Government to probe use of refoirestation funds

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)