Government to probe use of refoirestation funds
JAKARTA (JP): Minister of Forestry and Plantations Muslimin Nasution said yesterday the use of the reforestation funds to finance businesses owned by former president Soeharto's family and cronies was being investigated.
He said his office and the Ministry of Finance were working together to ascertain whether there was malfeasance in the use of Rp 1.2 trillion (US$90 million) of the reforestation funds prior to this April.
"During the investigations, I have ordered that further disbursement of the reforestation funds be frozen," Muslimin added.
According to the Letter of Intent with the International Monetary Fund, the reforestation funds, including their interest, should be managed within the state budget and be used to develop forests and rejuvenate critical land.
" We will try our best to reallocate the misused funds to forest development," Muslimin told journalists after a meeting with environmentalists and non-governmental organizations.
The environmentalists and NGO leaders visited the minister yesterday to raise their concern over the misuse of reforestation funds mandated by Soeharto.
They also demanded that Mohamad "Bob" Hasan, a timber tycoon and close crony of Soeharto, be tried for his misuse of reforestation funds and other destruction of forest resources.
The reforestation fund is a mandatory fee imposed by the government on forest concessionaires to ensure that forests are managed in an environmentally sustainable manner. The size of the fees depends on the volume and type of timber felled.
Former president Soeharto, during his tenure in power, issued several decrees ordering the minister of forestry to allocate reforestation funds to various projects run by his family members and cronies which were not related to forest development.
In 1996, Soeharto asked the ministry to set aside part of the interest of the funds mostly deposited in state banks to aid state aircraft manufacturer PT IPTN, which was then chaired by B.J. Habibie (who is now the president).
According to earlier reports, IPTN received about Rp 400 billion, which was later converted into the government's stake in the aircraft company.
In 1997, according to audited reports issued by the Supreme Advisory Agency (Bepeka), Soeharto also instructed the Ministry of Forestry to set aside about Rp 250 billion from the funds to help PT Kiani Lestari -- a company owned by Hasan for its pulp and paper factory in East Kalimantan.
Urea pill fertilizer manufacturer PT Ario Seto Wijoyo -- a company owned by Soeharto's grandson Ari Sigit Harjojudanto also obtained about Rp 80 billion of the fund.
Other Soeharto decrees allocated Rp 100 billion of the funds for poverty alleviation and Rp 23 billion for purchasing the shares of a private jet development company linked to IPTN.
Muslimin, however, said that not all of the funds' allocations had been disbursed.
But he said he did not know whether all the funds given to those companies had been repaid.
Director General of Reforestation and Land Rehabilitation Harsono said separately that the ministry was preparing a decree to classify the type of forest development which could use the reforestation funds.
"The directorate general of reforestation and land rehabilitation will be very pleased if the funds are given back to us, because we will need a lot of money to reforest and rejuvenate critical land," Harsono said. (gis)