Fuel price hike blamed for logging industry troubles

Fuel price hike blamed for logging industry troubles

Rusman, The Jakarta Post, Samarinda

The timber industry in East Kalimantan is on the brink of
collapse due to rising production costs and a lack of raw
materials, an executive with a timber firm association says.

Taufan Tirtamana, the secretary of the Indonesian Timber Firm
Association (APHI), said the government must intervene to save
the industry, otherwise thousands of workers would lose their
jobs.

Taufan blamed the fuel price hike on Oct. 1 for the rising
production costs. "The higher fuel price has burdened a lot of
timber firms, leading to slow business in timber sales and
production here," he said. These companies consumed significant
amounts of fuel during wood processing and transportation.

The second problem was the government policy to cut legal tree
felling quotas in East Kalimantan, Taufan said. Last year, the
government allowed 1.5 million cubic meters of timber to be
felled in the province, but this year, the quota was reduced to
1.4 million, leading into lack of raw materials for mills.

The national crackdown on illegal logging is also likely to
have affected business.

Demand for logs reaches about 8 million cubic meters a year
and firms now seeking logs outside East Kalimantan have only
incurred increased transportation expenses.

Taufan called for the government to subsidize fuel for timber
firms and increase the quotas for logged timber.

Meanwhile, the East Kalimantan manpower office estimated some
54,000 people worked in the forestry, milling and transportation
industries.

Some 4,200 workers were laid off last year with 1,200 losing
their jobs so far this year.

Suriansyah, 34, was one of those unlucky workers. He had still
not received the severance pay he was legally entitled to,
despite working for his company for several years.

"The workers understand the timber industry is still in the
doldrums, but we badly need severance pay to continue living,"
Suriansyah said.

A migrant from East Java province, Suriansyah has been joining
protests about the issue since last week. He is planning to set
up a small restaurant back in East Java if he gets paid out.