Forest assets in IBRA

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