Donors shift focus to Indonesia's forests

Donors shift focus to Indonesia's forests

JAKARTA (JP): Indonesia's forest management will be the main
issue in next week's donors meeting in Jakarta, the World Bank's
country director Mark Baird said on Wednesday.

Baird noted that Indonesia's donors in the Consultative Group
on Indonesia (CGI) were very much concerned about rapid
deforestation in the country, and would, therefore, demand the
government stop it.

In the consultative group's meeting on Feb. 1 and Feb. 2, the
government is expected to present a clear and complete medium-
term forestry program and a plan of action to address the current
problems.

"We want to see the Indonesian government providing a medium-
term program in forestry that will address problems in a holistic
way and implement urgent action on the problems, especially
illegal logging," he told journalists on the sidelines of a World
Bank-sponsored seminar on Indonesian forests.

A number of forestry experts and representatives from various
environmental organizations, such as Walhi (the Indonesian Forum
for the Environment) and the Center for International Forestry
Research and World Wide Funds, took part in the seminar.

Baird said the World Bank and other donors wanted the
government to take stern action against illegal logging and
against companies that clearly violated rules on sustainable
forest management.

"What we are looking for is a commitment backed up by
enforcement, and that requires quite a fundamental change in the
way the judicial system and the police work," he said.

He said that he was confident that if the government presented
a good program to address various forestry problems, donors would
be very supportive.

"I am sure that major donor countries such as the European
Union, the United Kingdom, Germany, Finland and Canada -- who are
able to provide grant funds -- will be willing to expand their
level of grant support if they could support a strong program in
forestry here," he said.

Opening the seminar, Coordinating Minister for the Economy and
Finance Kwik Kian Gie said he agreed that the Indonesian
government should not delay any further the drafting of programs
on the forestry sector.

He also admitted the government needed to take effective
action to resolve urgent forestry issues, such as deforestation
and illegal logging.

According to World Bank data, over 30 million cubic meters of
timber were harvested illegally in Indonesia during the 1997/1998
period.

In the same period, around 29.5 million cubic meters of timber
were felled legally, but done so using unsustainable clear-
cutting methods.

Indonesia's forest areas have been disappearing at an alarming
rate of around 1.5 million hectares per year in the last 12 years
due to forest conversion, forest fires and illegal logging.

If there is no immediate and effective action taken to curb
deforestation, Indonesia will see its commercially valuable
forest resources completely depleted within ten years to 15
years.

Oscar Mascagni, technical officer in charge of forestry
projects financed by the European Commission in Asia, said the
commission was also very worried about the forestry sector in
Indonesia.

He said the commission was especially concerned about how the
Indonesian government awarded forest concessions and how it
planned to curb illegal logging and enforce the law.

"These are the points that the new government must strongly
address in the future to show that there is a willingness, so
that our continuing involvement in the future can be more
effective," he said.

Under an agreement with the International Monetary Fund, the
government, in this case the forestry and plantations ministry,
promises to observe its moratorium on new forest conversion
licenses. It will do so until transparent, rules-based procedures
are developed to minimize further conversion of the remaining
natural forests.

The government is also required to review its forestry sector
taxation policy starting this month, in consultation with the
World Bank. At the same time, the government promises to ensure
that the forest resource royalty rate provides at least 60
percent of the economic rent from logs and, thereby, protects the
country's forest.

Following the seminar, the government -- as stated in its
agreement with the IMF -- should establish a ministerial working
group to deal with forestry issues. (udi/cst)