Government sets standard selling prices for timber
Government sets standard selling prices for timber
JAKARTA (JP): The government has set standard selling prices
of various forest products destined for export as the basis for
calculating the resource royalty provision.
The industry and trade minister said in a decree dated June 8
obtained by the media yesterday that the standard selling prices
of timber were calculated by averaging prices on the
international and domestic markets.
The new decree also stated that the calculation of the wood
standard prices depended on the type of products and their
origin.
The standard price for big-diameter logs, such as meranti from
Sumatra, Kalimantan, Sulawesi, and Maluku, is US$59 per cubic
meter.
Mixed jungle wood with a diameter of more than 30 centimeters
is $35 per cubic meter.
Wood from industrial forests have also different standard
prices: $7 per ton for pine, $5 per ton for acacia, $3 per ton
for balsa, $5 per ton for eucalyptus and $3 for sengon.
The government also imposes various standard prices on fancy
woods, such as teak, ebony and sandalwood.
The standard price for teak is $67 per cubic meter, ebony $574
per ton and sandalwood $676 per ton.
All those woods' standard prices will be effective until Dec.
31, 1998.
The decree stated those standard prices would be adjusted
periodically to accommodate fluctuations in market prices.
Titus Sarijanto, an expert at the Ministry of Forestry and
Plantations, said yesterday that the official standard selling
prices were too high compared to the current prices of logs on
the international and domestic markets, making it hard for timber
companies to export their products.
Meranti logs, for instance, were sold at $125 per cubic meter
internationally and Rp 250,000 at home, Titus said.
Last month, the government introduced resource royalty
provisions, or rent taxes, on the country's timber companies to
replace mandatory forest royalties, as required by the
International Monetary Fund (IMF) in exchange for a US$43 billion
bailout package.
The imposition of the resource rent taxes aims to protect the
environment and eliminate the bias against production for
exports.
According to Government Regulation No. 59/1998, dated May 5,
forest concessionaires are liable to pay rent taxes, ranging from
zero to 6 percent of timber sales.
Concessions
Meanwhile, the director general of forest utilization at the
Ministry of Forestry and Plantations, Harnanto HM, said yesterday
that the government would work with the IMF to set a new date for
the auction of forest concessions and design the best bidding
mechanism possible to prevent the concentration of ownership in a
handful of big timber companies.
Harnanto said the government would grant no new forest
concessions in order to prevent further deterioration of the
country's forests.
Therefore, new logging contracts would be limited to areas
whose concessions had been revoked by the government.
The auctioning of forest concessions is stipulated in the
Supplementary Memorandum on Economics and Financial Policies
signed by the government and the IMF last April.
Under the memorandum, Indonesia is supposed to introduce the
auction system by the end of this month.
The memorandum said adopting an open bidding system to appoint
forest concessionaires would help ensure transparency in the
management of the country's forest resources.
Under former president Soeharto's administration, the
government awarded forest concessions to certain companies and
individuals, mostly Soeharto's cronies, without open tender,
which had according to some analysts led to the destruction of
forests. (gis)