President defends land use fees to save forests

Dessy Nurhayati and Adianto P. Simamora, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono defended Friday a new regulation to impose fees on non-forestry firms to rehabilitate the country's deteriorating forests.

The regulation would raise extra money to finance reforestation programs, he said.

"The aim is good, to save our forests," the President told reporters after a limited Cabinet meeting at the Forestry Ministry.

In attendance were Vice President Jusuf Kalla, Coordinating Minister for Economics Boediono, Coordinating Minister for People's Welfare Aburizal Bakrie, Forestry Minister Malam Sambat Kaban and Finance Minister Sri Mulyani.

Yudhoyono said many people, however, misread the regulation and accused the government of renting out the protected forests to investors.

"The idea is not a forest-renting business. This is not to rent protected forests to mining companies," he said.

The President said the forest use fees of between Rp 1.2 million and Rp 3 million per hectare per year, as set in the regulation, could still be debated.

Environmental groups have said the fees were too low compared to potential environmental losses from open-pit mining activities.

Greenomics Indonesia has proposed the government raise the fees to US$16,000 per hectare per year.

Senior forestry official Yetti Rusli said the fee had been determined without prior research, by a team comprising inter-governmental officials.

"The decision (on fees) was made merely from computer simulations," she said.

Yetti said the team had calculated the projected production cost and revenues of non-forestry companies, including mining ones, when running businesses in forests.

"Therefore the fee could be changed depending on domestic and global economic conditions," she said.

Yetti said her office could not set higher fees for forest use as it would affect the country's investment climate.

Minister Kaban insisted the government would not award new licenses for open-pit mining companies to operate in protected forests.

"The forest use fee is only for companies failing to provide lands as compensation for the forest areas they use for their business," he said.

Data from the ministry shows there are currently 334 non-forestry businesses operating in the country's 293,556 hectares of forests.

The ministry is now examining 586 business proposals for licenses.

In 2004, the government agreed to allow 13 firms to run an open-pit mining business in protected forests, mostly in the eastern part of the country.

However, none of the 13 companies have started operations.

Indonesia contains the world's third-largest forest areas after Brazil and Congo, with 120 million hectares.

President Yudhoyono said the country had 66 million hectares of production forests and 33 million hectares of protected forests. The remaining 20 million hectares are conservation forests, he said.

He said the government would work to improve community-based forests to help raise the welfare of local people.

"We are now developing community-based forests in North Sumatra, Yogyakarta, West Nusa Tenggara and Southeast Sulawesi," he said.