Government loses US$4.39m though forestry loopholes
Government loses US$4.39m though forestry loopholes
JAKARTA (JP): The government plans to require forest
concessionaires to undergo official assessments of their logging
activities to make certain they are paying their forest royalties
and reforestation fees, a minister says.
Minister of Forestry Djamaludin Suryohadikusumo said after
installing forestry officials yesterday that under the current
self-assessment mechanism, many concessionaires have been able to
avoid paying the mandatory forest contributions.
Financial losses caused by unpaid fees, according to a Supreme
Audit Board calculation earlier this month, reached Rp 2.76
billion (US$1.2 million) in forest royalties and US$3.19 million
in reforestation fees during the first semester (April-September
period) of 1994-95 alone.
"I think it is time for the self-assessment system to be
revised," Djamaludin said.
The self-assessment system, he said, has loopholes which
enable concessionaires to escape from paying forest fees and to
mark down the amount of their logging activities. It also
encourages the illegal felling and marketing of timber.
Djamaludin said that in the future, only large concessionaires
with their own processing plants and a "good reputation" --
endorsed by the ministry's local offices -- would be allowed to
conduct self-assessments and complete logging documents by
themselves.
"The government may have to select which companies need
official assessment and which do not," he said.
According to government regulations aimed at maintaining
forest sustainability, forest concessionaires must pay
reforestation fees at a range between $10.50 and $20 per cubic
meter of logs felled and pay forest royalties of up to $255,000
per ton depending on the type of wood.
The self-assessment mechanism, Djamaludin said, is based on
trust and is meant to reduce contact between government officials
and the private sector because "the more contact is made, the
larger the chance of collusion".
However, he admitted that the government has failed to keep a
close eye on the implementation of the self-assessment system,
allowing companies to make too many "mistakes".
Djamaludin cited cases where companies declared a shipment of
50 cubic meters of wood in their documents, while actually
shipping 200 cubic meters.
"These things happen not only because the government has
failed to keep an eye on the system, but also because the system
enables them to carry out such fraud," he said.
Djamaludin said a new assessment system would be discussed in
an upcoming coordination meeting involving related ministries.
Calculation
Although he declined to give his own figures for the amount of
losses caused by the present system, he pointed out that they
could be calculated by comparing the trees being felled and the
sum of forest royalties and reforestation fees collected.
"If felling has gone up by 30 percent and the fees by only 20
percent, we can say that there is a fraud of 10 percent in the
tree felling," he said.
Djamaludin explained that according to regulations, logging
activities can be conducted not only by concessionaires -- whose
concessions can be revoked by the government -- but also by
holders of companies holding wood-utilization permits.
Holders of such permits are required to submit a bank
guarantee before they can conduct logging activities, which, he
said, gives the government a certain degree of control.
The officials installed by Djamaludin yesterday included
Bambang Soebijantoro, who was appointed as the new marketing
director of the state-owned Perhutani forestry company, Efendi
Bachtiar Hasnan as commissioner of PT Inhutani II; Sumahadi as
chief commissioner of PT Inhutani IV, as well as M. Arie
Soedarsono and Kamil Sjoeib as commissioners of PT Inhutani IV.
Oetomo S. was installed as chief commissioner of PT Inhutani
V, Waskito Surjodibroto and Nur Indiarto as commissioners of PT
Inhutani V, and Toga Siallagan and Idar Effendi Salam Nasution as
instructors at the Ministry of Forestry's education and training
division.(pwn)