Probosutedjo, insolence and the destruction of forests

Meidyatama Suryodiningrat, The Jakarta Post, Jakarta

This nation is learning that with enough determination and a few good men, high-level corruption can be prosecuted.

Nevertheless, we perhaps forgot that 'good' white-collar criminals are just as determined in terms of regrouping, like a snake shedding its skin every so often.

Unfortunately most of us are either too blind or ignorant to realize what is happening, and like buffoons are hoodwinked by their deviousness.

The damage done far exceeds the simple loss of state funds.

Convicted tycoon Probosutedjo may be languishing in a jail, but his activities in the very field he was convicted are continuing stronger than ever.

The half-brother of former President Soeharto was convicted of pilfering Rp 100.9 billion of state reforestation funds in his capacity as a principal of Menara Hutan Buana (MHB).

As part of the requirement for their operating license, MHB was required to spend the funds on replanting and forest management, in order to ensure a renewable supply of raw materials for the company's planned pulp and paper mill.

But the company made false claims about the extent of the area replanted in South Kalimantan under its license (HPHTI) for an industrial timber plantation.

As it turns out, even the areas that were replanted failed to meet the standards of quality demanded by their licensing guidelines, and the bulk of the reforestation financing was pilfered.

Despite Probosutedjo's conviction, MHB is now trying to reassert itself in the Indonesian timber industry under its new name Hutan Rindang Buana (HRB) -- after a divestment of ownership by Probosutedjo -- and is seeking to build a pulp mill in South Kalimantan.

According to NGO sources, United Fiber controls 90 percent of HRB shares, and an Indonesian-born businessman owns 11.2 percent of United Fiber shares.

This businessman is a former partner of Probosutedjo and a nephew of timber baron Prayogo Pangestu, NGO sources say.

MHB's forestry licenses were initially suspended by the Minister of Forestry in 2002, but the license was then handed over to United Fiber that has taken over the plantation and company infrastructure.

The decision of the minister was then taken to court and a ruling last week found the suspension of the license to be invalid.

Nevertheless, in a welcome act of defiance, current Minister of Forestry MS Ka'ban has insisted he would not heed the court ruling.

But in a stunning act of audacity, Probosutedjo has reportedly offered to return over Rp 100 billion to the state if the licenses were renewed.

The failure of MHB in fulfilling its reforestation requirements carries enormous environmental costs, according to sources familiar with the case.

They say large areas of the timber plantation have only patchy forest cover and the resulting watershed degradation now increases the likelihood of fire, mudslides, and flooding while reducing water resources.

On the immediate economic side, the failure to replant leads to a shortage of pulpwood timber, which will become more acute as demand for forest products increases.

The shortage of legal timber entices unscrupulous companies to log illegally in natural forests; forests which will also not be replanted, leading to a vicious cycle of environmental and economic degradation.

By some estimates, as much as 75 percent of the logging carried out in Indonesia is illegal. That virtually guarantees that forestry management practices and reforestation programs will be non-existent in the areas that suppliers are forced to resort to, environmentalists say.

The misappropriation of funds has social and political fallout as well. In the absence of regenerated forests for continued harvesting, these companies find themselves embroiled in land disputes with local communities and agricultural companies.

To supply their needs, pulpwood companies often demand that adjacent land belonging to estate companies and local communities be turned over for exploitation.

The destruction of additional natural forest and animal habitat could be avoided if the current licensing requirements were met and the funds allocated for that purpose had not been stolen, according to one source.

It is time to say enough to such practices -- to such levels of impunity, the destruction of the environment and being conned by clever business schemes. Let's not be fooled again.

By winning the appeal over the suspension of their license, MHB may have won in terms of the law, but it is highly questionable whether its intentions are honorable.