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Witness claims Soeharto played role in graft case

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Jakarta Post - October 17, 2000

Jakarta – A witness in the multimillion dollar graft trial of timber baron Mohamad "Bob" Hasan told a court hearing on Monday that in 1992 then president Soeharto ordered that a forestry mapping permit be granted to a firm belonging to the defendant.

"I was ordered by then president Soeharto not to give security clearance, which allows for forestry mapping and shooting of (forest) aerial photographs, to any other firm other than PT Mapindo Parama (MP)," former director general of forestry inventory and planning at the Ministry of Forestry, Soenarsan Sastrodimitro, told the hearing at the Central Jakarta District Court presided over by Judge Subardi.

Prosecutors have accused Hasan of causing the state US$75.62 million in losses and $168 million in losses to the Association of Indonesian Forest Concessionaires (APHI), via a fraudulent mapping project which was not preceded by an open tender.

Soenarsan said he was specifically ordered by Soeharto, in a meeting on how APHI would coordinate the defendant's firm in carrying out the 1989 mapping project, at the presidential palace in November 1992.

"Soeharto told me in front of everybody at the 'expose' that I should stop issuing permits for any other firm, except for that of the defendant,"he said. The defendant, who chaired APHI from 1989 to 1998, initially granted the project to PT Adikarto Printindo (AP) in 1989, a firm whose shares he eventually bought in full and whose name he changed to PT Mapindo Parama in1991.

"The then forestry minister, Hasjrul Harahap, also ordered me to recommend only one firm – the defendant's firm – for the project, despite the firm's obvious inability to complete the project single-handedly," the witness, who was director general from February 1989 until June 1993, said. The project involved the mapping and shooting of aerial photographs of 88.63 million hectares of forest concessions belonging to 599 concessionaires. However, Soenarsan said, the work done by MP was carried out too slowly since it was handling the project alone.

The witness admitted to having recommended PT AP to the forestry ministry, saying that it was the minister's wish. "PT AP worked by the rules, but it was only one firm. It should have worked with more firms ... I recommended 18 reputable consulting firms, including PT AP, but the minister picked only PT AP," Soenarsan said.

"I also told the minister that concessionaires were all scared of Bob Hasan ... and that they really did not want him in charge of the project. But it was no use." Soenarsan also told the hearing that officials of Hasan's company had been seen trying to extort money from concessionaires. "I immediately reported this to the minister, whom I believe informed you (Hasan) of the matter. To my knowledge, the minister told me that upon hearing the news, you (Hasan) fired those officials," he said.

He said he had no idea about the disbursement of $87 million from the reforestation fund which was used for the aerial mapping of protected forests. "Such a project did not happen until 1996, by which time I was already retired. In general, the use of reforestation funds must be legalized by the president," he said. Soenarsan said that the permit issued by the forestry ministry was for the mapping and shooting of aerial photographs for concession areas belonging to only 81 of the 599 companies, or 8.85 million hectares of forest concessions.

"The defendant also carried out the photographing project, by making forest concessionaires pay $2 per cubic meter of logs bound for export," Soenarsan said. "While 75 companies paid before the photographs were taken, six state-owned forest companies refused. They were allowed by the Ministry of Forestry to postpone payment until after delivery of the photographs.

"Since they never received the photographs, they never ended up paying." He identified the six companies as state-owned forestry companies PT Inhutani I in East Kalimantan, PT Inhutani II in South Kalimantan, PT Inhutani III in Central Kalimantan, PT Inhutani IV in North Sumatra, PT Inhutani V in South Sumatra and state forestry firm Perum Perhutani.

Earlier APHI said that it had paid MP $2.49 per photographed hectare, whereas in comparison, Perum Perhutani used another firm's services and paid only $1.80 per photographed hectare. Chief prosecutor Arnold Angkouw repeatedly implied at the hearing that Mapindo had marked up the contract for the mapping project.

Another witness, Haposan Simatupang, who is an auditor at the ministry's inspectorate, told the hearing that auditors had found a circular dated September 1, 1988, one year before the defendant, as APHI chairman, granted theproject to PT AP.

"The letter, signed by the defendant, was addressed to the executive board of the Association of Indonesian Wood Panel Producers (Apkindo) informing it that $2 per cubic meter of logs bound for export should be paid as fees by forest concessionaires," Haposan said. When asked who was the Apkindo chief then, Haposan answered: "the defendant".

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