Perhutani management accused of corruption

Rendi A. Witular, The Jakarta Post, Jakarta

Top officials at the ailing state-owned forestry company PT Perhutani have come under fire after being implicated in a Rp 43 billion (about US$4.8 million) corruption case.

Ministry of Forestry spokesman Tachrir Fathony told The Jakarta Post on Thursday that the case was being investigated by the National Police.

He said the ministry had received a report about the alleged corruption several months ago, but it could not do anything as financial affairs were under the authority of the Office of the State Minister of State Enterprises.

The case began when Perhutani management last year requested permission from the Office of the State Minister of State Enterprises to use part of the company's 2001 net profit (about Rp 111 billion) to finance programs to improve its corporate image.

The Perhutani management wanted Rp 43 billion for the program.

The ministry approved the request and urged the management to use a professional public relations expert, selected through a transparent tender process.

But the project never materialized.

This led to allegations that the funds had been embezzled by Perhutani president Marsanto and his close aides.

The Rp 43 billion amount is close to the Rp 58 billion needed to rehabilitate 30,000 hectares of destroyed forest in Java.

Some employees then reported the Perhutani top management to the police.

The head of the law division at Perhutani, Miftahudin, told the Post that the police had thus far interrogated 14 high- ranking Perhutani officials in connection with the case.

However, he said, the police had yet to summon Marsanto.

A Perhutani official who requested anonymity said he doubted the police would question Marsanto because the latter had bribed a number of senior police officers.

Marsanto told the Post that he was not aware of the corruption case and declined to comment on the accusation.

The government has given Perhutani the task of managing forests in Java.

But many environmentalists have blamed Perhutani for contributing to the destruction of natural forests in Java and Madura due to the company's failure to rehabilitate and sustain its forest resources.

Perhutani is on the verge of bankruptcy, given the fact that its net profit has sharply declined from year to year, reportedly due to rampant corruption.

In 2002, the company's unaudited net profit decreased to Rp 140 billion from Rp 252 billion in 2001.

Forests in Java and Madura total 2.9 million hectares, with 2.6 million hectares under the control of Perhutani.