Audit on consumption of used logs underway

Audit on consumption of used logs underway

Rendi A. Witular, The Jakarta Post, Jakarta

The Ministry of Forestry and BRIK, an industry group, have
begun a joint audit of the country's forestry-related industries
to get an exact count of the number of logs being used.

The chairwoman of the Forestry Industry Revitalization Agency
(BRIK), Soewarni, said that as part of the audit, the agency was
currently recording all logs consumed by local industries.

"We are now inspecting all forestry-related companies in order
to record their input and output. But our inspection only covers
exporting companies," said Soewarni on Wednesday.

Exporters are being targeted in the audit because they are in
the majority, Soewarni said, adding that about 95 percent of the
country's forestry-related products were for export.

To support the audit, the Ministry of Trade and Industry
issued a ministerial decree in March this year requiring all
forestry-related products to first undergo "administrative
inspection" by officials from the BRIK and the Ministry of
Forestry before being exported.

This means companies are not allowed to export their products
unless they receive a license from the agency.

Soewarni said that as of the end of August, the BRIK had
issued export licenses to 3,867 companies and rejected
applications from 36 firms.

Soewarni said after completing a comprehensive study of log
consumption, the BRIK would submit a report to the Ministry of
Forestry. Starting from the end of this year, the ministry,
possibly along with an independent auditor, is expected to study
the report and arrive at the number of illegally cut logs being
used by companies.

Should the ministry find a discrepancy between the input and
output of a certain company, it might conclude that the firm has
used illegally cut logs as raw material.

Minister of Forestry M. Prakosa earlier said the audit was
"the first in the country's history".

Currently, the government has no reliable mechanism for
auditing the consumption of logs. The absence of a reliable audit
system has enabled many companies to cheat on their log
consumption.

Forestry-related industries have long been blamed for the
rapid loss of the country's natural forests.

The incredibly huge discrepancy between timber demand and
logging quotas set by the government has resulted in rampant
illegal logging throughout the country.

This year, the government has reduced the log supply quota to
6.8 million cubic meters from last year's 12 million cubic
meters. This decision sparked protests from industry players, who
say the industry has a production capacity of 30 to 40 million
cubic meters per year.

Forestry-related industries have been major export earners for
the country. Last year, they accounted for a total of US$6.5
billion in revenue, or 11.5 percent of the country's foreign
exchange revenue.