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Great Lakes Article:

Logging ban pleases environmentalists but upsets pulp industry

Rendi A. Witular, The Jakarta Post, Jakarta
07/01/02

The government's plan to temporarily ban logging in natural forests has been praised by environmentalists but upsets industry players who fear the policy will have a big impact on their businesses.

The Ministry of Forestry is reportedly drafting a decree on the logging moratorium's details following the issuance of governmental regulation No. 34/2004 on June 8, which authorizes the ministry to impose the moratorium.

"We fully support the plan as it will protect our forests, which have suffered major damage in the past," Agus Purnomo, director executive of World Wild Fund (WWF) for the Jakarta branch, told The Jakarta Post over the weekend.

Agus maintained that the new policy was not aimed at hurting forestry-based businesses, but at forcing them to take more care of the environment in their operations.

"The government regulation emphasizes the use of wood from forest estates as raw material for the businesses," said Agus.

Today, despite having been given concessions for large industrial timber estates (HTI) timber and pulp factories prefer to take their raw material from natural forests rather than planting trees on their concessions.

The ministry has thus far allowed the practice to continue by providing them with logging licenses (IPKS).

Many forestry-based businesses take their raw material from natural forests because it is much cheaper than buying logs grown on timber estates or than the expenses they would incur to develop forests on their concessions.

"Pulp factories would not be affected by the moratorium if they had developed their forests long ago and had not heavily relied on natural forests.

"They should have developed forest estates before setting up factories," said Agus.

Based on joint research by WWF and the Center for International Forestry Research (CIFOR), of the 120 million cubic meters of logs used by the pulp industry during 1988-2000, only 10 percent was harvested from forest estates.

Statistics of the Office of the State Minister of the Environment show the rate of deforestation in the country reaches between two million and 2.4 million hectares a year.

The secretary-general of the Pulp and Paper Association, Kahar Haryopuspito, said the logging moratorium would deal a heavy blow to the industry as it would result in a shortage of raw material.

"The moratorium is a serious threat to the industry. And this is deplorable given the fact that world demand for pulp increases each year, and the pulp industry has handsomely contributed to the country's foreign exchange earnings," said Kahar.

Despite the economic crisis, the country's pulp and paper industry has progressed well over the past five years. Exports of pulp and paper products reached US$3.5 billion in 2000, up from $2.7 billion in the previous year. Some 60 percent of the industry's output is exported, while 40 percent is sold at home.

Meanwhile, pulp industry analyst Gatot Ibnusantosa warned that if the government realized its moratorium plan, the country's pulp and paper output could fall this year.

"The ban will, of course, have a severe impact on the industry. The industry will have to reduce its capacity or even import raw material, which will render their products uncompetitive against those produced in other countries," said Gatot.

Gatot added that the government should find a solution that would protect the businesses as well as the country's forests.

"For instance, if the government wanted the pulp industry players to rely on forest estates, the government should facilitate licensing for forest estates," he said.

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