Concessionaires short timber provision

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo said yesterday forest concessionaires had provided only 36 percent of the timber they should have allocated to locals in their concession areas.

Djamaludin said the government had expected the concessionaires to give at least 990,000 cubic meters of timber, assuming that concessionaires contributed 5 percent of their production as stipulated by it.

"Only 25 percent, or a little over 100 concessionaires have properly applied the regulation," he said after meeting about 50 concessionaires yesterday.

Ministerial Decree No. 12/1996 issued last May states that each concession holder must allocate 5 percent of its timber to locals.

The ruling was expected to guarantee locals' access to cheap timber.

Djamaludin said that if concessionaires failed to comply with the rule, his office would give three warnings before revoking their licenses.

"A revocation will be made 60 days after a third warning," he said, adding that no concessionaire had got a third warning.

Djamaludin was quoted by Antara as saying that concession holders should be able to sell their timber to locals cheaply through cross subsidies from their commercial sales to downstream industries.

"The timber for locals need not be of the best quality. Cheap timber has lower reforestation funds and forest royalties, which should be the only components in the price structure of wood for locals," he said.

Reforestation funds and forest royalties are part of timber's price structure. Their amounts depend on wood types, so people selling cheap wood will pay lower reforestation funds and forest royalties.

It was reported that in September only 45 concessionaires had complied with the ruling, providing 84,165 cubic meters of wood to locals. (pwn)