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.