Dozens of timber firms to lose licenses

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The government looks set to revoke the licenses of at least 21 industrial timber estate (HTI) concession holders for failing to pass mandatory environmental audits conducted on around 90 firms.

Ministry of Forestry spokesman Tachrir Fathoni said on Friday the firms would add to 36 concession holders who had had their licenses revoked last December.

"The firms, whose licenses will be repealed, have failed to maintain their forest concessions based on our requirement on technical matters and/or healthy financial performance," he told The Jakarta Post.

He refused to name the troubled timber companies, but said the ministry was likely to announce the revocations next week.

"Yesterday (Thursday), Minister of Forestry M. Prakosa received the audit report from the team. Afterwards, Pak Prakosa will issue a decree to revoke the licenses," he said.

Of 36 companies with licenses already revoked, 32 firms did not replant trees in their concession areas, while the rest failed to present good financial performance.

Eleven of the firms have challenged the government's decision in the State Administrative Court.

The forestry law allows the government to offer licenses, which are then tendered to other companies. Local people and other stakeholders are also allowed to take over and manage the concessions.

Pending the transfer of the license, the provincial governments are responsible for protecting the areas from any security disturbances, including illegal logging.

The government, which introduced HTI concession in 1984, is moving to act against companies which ignore the reforestation program.

According to analysts, the government issued HTI concessions to meet the rising log demand in the country and to raise its authority over the country's forests.

Under Law 41/1999 and government regulation No 34/2002 on forest management, a company could exploit HTI concession areas for 100 years.

In the late 1960s the government issued forest concessions (HPH).

The government has also appointed an independent auditor to evaluate the HPH concession holders before it decides whether to revoke their licenses.