Forestry ministry raises royalty rates by 9-27%

Forestry ministry raises royalty rates by 9-27%

JAKARTA (JP): The forestry ministry has decreed an increase in
forest royalties by a range of nine percent to 27 percent, to
keep up with price rises on the world market and inflation.

A spokesman for the ministry said yesterday the new ruling,
Decree No. 376/1995, came into effect on Aug. 1 and remain
effective until March 31, 1996.

The decree, which employs a new method of grouping Indonesia's
provinces, stipulates that for Sumatra, Kalimantan, Sulawesi and
Maluku, forest royalties for meranti (shorea sp.) are now Rp
23,500 (US$10) per cubic meter, up by 9.3 percent from the
previous rate. Royalties for other types of wood are set at Rp
14,000 per cubic meter, up by 27.3 percent.

For the provinces of Irian Jaya, West and East Nusa Tenggara,
Bali and East Timor, royalties for meranti have been increased by
8.6 percent to Rp 19,000 and for other types of wood by 12.5
percent to Rp 9,000.

There is a 10 percent increase in the royalties for luxury
wood, sandalwood, ebony and teakwood.

The royalty for luxury wood now stands at Rp 29,500 per cubic
meter, for sandalwood Rp 255,000 per ton, for ebony Rp 210,500
per ton. For teakwood, the new royalties range from Rp 6,500 to
Rp 24,500, depending on the diameter of the tree.

In another change from the previous decree -- which had been
in force from June 1, 1994, to May 31, 1995 -- two new,
additional criteria have been introduced in the determination of
the new fees.

Under the previous decree, the level of royalties depended on
the province from which the wood was taken, the type of wood and
its diameter.

The new decree, however, also puts an emphasis on the
utilization of the wood and the type of forest from which the
wood was taken.

Thus, unlike the previous decree, the new decree provides for
different royalties for wood that comes from an industrial timber
estate than for that which comes from natural forests. Wood taken
from natural forest in a province that has no pulp industry falls
in yet another category.

Under the new decree, pine wood chips from natural forests,
for instance, are subject to a fee of Rp 7,000 per ton --
unchanged from the previous rate. However, if taken from
industrial timber estates, it is subject to only Rp 3,000 per
ton.

Meanwhile, all types of wood chips originating in the natural
forests of provinces which do not have pulp factories are
exempted from forest royalties.

The new decree also stipulates that waste wood from various
luxury-wood types are subject to the same level of fees
regardless of diameter.

According to a statement issued by the ministry's public
relations office, forestry royalties for non-wood products --
which include rattan, resins, oils, bird nests and bamboo -- have
not been increased because such commodities are collected not by
large-scale businesses but by the people living on the outskirts
of the forests.

Forestry royalties are among the mandatory fees that forest
concessionaires must pay in order to continue operations.

The ministry's Director General for Forest Utilization Titus
Sarijanto said earlier this year that, while the increase in the
fees would be hard on the domestic market, it was unavoidable.

The rates of forest royalties are usually reviewed every six
months. (pwn)