Unpaid reforestation fees reach Rp 170b

JAKARTA (JP): Unpaid reforestation fees have reached more than Rp 170 billion (US$22.6 million) as of October this year, according to a senior official at the Ministry of Forestry.

Director General of Forest Utilization Harnanto H. Martosiswojo said on Wednesday that the timber companies would be given two months from now to settle their debts.

"Timber companies will be given a warning and a two percent fine per month will be imposed. If they fail to pay their debts after two months, their logging contracts will be revoked and the cases will be handed over to the State Receivership Agency," he said.

Harnanto said many timber companies might not pay their obligations on time due to a lack of liquidity resulting from low wood prices and sluggish demand in the market this year.

Minister of Forestry and Plantations Muslimin Nasution has pledged to reveal the names of the timber companies which do not pay the arrears this month.

But Harnanto said that his office was still hesitant to reveal the debtors because its data "is not complete".

"If we accuse the wrong companies we could be sued," he said.

The reforestation fund is a mandatory fee imposed by the government on forest concessionaires to ensure that forests are managed in an environmentally sustainable manner. The size of the fee depends on the volume and type of timber felled.

Since April 1, the government has accounted for reforestation funds collected from timber companies in the state budget as nontax receipts. Previously, the funds were transferred into the Ministry of Forestry's bank account and its allocation was governed by presidential decree.

The ministry expected to collect Rp 1.35 trillion in reforestation funds in the 1999/2000 fiscal year, up 20 percent from the Rp 1.13 trillion estimated this fiscal year.

Earlier this month, the ministry announced that timber companies would be obliged to pay reforestation funds in advance and not after they sold their logs or wood products in a bid to avoid late payments.

The ministry is also considering increasing the fine on late payments to between 1.5 and two times the current banking commercial rates in a bid to force timber companies to pay the fees on time. (gis)