Breakaway MPI backs govt plan for $48m fund use

JAKARTA (JP): A breakaway reform group of the Indonesian Forestry Society (MPI) said on Thursday they supported the Ministry of Forestry and Plantations' decision to use the association's US$84 million savings to help cooperatives and two local banks.

The chairman of MPI Reformasi's investigation team Agus Miftach said the funds, collected by controversial former MPI Chairman Mohammad "Bob" Hasan from members of the Association of Indonesian Wood Panel Producers (Apkindo) was deposited in the now defunct Bank Umum Nasional (BUN).

BUN, controlled by Hasan, was one of several banks closed last year as part of the government's massive measures in restructuring the country's ailing banking industry.

Agus said that due to BUN's current status and its link to Hasan's business empire, which is now under government investigation because of its close links with former president Soeharto, the funds could not be recovered without the approval of President Habibie.

"If the association can recover the money, it would be better to put it toward the government's programs, instead of returning the money to the members," he said.

He said that Minister of Forestry and Plantations Muslimin Nasution has ordered that around $27 million of the money be channeled into Bank Bukopin and Bank Mualamat Indonesia (BMI) to help the two banks boost their capital.

"The minister also ordered that the remaining $57 million be earmarked to the Indonesian Forestry and Plantation Cooperative, which will use the funds for forest rehabilitation programs and social programs for people living near forests," he said.

Agus said that Bukopin and BMI would receive around Rp 150 billion and Rp 50 billion respectively to help with their recapitalization programs.

MPI Reformasi's chairman Sofyan Siambaton said that this money accounted for about 4 percent of the $2.04 billion collected by Hasan's group of forestry-related companies from 1991 to 1997.

Appointed chairman of MPI in 1991, Hasan resigned last March following his appointment as minister of trade and industry. The May government shake up split MPI into two groups, one remaining loyal to Hasan and the other advocating reform.

Agus said his group would continue to recover the money, which Hasan allegedly kept in local and foreign banks.

MPI is an umbrella group for nine forestry-related organizations, including Apkindo, the Association of Indonesian Concessionaires (APHI) and the Indonesian Saw Millers Association (ISA).

The old MPI and its association members have been criticized for alleged cronyism and abuse of power. Apkindo's monopoly was abolished in February under the government's agreement with the International Monetary Fund (IMF). (gis)