Wednesday, 17 March 2010

State losses from forestry graft could reach 30 trillion: NGOs

State losses from forestry graft could reach 30 trillion: NGOs

Bagus BT Saragih , The Jakarta Post , Jakarta Wed, 03/17/2010

The Corruption Eradication Commission (KPK) has been slow to investigate corruption in the forestry sector, despite it being declared a priority, say officials from Indonesia Corruption Watch (ICW).

“The KPK has made tackling graft a priority in four sectors: education, health, mining and forestry. Therefore, we urge them to implement concrete plans rather than just engage in lip service,” Febri Diansyah, a legal researcher from ICW, said Tuesday.

ICW, along with the Sawit Watch and the Indonesian Forum for the Environment (Walhi), released an estimate of potential state losses from illegal logging, which they said had reached Rp 14.13 trillion (US$1.54 billion).

“The actual state losses, however, may be as high as Rp 30 trillion. Our simple calculation is based only on official data from the Forestry Ministry, which may not reflect the actual condition,” Febri said.

ICW’s calculation was based on the estimated number of logs cut from converted forest areas, multiplied with the average price of timber, which stood at Rp 200,000 per cubic meter, Febri added.

Since 2003, converted forest areas reached 700,000 hectares, while timber potential per hectare reached 100.9 cubic meters, said the NGOs.

Febri said that former forestry minister Malem Sambat Kaban, had once estimated that potential state losses were as high as Rp 30 trillion.

The Environmental Investigation Agency (EIA) and its Indonesian partner, Telapak, said that state losses from illegal logging might have reached Rp 40 trillion per year.

“A higher amount is also possible as potential losses should be calculated not only from the price of timber, but also from the Provision for Forest Resources [PSDH] and the Reforestation Fund [DR],” Febri said.
The NGOs recorded nine high-profile cases in the forestry sector that they urged the KPK to investigate.

The cases occurred in Riau, Central Kalimantan, South Sumatra, and North Sumatra. The NGOs claimed the cases might have caused Rp 6.66 trillion in state losses.
Since its establishment in 2003, the KPK has so far completed investigations of three graft cases in the sector.

The cases included illegal forest conversion in East Kalimantan in 2006, which saw former governor Suwarna Abdul Fatah sent to jail, and illegal logging in Pelelawan regency, Riau, in 2007, which saw regent Tengku Azmun Jaafar sent to prison.