Government to reshuffle Perhutani management

Government to reshuffle Perhutani management

Rendi A. Witular, The Jakarta Post, Jakarta

The Ministry of Forestry plans to reshuffle top-level
management of state-owned forestry company Perhutani next month,
as some directors had been implicated in an alleged corruption
case, an official said.

Ministry of Forestry spokesman Tachrir Fathony told The
Jakarta Post on Thursday that the reshuffle was expected to take
place immediately after President Megawati Soekarnoputri signed a
regulation that would return the responsibility for Perhutani to
the Ministry of Forestry from the Office of the State Ministry of
State Enterprises.

Megawati is expected to sign the regulation next month.

"Our stance is clear -- we don't want figures who are tainted
with allegations of corruption to manage the country's heavily
damaged forests," said Tachrir.

He said that based on the new regulation, the ministry could
reorganize the Perhutani management with the approval of the
Ministry of Finance.

The alleged corruption case centers on the misuse of Rp 43
billion (US$4.8 million) from the company's internal funds. The
fund had been allocated to finance a corporate image campaign
last year that was never realized, which prompted several company
employees to report the top management to the police for alleged
corruption.

Currently, the National Police is still investigating the case
and have named company president Marsanto and director for
planning Bambang Aji as the main suspects.

Perhutani is assigned by the government to manage 2.6 hectares
of forest in Java.

However, due to mismanagement, about 70 percent of the
controlled forest areas are now believed to be damaged.

In a bid to improve the company's performance, the government
transferred the company to the Office of the State Minister of
State Enterprises in 2001, and changed the company's status into
a profit-oriented firm from its former non-profit status.

After two years, however, the Supreme Court annulled the new
status, as it became evident that the office had failed to
improve Perhutani's performance in managing the forest areas.