Fendi Hutani halts timber operations in East Timor

Fendi Hutani halts timber operations in East Timor

JAKARTA (JP): PT Fendi Hutani Lestari, a timber estate firm
linked to tycoon Mohamad "Bob" Hasan, has ceased operations in
East Timor due to growing insecurity and political uncertainty in
the province, an official said on Monday.

Ministry of Forestry Director General of Forest Utilization
Waskito Soerjodibroto said Fendi Hutani, a joint venture between
state timber company PT Inhutani I and PT Fendi Indah, a company
owned by Bob Hasan, had temporary halted operations in Viqueque,
East Timor.

"The company's president visited me today to report its
decision to temporarily stop operations in East Timor in view of
growing uncertainties in the province."

East Timor's future has been called into question following
the government's change of mind over the political status of the
province.

President B.J. Habibie decided in January to grant East Timor
independence if it rejects the government's wide-ranging autonomy
offer.

Tension has intensified following the decision with violence
between groups of pro-independence and pro-Indonesian youths.

"The company reported that two of its employees had been
killed while many others were attacked in past months. The rest
of the employees feel insecure to work in the province," Waskito
said.

The company operated about 40,000 hectares of timber estate in
Viqueque, which is planted with wood used for carpentry, he said.

Fendi Hutani was established in 1996 -- with Fendi Indah
taking a 60 percent stake and Inhutani I 40 percent -- to
rehabilitate East Timor forest and land and to provide job
opportunities for locals.

"But in reality, the task was difficult to carry out due to
the unfriendly response from East Timorese."

Waskito said continued involvement by the company in the
province depended on the future of East Timor.

"If its people choose independence, the government, as the
owner of Fendi's shareholder Inhutani I, sees no need to continue
company operations in East Timor."

He said if this occurred, the government would grant Fendi
Hutani a 40,000 hectares in West Nusatengara to develop a timber
estate. (gis)