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)