Give credit where its due
Jakarta Post Jakarta Banks to increase credits to the long-neglected forestry sector, says NGO su
As the government has relaxed some regulations on the forestry-based industries, forest concessionaires (HPH) are preparing for additional financing from banks which have long neglected the sector. Based on a report by Greenomics, a non-government organization specializing in forest business and environmental issues, of the 105 concessionaires it has surveyed, some 80 companies will target total credits of about Rp 1.64 trillion in the next 10 years, marking the return of bank loans to an industry they shied away from since the 1998-1999 crisis.
“These 80 concessionaires control a total of 5.91 million hectares of forest concessions across Indonesia,” Vanda Mutia Dewi, the Greenomics Coordinator for Indonesia, said here over the weekend.
The Greenomics data shows that during the next 10 years it is estimated that 10 concessionaires in Papua alone may secure credits totaling Rp 262.65 billion.
In Kalimantan, 50 of 73 concessionaires may secure Rp 960.73 billion, in Sulawesi, all 5 concessionaires may secure Rp 73.82 billion, in Maluku, 12 out of 13 concessionaires may deploy Rp 238.47 billion, and in Sumatra, 3 out of 4 companies may mobilize Rp 101.56 billion.
Given this probable rise in credit financing , Vanda said efforts should be made by all sides, particularly the banking system and the Forestry Ministry, to make sure firms will practice sustainable forestry management and that new credits will not lead to non-performing loans.
“To get such results, the banks should only give credits to those with good performance,” she said.
“Improper forestry management practices and bad loans for tens of trillions of rupiah after the economic crisis in 1998 should provide lessons for us all. This is what made banks reluctant to finance the forestry business since then,” she said.
Hadi Daryanto, the Ministry’s director general for forest product development, said that the government has relaxed a series of regulations, including allowing that forest concessionaires’ yearly work plans (RKT) specifying numbers of logs to be cut can now be used as collateral by the firms, while the concessions themselves can now be transferred to other companies, with the permission of the Forestry Minister.
He said that as part of improving forestry governance, the government has published its yearly evaluation of concessionaires performance every February. Of the 297 concessionaires, only 70 are considered to have good performance.
“This evaluation can be shared with banks to help them in selecting which companies deserved credits.”
He said that good forestry governance would encourage forest businesses to grow and secure that the sustainability principle would be the basis for their further development.
“As the world is increasingly aware of such principles, I think the government has no choice but to continue improving its forest governance,” he said.
Taufik Alimi, the chairman of the National Forestry Council, added that concession holders should benefit from adopting sustainable forestry management through the proposed carbon trading mechanism under the Reduction of Emissions from Deforestation and Degradation Plus (REDD Plus) scheme.
Sources http://www.thejakartapost.com/
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