Reforestation funds will be included in state budget
JAKARTA (JP): Reforestation funds will be included in the state budget for the 1998/1999 fiscal year, which will be unveiled by President Soeharto tonight, a minister said yesterday.
Minister of Forestry Djamaludin Suryohadikusumo said that next fiscal year, which will start April 1, reforestation funds would be part of state receipts from nontax sectors.
"The reforestation funds will be accounted for in the state budget so the funds can be used by other related institutions in managing forests and other natural resources in a sustainable manner," the minister said in a media conference.
At present, the reforestation funds are managed by the Ministry of Forestry, but are not accounted for in the state budget. Their utilization, therefore, escapes legislative supervision.
According to Presidential Decree No. 29/1990, reforestation funds collected from levies on forest concessionaires must be used to develop forests and rehabilitate land.
The funds became a hot topic last year after the disclosure that Djamaludin lent Rp 250 billion (US$41.67 million) of the funds to PT Kiani Lestari -- a company owned by timber tycoon Mohammad "Bob" Hasan -- for its pulp and paper factory in East Kalimantan.
Earlier last year, many observers and environmental organizations chastised the government after it ordered that some interest from the funds -- amounting to more than Rp 400 billion -- be used to aid state-owned aircraft manufacturer PT IPTN.
Reforestation funds collected in 1996 totaled Rp 880.7 billion.
Djamaludin said the change would allow the government to tighten control of the use of reforestation funds.
He also announced that the government had issued a presidential decree in setting reforestation funds in rupiah instead of U.S dollars to provide timber companies more certainty in the current monetary crisis.
According to Presidential Decree No. 53/1997, dated Dec. 31, reforestation funds will be charged in rupiah. The decree has been in effect since Jan. 1.
The switch in the currency of payment was necessary due to the fluctuation of the rupiah against the U.S. dollar, Djamaludin said.
"The change will ensure certainty for timber companies and also encourage forestry sector exports," he said.
Previously, the government charged $16 for every cubic meter of forest leased to concession holders for the reforestation funds.
Djamaludin declined to give the amount of reforestation funds kept by his ministry, but said as of September last year the reforestation funds collected from the country's forestry companies totaled about Rp 2 trillion.
Most of the funds are kept in the country's seven state-owned banks, including Bank Rakyat Indonesia, Bank Negara Indonesia, Bank Bumi Daya, Bank Tabungan Negara, Bank Pembangunan Indonesia, Bank Dagang Negara and Bank Ekspor Impor Indonesia.
Djamaludin said the change in the reforestation fund fees would be valid for future payments.
Unpaid fees from previous months would still be charged in dollars, he added.
Under the new decree, the fee set for meranti wood is Rp 48,000 per cubic meter in Kalimantan and Maluku, Rp 42,000 per cubic meter in Sumatra and Sulawesi and Rp 39,000 per cubic meter in Irian Jaya, and East and West Nusa Tenggara.
Djamaludin said the fees set in Kalimantan and Maluku were higher than other areas because the two areas produced better quality meranti.
The government will not charge any fees for wood chips and logs with a diameter less than 29 centimeters for timber companies located in some provinces which do not have pulp and plywood factories.
Djamaludin said the new decree would be valid until further notice.
"We will review the decree if there is any new economic developments," he said. (gis)