CGI, government `failing' to fight illegal logging

The Jakarta Post, Jakarta

Indonesia and its donors grouped in the Consultative Group on Indonesia (CGI) have not been doing enough to curb illegal logging as the practice continues unabated, according to forestry activists.

Bambang Setiono from the Center for International Forestry Research (CIFOR) and Arbi Valentinus from the Telapak forestry non-governmental organization criticized the CGI for its failure to press the government to end ongoing rampant illegal logging, despite the latter's detailed promises given after a CGI meeting in 2001.

Worse still, the CGI this time agreed to extend new loans totaling US$2.7 billion and failed to tie them to government measures to curb illegal logging.

"The CGI should have been assured of the government's seriousness in handling legal and court reforms as regards forestry before extending new loans and grants," Bambang told The Jakarta Post.

The government gave four commitments in the field of forestry policy as part of the requirements for further CGI loans during a meeting in 2001.

These were reducing capacity and restructuring forestry companies in order to balance log supply and demand, closing down those companies that could not repay loans, imposing a moratorium on the exploitation of natural forests, and stopping illegal logging.

To implement its promises, the government introduced a number of policies on the moratorium, and issued a presidential decree on illegal logging. But all of these efforts failed to work due to weak law enforcement.

Nevertheless, the CGI and its Donor Forum on Forestry have seemed to have turned a blind eye, and agreed to extend new loans to Indonesia.

To make things worse, the CGI supported the government's moves to bail out forestry companies, thus further endangering Indonesia's forests, according to Arbi Valentinus from Telapak.

"The government and the CGI have used taxpayers' money and loans from foreign donors to help the companies continue to destroy forests illegally," he said

CIFOR and Telapak data show that the government has spent some Rp 34 trillion in taxes and foreign loans to bail out 111 forestry-related companies so that they can continue exploiting forests.

These companies are now under the control of the Indonesian Bank Restructuring Agency (IBRA), and have a machine capacity six-times higher than the amount of timber they are allowed to fell.

They have a combined production capacity of some 37 million cubic meters of timber. Meanwhile, the official estimate of the timber available to them this year is only 3.5 million cubic meters.

"This means that the remaining timber needed to meet their demands comes from illegal loggers," CIFOR's Bambang said.

The government, he said, must no longer help companies that have been proved to be supporting illegal logging.

According to an official forecast, illegal logging activities produce 50.7 million cubic meters of timber annually, resulting in financial losses to the state of at least Rp 30.42 trillion (US$3.37 billion).

CIFOR also urged the government to delay the sale of loans owed by forestry companies at a large discount as this would only lead to further deforestation.

The sale of forestry company loans at a big discount would allow their former owners or associates to buy them back and get new loans so as to expand their forestry activities, thus worsening illegal logging due to their huge demand for logs.

The total debt of the companies under IBRA control reached Rp 34 trillion, with almost half of this being owed by forestry tycoon Mohamad "Bob" Hasan and the Sinar Mas Group.

Bob Hasan, who has been convicted of embezzling state funds and is now imprisoned for corruption in Nusa Kambangan, Central Java, owes some Rp 5.34 trillion while the Sinar Mas Group owes Rp 9.23 trillion.

Both Bambang and Arbi called on the CGI and the government to once again pay attention to the effort to protect Indonesia's forests by curbing illegal logging.

The government, for its part, had to make a real effort to overcome illegal logging, such as by establishing a team to investigate legislators, and police and military officers who were involved in illegal logging.

"The government must also conduct a regular review, and make sure that there is transparency throughout all of the process involved," Bambang said.

Meanwhile, the CGI needed to give technical and financial support to the government.