Scoring system for bids in logging auction

JAKARTA (JP): A scoring system will be used in awarding logging contracts to ensure only parties displaying a strong commitment to protecting the environment and engaging participation of local people will win, a minister said yesterday.

Minister of Forestry and Plantations Muslimin Nasution said timber companies and cooperatives would be scored in the auction according to their status and ability to meet several requirements, such as involving local people in management of concessions.

"For example, cooperatives, small companies and timber companies with a good track record will be given a higher score. Whoever gets the highest score will get the logging contracts," he said in a discussion on cooperatives' roles in the reform era.

The system is important to ensure that bidders with weak financing, such as cooperatives and small companies, would also have an equitable chance, he added.

The minister said the government initially planned to issue a conventional bidding system in granting new licenses, but decided against it because it would only benefit big companies.

"We delayed the auction program because we wanted the system to also benefit small bidders. But, don't worry, the regulation on the auction will be issued next month."

Last month, Muslimin said the government was considering limiting corporate and personal ownership to prevent a concentration of forestry assets in the hands of a few companies.

He said open bidding would apply only to areas left vacant by suspended timber companies because the government would not open any more natural forest to logging operations.

The auction of forest concessions is stipulated in the Supplementary Memorandum on Economic and Financial Policies, a reform package agreed to by the government with the International Monetary Fund (IMF) in exchange for emergency funds of US$43 billion.

Indonesia was initially scheduled to introduce the auction system by the end of July. But in the latest memorandum agreed on with the IMF, the plan is rescheduled until the end of this year.

At least 423 private companies are currently involved in logging activities on 61.7 million hectares nationwide.

The government first began to award forest concessions to private companies under the 1971 Forestry Law, which granted holders the sole right to cultivate and exploit forests in their concession areas. (gis)