Govt determined to recover Rp 675b reforestation funds
Fitri Wulandari, The Jakarta Post, Jakarta
The government is considering various options, including filing criminal charges, to recover some Rp 675.59 billion (US$76.1 million) in reforestation funds lent to 14 industrial timber plantation (HTI) companies whose licenses were recently revoked.
"We have a few options from the most lenient, such as ordering them to repay the funds, to the toughest, that is bringing them to court to face criminal charges for misusing the funds," Koes Saparijadi, spokesman for the Ministry of Forestry told The Jakarta Post on Thursday.
According to Koes Saparijadi, the companies could be charged with misusing the reforestation funds by not using them to develop the concession areas as required under their licenses.
"The government has been too lenient. So, we shall do everything to recover the funds," he said.
The amount of funds loaned to the 14 errant firms exceeds the amount allocated by the government to repair and rebuild elementary schools across the country for next year.
The government has allocated Rp 625 billion from the state budget to renovate 90,000 Islamic and state elementary schools across the country next year.
By way of another comparison, the funds loaned to the 14 HTI firms totaled more than half of the reforestation fund target of Rp 1.24 trillion set by the government for next year.
Last month, the Ministry of Forestry revoked the licenses of 14 HTI companies after an assessment showed they were not financially and technically sound enough to carry out the project.
The fourteen companies included PT Kiani Hutani Lestari in East Kalimantan, which is owned by jailed tycoon Mohammad "Bob" Hasan, and PT Menara Hutan Buana in Central Kalimantan, which is owned by former president Soeharto's stepbrother, Probosutedjo.
Dissatisfied with the decision, 13 companies filed a class action suit against the ministry at the Jakarta Administrative Court, the hearing of which is still in progress.
The indication that the funds were misused was apparent in their poor performance showing an average success rate of 20 percent, Koes said.
Of the total area of 989,079 hectares awarded to the concessionaires, by Nov. 5 of this year they had managed only to developed industrial timber plantations covering 188,950 hectares, despite the fact that the government had provided them with loans.
"If they had used the loans properly, the plants would have grown and the companies would not be running at a loss," he added.
At present, the Ministry of Forestry plans to revoke the operating licenses of an additional 13 industrial timber plantation companies for failing to comply with sustainable production requirements.
Revocation of operating licenses of HTI companies is part of a government move to restructure the badly managed forestry industry.
Economists and environmentalists, who have often voiced concern over corruption in the industry, said the failure of the HTI firms to meet their obligations had proved the charges of rampant corruption in the industry.
They said technically, it was impossible for HTI firms to fail to develop timber plantations as they had received many facilities from the government to carry out the projects. At the start of the operation, they are allowed to clear old growth forests in their concession areas and sell the trees to raise funds for the development of timber plantations. They are also provided with interest-free reforestation funds by the government.
14 HTI companies: PT Kiani, PT Menara Hutan Buana, PT Acehnusa Indrapuri (Aceh), PT Adindo Hutani Lestari (East Kalimantan), PT Tusam Hutani Lestari (Aceh), PT Rimba Wawasan Permai (Aceh), PT Rimba Timur Sentosa (Aceh), PT Surya Hutani Jaya (East Kalimantan), PT Intraca Hutani Lestari (East Kalimantan), PT Wana Tani Lestari (Southeast Sulawesi), PT Hutan Barumun (North Sumatra), PT Anangga Pundinasa (East Kalimantan), PT Rimba Equator Permai (West Kalimantan), PT Silva Inhutani Lampung (Lampung).