Britain rejects RI plywood over illegal timber issue

Rendi A. Witular, The Jakarta Post, Jakarta

In another blow to Indonesia's ailing forestry-based industry, British buyers have rejected Indonesian plywood over a report that the logs used for the plywood were felled illegally.

Forestry Industry Revitalization Agency (BRIK) chairwoman Soewarni said the rejection came following a report by Greenpeace which alleged that about 80 percent of Indonesian plywood exported to Britain was made of illegally cut timber.

"Greenpeace's report is very detrimental to our plywood industry. The report is an exaggeration," said Soewarni on Wednesday.

Greenpeace is a global non-governmental organization dealing with environmental issues.

Soewarni said the buyers were afraid of accepting the plywood because the British government had signed an agreement with the Indonesian government two years ago to reject all forestry-based products suspected of being produced from illegally cut logs.

She said that British buyers began rejecting Indonesian plywood three months ago.

"The buyers want a legal statement from the Indonesian government over the legality of the plywood or else they will continue to reject the plywood," she said.

Soewarni said the rejected plywood had passed an administrative inspection by the agency to ensure the legality and origin of the timber.

The plywood cannot be exported if the agency finds the timber used to make the plywood was felled illegally, she said.

According to the agency, at least 17 local companies have been harmed by the rejection, with the volume of refused plywood reaching an estimated 300,000 cubic meters.

Indonesia exported five million tons of plywood in 2002, generating revenue of US$441 million, according to government data.

BRIK was set up by the Ministry of Forestry and the Ministry of Trade and Industry to prevent companies from using illegally cut logs and to help resolve industry-wide problems.

Minister of Forestry M. Prakosa said that in response to the move by the British buyers, his ministry would issue a notice to be attached on all forestry-based products exported to Britain, stating that the products were made from legally cut logs.

"We will issue a legal statement to British buyers that all forestry-based products endorsed by the agency are by definition legal," said Prakosa to reporters on Wednesday.

The country's plywood industry has been in the doldrums after the government launched efforts to restructure the industry several years ago. The government has cut logging quotas to save what little remains of country's natural forests and prevent them from being further overexploited by the industry.

At the same time, companies which use legally cut logs are also facing a drop in exports, as the market is flooded with plywood from producers who use illegally cut logs.

The government has thus far been far from successful in cracking down on illegal logging.

The plywood industry has several times complained to the government about the smuggling of illegally cut logs to Malaysia and China, which has enabled the plywood industries of both countries to eclipse Indonesian companies.

Painting a bleak picture of Indonesia's forestry-related industry, the Indonesia Employers' Association recently said between 500,000 and 600,000 workers in the industry, including at plywood companies, would lose their jobs this year.