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.