Government gives concessionaires year-end deadline

Government gives concessionaires year-end deadline

Rendi A. Witular, The Jakarta Post, Jakarta

The Ministry of Forestry has given all forest concessionaires
until the end of this year to put their house in order, warning
that any companies found to have failed to develop their forest
areas sustainably next year will have their licenses revoked.

The ministry said that, starting on Jan. 1 next year, it would
send 12 independent companies, selected by the ministry, to
assess the operations of the concessionaires.

Based on the results of the assessment, the government would
decide whether to revoke the concessionaires' licenses or allow
them to continue their operations.

Director general for the development of forest production
Suhariyanto said the new policy was aimed at preventing further
destruction of the country's forests.

"We must give our forests a break. They badly need to be
rehabilitated. Any concessionaires who have failed to meet our
requirements for sustainable production will have their licenses
revoked," Suhariyanto told The Jakarta Post over the weekend.

According to the ministry, deforestation had affected 40.26
million hectares of the country's total natural forest, which
amounts to 119.7 million hectares.

The ministry also said that some 43 percent of the country's
forest concession areas were either in a critical state or no
longer productive.

As a matter of fact, Suharyanto said, the 12 assessment
companies would start work this month, analyzing 116
concessionaires whose licenses had expired this year and had
applied for extensions.

Next year, the 12 companies would analyze the other 296
concessionaires who still had effective licenses.

The 12 assessment companies will check if the concessionaires
have applied sustainable development principles to their
operations: that they have not sought trees outside their
contract area or felled immature trees in their contract areas as
raw material for their pulp and paper or plywood plants, or
sawmills.

Under the existing regulations, concessionaires are only
allowed to cut trees that have a diameter of more than 50
centimeters.

If a concessionaire is unable to meet sustainable development
principles, its license will be revoked and auctioned off.

If no one is interested in buying the license, the ministry
will take over the concession to rehabilitate the area concerned.

The rehabilitation will be financed by the reforestation fund
collected from concessionaires, which, this year, is projected to
reach Rp 810 billion (US$92 million).

Spokesman for the Association of Indonesian Forest
Concessionnaires (APHI) who also heads the advocacy division at
the association, Riza Suarga, voiced criticism of the policy,
warning that it would result in massive layoffs in the forestry
industry.

"The government has the right to revoke the licenses. But, has
it considered any solution to the impact of the revocation?

Some 4 million workers, from upstream to downstream companies,
depend for their livelihood on this business," Riza warned over
the weekend.

Riza feared that massive layoffs caused by the new policy
would lead to an increase in illegal logging, as the laid-off
employees would resort to illegal activities in their struggle to
survive.

Riza added that other sectors of the industry, such as
plywood, pulp and paper and sawmill companies, would also be
severely hit by the ruling due to a lack of raw material.

However, Suhariyanto dismissed the notion that the new ruling
should be blamed for the shortage of raw material.

"What we are going to do is to close concessions that no
longer have any more trees suitable for felling.

"If the policy causes a shortage of raw materials, that means
the concessionaires have carried out illegal logging," he said.

The Association of Indonesian Wood Panel Producers (Apkindo)
said earlier that the ruling would cause about 75 percent of
existing plywood companies to close down, rendering at least
500,000 people jobless.