Indonesia to Sell and Give Away Forests Soon

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WORLDWIDE FOREST/BIODIVERSITY CAMPAIGN NEWS

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Forest Networking a Project of Ecological Enterprises

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2/1/99

OVERVIEW & COMMENTARY by EE

Indonesia is poised, perhaps, to take a new direction in forest

management. Three million hectares of recently expired concessions

are to be given free to small firms and cooperatives in the forest

areas, and a another three million will be auctioned off. It will be

interesting to see whether the massive and historically mismanaged

forest sector can be reformed before the resource is committed

entirely and irrevocably to commercial over-harvesting.

g.b.

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Title: INTERVIEW - INDONESIA TO SELL 3 MLN HA FOREST SOON

Source: Reuters

Date: January 29, 1999

Byline: By Gde Anugrah Arka

JAKARTA - Indonesian Forestry and Plantation Minister Muslimin

Nasution said he expected to start auctioning three million hectares

of forest concessions next week as part of the country's asset

redistribution drive.

"We expect to start the auction process next week," Nasution told

Reuters in an interview.

"(The auction) is part of the drive to redistribute forestry assets,

particularly to those communities living in the forest area and

nearby," Nasution said.

The move would boost a sense of belonging for the local people,

improve their well-being and help the government secure their support

in dealing with any fresh forest fires.

Forest fires in Indonesia in 1997 and 1998 were regarded as one of the

world's worst environmental disasters this century.

The World Wildlife Fund had said the fires affected five million

hectares mostly consisting of forest and small scale plantations,

mainly on the islands of Borneo and Sumatra.

Environmental activists had blamed the fires partly on bad forest

management by large companies controlling the concessions.

Conglomerates currently hold most of Indonesia's 51.5 million hectares

of forestry concessions, with Barito Pacific among the largest,

holding around 2.7 million hectares.

Nasution had said the concessions which would be auctioned came from

about nine million hectares of concessions that recently expired.

Three million would be given free to small firms and cooperatives in

the forest areas. The existing concessions would be extended for the

remaining three million hectares.

"We are doing our best to involve cooperatives and small scale firms

in the area so that they also have a chance," he said. "If all of

concessions go through auctions, they will have no chance (to profit

from the forest)."

Small firms or cooperatives would be given a maximum 50,000 hectares

each. Bidders at the auction would be allowed to buy a maximum 100,000

hectares each.

He said the auction was aimed at increasing transparency as part of a

raft of reforms required by the International Monetary Fund in return

for financial assistance to help Indonesia through its worst economic

crisis in three decades.

The auction would be partly determined on buyers' commitment to

sustainable forestry, rather than just the highest price, he said.

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