Govt loses Rp 15t in unpaid royalties, reforestation funds
Govt loses Rp 15t in unpaid royalties, reforestation funds
JAKARTA (JP): Inefficiency and lack of supervision in forest
management have cost the government approximately Rp 15 trillion
(about US$1.8 billion) in unpaid royalties and reforestation
funds in the last five years, according to findings by the
Ministry of Forestry and Plantations and the Development Finance
Comptroller (BPKP).
Minister of Forestry and Plantations Muslimin Nasution said
here on Thursday that the government also considered the
possibility that corrupt, collusive and nepotistic (KKN)
practices had contributed to the loss.
"We'll see to it that further investigations will be conducted
into these findings," he told the media.
The ministry and BPKP conducted an audit between the fiscal
years of 1994/1995 and 1998/1999, the result of which was
presented during the media conference.
The ministry's report of the Rp 15 trillion potential losses
is based on the difference between the potential income derived
from the targeted Yearly Work Plans (RKT) submitted by existing
timber companies to the ministry, and the actual log output they
reported.
"There is a gap in the potential production amount as stated
in the RKT of companies and what they have actually produced,"
Muslimin explained.
Irregularities were also found in the operation of companies
holding forest concessions, the minister said.
The ministry took a sample of three companies holding forest
concessions, whose owners are believed to enjoy close relations
with the Soeharto family, and found several violations, among
others: felling trees outside the permitted area, not conducting
any operations for 17 years and subcontracting forest
exploitation to third parties.
However, the ministry encountered difficulties in tackling
administrative violations in such companies, as most licenses
were obtained under regulations enacted during the Soeharto
regime, which supported KKN practices, Muslimin said.
Yet in July, the ministry reported that it had revoked eight
forest concessions totaling 1.7 million hectares from companies
jointly owned by former president Soeharto's children on alleged
KKN practices.
The ministry suspected that the eight forest concessions were
granted through KKN practices, as defined on the basis of
President B.J. Habibie's directives.
The ministry's move to revoke the eight forest concessions was
based on joint audits by BPKP and Ernst & Young.
Auditing of reforestation funds by independent international
auditors is stipulated in the Supplementary Memorandum on
Economic and Financial Policies, a reform package agreed to by
the government with the International Monetary Fund in exchange
for emergency funds of US$49 billion.
Muslimin said Ernst & Young should have finalized the audit
in late August so that his office could announce the audit result
before the change in the Cabinet at the end of this year.
The minister also announced on Thursday the transfer of the
six timber companies' forest concession rights due to their
alleged KKN practices and forest regulations violations.
They include concession rights held by PT Alas Helau and the
Karya Delta Permai group, both of whose shares were owned by
family members of Soeharto and their business associates.
Redesigned forest concessions will then be placed under the
management of local universities and Islamic boarding schools,
Muslimin said.
Muslimin also said that problems also occurred at plantations
after the ministry looked into the operation of 33 companies in
11 provinces that cultivated an area of 303,000 hectares.
The Salim business group, for instance, has violated maximum
land usage by 40,871 hectares in Riau province and by 18,850 in
Central Kalimantan, the ministry reported.
The ministry also encountered irregularities during land-swaps
procedures for non-forestry activities.
It registered eight companies with indications of KKN, of
which three, PT Semen Cibinong, PT Indocement Tunggal Perkasa and
PT Arha Putra Internasional have been inspected on site.
The three companies were given three months as of Sept. 1 to
solve the matter or their usage rights on forests through the
land-swap procedure would be revoked.
The remaining five companies will also undergo inspections
shortly, the ministry reported.
To further eradicate KKN practices in the Ministry of Forestry
and Plantations, Muslimin said, the government will replace the
Basic Forestry Law 5/1967 with the Basic Forestry Law 41/1999.
According to him, the new law would enable the government to
prevent KKN practices as well as abuses on forest rights
concessions. (03)