SGS assigned to assess timber companies

JAKARTA (JP): The government has assigned the Geneva-based Societe Generale de Surveillance (SGS) to assess the sustainability of the forest concessions of timber companies which intend to go public.

Minister of Forestry Djamaludin Suryohadikusumo said yesterday that the results of SGS's assessment will be disclosed to the public and submitted to the Capital Market Supervisory Board (Bapepam) for further evaluation.

"It is Bapepam that will decide whether the assessed timber companies will be qualified to make an initial public offering or not," the minister told reporters during a break in a hearing with Commission IV (agriculture and forestry) of the House of Representatives.

Djamaludin reiterated that forest-based companies intending to sell shares to the public are no longer required to obtain a letter of recommendation from his office.

"They are now instead required to have their forest concessions assessed by SGS because their business viability and prospects depend on the sustainability of their concessions," he pointed out.

A timber company planning an initial public offering of shares was earlier required to produce a letter of recommendation from the minister.

PT Artika Optima Inti's initial public offering, scheduled for last June, has been postponed due to the absence of a recommendation.

Djamaludin explained that SGS had been chosen because it has the personnel and ability to carry out the assessment.

"If PT Surveyor Indonesia and PT Sucofindo, for instance, had the personnel and capability to conduct the assessment, I'd welcome them to join. The more surveyor firms involved, the better," the minister said.

SGS is the sub-contractor of state-owned PT Surveyor Indonesia in the conducting of pre-shipment inspection of imports to Indonesia.

Djamaludin added that the assessment of forest concessions is completely separate from the assessment of the business and financial performance of timber companies.

"Obviously, timber firms intending to list their shares on the stock exchanges are also required to make the compulsory public expose of their business and financial performance to investors, securities companies and brokers." he added.

Response

Bapepam and the Association of Indonesian Wood Panel Producers hailed the minister's decision to ease the requirement on timber companies intending to go public, saying the move will encourage more companies to list themselves on local stock markets.

At present only two timber companies are listed on the Jakarta Stock Exchange (JSX) -- PT Barito Pacific Timber and Sumalindo Lestari Jaya.

Djamaludin said three more timber companies -- PT Kiani Lestari, which is controlled by Mohammad Hasan; the Surya Dumai Group, and PT Artika Optima Inti, a subsidiary of the widely diversified Djajanti Group -- plan to go public.

The minister said that although timber companies go public, the government maintains control of their forest concessions.

He reiterated a previous ruling that prohibits timber companies from including their forest concessions in their fixed assets because the forests are owned by the government.

"I don't want our forests to be sacrificed simply for the interest of their shareholders. The government is still empowered to revoke their concessions if their management does not fulfill the rulings on sustainability," Djamaludin added. (rid)

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