Govt beaten again in court, this time against logging firm

JAKARTA (JP): The government has suffered another defeat in the courts of law -- this time against a private logging company with which it has formed a partnership, in a dispute over a forestry concession in South Sulawesi.

An upset Minister of Forestry Djamaloedin Soeryohadikoesoemo vowed he would fight this court battle, however, and is taking the case to the Supreme Court. The government also plans to counter-sue the private company, he said.

"We didn't do anything wrong. Why should we give up?" Djamaloedin said after inducting a number of officials in his ministry yesterday.

The South Sulawesi High Court has ruled in favor of PT. Ryani Indah, an Ujungpandang-based company, which has formed a partnership with the state-owned PT Inhutani I to form PT. Ryani Hutani Sipatuo timber firm on a 40:60 equity basis.

The subsidiary won a 32,000-hectare forestry concession in Maningpajo, Wajo regency, South Sulawesi, in 1991.

As it turned out, however, part of the concession overlapped with the ranch belonging to a subsidiary of Ministry of Agriculture.

PT. Ryani then filed a lawsuit against the Minister of Forestry, the management of PT. Inhutani I and the head of the South Sulawesi forestry office, seeking compensation for the losses caused by the contract.

Both the Ujungpandang District Court and the South Sulawesi High Court ruled for PT. Ryani, ordering the government pay Rp 2.4 billion ($1.1 million) the company had invested in the joint venture plus back interest payments.

Inhutani itself had invested Rp 1.6 billion in the venture and the Ministry of Forestry had provided Rp 3.8 billion in loans to finance the operation of PT. Ryani Hutani Sipatuo.

Djamaloedin accused the management of PT. Ryani of squandering the money to buy luxurious cars as well as paying the rent of the office which is actually belongs to PT. Ryani.

The ministry is currently preparing a new lawsuit against PT. Ryani for its refusal to allow PT. Inhutani I to inspect the project and also for embezzling state funds.

On the overlapping concession, he said the Ministry of Forestry and the Ministry of Agriculture have agreed to jointly use the area.

"We can grow sengon trees as well as rumput gajah for livestock in the same area," he said, referring to a kind of local tree and wide-leaf grass. (09)