Government revokes vast forest concessions

Government revokes vast forest concessions

JAKARTA (JP): Eight forest concessions totaling 1.17 million
hectares owned jointly by former president Soeharto's children
and their business associates were revoked because they were
allegedly granted through corruption, nepotism and collusion, the
government announced on Thursday.

Thirteen other forest concessions covering 1.36 million
hectares will not be renewed when they expire next March,
Minister of Forestry and Plantations Muslimin Nasution announced.

"These measures were based on the findings of joint audits and
comprehensive due diligences by the Government Finance
Comptroller and Ernst & Young auditors," Muslimin said.

He said the audits and investigations of forest concessions
and plantation licenses were part of the national drive against
corruption, collusion and nepotism headed by Coordinating
Minister for Development Supervision and State Administrative
Reforms Hartarto Sastrosoenarto.

"Our focus now is safeguarding state assets," he said, adding
that further investigations into the concessions would be
conducted for the purpose of possible criminal prosecution.

He said, however, that all the concessions and licenses
obtained by the Soehartos and their business associates appeared
to be technically legal because regulations during the Soeharto
regime were designed to legalize such practices.

Nevertheless, he said the forest concessions had been obtained
through corruption, collusion and nepotism as defined by Hartarto
on the basis of President B.J. Habibie's directives.

Muslimin said the revoked forest concessions belonged to the
Karya Delta Group, the Alas Helau Group, IFA and the Kalamur
Group in the provinces of West, East and Central Kalimantan and
Jambi.

These business groups, he added, were jointly owned by
Soeharto's daughters Siti "Tutut" Hardijanti Rukmana and Siti
Hutami Adiningsih and a number of their associates, including
Muhammad "Bob" Hasan and Prajogo Pangestu.

"The forest concessions will be redesigned and put under the
management of local universities, cooperatives and Islamic
boarding schools," Muslimin said.

The 13 forest concessions which will not be extended after
they expire next March are owned by Pangestu's Barito Pacific
Group, Eka Tjipta Widjaya's Indah Kiat Group, the KLI Group
controlled by Hunawan, the Alas Kusuma Group controlled by
P.O.Suwandi, the Daya Sakti Group controlled by Widya Rahman, the
Hutan Raya Group controlled by Anthony Salim and the Benua Indah
Group controlled by Boediono.

Prajogo's Barito Pacific is the country's largest forest
concession holder, controlling 3.5 million hectares of forest
across Indonesia. Bob Hasan's Kalimanis Group is the fourth
largest concession holder, with logging rights to 1.63 million
hectares of forest in East Kalimantan, Aceh and Southeast
Sulawesi.

Muslimin said the auditors also concluded that nine timber
estate companies, seven of which were controlled or partly owned
by Hasan, had either obtained their licenses through corruption
and nepotism or abused reforestation funds from the government.

Four of the timber estates, PT Fendi Hutani Lestari and PT
Tusam Hutani Lestari, controlled by Hasan, PT Adindo Hutani
Lestari, owned by Soeharto's daughter Siti Hediyanti Prabowo, and
PT ITCI Hutani Manunggal, jointly owned by Hasan and Soeharto's
son Bambang Trihatmodjo, were found to have marked up the cost of
their projects to receive additional reforestation funds from the
government.

"These four companies will have to return Rp 50.71 billion in
reforestation funds to the government," Muslimin said.

Muslimin said the Soehartos and their associates were also
found to control 303,000 hectares of plantations in seven
provinces through 33 companies.

He said his ministry would soon revoke the licenses of two oil
palm plantations, PT Maharani Puri Citra Lestari, owned by Siti
Prabowo, and PT Gunung Sinaji, controlled by Soeharto's youngest
son Hutomo "Tommy" Mandala Putra.

Muslimin said his office was also in the process of canceling
two forestland-swap deals between the government and PT Pertiwi
Lestari, controlled by Anthony Salim, and PT Gunung Mas Alam
Semesta, owned by Tutut's husband Indra Rukmana.

"The cancellation of the deal with PT Pertiwi Lestari alone
would save the government Rp 499 billion in state assets," he
said.

He added that two other forestland-swap deals with PT Kapuk
Naga Indah in Tangerang and PT Mandara Permai in Angke Kapuk,
West Java, were being reviewed for suspected corruption,
collusion and nepotism. Both companies are owned by Anthony
Salim. (gis)