Firms asked to set aside more timber for locals

JAKARTA (JP): Companies must now set aside half their timber from forest-conversion projects for domestic sales and locals living near the forests, a senior government official says.

Director General of Forest Utilization Titus Sarijanto said Tuesday evening that logs to be sold domestically should have a diameter of less than 49 centimeters.

"But if logs of that size make up less than 50 percent of those harvested, the companies should add larger diameter logs to meet the 50-percent target," he said.

Titus said a company could only use or sell its timber to export-oriented wood-based industries after it had complied with the ruling.

He did not say when the ruling would take effect.

According to government regulations, companies and government offices must have forest-clearing permits before opening up forest areas for plantation, agricultural or transmigration projects.

These permits, known by the Indonesian acronym IPK, allow their holders to harvest, use or sell timber from forest clearing.

Last May, the Ministry of Forestry issued a regulation requiring forest concessionaires to allocate 5 percent of their timber for local markets.

This regulation was meant to give people living near the concessions better access to the wood harvested.

Titus said that many concessionaires had not met this requirement and only 41 percent of the government's target for this scheme had been achieved.

He said that by the end of 1996, only 99 forest concessionaires -- less than 25 percent of the country's total -- had fulfilled their obligations by setting aside 5 percent of their wood for locals.

The government said that only 416,964 cubic meters of wood had been collected under the scheme, well short of its target of 990,000 cubic meters.

Minister of Forestry Djamaludin Suryohadikusumo earlier this month blamed the shortfall on the concessionaires which were "too export-oriented".

Processed timber exports earn more for their added-value than timber sold to the locals who have low purchasing power.

Djamaludin called this an "irony" because locals should have easy access to wood considering that Indonesia was one of the world's biggest tropical timber producers.

State-owned PT Inhutani I said earlier this month that it only managed to provide locals with 13,355 cubic meters of logs and sawn timber last year, or 31 percent of its target under the scheme.

Inhutani I president A. Fattah said the shortfall was caused by local's reluctance to buy from his company.

"The locals prefer to buy from the black market, where wood is cheaper," he said.

Fattah said the price difference was unavoidable because the price of wood on the black market did not incorporate the mandatory reforestation funds and forest royalties.

The two mandatory fees are imposed by the government to ensure that forest concessionaires manage their forests in an environmentally-sustainable way.

Antara recently reported that about 70 forest concessionaires in East Kalimantan had trouble distributing their 5-percent timber allocation for locals.

Timber executives there said that since the ruling came into effect in January 1996, the concessionaires should have allocated about 250,000 cubic meters of their timber for locals.

East Kalimantan produces about 5 million cubic meters of logs a year.

The executives said locals were reluctant to buy their timber because their prices -- which reached Rp 400,000 (US$174) a cubic meter including reforestation funds and forest royalties -- were much higher than the Rp 100,000 price of illegally-felled timber on the black market.

"So it's not that we don't want to allocate 5 percent of our production for locals. Our prices are just not competitive compared to those for illegal timber," an executive said. (pwn)