Timber firms object to new forestry fee plan
Timber firms object to new forestry fee plan
JAKARTA (JP): The Association of Indonesian Wood Panel
Producers (Apkindo) on Friday balked at the government's plan to
impose a new forestry fee, saying it would place heavy financial
burdens on the timber industry.
Apkindo chairman Abbas Adhar said on Friday that the measure
would hike the wood-processing industries' production costs and
cut profit margins.
"Timber companies will most likely increase log prices to
compensate for the new fee," he said.
Minister of Forestry and Plantations Muslimin Nasution, said
last week the government would impose a new fee on the country's
timber companies to inject funds into local community resources.
He said the fee, to be set at US$2 for every cubic meter of
logs produced by timber companies, would be introduced later this
month or early next month.
Funds raised from the new fee, called the levy and grant, will
be used to improve educational and other resources for local
communities.
The fund will be managed by an independent foundation
currently being set up by the government.
Abbas said current favorable timber prices on the
international market indicated the $2 fee was not overbearing.
"But when log prices fall, an impact will be felt."
The fee will replace the existing fee of Rp 1,000 (12 U.S.
cents) for every cubic meter of timber felled. The fee goes to
local administrations.
Local officials have repeatedly complained that the amount is
too small to develop prosperity for local people, adding that fee
collection is very difficult to control.
In addition to the above fees, timber companies are still
required to pay reforestation fund and forest royalties --
mandatory fees imposed by the government on forest
concessionaires to ensure forests are managed in an
environmentally sustainable manner. The fee amount depends on the
volume and type of timber felled.
Log quota
Director General of Forest Utilization Waskito Soerjodibroto,
said the government set a logging quota of between 20 million and
22 million cubic meters of logs for the 1999/2000 fiscal year.
The amount corresponds to the current fiscal year quota.
He denied concessionaires' allegations that the government was
too slow in approving timber companies' logging plans, causing a
scarcity of log supplies for wood-processing industries.
"Timber companies' logging plans will be approved by April 1.
The delay was caused by timber companies late in submitting their
annual working plan," he said.
Chairman of the Association of Indonesian Concessionaires Adi
Warsita Adinegoro, urged the government to approve the plans as
soon as possible, as any delay disrupted log supplies.
He said in past years, 40 percent of logging plans submitted
by 400 timber companies were approved by the government by March.
So far this year, not a single timber company has seen their
working plan approved.
Government approval of the logging plan determines the annual
logging quota for each timber company. (gis)