Ecolabeling agency to study firms
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo said yesterday that forestry-related firms intending to go public must be assessed by and gain approval from the ecolabeling agency.
Speaking to reporters yesterday, Djamaludin said the Indonesian Ecolabeling Agency (LEI) will soon start assessing forestry firms to determine whether or not they are ready to comply with ecolabeling requirements.
Starting the year 2000, ecolabeling will become a prerequisite for producers of tropical timber to gain access to markets in certain consumer countries.
Djamaludin said the agency, which is chaired by former environment and population minister Emil Salim, will start its assessments in a couple of months as a tryout before the ecolabeling requirement is actually implemented.
The agency will prioritize forestry firms that intend to go public, Djamaludin added.
He was responding to recent reports stating that the Surya Dumai Group, which has businesses in forestry-related sectors, was planning to go public.
When plans started late last year, executives of Surya Dumai had said the company planned to sell 60 million shares or 30 percent of its total shares.
Surya Dumai aims at collecting Rp 180 billion (US$78.26 million) from the sales of its shares.
Djamaludin reiterated yesterday that the Ministry of Forestry will not give any recommendation to firms that rely on timber from natural forests for their raw material supply.
Apart from a recommendation from LEI, forestry firms planning to go public must also conduct a public presentation and gain approval from the government and from surveyor companies.
"The ecolabeling agency will ensure a firm's environmental sustainability while the surveyor will assess its production capability," he said.
Security
Djamaludin said all these requirements were necessary to give a sense of security to prospective investors. "We don't want investors to buy a cat in the bag," he said.
Djamaludin said earlier this year that 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 or issue 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 performance of the concessionaires, which were said to have failed to meet the basic requirements needed to be allowed to harvest at their full capacities.
These requirements include, among other things, developing social forestry programs and timber estates in cooperation with transmigrants, paying all official levies and fees and planting certain crops.
The ministry in 1994 rejected the proposal of PT Artika Optima Inti -- a subsidiary of the Djajanti Group -- to go public, although the firm had already received the go-ahead from the Capital Market Supervisory Agency. Artika was said to have failed to meet a number of obligations. (pwn)