Indonesian Political, Business & Finance News

Ministry to punish faulty forestry firm

Ministry to punish faulty forestry firm

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo threatened to impose "harsh sanctions" yesterday on the Dayak Besar Group, which is controlled by businessman Yusuf Hamka, for violating forestry regulations.

Djamaludin also replaced the top executive of a state-owned forestry company yesterday due to the firm's violations of forestry regulations.

"We will soon take action against the (Dayak Besar) group because two of its subsidiaries, PT Dayak Besar Vincent Timber Co. and PT Gelora Dayak Besar, have repeatedly violated forestry regulations and challenged the ministry's authority," Djamaludin told reporters after swearing in forestry ministry officials and several top executives from state-owned forestry firms.

The minister announced that he has already issued orders forbidding the two firms from obtaining the necessary permits to transport their logs and sawn timber from their concession areas.

Dayak Besar Vincent Timber and Gelora Dayak Besar both control forest concessions totaling 170,000 hectares in Kutai, East Kalimantan.

Executives of Dayak Besar Group declined to give any comment when they were contacted yesterday.

Sources at the Ministry of Forestry said yesterday that the two firms, which employ more than 2,000 workers, own a plywood mill in Surabaya, East Java.

Minister Djamaludin also said that Dayak Besar closed its headquarters and its plywood mill in East Java this month for unknown reasons.

Djamaludin caused a sensation last year when he succeeded in forcing two timber companies controlled by influential tycoon Prajogo Pangestu to hand over 49 percent of their respective equity shares to state-owned firms in return for the renewal of their forest concessions.

The two Dayak Besar firms repeatedly violated various forestry regulations last year, the minister said, which should have led to the revocation of their concessions.

"But we decided that we should give them a chance to improve their management," he explained. "We also decided that state forestry firms should take over 20 percent of their shares so that our staff could guide them to manage their forests properly."

"Despite initially agreeing to our decision, they refused to cooperate and even prevented four of my officials, who were appointed to join in the their management team, from carrying out the post-auditing of the two firms," Djamaludin said.

He added that the four officials, who were assigned as commissioners and directors of the two Dayak Besar firms, were summoned back to the ministry.

Replacement

In yesterday's ceremony, Minister Djamaludin installed Abbas Ts as president of PT Inhutani IV to replace Hardjito Haknyosubroto, who was held responsible for the forestry violations in North Sumatra.

"Yes," the minister confirmed, "I have replaced the president of PT Inhutani IV because the company was recently involved in a deal which led to the destruction of a conserved forest in North Sumatra."

"Hardjito was not personally guilty of the violation, but he, as the company's president, must take responsibility," Djamaludin said.

He also said that the ministry is still investigating the extent of the damages caused by the company.

Hardjito was not available for comment yesterday.

Djamaludin confirmed that Inhutani IV's deal with PT Permata Hijau Sawit to open palm oil plantations had led to the destruction of a protected forest around the site of the plantations.

The other executives installed yesterday included Mohammad Toha Mochtar, who was appointed as president of Inhutani V, Njasim Nibun Saputra as production director of Inhutani V and Aman Somana as production director of Inhutani IV. Toga Silitonga was installed as chief of the forestry ministry's research and development agency. (hdj)

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