Govt sets up new agency for fores industry

Rendi A. Witular, The Jakarta Post, Jakarta

The Ministry of Trade and Industry and the Ministry of Forestry agreed on Monday to set up a new agency to help resolve the various problems facing the country's ailing forestry-based industry.

Antara news agency said the main missions of the new agency would be to seek ways to boost the dwindling export performance of the forestry-based industry, and to resolve the raw material shortage hampering the industry.

It added that the agency would also help find ways to prevent the country's natural forests from further degradation and to protect the environment.

The new agency, to be officially unveiled next month, will be called the Agency for Forestry-Based Industry Affairs and Sustainable Raw Materials. It will consist of top officials from the two ministries, and representatives from the industry.

Sources say that Minister of Trade and Industry Rini MS Soewandi and Minister of Forestry M. Prakosa had been locked in a heated debate over policy gaps between the two ministries before agreeing to set up the agency.

Rini was quoted by Antara as saying that one of the agency's main jobs would be to help curb illegal logging, which has caused both environmental degradation and damage to the forestry-based industry, whose exports have been badly affected.

Locally made plywood, for example, is more expensive than products from overseas plywood manufacturers, who can buy illegally cut logs smuggled out of Indonesia at much cheaper prices.

Nana Suparna, an executive from the Indonesian Society of Forestry and the Indonesian Forest Estate Association, said industry players welcomed the planned agency.

"At least we can use the agency to hear out our problems," he said.

Meanwhile, a source said those in the industry were hopeful the agency could persuade the Ministry of Forestry to drop a planned logging moratorium, which would drastically limit the supply of logs for the forestry-related industry.

The Indonesian Wood Panel Association has predicted that some 75 percent of plywood companies will go bankrupt if the policy is implemented.

The new policy is currently scheduled to become effective early next year.