DIGEST No. 22

Title: Timber for Java, at a price in corruption

Date: 18 September, 1996


Indonesia's dominant position worldwide as a plywood supplier, with
its attendant problems of over-exploitation, has often been
highlighted. Less well understood is the state of the timber
industry for domestic consumption. Indonesian newspapers have
recently brought considerable attention to bear on the corrupt,
uncontrolled nature of that industry, and on efforts to bring it
under control. 

Timber baron Bob Hasan in 1993 estimated that illegal timber, both
for domestic use and export, is costing the government US$3.5
billion a year. Most illegal timber comes to Java from South
Sumatra and Central Kalimantan. North Sumatra is another major user
of illegal timber. 'Illegal' timber may be cut from beyond the
boundaries of a forest concession. More importantly from the
government's viewpoint, no Forestry Fee (Iuran Hasil Hutan, IHH)
has been paid on it, and no Reafforestation Fee. At present, these
fees amount to US$22 per m3, as against a market value of over
US$100 for the timber. The chief mechanism for controlling timber
is the transport permit for logs (SAKO) or for sawn timber (SAKB). 

Forestry Minister Djamaludin Surjohadikusumo and Jakarta Area
Military Chief of Staff Sutiyoso in February said that 70% of the
timber coming into Jakarta (for its housing industry especially)
was illegal, and announced a crackdown. 83 Ships carrying illegal
timber were detained, but little has been heard of the operation
since then. 

Harbour masters are responsible for seeing that the paperwork is in
order, and that barges are not loaded with more than is stated. The
local military are a key component of special Integrated Forestry
Security Teams (TPHT), formed two years ago to crack down on timber
corruption. But they are only equipped with one small speedboat in
even the worst places - such as the harbour towns of Kotawaringin
(Barat and Timur) and Kapuas, both in Central Kalimantan.
Furthermore, Forestry Minister Djamaludin said yesterday that
cooperation between forestry officials and the military through
TPHT was poor in the regions, due to 'deviations by officials'.

Tens of thousands of cubic metres of 'unclaimed' logs and planks
were found by conservation officers (BKSDA) in South Sumatra in
May, but no arrests were made. The local military a little later
found another 62 000 unclaimed logs and 45 illegal sawmills in
South Sumatra in a week, but again no arrests were made.

Illegal logs are usually floated out to sea at night and loaded
onto waiting barges. One barge holds 2500-3500 cubic metres of
logs, now worth almost half a million US dollars in Java. Sawn
timber is carried to Java in small sailing ships with loads of 50-
100 m3.

The coast guard in Sampit, Central Kalimantan, managed to seize one
barge of logs in June only because a navy ship was patrolling in
the area. Other barges escaped. 

The detention of a loaded barge often means little. Mid August six
barges loaded with logs seized by TPHT 'disappeared' from the pound
at Kotawaringin. A few weeks later another nine barges disappeared
from detention off Samadu, Central Kalimantan. Local officials say
(anonymously) that the industry has strong connections in Jakarta.

Even when illegal timber is seized properly, it is often resold. So
22 000 cubic metres were reported 'disappeared' from the
prosecutor's control in Kotawaringin Barat, and 3000 cubic metres
from Katingan Hilir, in June. 

One determined recent effort is apparently still going on - since
mid-June authorities in Cirebon on Java's mid-North coast, a major
entrepot for illegal timber, have inspected every incoming cargo of
timber. This has meant long delays, and also a sudden drop from 100
timber ships a month to about 40 coming into Cirebon. But in other
ports such as Pati and Semarang ships unload sawn timber from
Kalimantan without even reporting to the authorities.

In September, under World Bank pressure, the government announced
a 10% rise in the IHH, but timber businessmen in South Sumatra said
the collection mechanism was so weak they preferred to stay with
the accepted bribing system.

When police in July tried to crack a ring based in Surabaya
producing hundreds of false SAKO and SAKB, robbers broke in and
stole much of the evidence from a safe in the Forestry Office in
Surabaya. It was regarded as an inside job. Two of the eleven
suspects fled to Kalimantan.

These incidents demonstrate that serious efforts are being made to
gain control over the industry, probably not so much to stop
degradation of forests as to increase government revenue. But, as
one Central Kalimantan timber official said in June, only a top
military effort directed from Jakarta can do that.


Gerry van Klinken, editor, Inside Indonesia magazine.

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