Government set to introduce new forestry fee

JAKARTA (JP): The government will impose a new fee on the country's timber companies to inject funds into local community resources, Minister of Forestry Muslimin Nasution said on Friday.

Muslimin said the fee, to be set at US$2 for every cubic meter of logs produced by timber companies, would be introduced later this month.

"Funds raised from the new fee will be used to improve the prosperity of the local people, to enhance their education and their quality of life," he said after meeting with President B.J Habibie.

Muslimin said the government was currently establishing a foundation to manage and control funds raised from the fee collection.

"The fund will be managed by an independent foundation set up by the government, members of which will comprise nongovernmental organizations, executives of timber companies operating in the provinces, timber associations, educational institutions and local administrations," he said.

"The foundation, which is expected to be established this month, will manage the funds transparently so that it will be publicly accountable."

Muslimin said that currently, the government required timber companies to transfer a Rp 1,000 (12 U.S cents) fee for every cubic meter of timber felled to local administrations.

"But the amount is too small to develop prosperity for local people and the fee collection is very difficult to control."

He added that timber companies' cash flow would not be disturbed due to the additional cost of the fees, because the amount was "too small".

"Paying $2 per cubic meter is very small compared to the price of logs which can amount to $80 per cubic meter to $100 per cubic meter.

"The amount collected will be enough to develop local resources. For example, East Kalimantan produces five million cubic meters of logs annually, while Irian Jaya produces 3 million cubic meters annually. The two provinces will obtain $10 million and $6 million in funds respectively every year from the fees. The amount will be adequate to develop local resources."

Timber companies would face penalties, either in the form of fines or reduced logging quotas if they failed to pay the fee on time.

Muslimin said timber companies are still required to pay reforestation fund and forest royalties, mandatory fees imposed by the government on forest concessionaires to ensure forests are managed in an environmentally sustainable manner. The fee amount depends on the volume and type of timber felled.

He said timber companies have responded positively to the resolution.

"In fact, the plan was introduced by the MPI (the Indonesian Forestry Society)."

Muslimin said the fees would secure forest areas from being damaged or plundered by local people. (gis/prb)