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.