Three of Djajanti's concessionaires revoked
Three of Djajanti's concessionaires revoked
JAKARTA (JP): The government has decided to revoke the licenses of three Djajanti Group concessionaires after finding proof that its wood-based industrial subsidiary, PT Nusantara Plywood, was involved in selling illegal timber.
Minister of Forestry Djamaludin Suryohadikusumo, who made the statement in a hearing with members of the House of Representatives yesterday, said Nusantara Plywood has also been fined Rp 1.3 billion (US$567,685) for its misconduct.
He added, however, that the three concessions would continue to be operated in cooperation with the Djajanti Group under joint operation arrangements with state-owned PT Inhutani III to prevent mass layoffs and to ensure log supplies to PT Nusantara Plywood.
In addition, he said, the terms of two other forest concessions held by Djajanti, which are scheduled to end this year, will not be extended. They will instead be managed by the ministry's state-owned firms.
Nusantara Plywood, which is based in Gresik, East Java, came under public scrutiny last year after the government suspected the firm was fencing illegally-felled timber.
Under Ministerial Decree No. 393/1994 the government can revoke the licenses of concessionaires related to wood-based industrial firms if the latter are found to have bought illegal timber for its supplies of raw materials.
Shortly after announcing the allegations last year, the government issued a decree stipulating that Djajanti was no longer allowed to self-assess its logging documents, but had to undergo assessment by officials.
Djamaludin said the fine against Nusantara Plywood was determined last December and the company settled the payment last month.
According to government regulations, the fine is 10 times the amount of reforestation fees and forest royalties which should have been paid on the value of the illegal timber.
Djamaludin yesterday refused to disclose the names of the delinquent concessionaires, but acknowledged that all three were based in Central Kalimantan and controlled a total concession area of about 300,000 hectares.
Djajanti, which is owned by businessman Burhan Uray, currently holds 26 concessions which manage 2.8 million hectares of forests in Maluku, Irian Jaya and Kalimantan.
Djamaludin said the group's concessions in Irian Jaya, which provide raw material supplies for its wood-based industrial firm in Maluku, will not be revoked.
"Djajanti has accepted the government's ruling and a decree on the revocation will soon be issued," he said.
He said the three concessions will later be operated by Djajanti under a two-year joint operational agreement with state- owned PT Inhutani III.
Under the joint operation, Inhutani will handle management of the concessions, while logging and other field activities will be carried out by employing Djajanti's workers and equipment.
After a two-year period, Djajanti and Inhutani may decide to set up a joint venture, while the workers may choose between working for the joint venture or joining Inhutani.
"Nusantara Plywood will be guaranteed a sound raw material supply because the timber (from the joint venture) will be prioritized for it," he said.
"We will try to prevent as much as possible any negative effects which could result from the revocation of the concession licenses," Djamaludin added.
Soejono Varinata, a member of Djajanti's board of directors, when contacted by The Jakarta Post yesterday, refused to comment. He affirmed, however, that he would abide by the government's ruling.
Responding to questions on PT Sumber Mas, which was also accused last year of fencing illegal timber, Djamaludin said the government's inspection team found no evidence that the company had engaged in any illegal timber trade.
He said that based on post-audit checks by the government's investigation team, Sumber Mas, which is also located in Gresik, only under-invoiced its documents. As a result, it was required to pay a fine of Rp 166 million. (pwn)