Indonesian Political, Business & Finance News

New forest areas for profiteers?

| Source: KORAN TEMPO

New forest areas for profiteers?

From Koran Tempo

Several days ago, the government issued two important decrees for the integrated forestry sector (SKT), which covers activities from legal logging under forest concessions (HPH) to wood processing. First, industries using raw materials from unspecified sources are to be closed. Second, industries using limited available raw materials are to be reduced in their installed capacity.

SKT materials are derived from HPH. It is very easy to take action against SKT because the domiciles of integrated forestry companies are clear. Even by ignoring corporate legal certainty, a forestry minister can whack -- and has knocked down -- almost 100 forest concessionaires already fulfilling requirements for permit extension, including the payment of costs and HPH contributions, by refusing to sign extension documents for reasons of performance review and inspection of the volume of standing trees.

Therefore, the nearly 100 concessionaires are banned from logging, meaning that SKT's material shortage is not only due to corporate failure, but also results from the minister's legal infringement.

Another cause of material shortage is concessionaires' operational shutdown owing to their inability to respond to the growing public demand in the last four-year period of reform.

In the catchment area of Kahayan, Central Kalimantan, five concessionaires have been forced to discontinue their operations in the last several months. Three others keep selling their logs to unselected buyers.

There is fear that those in the catchment areas of Barito, Kapuas, Katingan and Mentaya may have to end their business as well. What is the minister's view about the lack of materials caused by the breach of legal provisions and the unreasonable public demand?

The hundreds of idle HPH areas will expand the forest area for illegal logging by profiteering financiers. While the forestry minister and local communities have "succeeded" in dealing a hard blow to HPH/SKT companies, the minister remains helpless in the face of financiers and smugglers.

DEHEN BINTI

Banjarmasin, South Kalimantan

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