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)