Ridwan Max Sijabat, Jakarta – Greenomics Indonesia and the Indonesian Corruption Watch (ICW) urged the government Sunday to cancel its plan to write off Rp 1 trillion (about US$1.1 billion) of the debts of forestry companies.
The two non-governmental organizations argued that the companies, which received loans from state-owned banks for forestry sector projects, spent the bulk of the money on projects in other sectors. They said the write-off would cause huge state losses, injustices and corruption in the courts.
The government's plan to cancel the companies' debt was announced by Forestry Minister M.S. Kaban recently after discussion with President Susilo Bambang Yudhoyono. Kaban said the companies had proposed the write-off and he would facilitate it.
"We have sent a letter to Finance Minister Sri Mulyani Indrawati, asking her to turn down the proposal," Greenomics Indonesia coordinator Vanda Mutia Dewi told The Jakarta Post here over the weekend. She said it was important for Sri Mulyani to make a public response to the proposal because Kaban had signed a memorandum of understanding on forestry management with Greenomics and the ICW.
Kaban has issued a decree on the write-off procedure for forestry companies. More than 96 companies, which owe the state Rp 1.08 trillion in total, would be eligible for the debt relief on the grounds that they went bankrupt due to the economic crisis that hit the country in 1997.
The government made the loans through state-owned PT Bank Mandiri, Bank BNI and Bank Rakyat Indonesia to help the companies reforest their concession areas under the industrial forest program.
Kaban said that just like bankers who received "amnesty" because they could not repay their debts to the Central Bank, forestry businesspeople deserved a similar privilege. "At least the debtors should be excepted from paying interest," he said.
ICW coordinator Teten Masduki said the scheme proposed by the forestry minister was unjust because companies that had profited from illegal logging operations and received loans from the reforestation fund would be given a debt reprieve. "The forestry companies do not deserve such a facility because according to an independent audit, the greater part of the loans was used for things other than reforestation," he said.
Data made available by ICW and Greenomics shows that a number of the 96 troubled companies have debts amounting to Rp 20 billion or more. They are PT Inhutani I, Inhutani V, PT ITCI Hutani Manunggal, PT Adindo Hutani Lestari, PT Kiani Hutani Lestari, PT Tanjung Redeb Hutani, PT Surya Hutani Jaya, PT Musi Hutan Persada and PT Aceh Nusa Indrapuri.