State treasury to control reforestation funds

State treasury to control reforestation funds

JAKARTA (JP): Forestry Minister Djamaludin Suryohadikusumo
announced plans to tighten control of the use of reforestation
funds yesterday by counting them in the state budget.

But he did not rule out allocating a portion of the
reforestation funds to pulp and paper companies.

He said the House of Representatives was deliberating a bill
on nontax revenue, including reforestation funds.

The bill stipulates all nontax revenue shall be transferred to
the state coffers and be accounted for in the annual state
budget.

"Once the bill is passed into law, the government will issue a
regulation on the use and account of the reforestation funds," he
said.

The reforestation funds -- which are raised from
concessionaires -- are currently transferred to the Forestry
Minister's account. The allocation and use of the funds are
governed by presidential decree.

The funds recently became a hot topic after the disclosure
that Djamaludin lent Rp 250 billion (US$108.70 million) of the
funds to PT Kiani Lestari for its pulp and paper factory in East
Kalimantan. The firm is owned by timber tycoon Mohamad "Bob"
Hasan.

Djamaludin said the loan was given to Bob Hasan based on a
presidential decree. But he denied the government was favoring
Bob Hasan, a close friend of the President, saying the funds were
also available to other pulp and paper companies.

Reforestation funds collected last year totaled Rp 880.7
billion, up from Rp 809.6 billion in 1995.

Djamaludin said the bill would allow his ministry to use only
a portion of the funds for reforestation efforts.

When asked if the ministry might lend the funds to pulp and
paper manufacturers, the minister said, "Let us see what will be
stipulated in the government regulations which will implement the
bill after its enactment by the House."

In addition to paying reforestation funds, concessionaires are
also obliged to pay forest royalties. According to a 1967 law,
the royalties have to be transferred to the state treasury.

The government received Rp 592.8 billion in forest royalties
last year, up from Rp 539.3 billion in 1995.

Djamaludin warned concessionaires not to cheat the government
of reforestation levies and royalties by making false financial
reports.

Unlike the current ruling which only threatens cheating
concessionaires with warnings and fines, the cheating companies
face jail terms under the bill.

"The bill threatens any violator with six years jail. If he or
she repeats the violation within one year, they will get jail
terms which are twice as long," he said.

He said the ministry had issued a forestry accounting standard
in 1993 which was made obligatory in 1995 but only 24 percent of
about 480 concessionaires followed the standard.

"Over the past three years several concessionaires submitted
only one or two financial reports to the ministry. Some of them
even have never filed one," he said.

Some companies did not reveal their equity capital in their
reports as required by the accounting standard, he said.

Djamaludin also criticized concessionaires for not being
prepared for the implementation of ecolabeling scheduled for
2000. (jsk)

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