Thu, 12 Feb 2004

NGOs urge timber companies to pay their debts

P.C. Naommy The Jakarta Post Jakarta

Environmental organizations and a corruption watchdog said on Wednesday they were giving 601 companies 30 days to pay reforestation funds and royalty arrears or they would announce their names to the public.

The Indonesian Environmental Forum (WALHI), Greenomics Indonesia and the Indonesian Corruption Watch (ICW) also urged the government to take action against the companies, which they said owed total arrears of Rp 1.28 trillion (US$152.38 million).

Of the total reforestation funds and forest resources royalties, 60 percent will go to the central government to fund the national reforestation program, and the rest will go to provincial governments to fund reforestation in the provinces.

With these arrears, the government should be able to rehabilitate about 426,667 hectares of forest, under a cost assumption of Rp 3 million per hectare.

The NGOs noted that the arrears had increased by 36.3 percent from Rp 464.5 billion in 2001 to Rp 1.28 trillion in 2003. Companies in Kalimantan account for 56 percent of this figure, or Rp 1.2 trillion.

Teten Masduki, director executive of the ICW, said the Indonesian forestry sector should ban these companies and their owners.

According to Government Regulation No. 35/2002, a timber company that fails to pay its reforestation funds on time can be fined 2 percent of the total debt per month.

But many companies fail to follow the regulations. The report from the NGOs indicates that seven out of the top 20 companies in arrears have asked the Ministry of Forestry to reschedule their debts.

The executive director of Greenomics Indonesia, Elfian Effendi, said the government could prosecute the companies under Article No. 22/1997 of the Criminal Code.

WALHI said the government had failed to make this case a priority.

"When compared to the Rp 1.7 trillion BNI (Bank Negara Indonesia) case, this case is not too different, so the government should not make it a second priority," said Longgena Ginting, executive director of WALHI.

According to Longgena, about 3.8 million hectares of forest are destroyed each year because of improper logging practices by both legal and illegal loggers.