Minister reveals fraud in timber documents

Minister reveals fraud in timber documents

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
revealed yesterday the discovery of falsified shipment documents
for timber entering Java.

"The false documents have not only brought illegally-cut
timber to Java from other islands but also caused state losses in
the form of uncollected taxes or levies," he told reporters after
a hearing with members of the House of Representatives'
Commission IV which oversees agriculture and forestry.

Djamaludin refused to estimate the amount of financial losses
caused by the contraband trade which apparently took place over a
number of years, but he said that four million cubic meters of
mixed wood and logs entered Java each year.

"Suppose 30 to 50 percent of the timber was not covered by the
proper documents, then there were one to two million cubic meters
of timber entering Java illegally each year," he said.

Djamaludin said the police and the state-owned Perum Peruri,
which prints state documents, were currently studying the case.

"If there is evidence of fraud, then the original documents
issued by the government will have to be changed to avoid further
counterfeiting," he said.

The documents -- called SAKO for mixed wood, and SAKB for logs
-- are needed by forest concessionaires and logging-permit
holders to enable timber to be transported out of their
respective areas to Java, where many timber processing industries
are located.

Detecting

Director General of Forest Utilization Titus Sarijanto said
that indications of fraud were detected about four months ago in
South Sumatra and a similar racket of falsifying documents was
suspected in West Kalimantan, although investigations have yet to
be done.

"We need to be very careful in investigating these cases
because the syndicate operates very discreetly," he said, adding
that there was evidence indicating that the false documents were
printed overseas.

Djamaludin added that illegally-cut timber seized by the
authorities will no longer be auctioned but will be delivered
directly to the state ministry of public housing to build low and
medium-cost houses, as designated in a joint decree issued
earlier this year.

"This way, illegal wood cannot be made legal by smugglers who
pay penalties for their crime," he said.

The joint decree stipulates that the State Housing Company,
Perumnas, does not need to pay the mandatory reforestation fund
and forest royalties.

Forest concessionaires and holders of logging permits are
required to pay contributions to maintain forest sustainability.

Commenting on the amount of reforestation funds collected by
the ministry, Djamaludin said his office has so far accumulated a
total of Rp 3.1 trillion (US$1.4 billion), of which Rp 700
billion was interest.

Djamaludin pointed out that of the Rp 700 billion in interest,
Rp 500 billion will be used to establish at least one million
hectares of rice estates in areas outside Java, to support the
country's self-sufficiency in rice.

Last year, amidst public controversy, Rp 400 billion of the
interest of the funds were used to finance the construction of
the N-250 aircraft by the state-owned Industri Pesawat Terbang
Nusantara aircraft company.

He said that the utilization of reforestation funds are
governed by Presidential Decrees No. 29 and 30, 1990.

"If the funds or interest of the funds are to be used for
other specific purposes (outside forest development), it will be
governed by another presidential decree which does not
necessarily contradict the existing decree," he said. (pwn)