Two plywood companies shut down, more to follow

Rendi A. Witular, The Jakarta Post, Jakarta

The Ministry of Forestry has revoked the licenses of two privately-owned plywood manufacturers for utilizing illegal logs and violating production capacity limits.

The ministry is expected to prohibit more forestry-related firms from operating this year after it completed an inspection of some 44 companies, which are mostly engaged in plywood manufacturing.

Minister of Forestry Mohamad Prakosa told reporters on Monday that the license revocations were part of the ministry's policy to punish dishonest companies, which have long been blamed for the depletion of the country's natural forests.

"We will strictly evaluate and supervise the operations of forestry-related companies. Our teams will check the origin of their raw materials, production systems, output, licenses, machinery, labor conditions and their debts," said Prakosa.

The two companies whose licenses were revoked are plywood producers PT Wana Rimba Kencana in East Kalimantan and PT Benua Indah in West Kalimantan.

According to the ministry, Wana Rimba was suspected of using illegal logs for its raw materials while Benua Indah was accused of unilaterally increasing its production capacity without any permission from the Ministry of Forestry.

Prakosa said the two companies were now being investigated by the National Police and the Attorney General.

The two firms were inspected by a new ministry watchdog called the Revitalization of Forestry Sector Industries Task Force, which was established under a ministerial decree issued in November last year.

The main job of the team is to ensure that forestry-related firms operate in accordance with the law. By the end of this month, the task force will have inspected another five forestry sector companies in Kalimantan and Sumatra.

The country's forestry industry has long been blamed for the rapid acceleration of deforestation as the installed capacity of the industry had soared to an alarming level of between 60 and 70 million cubic meters a year.

Although since the late 1990s economic crisis actual production levels have dropped to around 30 million cubic meters per year, this figure was still much higher than the permitted raw materials supply of around 12 million cubic meters per year.

This incredible discrepancy between supply and demand, which devours wood much faster than forests can grow, is the main reason behind illegal logging.

Ruster

Govt to auction concessions

The government will auction at least 100,000 hectares of forest concessions formerly controlled by 14 industrial timber plantations, or what are locally known as HTI, whose licenses had been revoked by the Ministry of Forestry.

Minister of Forestry M. Prakosa said the concessions slated to be auctioned were those located in remote areas and where the forest conditions could no longer be sustained.

The 14 concessions cover an area of around 1 million hectares, scattered across the provinces of Aceh, North Sumatra, Lampung, East Kalimantan, West Kalimantan, South Kalimantan and Central Sulawesi.

Millions of ex-HTI concession areas will likely be auctioned to private firms as the ministry is scheduled to revoke another 56 concessions this year. -- JP