Forestry minister blasts cheating by timber firms

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)