Timber firm faces lawsuit after monopoly allegations

Timber firm faces lawsuit after monopoly allegations

Haidir Anwar Tanjung, The Jakarta Post, Pekanbaru, Riau

A timber company is facing a Rp 100 billion lawsuit over charges
of monopolizing timber supplies to PT Riau Andalan Pulp and Paper
(RAPP), one of the largest pulp and paper companies in Southeast
Asia.

Chief commissioners of PT Punty Group Jupri Zubir said on
Thursday that it would sue PT Anugrah Nusantara Lestari, a
subsidiary of the giant PT Raja Mas Garuda Group, under
antimonopoly legislation.

"We are taking legal action so that PT RAPP will revise its
policy of appointing PT Anugrah as the sole supplier of its raw
materials," Punty Group lawyer Firdaus Basir said.

"Such a monopoly practice causes unhealthy competition."

Firdaus said PT Anugrah only received raw materials from
companies in partnership with PT RAPP and others owned or linked
to certain officials, while supplies from other firms were
ignored.

In the lawsuit, Jupri would demand that the Jakarta-based
Anugrah pay Rp 100 billion in compensation for financial losses
to local timber firms, which were caused by the alleged monopoly.

"If we win the court battle, we will donate the money to flood
victims and for the construction of houses of worship in Riau,"
he added.

Apart from practicing a monopoly, PT Anugrah bought timber
from local firms at cheaper than normal prices, he said.

Citing an example, Jufri said PT Anugrah bought one ton of
wood from a local timber company for only Rp 165,000, but it sold
it to PT RAPP for up to Rp 300,000.

"As PT Anugrah supplies some 1,000 tons per day, it can
collect Rp 1.5 billion in profit daily," he said, accusing PT
RAPP of being behind this pricing game aimed at pressing wood
prices as low as possible.

PT RAPP's general manager of social security and licenses
Paullin Batubara denied that her company only wanted to buy wood
from PT Anugrah.

She said PT RAPP allowed any timber firm to sell it their
products, adding that her company had established partnership
cooperation with 19 companies, 14 cooperatives and others.

Paullin said her company rejected buying raw materials from PT
Punty Group because it was too far to transport products to PT
RAPP from Jufri's base in Rokan Hulu regency, Riau.

"In the future, we can buy timber from PT Punty Group if
transportation facilities are developed. For the time being, we
only receive wood coming from locations close to our company,"
Paullin said.

However, Jufri countered, questioning why PT RAPP bought wood
from the Sijunjung area in West Sumatra province, which is
located further away than his company.

"Since November last year, we have submitted a proposal to
supply timber to PT RAAP, but it has always been rejected for the
reason of distance.

"But it is strange why wood products from Sijunjung are
received only because their owners are influential figures in the
Indonesian Timber Business Association (Apkindo)," he said.

Meanwhile, local environmentalists have urged the Riau
administration to forbid RAPP, located in Palalawan regency, some
75 kilometers east of the Riau capital of Pekanbaru, from
increasing its annual output because it would adversely damage
the environment.