Djajanti Group urged to raise responsibility
JAKARTA (JP): Members of the House of Representatives yesterday questioned the Djajanti Group, which has widely diversified operations in the eastern provinces, and its commitment to meeting social and environmental responsibilities.
Members of the House's Commission IV, which oversees agricultural and forestry affairs, expressed concern in a hearing with Djajanti executives yesterday regarding its 2.8 million hectares of forest concessions, from which Djajanti has allocated only 60,000 hectares for reforestation projects, including the establishment of industrial timber estates.
"Although we acknowledge Djajanti's efforts in developing eastern Indonesia, we also urge the group to increase its social responsibilities -- such as the welfare of transmigrants -- as well as its environmental obligations," said legislator Djasman Ismail.
Djajanti currently holds 21 concessions for 2.8 million hectares of forests in Central and South Kalimantan, Maluku and Irian Jaya, as compared to only one concession measuring 217,000 hectares in 1970.
It has grown into a conglomerate of integrated wood-based and fishery-based industries. It also operates in the shipping, sagoflour and cement businesses, and owns some 30,000 hectares of cacao and oil palm plantations.
Extension
A.D. Erlangga, the director of Djajanti's forestry division, said yesterday that from the group's 21 forest concessions, four -- all of which are located in Kalimantan -- have expired.
"But only today, we received word that the licenses of our concessions have been extended, with the state-owned firm Inhutani III to be involved in our management," he said.
Erlangga said that the extension of the four concessionaires, covering a total of 600,000 hectares, was possible because they were located in a single area and could be merged under a single management.
The Ministry of Forestry stipulates that the operating permits of concessionaires which fail to demonstrate sound forest management would not be extended unless they are willing to involve state-owned forestry firms in their management.
Effendi Sastrawidjaja, a member of Djajanti's board of directors, also disclosed yesterday that the group's subsidiary, PT Artika Optima Inti (AOI), which operates wood-based industries and holds forest concessions in Maluku, would soon go public.
"It is only a matter of time before we can conduct the public offering," he said.
Independent surveyors estimate that AOI's concessionaires can supply wood to the company's industries for as long as 15 to 20 years only.
Meanwhile, House members yesterday praised the Djajanti Group for managing to survive despite the extreme lack of basic infrastructure and public facilities in the region.
Investment
"Development in eastern Indonesia is not easy... It requires great amounts of investment and therefore the House highly regards the management of the Djajanti Group for being able to utilize natural resources in eastern Indonesia," said legislator P.H.M. Siahaan, who led yesterday's hearing.
Djajanti owner, Burhan Uray, recollected his experiences in developing the forestry and fishery resources in Kalimantan, Maluku and Irian Jaya, which he first started in 1956.
He said that compared to more developed regions in the country, the difficulties in Indonesia's eastern provinces resulted in higher capital costs of investments.
President Soeharto has called for more concerted efforts to accelerate the development of the eastern provinces since 1990. However, the response from the private sector has been lukewarm due to the challenges posed by the backwardness of the region. (pwn)