Timber firms slam govt's new reforestation ruling

Timber firms slam govt's new reforestation ruling

JAKARTA (JP): The country's timber companies have voiced
criticism of the government's new policy of obliging them to make
huge reforestation fund payments prior to the commencement of
their operations, saying that the policy will bankrupt most of
them.

Indradi Kusuma, president of PT Erna Djuliawati, said that the
government's plan to issue a ministerial decree obliging timber
companies to make advance payments worth three years of
reforestation fund contributions would severely damage the
already-struggling timber companies.

"We really don't know how to raise the huge amounts of money
needed to cover these massive new reforestation fund payments,"
Indradi told reporters at a media gathering.

Indradi said that every timber company would find it difficult
to find the sums of money required under the new ministerial
decree.

"In fact, the (reforestation) payments will be much higher
than our operating costs per year," he said.

Minister of Forestry Marzuki Usman emphasized on Wednesday
that the new ruling on reforestation funds was expected to take
effect within two weeks.

The new reforestation fund is aimed largely at cracking down
on illegal logging activities carried out by "unscrupulous forest
concession holders", Marzuki claimed.

"We want to stop the damaging impacts of logging activities on
the forests. Around 30 million hectares of forest have been
damaged, while another 55 million hectares are now in critical
condition," Marzuki said.

Observers said the government's current aggressive measures to
contain illegal logging in Indonesia were closely related to the
pressures being exerted by the country's creditors, including the
World Bank, the United Nations Development Program, and the Paris
Club of creditor nations.

Combating illegal logging is one of the requirements set by
these organizations for Indonesia to continue to be able to
access loans.

Criticism of the new ruling has also been aired by the
Association of Indonesian Forest Concession Holders (APHI).

The association warned last week that the new ruling could
lead to the closure of many timber companies.

APHI, which represents around 350 timber companies, said the
closure of the timber companies would leave around four million
workers jobless.

"The government will also lose around $8 billion in foreign
exchange earnings from the forestry sector," it added.

But Marzuki was unfazed by the association's warning.

"We don't care if they are going to close down because of the
ruling.

"They can look for other jobs instead of logging and hunting
in the forest, activities which will only worsen the country's
forestry situation," Marzuki said.

Marzuki however believed that the new ruling would only lead
to timber companies exercising more care in the conduct of their
operations rather than bankrupting them.

As such, he said he was optimistic that the government would
be able to collect greater revenue from the industry next year.

The ministry proposed a Rp 2.8 trillion budget for 2002 to the
House on Wednesday, representing a 30 percent increase on the
estimated Rp 2.05 trillion budget for this year.

"We estimate that we will raise about Rp 5.5 trillion in total
revenues. Next year's revenues will come from the reforestation
fund at Rp 3.9 trillion, provision for forest resources (PSDH) at
Rp 1.5 trillion, and other levies and fees at around Rp 63
billion," Marzuki said. (03)