restrictions on plywood

JAKARTA (JP): Plywood producers remain restricted by an export
quota mechanism set by the Association of Indonesia Wood Panel
Producers (Apkindo) even though restrictive marketing
arrangements were abolished by the then industry and trade
minister, Tunky Ariwibowo, in late January.

Apkindo director Tjipto Wignjoprajitno has submitted plywood
export quotas for the various markets for the April through June
quarter to the director general of foreign trade, Djoko Moeljono,
for approval.

"I hereby notify you that an export quota system can still be
enforced for plywood for the next three years and ask you to
issue a decree on the quota allocations for the registered
exporters as listed herewith," Tjipto said in a letter dated
April 16, 1998, to the director general.

Tunky issued four decrees on Jan. 21 which abolished
restrictions on plywood trade and dismantled Apkindo's joint
marketing boards which the IMF branded as a cartel-like
organization.

The rulings, effective in early February, were enforced to
implement the economic reform package which was agreed with the
International Monetary Fund (IMF) and signed by President
Soeharto on Jan.15.

Apkindo's cartel-like marketing organizations were one of the
restrictive marketing arrangements that were killed by the Jan.
15 reform package.

Minister of Industry and Trade Mohamad "Bob" Hasan, who had
chaired Apkindo since 1986 until his appointment to the cabinet
in mid-March, has also pledged to abide by the terms of the IMF-
backed reform program.

"Now all plywood trade is free, all companies can export or
sell as they want. They don't have to be members of Apkindo,"
Hasan asserted in late March.

Hasan himself owns one of Indonesia's largest plywood groups
but has relinquished his management positions in all his
businesses after his appointment to the cabinet.

Tjipto confirmed to The Jakarta Post yesterday that the
plywood export quota system which had been applied since 1987
could be maintained until the year 2000 despite the IMF-brokered
reform program.

"Based on the agreement with the IMF, quota arrangements which
were in place before the signing of the agreement can continue
until the year 2000," he added.

Tjipto said the quotas were set by the industry and trade
minister on the basis of recommendations made by Apkindo.

However, the executive of a plywood company here, contended
yesterday that Apkindo had determined the plywood export quotas
and distributed them to plywood companies since 1987 and the
minister simply rubber stamped them.

The quota arrangement is simply designed to vest Apkindo with
the power to dominate the plywood industry and to collect rent
from plywood producers, the executive, who insisted on remaining
anonymous, said.

"As Apkindo virtually controls the distribution of the export
quotas, plywood companies have to become Apkindo members in order
to be able to export," he said.

The Jan. 15 reform package stipulates, among other things,
that no organization will be allowed to assign exclusive
marketing areas or to dictate production volumes or market shares
to individual enterprises.

But Tjipto insisted that the quota system was necessary to
curb excessive logging and to prevent a price war among
Indonesian exporters.