Five plywood plants in trouble due to poor management

Five plywood plants in trouble due to poor management

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo disclosed that five plywood factories are currently in deep trouble due to poor management practices and irresponsible logging.

Djamaludin told a press conference Friday said the five companies were PT Hartati, PT Dayak Besar, PT Marina, PT Sangkulirang Bakti and PT Sumber Mas.

The first three firms -- Hartati, Dayak Besar and Marina -- had already closed because of internal problems, including poor management, he said.

Hartati, a plywood factory which has been abandoned by its owner, has yet to pay a Rp 5.6 billion (US$2.44 million) fine for several violations. "Because the factory has made several violations, its forest concessions have had to be revoked," Djamaludin said.

He added that the case has been submitted to the Attorney General's Office.

Dayak Besar and Marina were closed by their owners due to internal problems, including conflicts in the joint ventures and loan problems with their banks.

The other two factories -- Sangkulirang Bakti, a subsidiary of the Barito Group, and Sumber Mas -- were reported by forestry officials as lacking the virgin forests required to conduct sound forest management practices.

Djamaludin said the concession period of the three concessions owned by Sumber Mas would end in the near future.

"Although Sumber Mas has its own concessions, it's strange that its plywood factory in Gresik, East Java, gets more than 90 percent of its raw material supply from the market and not from its own forests," he said.

Djamaludin said that ever since the government started awarding forest concessions to private companies in the early 1970s, the Ministry of Forestry had had to end the operations of 160 forest concessionaires. There are approximately 490 forest concessionaires still operating in the country.

Conversion

Djamaludin said that out of the 160 concessionaires, 14 were converted to serve other purposes, including for national parks and preservation sites; nine were inactive because they have been abandoned by their owners; 89 were unable to have their 20-year concession periods extended because they either had no virgin forests left, had conducted poor forest management practices or sub-contracted their concessions to other parties; and 48 had their concessions revoked by the government, after a series of warnings on law violations.

Djamaludin added that three companies had their concessions revoked without any warning because two of them had left their forests unattended after the clear-cutting of the areas and the other one had sold its concession to a third party without the minister's permission.

He said the government could help solve problems faced by privately-run forestry companies by including a number of officials from state-owned forestry firms in the management of their forests.

But he pointed out this could only be done if the concessionaires had a certain amount of virgin forest left and avoided clear-cutting.

So far, 27 forest concessionaires who own plywood factories have agreed to establish joint ventures with state-owned firms.

"Forests are a renewable resource. If a concessionaire refuses to replant trees that it has cut down and its plywood firm suffers because of that, it shouldn't blame the government," Djamaludin said. (pwn)