(en) Kalimantan: the rape of the forests

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KALIMANTAN: THE RAPE OF THE FORESTS A selection of articles from Down to Earth newsletters

DtE 32, February 1997

ALL LOGGED OUT!

Further evidence of the crisis in Indonesia's forestry industry is emerging as Ministry of Forestry, Djamaludin Suryohadikusomo, confirmed in October that 60 of the 90 private forest concessions to end in 1996 would not be renewed due to poor management. The 60 concessions will be handed over to the state owned forestry companies Inhutani I-V. Given the appalling state of the forests left in the care of concessionaires, it is not surprising that the Inhutanis are taking over these concessions with reluctance. The private logging companies have stripped the most profitable virgin forests and ignored their reforestation obligations, despite forestry regulations requiring them to implement Indonesia's selective cutting and replanting policy (TPTI). In Central Kalimantan, for example, PT Inhutani III is to develop 2.2 million hectares of timber estates in areas formerly (mis)managed by nineteen concessionaires. The companies, which will form joint ventures with Inhutani, include two of the best known logging concerns in Indonesia, Jayanti and Barito. The others include Tanjung Raya, Dwima, Antang Group and Bumi Indah Raya. Of Inhutani III's new concessions, 7.6% are virgin forests; 75% are logged-over and 17.4% are grassland and scrub. Only 5.7% of the area handed over to Inhutani V was virgin forest. "If forests were managed in a sustainable manner, at least 43% should have been virgin forest", said its President. According to Inhutani III's production director, the company will spend US$5.9 million to replant the forests this year, which will be taken from the reforestation funds, or from profits. "If the reforestation fund is difficult to tap, we'll use 20% of our profit," he said. Clearly, the reforestation fund, which consists of fees collected from timber concessionaires, is not easy to get hold of, despite its huge size -- it reached Rp 880.7 billion last year up from Rp 806.6 billion in 1995. Perhaps this is because large amounts of the fund is being used for purposes other than reforestation - like the destruction of hundreds of thousands of hectares of swamp forest, also in Central Kalimantan, for the million-hectare rice fields project (see DtE 29/30 and 30). Forestry analysts have questioned whether the state-owned companies will be able to manage the forests any better, especially as two of them have less than six years experience. The Forestry Minister stated that 20 million hectares of Indonesia's forests were in a critical state and warned that the proportion could increase rapidly. However, he put most of the blame on shifting cultivators. At a conference on sustainable tropical forestry management, Forestry Department expert, Dr IGM Tantra, warned that Indonesia's natural forests could be completely logged out by 2030 unless the TPTI system was properly practised.

Source: Kompas 23/10/96; Jakarta Post 11/10/96 Jakarta Post 7/12/96, 13 /1/ 97

Indonesia gets $42 million forestry grant from EU

Indonesia has received a 33 million ECU (US$ 42.3 million) grant from the European Union to start a programme in South and Central Kalimantan and to establish a Forest Liaison Bureau. The grant was presented to Forestry Minister Djamaludin in December by EU Ambassador in Jakarta Klaus-Peter Schmallenbach, Swedish Ambassador Mikael Lindstrom and Finnish Ambassador Hannu Himanen. The programme is supposed to help the government develop sustainable forest management and optimal utilisation of forest products. It is also supposed to involve local communities in South and Central Kalimantan, as well as local governments and the private sector. Unfortunately, this community involvement seems to mean imposing changes on their agricultural practices. According to Schmallenbach, it is important to guide local communities in carrying out more productive planting techniques which take up less land and "less temptation for logging". "It is also important to educate the local communities to regard to forests as the most important asset not only for themselves but for their children and their children's children." This last statement would perhaps be more appropriately targeted at the government-approved timber concessionaires, for the devastation they cause in the forests and their total disregard for the welfare of future generations. The current EU-Indonesia forest programme consists of five major projects, including a fire prevention and control project and the controversial Leuser National Park Development Programme. (Jakarta Post 14/12/96)

DtE 32, February 1997

IFC funds Trans-PIR project

The International Finance Corporation, private sector arm of the World Bank, has agreed to provide US $41 million in equity and loans to an Indonesian company to develop oil palm estates and refineries in West Kalimantan. The IFC has also helped the company, PT Kalimantan Sanggar Pusaka, raise a $10 million loan from the German Development Bank. Kalimantan Sanggar is a subsidiary of the forest-based Satya Djaya Raya Group, popularly known as Lyman Group. The company will use part of the loan to develop 34,000 hectares of oil palm plantations under the nucleus estate/smallholder scheme which uses transmigrant families, as well as local farmers. Corporate secretary Indradi Kusuma said the project will help raise the living standards of more than 17,000 rural families. He quoted IFC's director for agribusiness development Karl Voltaire as saying " we are pleased to be associated with a project that has a high development impact." (Jakarta Post 22/11/96) Unfortunately, the project probably will have a high development impact, the negative kind, that leads to explosions of social tension like the recent events in Sambas.

DtE 29/30 August 1996

THE TALES OF TWO BAD CONCESSIONAIRES

Dayak Besar -- out of logs and cash

The Dayak Besar Group controls forest concessions of around 200,000 hectares and a number of timber mills in East Kalimantan. Poor management prompted the government to ban two of its subsidiaries, PT Dayak Besar Vincent Timber Co. and PT Gelora Dayak Besar, from transporting logs and sawn timber from their forest concessions in East Kalimantan to their wood-based industries. Dayak Besar's concessions ended in 1992, but the forestry ministry issued a temporary extension on condition that the Group establish a joint-venture with the state-owned forestry firm. The agreement was cancelled, however, when Dayak Besar closed down its office. The group was declared bankrupt in 1995 with debts amounting to Rp350 billion (US$152 million) of which the majority was owed to state-owned Bank Rakyat Indonesia. It also owes a large amount of money, including unpaid reforestation fees to the government. Business tycoon Probosutedjo (a half-brother of President Suharto) agreed to take over the debt-ridden companies of the Dayak Besar group last year, but in March announced his decision to back out of the deal. His comments give a hint of the havoc caused by the logging company:

"...it turns out I have to pay those huge debts with nothing left of the forests to manage. Where would I get the money?"

(Jakarta post 4/3/96)

Djajanti Group -- soft punishment

In February this year the government announced that it had decided to revoke the licences of three Djajanti Group concessionaires after finding proof that its downstream subsidiary PT Nusantara Plywood was involved in using illegal timber. Nusantara Plywood, based in Gresik, East Java, has also been fined Rp 1.3 billion (US$567,685). The concessions are in Central Kalimantan and cover around 300,000 hectares. Djajanti, owned by Burhan Uray, is one of Indonesia's biggest timber groups. It currently holds 25 concessions which cover 2.8 million hectares of forests in Kalimantan, Maluku and West Papua (Irian Jaya). The West Papua concessions provide logs for a massive plywood mill in Maluku. Revoking concessions, however, is not as bad for the company as it sounds, however. The company will continue operating the concessions under a two-year cooperation agreement with state-owned PT Inhutani III. This is to prevent mass lay-offs of workers and to ensure log supplies to the Nusantara mill. Under the arrangement, PT Inhutani III will take over management of the concessions while logging and other field activities will be carried out by the Djajanti workforce. After the two-year period, the two companies may decide to set up a joint venture. Logs produced under the joint cooperation will supply the Nusantara Plywood plant. Two other concessions (but not those in West Papua) due to expire this year will not be renewed, according to Djamaludin. (Jakarta Post 14/2/96, Republika 14/2/96)

[This was part of a larger report on the state of the forests in Indonesia. Copies of this available on request.]

------------------------------------------------------------------------ Down to Earth International Campaign for Ecological Justice in Indonesia

Carolyn Marr (dte@gn.apc.org)

FREEDOM PRESS INTERNATIONAL http://www.tao.ca/~freedom

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