Forest companies told to raise workers' pay

Forest companies told to raise workers' pay

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
urged forest-related companies yesterday to pay their workers
more than the new minimum wage levels announced recently by the
government.

Speaking to reporters after a meeting of executives from the
state-owned Perum Perhutani firm, Djamaludin said that forest-
based companies, including private holders of forest concessions,
should increase the wage levels of their workers by more than 10
percent if possible.

"That way the companies' profits can go back to the forests
and the people, which include those working for the company," he
said.

The government earlier this week increased minimum wage levels
in 25 of the country's 27 provinces by an average of 10.63
percent. The new ruling is expected to go into effect this April.

The increase is higher than Indonesia's 8.6 percent inflation
rate of last year, but the new wage levels in most provinces
still cover only 93 percent of what the government considers the
"minimum level for subsistence".

Djamaludin said yesterday that forest-based companies should
try to increase wages by up to 15 percent above the new wage
levels.

The president of Perhutani, Harnanto H.M., told reporters that
Perhutani intends to pay its workers 10 percent more than the new
wage levels, or about 20 percent more than their current levels.

He acknowledged that Perhutani's profits may decline as a
result of the higher wages, but pointed out that because
Perhutani was a state-owned firm, its mission was not only to
maximize profits but to increase the social welfare of people
living off the forests.

Profits

Djamaludin said at yesterday's speech that the total before-
tax profits of the six state-owned firms overseen by the Ministry
of Forestry -- Perhutani, PT Inhutani I, PT Inhutani II, PT
Inhutani III, PT Inhutani IV, PT Inhutani V and PT Inhutani VI --
totaled Rp 135.48 billion (US$59.16 million) last year.

From this amount, Rp 87.82 billion, or 64 percent, came from
Perhutani.

In 1994, the six firms recorded before-tax profits of Rp
207.18 billion, up from Rp 130.36 billion in 1993 and Rp 49.53
billion in 1992.

Perhutani, which manages forests in Java only, is projected to
earn Rp 746.73 billion this year from the logging activities of
its teakwood and natural forests. Its before-tax profits this
year are estimated to reach Rp 85.16 billion.

Perhutani's activities this year will take place on 85,535
hectares of teakwood forests and 69,431 hectares of natural
forests.

Its teakwood production is expected to reach 882,693 cubic
meters and production for other types of wood is expected to
reach 1.07 million cubic meters. (pwn)