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Indonesian tycoons own firms blamed for forest fires

American Reporter - September 27-28, 1997

Azhar Basri, Jakarta – An Indonesian ministerial report has blamed 176 logging and plantation firms over the huge forest fires which had already choked most areas in southeast Asia, saying that those companies had conducted the dangerous slash-and-burn practice to clear their land.

The Jakarta Post on Friday quoted a report from the Ministry of Agriculture that revealed 14 of the firms are still continuing the dangerous activities despite an official ban declared earlier this month by the Minister of Agriculture, Sjarifuddin Baharsjah, and Minister of Forestry Djamaluddin Suryohadikusumo.

The report listed the names and the location of the 176 companies in eight Indonesian provinces on the islands of Borneo and Sumatra, but did not name the principal shareholders or owners of the firms. It also does not specify the names of the 14 firms.

Some of the 176 companies are owned by Indonesia's wealthiest figures, including Indonesia's No. 1 and No. 2 tycoons Liem Sioe Liong and Eka Tjipta Wijaya, timber tycoon Bob Hasan as well as Prayogo Pangestu of the widely-diversified Barito Pacific Group.

All of them are politically well-connected. Indonesian environmentalists doubt that blame for the annual "slash and burn" fires routinely used to clear land will be placed where it belongs, as the tycoons are widely considered to be more influential here than the ministers.

Baharsjah said earlier this week that the government has given the companies until Oct. 1 to defend themselves by filing reports on their activities, adding that he will first conduct checks in the field before taking punitive actions against erring companies.

Nearly 10,000 Indonesian and Malaysian firemen are fighting the blazes on Sumatra, Borneo, Sulawesi and Java, which have sparked a major health scare across the region, halted many business and government activities and discouraged thousands of tourists from visiting Southeast Asia.

Jakarta has declared a national disaster and Kuala Lumpur a state of emergency in Sarawak, a Malaysian state on Borneo, whose southern part is owned by Indonesia and known as Kalimantan.

Media reports here even speculated that an Indonesian Airbus passenger jet which crashed on Friday in northern Sumatra, killing all 234 people on board, was caused by the thick smoke which has enveloped the area over the last two months.

Among the firms on the agricultural ministry's black list are Hasan's PT Kiani Lestari, operating in southern Borneo; Pangestu's PT Musi Hutan Persada, in southern Sumatra, Wijaya's PT Indah Kiat in Riau, close to Singapore across the Malacca Strait, and several companies under the Salim Group, which is controlled by Liem Sioe Liong.

Liem is a longtime associate to Indonesian President Suharto, who have been friends since the 1950's, when the young lieutenant colonel Suharto was a military commander in Central Java and Liem had just started his business in the province.

Hasan is a golfing partner of Suharto's who plays golf twice or thrice a week with the president, encouraging jibes here that Hasan meets with Suharto more often than government ministers usually do.

Hasan is also widely known to be a trusted business advisor to the president, running the day-to-day affairs of several business groups including the widely-diversified Nusamba Group, which are owned by private foundations controlled by Suharto.

Prayogo is a younger tycoon who has close ties to the eldest daughter of Suharto, Siti Hardiyanti Rukmana. Both Prayogo and Rukmana have common interests in several businesses.

The logging firms here regularly start to clear land for rice fields and plantations ahead of the wet season, which was expected to begin last month but may be another two months away due to El Nino, the Pacific weather formation that has brought a prolonged drought to the region.

Ironically, theso-called "black list" also includes the names of state-owned plantation companies operating in southern Borneo, including PTP XVIII, PTP Pelaihari, PTP Pamukan, and PTP Muara Badak. Companies owned by an army foundation also found their names on the list.