Indonesian Political, Business & Finance News

Ministry seeks compensation for Perhutani to stop logging

| Source: JP:IWA

Ministry seeks compensation for Perhutani to stop logging

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The Ministry of Forestry is demanding financial compensation from the government for state-owned forestry firm Perhutani to stop cutting down Javanese forests to mitigate ever-worsening weather extremes, including the severe drought across Java at present.

The ministry's spokesman Tachrir Fathoni said on Tuesday that compensation for carbon absorption and fees from forest- exploiting companies that used its land, such as tap water firms and power plants, would facilitate Perhutani in focusing on its non-logging business activities, including ecotourism, medicinal plants and beekeeping.

"We think banning Perhutani from its logging activities should be thoroughly calculated economically, socially, and environmentally," Tachrir told The Jakarta Post Tuesday.

He also emphasized that the demand for logs and the derivative products on Java was still high, while many home-based industries relied on local wood.

"If Java tries to import logs from other countries to meet local demand, it will be too expensive," he said.

Besides, the government, particularly the office of State Ministry of State-Owned Enterprises (BUMN) should stop demanding that Perhutani generate more profit and instead consider environmental preservation as one of the company's achievements, Tachrir said.

Separately, Forest Watch Indonesia (FWI) said on Tuesday that the government had to enforce its decision to ban all logging on Java, but also should provide financial incentives for Perhutani to save Java's forests.

"The logging ban for Java is correct, but it is also fair for Perhutani to receive incentives from the government in order to shift its business to something other than chopping down what remains of the forests," FWI executive director Togu Manurung told the Post on Tuesday.

Manurung said the government could provide incentives to Perhutani by allocating reforestation funds and special allocation funds to the company.

Tachrir and Manurung were commenting on the announcement by Coordinating Minister for People's Welfare Jusuf Kalla on Monday that the government had decided to ban logging activities on Java due to the present drought and water crisis that is starting to affect more and more of the 128 million people who call the island home.

Javanese forests now account for a mere 5 percent of total land, far below what 30 percent level that many consider the minimum for maintaining ecological balance, according to data from the Ministry of Forestry.

Perhutani controls all commercial plantations and logging activities on Java. In addition, it also is involved in ecotourism, beekeeping and medicinal plants.

The Ministry of Forestry had earlier given Perhutani permission to process 931,000 cubic meters of natural forest wood this year, down from 1.46 million in 2002.

In addition to the logging ban, the government also urged people to reduce farming on Java and for farmers to do more on other islands in the country.

Manurung went on to say that Perhutani should comply with the government's decision even if demand for wood and its derivatives remained high.

"We know that local demand for wood is still high. The government can import logs to meet the demand, but of course that would be far more expensive, or allow some of the companies that rely on wood to close down," he added.

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