Government set to introduce new forestry fee

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)