[Kabar-indonesia] Don't Write Off Forestry Firms' US$1.1 Billion Debt, Govt Told

[JoyoNews at aol.com]

The Jakarta Post 
Monday, October 2, 2006

Don't Write Off Forestry Firms' Debt, Govt Told 

Ridwan Max Sijabat, The Jakarta Post, Jakarta

Greenomics Indonesia and the Indonesian Corruption Watch (ICW) 
urged the government Sunday to cancel its plan to write off Rp 1 
trillion (about US$1.1 billion) of the debts of forestry companies.

The two non-governmental organizations argued that the companies, which 
received loans from state-owned banks for forestry sector projects, spent the bulk 
of the money on projects in other sectors. 

They said the write-off would cause huge state losses, injustices and 
corruption in the courts. 

The government's plan to cancel the companies' debt was announced by Forestry 
Minister M.S. Kaban recently after discussion with President Susilo Bambang 
Yudhoyono. Kaban said the companies had proposed the write-off and he would 
facilitate it. 

"We have sent a letter to Finance Minister Sri Mulyani Indrawati, asking her 
to turn down the proposal," Greenomics Indonesia coordinator Vanda Mutia Dewi 
told The Jakarta Post here over the weekend. 

She said it was important for Sri Mulyani to make a public response to the 
proposal because Kaban had signed a memorandum of understanding on forestry 
management with Greenomics and the ICW. 

Kaban has issued a decree on the write-off procedure for forestry companies. 

More than 96 companies, which owe the state Rp 1.08 trillion in total, would 
be eligible for the debt relief on the grounds that they went bankrupt due to 
the economic crisis that hit the country in 1997. 

The government made the loans through state-owned PT Bank Mandiri, Bank BNI 
and Bank Rakyat Indonesia to help the companies reforest their concession areas 
under the industrial forest program. 

Kaban said that just like bankers who received "amnesty" because they could 
not repay their debts to the Central Bank, forestry businesspeople deserved a 
similar privilege. "At least the debtors should be excepted from paying 
interest," he said. 

ICW coordinator Teten Masduki said the scheme proposed by the forestry 
minister was unjust because companies that had profited from illegal logging 
operations and received loans from the reforestation fund would be given a debt 
reprieve. 

"The forestry companies do not deserve such a facility because according to 
an independent audit, the greater part of the loans was used for things other 
than reforestation," he said. 

Data made available by ICW and Greenomics shows that a number of the 96 
troubled companies have debts amounting to Rp 20 billion or more. They are PT 
Inhutani I, Inhutani V, PT ITCI Hutani Manunggal, PT Adindo Hutani Lestari, PT 
Kiani Hutani Lestari, PT Tanjung Redeb Hutani, PT Surya Hutani Jaya, PT Musi Hutan 
Persada and PT Aceh Nusa Indrapuri. 

------------------------------------------
Joyo Indonesia News Service
------------------------------------------