Forestry minister blasts cheating by timber firms
JAKARTA (JP): Minister of Forestry and Plantations Muslimin Nasution on Thursday accused timber companies and government officials of pilfering mandatory forest royalties and fees.
Muslimin criticized forest concessionaires for frequently failing to pay sufficient mandatory royalties and reforestation funds and blasted them for misusing the self-assessment method entrusted to them.
"The self-assessment method in collecting forestry fees has resulted in rampant violations and manipulations. So we plan to reintroduce the official assessment method," he said in his address to a discussion on forest utilization.
He said the government collected an average of Rp 800 billion (US$106.6 million) from reforestation fees and Rp 500 billion in forest royalties annually in the past, but added it should have been much more.
"The amount would be much higher if timber companies and government officials were not cheating."
He said many timber companies, in cooperation with government officials of related agencies, frequently misused transportation documents, called SAKO and SAKB, needed to transport logs and processed wood respectively.
Timber companies are currently subject to three mandatory fees of reforestation funds, forest royalty provisions and concession fees.
Reforestation funds and forest royalties provisions are aimed at ensuring the forests are managed in an environmentally sustainable manner. The size of the fee depends on the volume and type of timber felled.
A concession fee is the annual contribution of timber companies, which is determined by the size of the area managed by the forest concessionaires.
Under the current self-assessment system, timber companies are given the freedom to calculate the amount of reforestation funds and forest royalties they have to pay to the government.
He also pointed out that the government could easily correct the past mistakes if it were to take over the job of assessing forestry fees owed by timber firms.
Muslimin admitted that it would be difficult to remove the self-assessment system altogether because of the limited human resources in the ministry.
The ministry announced recently that unpaid reforestation fees reached more than Rp 170 billion as of October this year.
Muslimin vowed to enforce the law and to be stricter in imposing penalties so that companies could not get away with their offenses.
"Timber companies will be given a warning and a 2 percent fine per month will be imposed. If they fail to pay their debts after two months, their logging contracts will be revoked and the cases will be handed over to the State Receivership Agency."
Muslimin also said timber companies would be obliged to pay reforestation funds in advance and not after they sold their logs or wood products in a bid to avoid late payments.
He added that the ministry was also considering increasing the fine on late payments to between 1.5 and two times the current banking commercial rates in a bid to force timber companies to pay the fees on time.
He added that the ministry expected to collect Rp 1.35 trillion in reforestation funds in the 1999/2000 fiscal year, a 20 percent increase from the estimated Rp 1.13 trillion for this fiscal year.
In addition to the forestry funds, he said, the ministry would also collect Rp 566 billion in resource royalty provisions for the current 1998/1999 fiscal year and another Rp 29.2 billion in annual contributions from timber companies. (gis)