Forestry firms 'still need supervision'

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo has said the ministry should be allowed to continue technical supervision of state forestry and timber companies despite the change in the legal basis of state enterprises' operations.

"The Ministry of Forestry is still needed to provide technical supervision such as how to plant and cut trees, and how to increase productivity to state timber companies, which the Ministry of Finance can not provide," Djamaludin said after a breaking of the fast gathering Friday.

The government issued a set of regulations related to the operation of state companies last week to speed up the process of privatization and business efficiency in state enterprises.

According to the new regulations, the supervision of state companies would be handled by the Ministry of Finance. They were previously carried out by related ministries.

The regulations also state that related ministries have to send all documents related to their state companies to the Minister of Finance before April 17.

Previously, the state companies' oversights were carried out by the related ministries although the minister of finance is the companies' nominee shareholder.

Djamaludin suggested the Ministry of Finance, as a nominee shareholder of the state companies, should focus its supervision on the companies' finance and management to avoid the companies being abused by the related ministries.

"The move of companies' oversight is partly to avoid companies from being burdened with too much work from the related ministries," he said.

State companies face difficulties in improving their financial performance due to the financial burden imposed by related ministries.

Sources said that related ministries often milked state companies dry in their support of the ministries' programs and in providing financial support to their senior officials.

Speaking on the impact of the country's monetary crisis, Djamaludin said that state timber firms would reduce their felling activities in natural forests due to the crisis which has sharply reduced the demand for Indonesian wood and wood-related products overseas.

Djamaludin said state timber firms would continue to cut trees which grow in areas designated for industrial forests or plantation areas.

"In this way, our plans to open up more agricultural areas and timber estates can continue," he said, declining to give further details about the reduction rate of the felling activities.

He said the ministry has converted 3.4 million hectares of forest into plantation areas, 2.4 million of which has been converted into oil palm estates. The remaining one million hectares will be offered to foreign investors.

According to data from the ministry, the annual working plan for felling activities by state and private timber companies last year reached 22.5 million cubic meters, of which only 20 million cubic meters could be realized.

He said that private firms would have to decide whether or not to continue felling in natural forests because some of them have regular markets in Europe and the United States. (gis)