No new forest concessions to be awarded: Minister
JAKARTA (JP): Minister of Forestry and Plantations Muslimin Nasution said yesterday that the government would grant no new forest concessions in order to prevent further deterioration of the country's forests.
The minister said that logging contracts would be limited to areas whose concessions had been revoked by the government.
"The open bidding system for such forest areas is being prepared," Muslimin told journalists.
He said that adopting an open bidding system to appoint forest concessionaires would help to ensure transparency in the management of the country's forest resources.
The auction of forest concessions is stipulated in the Supplementary Memorandum on Economics and Financial Policies, a reform package agreed by the government with the International Monetary Fund (IMF) in exchange for a US$43 billion bailout package.
Under the memorandum, Indonesia is supposed to introduce the auction system by the end of this month.
"The bidding system will be designed in a such way as to prevent the concentration of forest concession ownership in only a handful of big companies," Muslimin said.
The government first began to award forest concessions to private companies through the 1971 Forestry Law, which granted concessionaires the sole right to exploit and cultivate forests in their concession area.
Private concessions -- which cover more than 61 million hectares of forest -- are controlled by 50 leading groups, including the Kalimanis Group owned by Mohammad "Bob" Hasan, Barito Pacific Timber owned by Prajogo Pangestu, Sujono Varinata's Djajanti Group, PT Alas Kesuma owned by Handjaja and Nana Suparna and the Mercu Buana Group owned by Probosutedjo, Soeharto's half-brother.
Informed sources say most of the forest concessions are also partly owned by Soeharto's children.
In a related development, about 300 environmentalists staged a demonstration at the ministry Thursday. They demanded Muslimin replace the existing forestry regulations, which they claimed only benefited a handful of companies, mostly owned by the former leader's family and friends.
The protesters, wearing green headbands, chanted slogans and carried banners calling on the government to use the proceeds of the country's forest resources for the interests of the whole of society, not just for a small clique.
Meanwhile, a group of forestry businesspeople announced yesterday the establishment of a new forestry organization called the Indonesian Forestry Society for Reform (MPI Reformasi) to replace the existing MPI, an organization once controlled by Soeharto's long-time crony Bob Hasan.
The new organization pledged to help the Ministry of Forestry manage the country's forests in an environmentally sustainable manner which would benefit locals, and to abolish several levies imposed by Bob Hasan's MPI which they said burdened timber companies.
The new organization, headed by Sofyan Siambaton as the general chairman, said that it had named the minister of forestry and plantations as its patron, and named the ministry's inspector general, Hariadi Dharmawan, and former directors general Hendarsun S. Sanusiputra and Titus Sarijanto as its advisors.
Forestry experts and the presidents of state timber companies PT Inhutani I to V are named on the lists of members.
Other key executives of the MPI Reformasi include chairmen Akie Setiawan, Soetono, Moh. Toha and Aris Adhianto and Zain Masyhur as the secretary-general.
MPI is a holding (umbrella) organization of all forest- related organizations, including the Association of Indonesian Wood Panel Producers (Apkindo), the Association of Indonesian Concessionaires (APHI) and the Indonesian Saw Mill Association (ISA).
MPI under Bob Hasan and its subsidiaries have been criticized for their crony-capitalism and rent-seeking practices.
The head of the new organization said that it was scheduled to meet Muslimin next Wednesday. (gis)