Indonesian Reforestation Fund Confiscated

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WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS

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Forest Networking a Project of Ecological Enterprises

http://forests.org/

6/25/98

OVERVIEW & COMMENTARY by EE

The Indonesian forest expanse has been plundered for the benefit of a

very few, with consequences for generations to come. Following is

coverage of confiscation of the "reforestation" fund that was

apparently used for everything but its purpose.

g.b.

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Title: Reforestation funds confiscated from Suharto-linked firms

Source: Agence France-Presse

Date: June 25, 1998

JAKARTA, June 24 (AFP) - Indonesia's new government has confiscated

millions of dollars of reforestation funds from firms associated with

former president Suharto, a senior minister said Wednesday.

Forestry and Plantations Minister Muslimin Nasution said the funds had

been retrieved following an investigation into the way the previous

administration had re-routed money into Suharto-linked firms.

Nasution said a probe had failed to find incidents of diversion of

funds, and "we have already been able to retrieve and suspend the ones

that were not yet used."

There has been mounting pressure for the government to investigate the

wealth of Suharto and his family. Critics accuse the family and

associates of having enriched themselves during his 32-year rule which

ended on May 21 when Suharto stood down.

Nasution said among the funds retrieved was 80 billion rupiah (5.4

million dollars) in credit awarded to Suharto's grandson Ari Sigit for

a fertilizing project.

He said the previous minister had deposited the money at an interest

rate of 16 percent, with the earnings later loaned to Sigit at an 18

percent annual interest rate.

"This (fund) is not lost because we have retrieved it," he said.

He also said a 200 billion rupiah (13.4 million) reforestation fund

that was going to be awarded to a firm owned by Muhammad "Bob" Hasan,

Suharto's timber tycoon golfing buddy and a former trade minister, had

been withheld.

"That fund was not yet used, so because of that we have held it back,"

he added.

The majority of the shares in Hassan firm, PT Kiani paper

manufacturing, are owned by Suharto-linked foundations.

A huge proportion of reforestation funds had reportedly been rerouted

into the national airplane manufacturing company, PT IPTN, during the

Suharto administration.

But Nasution said his ministry was still checking on whether or not

those funds had been used "for other purposes including for IPTN and

the buying of shares into PT DSTP."

PT DSTP is a company formed and chaired by by Suharto to finance the

building of a 130-seat passenger plane, the N-2130. It was the pet

project of Indonesia's new president B.J. Habibie when minister of

research and technology.

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