Forestry ministry to offer public 149 forest concessions

Forestry ministry to offer public 149 forest concessions

JAKARTA (JP): Minister of Forestry and Plantations Muslimin
Nasution said on Monday that his office would this year award 149
forest concessions through an auction system which will be open
to the general public.

Muslimin said the concessions on offer were those which
formerly belonged to companies which had their licenses revoked
for breaching logging regulations and failing to manage their
concessions in a sustainable manner.

"My team is still preparing the regulations and details of the
mechanism. Limits will be place on the size of concessions to be
auctioned and on concession ownership," Muslimin said in a
hearing with House of Representatives Commission III for
agriculture, forestry and plantations.

He said the auction would use a scoring system based on
financial, social and ecological criteria.

"I hope it can be completed by Oct.1," Muslimin said.

Last month, Muslimin said that a scoring system would be used
to ensure that only parties displaying a strong commitment to
protecting the environment and involving local people in the
management of concessions would be awarded timber harvesting
licenses.

He said the auction would apply only to existing areas of
production forest repossessed from renegade timber companies
because the government does not intend to open any more natural
forest to logging operations.

Under the reform package agreed between the government and the
International Monetary Fund (IMF), Indonesia was initially
scheduled to introduce an auction system for concessions by the
end of July. But in the latest memorandum on reforms, the plan
was rescheduled until the end of this year.

The government first began to award forest concessions to
private companies in 1971 under the auspices of the Forestry Law
which grants concession holders the sole right to cultivate and
exploit the forest in their concession areas.

Forestry funds

Muslimin also said that his office expects to collect Rp 1.35
trillion (US$122 million) in reforestation funds in the 1999/2000
fiscal year, up by 20 percent from the Rp 1.13 trillion forecast
for this fiscal year.

In addition to the forestry funds, the ministry also expects
to collect Rp 222.4 billion in resource royalty provisions and
another Rp 29.2 billion in annual contributions from timber
companies.

He said the ministry has forecast that total forestry revenues
included in the 1999/2000 state budget will be Rp 1.60 trillion.
This year, Rp 2.04 trillion in forestry revenues were included in
the state budget.

He attributed the difference to a fall in timber prices and a
decline in timber production.

Meanwhile, the ministry's secretary general, Oetomo, said the
ministry had collected a total of Rp 6.84 trillion in
reforestation fees and earned Rp 2.83 billion in interest between
April 1, 1989, and March 31, 1998.

He said most of the money raised had been used to finance
reforestation projects and the development of timber estates.

"The balance was about Rp 3.36 trillion in July, including
interest earnings of Rp 905 billion," he told members of the
committee.

He said the ministry would allocate a further Rp 1.15 trillion
from the reforestation fund and Rp 117.6 billion from the
interest earnings to finance reforestation programs in the
current financial year. (gis)