Government plans to limit ownership of forest assets

Government plans to limit ownership of forest assets

JAKARTA (JP): The government is considering limiting corporate
and personal ownership of the country's forest concessions to
prevent a concentration of forest assets in the hands of a small
number of companies.

Minister of Forestry and Plantations Muslimin Nasution said
yesterday that a plan to limit the ownership of forest
concessions was being studied.

Speaking at a hearing at the House of Representatives, the
minister said that the country's forest concessions were
controlled by a handful of business groups.

According to the minister's data, tycoon Hunawan Wijajanto of
the Kayu Lapis Indonesia Group owns the largest area of forest
concessions in the country. Through his 17 timber companies he
holds logging rights to 3.49 million hectares of forest in West,
Central and East Kalimantan, Maluku and Irian Jaya.

In second place is Burhan Uray. He holds rights to 2.95
million hectares of forest in Irian Jaya, Maluku and Central
Kalimantan through 10 companies under Djajanti Djaja Group and
seven companies under Budhi Nusa Group.

Timber tycoon Prajogo Pangestu is third on the list. He owns
the rights to 2.72 million hectares of forest concession in Riau,
Jambi, Central and South Kalimantan, North Sulawesi, Maluku and
Irian Jaya through 27 companies under his giant Barito Pacific
Timber Group.

Mohamad "Bob" Hasan, a long-time crony of former president
Soeharto, is in fourth position. His Kalimanis Group holds
logging rights to 1.63 million hectares in East Kalimantan, Aceh
and Southeast Sulawesi.

Soeharto's youngest daughter Siti Hutami Endang Adiningsih is
ranked 15th. She holds the rights to exploit 549,500 hectares of
forest in Central Kalimantan.

Muslimin said that a small number of powerful individuals had
gained control of the country's forest assets by taking over
small companies which owned concessions but lacked the capital to
run their own logging operations.

"We are still checking whether or not the changes in ownership
were legal," he told House Commission II for agriculture,
forestry and plantations.

According to existing regulations, any change in the ownership
of forest concessions needs the approval of the Minister of
Forestry and Plantations.

The minister also said yesterday that he was considering
revoking the licenses of timber companies which have bad track
records in managing the forest under their control.

Licenses will also not be extended if concessionaires have
failed to abide by the regulation which states that they must
give at least three percent of their shares to cooperatives, the
minister said.

He also said that in the future, forest concession rights
would be issued through an open bidding system to give the common
people a better chance of benefiting from the country's forest
resources.

He said that open bidding would apply only to areas left
vacant by suspended timber companies because the government would
not open any more natural forest to logging operations.

At least 423 private companies are currently involved in
logging activities over a forest area of 61.7 million hectares.

The country's six state-owned forestry companies -- PT
Inhutani I to V and Perum Perhutani -- have logging operations
spread over approximately 2.3 million hectares of land.

The government first began to award forest concessions to
private companies through the 1971 Forestry Law, which granted
concessionaires the sole right to cultivate and exploit forests
in their concession areas.

In 1997, the government extended the length of the concessions
from 30 years to 70 years. (gis)