INTERVIEW - INDONESIA TO SELL 3 MLN HA FOREST SOON
By Gde Anugrah Arka
JAKARTA - Indonesian Forestry and Plantation Minister Muslimin Nasution said he expected to start auctioning three million hectares of forest concessions next week as part of the country's asset redistribution drive.
"We expect to start the auction process next week," Nasution told Reuters in an interview.
"(The auction) is part of the drive to redistribute forestry assets, particularly to those communities living in the forest area and nearby," Nasution said.
The move would boost a sense of belonging for the local people, improve their well-being and help the government secure their support in dealing with any fresh forest fires.
Forest fires in Indonesia in 1997 and 1998 were regarded as one of the world's worst environmental disasters this century.
The World Wildlife Fund had said the fires affected five million hectares mostly consisting of forest and small scale plantations, mainly on the islands of Borneo and Sumatra.
Environmental activists had blamed the fires partly on bad forest management by large companies controlling the concessions.
Conglomerates currently hold most of Indonesia's 51.5 million hectares of forestry concessions, with Barito Pacific among the largest, holding around 2.7 million hectares.
Nasution had said the concessions which would be auctioned came from about nine million hectares of concessions that recently expired.
Three million would be given free to small firms and cooperatives in the forest areas. The existing concessions would be extended for the remaining three million hectares.
"We are doing our best to involve cooperatives and small scale firms in the area so that they also have a chance," he said. "If all of concessions go through auctions, they will have no chance (to profit from the forest)."
Small firms or cooperatives would be given a maximum 50,000 hectares each. Bidders at the auction would be allowed to buy a maximum 100,000 hectares each.
He said the auction was aimed at increasing transparency as part of a raft of reforms required by the International Monetary Fund in return for financial assistance to help Indonesia through its worst economic crisis in three decades.
The auction would be partly determined on buyers' commitment to sustainable forestry, rather than just the highest price, he said.
Source: (C) Reuters Limited 1999.
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