ICTI takes over Kayan's concessions

ICTI takes over Kayan's concessions

JAKARTA (JP): The Ministry of Forestry has transferred 290,000 hectares of forestry concessions previously held by plywood maker PT Kayan River Timber Product in East Kalimantan to PT International Timber Corporation Indonesia (ITCI).

"We have to execute the transfer because Kayan River's management of the concession was unsound," Head of the East Kalimantan office of the Forestry Ministry, Walter Nadapdap, was quoted as saying by Antara in Samarinda, East Kalimantan on Tuesday.

"Photographs show that the concession no longer has a virgin forest area," Nadapdap said, adding that the government had not approved Kayan River's logging plans for two years because of several violations.

The official did not elaborate which forestry regulations the company had supposedly violated. Nadapdap only said that the Kayan River's concession rights would expire this year.

Indonesian regulations stipulate that all forests are state property but can be cultivated by the private sector for a limited time and under tight selective-cutting regulations.

Kayan River is controlled by plywood tycoon Yos Soetomo, who was charged in the 1980s with tax evasion, corruption and smuggling. He was eventually acquitted under an unexpected ruling by the Supreme Court.

ITCI is jointly owned by the Army's Kartika Eka Paksi Foundation, timber baron Mohammad (Bob) Hasan, the ruling Golkar faction, and several foundations headed by President Soeharto and the Bimantara Citra Group, which is chaired by one of President Soeharto's sons.

According to available data, ITCI currently controls concessions of more than 500,000 hectares in East Kalimantan. The company has also won praise from various officials and ecological experts for its sound management.

"We picked ITCI because it has a good record in forestry management," Nadapdap insisted.

ITCI, according to the report, would start managing the concessions next year by cooperating with the state-owned PT Inhutani I.

The report also said that Yos Soetomo would be allowed to maintain some stakes in the concessions so he could continue to procure raw materials for his plywood plant in the area.

Soetomo denied any wrongdoing.

"The takeover has been planned for a long time and I did not commit any mistakes," he was quoted as saying.

Soetomo also said that the takeover agreement will not lessen his right to secure raw material for his plywood mill, which employs almost 5,000 workers. (hdj)