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)