Inhutani IV refuses to pay Aceh bill

JAKARTA (JP): PT Inhutani IV, the state forestry company with large concessions in Sumatra, refused yesterday to pay Rp 3.76 billion ($144 million) demanded by the Aceh provincial administration in local development levies.

Inhutani IV President Abas Ts said the company had never agreed to pay as much as Rp 2,000 per cubic meter of concessions to the Aceh administration.

"Inhutani IV is under strict orders from the minister of finance not to pay any levy that does not have strong legitimacy," Abas said.

Abas cited the minister of finance's 1995 decree which states that management should not respond to any request from within or outside the bureaucracy which could affect its objectivity in making decisions.

The finance minister is the nominee holder of all state-run companies.

The row erupted in July when Aceh Governor Syamsuddin Mahmud wrote to the Minister of Forestry Djamaloedin Soeryohadikoesoemo, demanding a freeze on Inhutani IV activities because the company did not bring any benefit to the province.

Founded in 1991, Inhutani IV runs 224,200 hectares of forest in Aceh, North Sumatra, West Sumatra and Riau. It manages 17 joint-venture timber estates and will develop 15 joint-venture concessionaires in northern Sumatra.

Abas said talks to resolve the row with the Aceh administration broke down and Inhutani IV was now waiting instruction from Minister of Finance Mar'ie Muhammad.

He questioned the Aceh administration's calculations, saying his company had only produced 525,000 cubic meters of wood since it began operation in Aceh in 1992.

"Even if we have to pay Rp 2,000 per meter levy, the total debt will amount to about Rp 1 billion," he said.

The company's present activities in Aceh include replanting 1,100 hectares in the former Olindo and Singkil concessions, maintaining 7,500 timber estates in Aceh Besar, planting 1,100 hectares of mangrove forest in Langsa, East Aceh, developing 1,100 hectares of public forest in Tiro and 1,000 hectares of protected forest in Indrapuri, and some social activities.

The company booked a pretax profit of Rp 6.7 billion ($2.58 million) last year, up from Rp 4.1 billion in 1995. (08)