Ecolabeling agency and MPI sign agreement

Ecolabeling agency and MPI sign agreement

JAKARTA (JP): The Indonesian Ecolabeling Agency (LEI)
yesterday agreed to cooperate with forestry firms in helping them
meet ecolabeling requirements and, in turn, enabling them to
penetrate markets that currently reject tropical timber.

A cooperation agreement was signed here yesterday by LEI's
chairman, Emil Salim, and the Indonesian Forestry Society's (MPI)
chairman, Mohamad "Bob" Hasan.

Under the agreement, LEI will promote sustainable forest
management to forest concessionaires and, beginning next month,
conduct tryouts to design and establish standard ecolabeling
procedures on 10 selected concessionaires.

Emil told reporters yesterday that the 10 concessionaires fell
into four categories: state-owned firms, forest-related firms
that plan to list their shares on a capital market, firms whose
forest management practices have been questioned by foreign
consumers and firms that operate near the Gunung Leuser National
Park in Aceh.

The 10 firms are state-owned PT Inhutani II, PT ITCI, PT
Sumalindo, PT Kiani Lestari, PT Kalimanis, PT Rimba Sunkyong, PT
Rimba Cipta Jaya, PT Geruti, PT Melapi and PT Mujur Timber.

Those planning to list are Mujur Timber, a subsidiary of the
Surya Dumai Group, and ITCI.

LEI will be assessing the sustainability of these
concessionaires to determine whether or not the forest-based
industries they are related to are fit to go public.

The International Tropical Timber Organization has stipulated
that, beginning in the year 2000, ecolabeling will become a
prerequisite for producers of tropical timber to gain access to
markets in certain consumer countries.

According to earlier reports, at least 19 countries have been
implementing ecolabeling principles since 1977. These include
members of the European Union, Canada, Japan, Scandinavian
countries, the United States, New Zealand, Australia, India,
South Korea, Singapore, Croatia, Taiwan and Israel.

"LEI will call on concessionaires to carry out their
commitments towards sustainable forest development. If forests
are developed in a sustainable manner, it will be for the
advantage of the businesses, not the government," Emil said.

He said a number of countries are currently concerned with the
way tropical forests are managed and, for this reason, have
decided to launch a boycott on imports of tropical timber
products.

"If the forests are managed in a sustainable way, there will
be no reason for the boycotts and this will benefit Indonesian
forest firms," he said.

Costs

Emil said LEI's operational costs will be provided by the
World Bank and reforestation funds. The World Bank's contribution
will amount to US$441,000, with reforestation funds a total Rp
730 million (US$317,319).

In the future, this will be used as a trust fund to cover
LEI's routine expenditures.

Emil explained that LEI is an independent, non-profit body
which relies on its credibility to carry out its
responsibilities.

Forest concessionaires that wish to gain an ecolabel must be
assessed by independent appraisal firms. Results of the appraisal
are then brought to LEI, which discusses them further with an
expert panel consisting of academicians and members of non-
governmental organizations. Based on the recommendations and
inputs from this panel, LEI can decide whether or not a company
is qualified to be given an ecolabel certificate.

"The panel of experts will be assembled on an incidental
basis. Once their job is finished with one company, they will be
dissolved. This is necessary to maintain their independence and
prevent collusion," he said.

Bob Hasan yesterday acknowledged that the involvement of Emil
Salim -- a former minister of population and environment -- in
LEI will guarantee the body's independence.

"We have offered to finance LEI's operations, but we have
always been rejected," he quipped.

He said that members of MPI are now more aware of
environmental preservation. This is not because of governmental
regulations, but because they feel that it is needed to maintain
their businesses.

Bob said ecolabels on Indonesian products will allow them to
gain higher prices on the international market.

Since the early 1970s, when the government started awarding
forest concessions to private companies, the licenses of 111
concessions have been revoked due to poor forest management.
Currently, some 491 forest concessionaires operate in the
country.

It is expected that in 1998/1999, all concessionaires will
have been assessed for ecolabeling.

Earlier this year, an assessment of 61 concessionaires
included in a pilot project concluded that only nine were
considered "adequately prepared" to meet ecolabeling requirements
and none were actually "prepared".

Furthermore, the government decided not to extend the logging
permits of 68 out of 188 concessionaires which had submitted
their annual logging plans for the 1996/1997 fiscal year.

The decision was based on the poor performances of the
concessionaires. (pwn)

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