Forest assets in IBRA

The Indonesian Bank Restructuring Agency (IBRA) is often likened to a dishwasher. The quickest way to sell credit assets worth Rp 158.7 trillion is a form of dish-washing.

Of course, it is a nice step for investors keen on acquiring problem debts. IBRA's intention arouses interest because it could allow investors to profit in a relatively short time. Investors, of course, know about the limitations involved.

Behind the efforts of IBRA, there still lie some unsettling issues.

How deep is the coordination between IBRA and the ministries concerned? The property sector is more facilitated with a plan to establish a holding company in July, but there are a few obstacles for the forestry sector.

Some time ago the Ministry of Forestry requested that 23 forest concessionaires/timber estate concessionaires (HPH/HTI) be excluded from the list of debtors going through IBRA's restructuring process. The reason was that the related companies had listed state assets in the form of forests as their collateral.

Minister of Forestry Mohamad Prakosa has asserted that IBRA should know that the forested areas held by the forest concessionaires cannot be used as collateral.

Ministry of Forestry data shows that in 2001, there were at least 126 forest concessionaires with assets under IBRA. The figure grew to about 224 companies, but the minister of forestry amended the number of companies suitable for restructuring under IBRA to only 103 companies, saying that the other 23 companies did not meet requirements for restructuring. These 23 companies have submitted their forest concessions and timber estates as collateral, even though the assets clearly belong to the state.

Perhaps it has been forgotten that most forest undertakings are related to forest concessions. They are aimed at maintaining the sustainability of forest production amid difficulties in maintaining a supply of logs.

The amid rigorous attempts to sell the credit assets, Rp 30 trillion of which belongs to the forest sector, should bring about an awareness that the forest restructuring process should adhere to the principle of sustainability.

-- Bisnis Indonesia, Jakarta