Better deal sought on plywood exports

Better deal sought on plywood exports

JAKARTA (JP): The government said yesterday it was seeking
better alternatives to the export quota system on plywood, which
has been criticized as restrictive and encouraging cartel
practices.

Minister of Industry and Trade Mohamad "Bob" Hasan and
Minister of Forestry and Plantations Sumahadi issued a joint
statement responding to the recent press reports on the requested
use of quotas for plywood exports.

"We are now working closely with forestry experts and the
World Bank to develop a better alternative than firm-based quotas
to help us reduce the pressure on our forest resources in the new
trade environment," Sumahadi said.

The statement said the quota strategy was intended to protect
forest resources.

"There are concerns that widespread illegal logging would
occur in order to supply raw material to an industry with
substantial excess capacity and a declining cost structure," it
said.

Media reports have published a recent letter from the
Association of Indonesia Wood Panel Producers (Apkindo)
requesting approval for quotas of plywood exports, addressed to
the Ministry of Industry and Trade.

In January, Hasan's predecessor, Tunky Ariwibowo, abolished
restrictions on plywood trade and dismantled Apkindo's joint
marketing boards in compliance with the International Monetary
Fund.

Apkindo director Tjipto Wignjoprajitno insisted Wednesday the
plywood export quota system, which has been applied since 1987,
could be maintained until 2000 in accordance with the IMF
program.

Plywood companies contend that Apkindo set the quotas and
distributed them to plywood companies, while the minister simply
rubber-stamped them.

Yesterday's statement also said the two ministries would issue
a decree in the next few days to set the maximum number of logs
which could be exported yearly.

"This number will set to include the annual allowable cuts
from forests, plus expected plantation and small holder
harvests," it said, adding that it was intended to prevent
illegal logging.

Under the planned decree, all firms will be free to export the
logs, contingent on them fulfilling all paper requirements and
permits, and providing proof that their logging practices are
environmentally sound.

"There is no system of registered exporters for logs -- the
new rules are designed to simplify exports while ensuring that we
take care of our forests," Hasan said. (das)