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)