Censession holders fail to pay $99m

A. Junaidi, Jakarta

Three non-governmental organizations (NG0s) alleged on Tuesday that many forestry concessionaires had failed to pay a total of Rp 955 billion (US$99.47 million) in reforestation fees and timber royalties (PSDH).

The Indonesian Forum for the Environment (Walhi), Indonesian Corruption Watch (ICW) and Greenomics Indonesia said that only Rp 325 billion out of a total of Rp 1.28 trillion in reforestation fees and timber royalties had been paid by concessionaires in 2003.

"Only 25 percent of the money has been paid. This shows that the concessionaires are not fulfilling their obligations," Greenomics executive director Elfian Effendi said during in a press conference.

Based on the latest data from the Ministry of Forestry, Elfian said that seven out of the country's 365 concessionaires had total arrears of Rp 174.46 billion in fees and royalties.

He said most of the concessionaires were able to settle their arrears, but they were uncooperative and lacked a willingness to pay what they owed.

"We support the Ministry of Forestry in issuing warning letters to these concessionaires or revoking their licenses," Elfian said.

Law No. 20/1997 on non-tax state revenues stipulates that the owners or shareholders of forestry firms that fail to pay their debts to the state may be fined or imprisoned.

The forestry ministry may also apply Government Regulation No. 34/2002 on forest planning and exploitation, which allows the government to revoke the concessions or permits of those companies that fail to pay the fees and royalties that they owe.

ICW coordinator Teten Masduki suggested that indebted companies be blacklisted and their names publicly announced by the ministry.

"Based on our experience, some companies will only pay their debts after their names have been made public," Teten said.

Some non-compliant forest concessionaires in 2003:

Name Area of Operation Amount of debt (in billions)

1. PT Benua Indah West Kalimantan Rp 45.24

2. PT Sari Bumi Kusuma Central Kalimantan Rp 38.80

3. PT Timber Dana East Kalimantan Rp 29.95 4. PT Artika Optima Inti IV Papua Rp 28.29

5. PT Artika Optima Inti II Papua Rp 15.58

6. PT Artika Optima Inti I Papua Rp 12.47

7. PT Hasnur Jaya Utama Central Kalimantan Rp 4.13

Total: Rp 174.46

Source: ICW, Greenomics and Walhi