Big timber companies welcome forest concession limit

By Sylvia Gratia MN

JAKARTA (JP): Owners of timber companies have welcomed the government's move to limit ownership of the country's forest assets on the grounds that it would benefit a lot of people.

Adi Warsita Adinegoro, the chairman of the Association of Indonesian Forest Concessionaires (APHI), said the move would give common people a chance to benefit from the country's forests.

"It will also help to reduce people's antipathy to big concessionaires, most of whom are Indonesians of Chinese descent. People currently consider that only big companies owned by those people are allowed to enter the forestry business," Adi said.

But Adi also urged the government to base its limits on each area's yield potential since the country's forests differed significantly.

The chairman of the Indonesian Forestry Society for Reform (MPI Reformasi), Sofyan Siambaton, said the new regulation would improve the country's forest management which was currently disorganized.

"The move, if it is implemented, will give local people and cooperatives a bigger chance to benefit from the country's forests which are currently being neglected," Sofyan said.

"It will also reduce the friction between the timber companies and the local people which sometimes caused clashes. The clashes happened because the local people saw an unfair distribution of wealth in their communities."

But Abbas Adhar, the chairman of the Association of Indonesian Wood Panel Producers (Apkindo), said the government's new plan would hurt the country's wood-processing industry.

Most of the country's wood-processing plants, set up to meet a government requirement that timber companies or forest concessionaires operate their own processing facilities, would face acute shortages of raw materials should the regulation be brought into effect, he argued.

Abbas said most timber companies owned wood-processing facilities in their concessions.

"The government plan is good but it shouldn't force plywood producers to suffer from a scarcity of logs," he said.

Minister of Forestry and Plantations Muslimin Nasution announced last week that the government would limit the amount of state forests individuals and companies could control in an attempt to giving equal business opportunities to smaller-scale businesspeople, including cooperatives and small businesses.

Muslimin said each concessionaire would be limited to 100,000 hectares of forest in each province under the new regulation, currently being prepared by the government.

Concessionaires would be allowed to manage forest areas in other provinces, he said, but the total could not exceed 400,000 hectares.

But, he said, the restrictions would be flexible, based on the areas and the commodities planted.

Rights

He said that the government would honor the rights of the concession holders until their terms expired.

After a contract expired, any new contract would be proffered based on the new regulation and would be issued through an open bidding system to give the cooperatives and small enterprises a better chance of benefiting from the country's forest resources.

Muslimin said the country's forest concessions were currently controlled by a handful of business groups, which managed logging contracts for millions of hectares of forests.

"Such a scale of forest control is not fair and has forced the government to reexamine its policy to increase forest management efficiency," he said.

But concessionaires are still doubtful about the capability of small companies and cooperatives to manage the country's forests in a sustainable manner.

"Are they ready to take over the concessionaires' job? Managing the forests in a sustainable manner needs a huge capital and a lot of experience," Adi said.

According to the ministry, at least 421 private companies are currently involved in logging activities on 51.5 million hectares. Most of them are affiliated to 15 leading business groups.

Kayu Lapis Indonesia Group, owned by Hunawan Widjajanto, is the country's largest forest concession holder. It controls 3.5 million hectares. Burhan Uray's Djajanti Group comes in a distant second with 2.9 million hectares.

Prajogo Pangestu's Barito Pacific Group controls 2.7 million hectares and Mohamad "Bob" Hasan's Kalimanis Group manages 1.6 million hectares.

The government first began to award forest concessions to private companies through a 1971 forestry Law, which grants concessionaires the sole right to carry out logging operations in their concession areas.

Director General of Forest Utilization Harnanto H. Martosiswojo said last week that the government would have approximately nine million hectares of forest to be offered to the public by the year 2000.

Those areas included 2.74 million hectares of concessions whose logging contracts had expired or had belonged to companies which had had their licenses revoked for breaching logging regulations and failing to manage their concessions in a sustainable manner, he said.