Scoring system for bids in logging auction

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)