Mon, 10 Oct 1994

Concessionaires told to cover losses from forest fires

JAKARTA (JP): The government will demand that concessionaires of industrial timber estates regreen forests damaged by fires and pay compensation for the losses caused, Minister of Forestry Djamaludin, Suryohadikusumo says.

Prior to a cabinet meeting at the Bina Graha presidential office here Saturday, Djamaludin told reporters that total financial losses caused by the recent fires in timber estates are estimated at Rp 34 billion (US$15.4 million).

"We will demand compensation from the concessionaires for these losses because the government has subsidized the costs for their reforestation efforts," he said.

The minister also said fires have razed about 17,000 hectares of industrial timber estates. Of these, 11,000 hectares are located in South Sumatra and the remainder in Lampung, Kalimantan and East Nusa Tenggara.

He said the South Sumatran forests damaged by fires are managed by three companies, including PT Musi Hutan Persada, which is controlled by timber tycoon Prajogo Pangestu.

The minister did not explain the exact relationships between Musi Hutan Persada and the publicly listed PT Barito Pacific Timber, which is also controlled by Prajogo.

Neither Prajogo nor other Barito Pacific executives were available for comment when contacted by The Jakarta Post on Saturday.

Contrary to press reports that fires had also affected Barito Pacific's forests, directors of the company said last week none of the company's forest concessions were affected by the recent fires.

The Ministry of Forestry last week stated that the recent forest fires had destroyed 5.11 million hectares of forests, brush and grasslands throughout the country. The ministry also said only 3.42 percent of the smog and fire originated from industrial timber estates.

In contrast, according to the Ministry, 85.2 percent of the thick smoke and forest fires came from areas populated by farmers who practice slash and burn cultivations. (hdj)