Govt gives HTI firms 30 days to pay back debts

Govt gives HTI firms 30 days to pay back debts

Rendi A. Witular, The Jakarta Post, Jakarta

The Ministry of Forestry has issued a 30-day ultimatum to 31
privately owned industrial timber estates (HTI) to surrender
their collateral assets as a guarantee that they will settle
their debts with the government.

The director for industrial estates at the ministry, Adi
Subaktiono, said on Friday that his office would revoke the
licenses of the timber estates if they failed to surrender their
assets within a specific time.

"We are giving the companies 30 days starting from today to
hand over an asset guarantee letter, or else we will revoke their
licenses at once," Adi said.

The 31 companies owe some Rp 803 billion (US$91.2 million) in
reforestation funds to the government. The fund is used to
finance the forest rehabilitation program.

Reports had earlier said that in the past many companies,
particularly those linked to top government officials, had
declined to pay the reforestation fund obligation.

The Ministry of Forestry has been under pressure to revamp the
corrupt forest management system of the past to help protect the
country's severely damaged forests.

The country's industrial timber estate companies manage a
total forest area of 2.7 million hectares.

The companies have long been blamed for contributing to the
destruction of the country's old-growth forests, especially in
Java and Madura, due to the companies' failure in rehabilitating
and sustaining their resources.

Last week, the ministry concluded the first phase of an audit
of 92 industrial timber estates to see which companies had
violated existing rulings on forest sustainability. There are a
total of 178 HTI firms.

From the first phase of the audit, 60 HTI companies were found
to have failed to meet the sustainability requirement, thus their
operations will have to be shut down.

The other 31 companies, however, managed to pass the test and
will be allowed to continue operations. Their next test now is
the requirement of surrendering their collateral assets and
repaying their reforestation fund obligation.

The ministry declined to disclose the details of the audit. A
number of environmental groups have criticized the lack of
transparency, saying that the audit might have been tainted with
vested interest.