Firms asked to set aside more timber for locals

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)