Indonesia Potential to Command Paper market in the World

Indonesia Potential to Command Paper market in the World
http://www.cappa.or.id/index.php?option=com_content&task=view&id=25&Itemid=1

Indonesia’s Pulp and paper had potential ability to command paper market in the world. Which today still commanded by Finland and South America like Brazil dan Chili. " Indonesia have potential to command pulp and paper market in the world because the big amount of basic material, until pulp and paper factories often charged by international NGO for breaking environtment law but in fact, it just dealings competition" said the director. Riau Andalan Pulp & Paper (RAPP) company, Leonardy Halim in Pangkalan Kerinci, Pelalawan District, Riau. According his opinion, supply of basic material like accasia in Indonesia have crops time only up to 7 years and have a good quality but in Europe and South America, accasia can harvest in 30 years. “with short harvest time but have the same quality with natural accasia so Indonesia have high competitiveness in pulp and paper market in the world, said Leonardy, the branch leader of April group company which central in Singapore. He said that charged breaking environtment law by international NGO caused their export prohibited entrance to Europe in 2003. "To proof the infraction they have to tested the product in Germany which finally unproof violate so their product get premium price in Germany. According his statement, the accusation Infracting environtment law due to pulp and paper Indonesia, as dealings competitionin Europe market. He said that Indonesia had prosperity and used modern technology, so Indonesia have the best basic material in quantity and so quality. In quantity with short distance and harvest time so guarantee the supply of basic material and in quality, accasia planted in Indonesia have long fiber as good as natural accasia so can give a good quality of paper, he said. So, he believe that Indonesian Paper in 2009 will command the world’s market overcome Brazil and Chili. He said that the capacity of RAPP is about 2 million ton per year and its production 1.9 million per year. Meanwhile from the production 85 % for export and 15 % for Indonesia. He expect the production in next year can reach China which estimated fast economic growth. Because of that, April Group as Leader company will invest 360 million US$. Meanwhile The manager of Public Relation of that company, --Fakhrunnas MA Jabbar--said that for Community Development they had built 3000 small community effort from various effort with earnings 3 billion rupiahs a month. According his opinion, small community effort around the factory consist of Farming, wood plantation, handicraft and animal husbandry. So they will keep develop until they can reach export market..

Local Wisdom for Management Forest

Jambi, March 24th 2007

Sir Nicholas Stern, --The economic adviser from England Government for Development and Climate change--, stay in Jambi for two days. He visited Guguk Village, Sungai Manau subdistrict, Merangin District with England ambassador for Indonesia Charles Humphrey. Stern would have a schedule also, to visit Lubuk Beringin village, Bathin III subdistrict, Ulu Bungo district, but cancelled because the machines of helicopter which take Stern and the others to the village which applicated rubber agroforest had broken. Stern watch with himself the community which organized by KKI Warsi manage the forest with customary law which they had done since a long time ago.Both of these villages have choosen because They had customary law which in fact can save the forest. Because the community realize forest as life sources and they depend on it for their whole life. “From the customary law which the communities had done, it giving a better results for the sustainable of the forest, said Executive Director KKI Warsi,RakhmatHidayat. The community of Guguk determained the forest as communities’ in the amount of 690 Ha since 2003 which is managed in customary law and keep the eternal. The communities’ forest was born because there are urging from outside, like Forestry Plantation belongs to PT. Injapsin who took Guguk Village’s area without confirmation become their concession areas, beside that it caused also from illegal logging around Guguk village. “The community realize that forest exploitation will cause degradation and destruction of the forest and also they will have complicated problems to access the forest’s sources which they had for a long time, said Rakhmat.
The Community of Guguk who Fasilitated by KKI Warsi struggled to take their right back on that forest. They won this Struggle, their village didn’t belongs to PT Injabsin’s anymore and they had permit from Merangin District in Legal Permission Letter SK No 287 2003, talk about Bukit Tapanggang area as communities’ forest of Guguk Village Kecamatan Sungai Manau Kabupaten Merangin on June 2nd 2003 .

The community of Guguk also made rules about using the forest which making management groups who will . manage their custom forest. Custom forest doesn’t mean that woods on it couldn’t take by the communities, but they had a rule to take it and keep the immortal. “Cut the woods could be done to make common facilities with a permit from managing group first. Each tree cut must be change with 5 trees planted,” added Rakhmat. He also said that there are convictions for woods robber from customary law .
Meanwhile in Lubuk Beringin, The communities around Kerinci Seblat National Park, with their local rules about agroforest system that mix rubber plantation with natural trees. These mixing plantation had the same function with natural forest as water catcher. “The community activities in both villages are decrease carbon emissions,” said Rakhmat.
As we knew that carbon emissions contributed on climate change. Therefore as Stern analised global climate change impact to economy. Climate change effect is seriously global threatment and need global opinion which pushing. The impact of what we’re doing now will give impact to climate change on the future. What we are doing now will contribute for climate change in the next 40-50 years. And what we will do in 10-20 years next will give big effect to climate in the middle and the end of century and so on.
According Stern opinion, climate change is a global thing on its affect so that international activity will be necessary to push an effective, deserve and certain scale opinion. These will need cooperation especially in many groups to create price and market for carbon, research of technology, development, distributing and adaptating especially for developing country.”
It become necessary because developing country will suffer more than developed country and become a big threat in decrease poor people. It caused by the weather of developing country hotter and high intensity of rain. Beside that, developing country depends on agriculture much while this sector will be very sensitive on climate change. “According Stern information, clearly we need certain step to save the world from carbon emission. What the communities Guguk and Lubuk Beringin village had done are one of potential step to decrease carbon emission, and hopely can be followed by other regions,” said Rakhmat.

Agriculture Minister: Stop Permit Issue on Peat Land

http://web.bisnis.com/edisi-cetak/edisi-harian/agribisnis/1id35199.html

NUSA DUA, Bali: Agriculture Department of Indonesia asked whole local government to stop issuing permit on behalf of peat land management due to evaluation which will be conduct on existing permit.

Agriculture Minister Anton Apriyantono said that the request has been distributed last two weeks, due to protest against peat land management in Indonesia which increasing carbon emission.

"For Temporary, we stopped the use of peat land. Meanwhile we evaluate the existing permit, is it include in the sustainable criteria or not," he said yesterday.

The important role of the existing of peat land is felt especially in case of carbon storage more then 30% of terrestrial carbon, has important role for hydrological cycles and maintain specific biodiversity.

The world peat land wide is about 38 million hectares with more than 50 % is in Indonesia. Indonesia’s peat land wide is estimated about 26 million hectares. Almost all peat supply located out side of java island which targeted as transmigration area, distributed in Sumatera 8,9 million hectares, Kalimantan 6,3 million hectares and Papua 10,9 million hectares.

In Sumatera, most of the peat land is located at east coast, and in Kalimantan located at West Kalimantan, Central Kalimantan and South Kalimantan. At those areas transmigration program is being directed. Location condition and peat distribution has causing Employment and Transmigration Department difficult to avoid the peat land as the area for transmigration development.

Agriculture Minister said during the exploitation of peat land in Indonesia, it only allowed for peat land below 3 meters thick. However Anton didn’t mention about the regulation fully followed by the parties who manage the peat forest.

He also mentioned about prohibition on peat land use which will be arrange by the central government, if this matter judged more effective compared to the local government regulation.

"Because many concerns on peat land problems, many say not sustainable. Due to this matter, we recommend for no more permit issue for peat land use. It has been asked to each local authority," he said.

Mean while, Chairman of Indonesian Delegation Mr. Emil Salim asked all integrated companies to Pulp and Paper Company to stop using peat land in their operation. He said that in a discussion which took place last Tuesday.

In the other hand, Forestry Minister Mr. M.S. Kaban said that peat land matter has been accommodated in REDD mechanism scheme. REDD (reducing emission from deforestation in developing countries) is a scheme of incentive issue from industrial countries to developing countries in order to reduce deforestation rate.

Especially for Indonesia according to Kaban, the government has provided special rules regarding the use of peat land through Government Regulation (PP).

"Through PP we will encourage sustainable forest management. Specifically, this Government Regulation prohibit the use of deep peat land," he said. (yeni.simanjuntak@bisnis.co.id)

By Yeni H. Simanjuntak
Bisnis Indonesia

Seven Companies infest Rp. 69 Trillion for Pulp and Paper

*Tuesday, 5 June 2007 01:56:00*

*JAKARTA, Investor Daily *

Seven Foreign Capital Companies and local companies will build Rp. 69 Trillion Pulp and paper mill in Indonesia.

The expansive of pulp and paper industry and bankrupt of several same industries in North America and North Europe has potential to placed Indonesia as the third biggest pulp and paper producer in the world, from the seventh place right now.

According information from *Investor Daily* from Capital Plants Coordination Biro in Jakarta last week, PT Indah Kiat Pulp & Paper Tbk will release total infestation Rp 15,43 trillion. Sub company of Asian Pulp and Paper (APP) under Sinar Mas group will build paper mill with capacity of 562.000 ton equal to Rp 10,57 trillion in Siak District, Riau Province. At the same location, Indah Kiat also will build pulp mill with capacity 600.000 ton per year equal to Rp 4,86 trillion.

Other foreign companies, PT Intiguna Primatama intends to build pulp industry in Riau with capacity 500.000 ton with amount of infestation Rp 1,5 trillion. By the Local capital companies infestation, PT Putra Adil Laksana, PT Tranindo Sinar Utama, and PT Karawang Ekawana Sukses, will build pulp industry at Barito Kuala (South Kalimantan) District respectively, Kapuas (Central Kalimantan), and Pontianak (West Kalimantan). Each pulp mill has capacity about 2 million tons per year with infestation value Rp 17,13 trillion.

In the other hand, PT Surabaya Agung Industri Pulp dan Kertas Tbk and PT Wirajaya Packindo will build paper mill in Java. PT Surabaya Agung is planning to build paper mill in Gresik (East Java) with value Rp 774,72 billion with capacity 110.000 ton per year, meanwhile PT Wirajaya will infest Rp 250 billion to build paper mill with capacity 150.000 ton per year in Tangerang (Banten).

Meanwhile, through APRIL, Raja Garuda Mas (RGM) group is in progress of building their second paper mill in Sumatera. Started last year will finish at the end of 2007, so the paper production will increase to 800.000 ton per year. APRIL which is one of the biggest pulp producers in the world has pulp mill in Indonesia with production capacity 2 million tons per year.

Chairman of Indonesian Pulp and Paper Association (APKI) HM Mansur Said, domestic or foreign pulp and paper investors are very interesting to build new plant in this country. This is related to many pulp mills in North America and North Europe is not competitive anymore.

Before, pulp from those two nations control 56,4% world production which reach 221,3 million ton. Meanwhile, production capacity for pulp in Indonesia estimated 6,73 million ton in 2007 with world market about 2,5%.

Senior Director Corporate Logistic Division of Sinar Mas Raymond A Liu said, amount of pulp industry with total of capacity 2,4 million ton in North America has been close down in last two years. Those industries are Domtar, Neenah Paper, Sappi, Bowater, Fraser, Tembec, and Western Pulp

*. *

Thus the pulp and paper industry in North Europe has been close down and relocated the mills because of the high of labour cost or the engine which already old.

Mansur explain, world pulp industries has relocated their mills to South America, so its pulp industry capacity increased, estimated becomes 8 million tons on 2008.

*The third biggest

*

According to Mansur, right now is a gold opportunity for Indonesia to take foreign infestation to pulp and paper industry. South America even scared if Indonesia becomes the strong competitor, because the wide of Indonesian Forest, competitive production cost, and close to Tiongkok which becomes their target for their pulp export.

Because of it, Mansur and Secretary General of Indonesian Forestry Society Agung Nugraha optimist, Indonesia has a chance becomes the third biggest pulp and paper producers. Because this country is still has supply for Timber Estate Plantation which very large.

According to Agung, if the government and forestry entrepreneur able to reach target of Timber Estate Development for 5 million hectares and Community based Timber estate Plantation for 9 million hectares until 2009, demand for material for pulp industry will never become problems anymore. "If all planted target can be fulfilled, Indonesia will become the third biggest pulp and paper producers in the world, at least at year 2012," said Agung.

Same optimism also said by President Director of Riau Andalan Pulp and Paper (RAPP) Rudi Fajar. He said that the close down of pulp mills in North America and North Europe gives a chance for Indonesia to draw infestation in this sector.

"In vary of forum already mentioned that Indonesia’c chance to draw large scale infestation in pulp and we can move from the world seventh producer to the third biggest producer" said Rudi.

Rudi Fajar explains, world pulp consumption will keep increase, supported by the increase of paper consumption for all types due to world economic healing.

In Rudi point of view, government policy is in line of the Indonesian ambition to become the world third biggest producers. This ambition can be achieved if land is provided with strong law protection for Timber Estate Plantation development. "RAPP still interest to expanse, if there still available land for Pulpwood Plantation," he said.

To solve the problems of infestation on the field, said Rudi, usually investor only acquitting critical Pulpwood Plantation Company or even pulp and paper industry. Later, those new investor just have to fix the management and technology.

Mansur adding, right now total of concession are which owned by national pulp company estimated only 3,3 million hectares, of the total production forest area and conversion production forest which can be exploited about 70 million hectares.

*A lot of quotations

*Mansur revealed amount of problems which obstruct the progress of investor to infest in large scale in Indonesia, for instant the law assurance and a lot of quotations.

Investor, he said, needs law assurance and consistency for long term also the security assurance, like free of land conflict and illegal logging in Pulpwood plantation. Investor also put attention on problems in labour, corruption, quotations.

"In Indonesia doesn’t provide infestation safety assurance, other nations like Tiongkok, Vietnam, Thailand, and Cambodia will become the infestation destination which seeing by foreign investor," Mansur said.

Agung Nugraha admitted that the big amount of quotation which experienced by the forestry manufacturer. "These days, forestry manufacturer has obligation to the country and community through taxes and non taxes, includes 13 items of quotations like reboisation fund, PSDH, and building and land taxes," said Agung.

*(c92/c107/shd/en)

A COMMON VISION FOR CHANGES IN INDONESIA’S PULP AND PAPER INDUSTRY

Submitted and signed in Riau, Sumatera, 13^th January 2007

A number of Indonesian NGOs and community organisations hereby express serious concerns about the sustainability of (the country’s) natural forests. The conversion of tropical forest to industrial tree plantations (HTI) to supply the pulp and paper industry has surpassed the limits that the forest and humanity can bear. It is essential to save the remaining forests and protect local and indigenous peoples’ rights in all the areas affected by pulpwood plantations and pulp and paper factories from unimaginable disaster. The uses of forests to meet demand for raw materials from the pulp and paper industry in order to supply paper for international consumption has a terrible history of expropriating and violating communities’ rights which has left its scars. We have seen how the workings of the market, facilitated by various government policies, have directly and indirectly brought about company practices that damage peoples’ livelihoods and the environment in general.

It cannot be denied that the pulp and paper industry provides substantial employment opportunities and government revenues at both the national and local level. However, it is patently obvious that the presence of this industry has far greater negative impacts on the surrounding community in form of damage to the environment and society, including social conflicts and poverty.

These problems have arisen due to differences in perspectives about forest management and in the way the interests of different groups have been addressed. Concerned parties such as NGOs now have a shared vision on the reconstruction and transformation needed in the development of Indonesia’s pulp and paper industry.

A number of points have been arisen as we have shared our experiences of organising advocacy and supporting affected communities through serious discussions about the pulp and paper industry. These have motivated us to take a stand together and to press for policy changes in order to stop all damaging practices and any further expansion of this industry. Over the next few years, we intend to monitor closely all policy instruments and to press for changes or revisions in these, working together in our different ways.

Based on these experiences, we have drawn up this Common Vision for Changes in Indonesia’s Pulp and Paper Industry which addresses policies, the industry and social conditions.

AIMS

To ensure that local and indigenous communities’ rights and interests are respected and ecological priorities are protected in fulfilling demand for Indonesian Paper.

Objectives

1. To intervene in policy changes at local, national and international level that promote the expansion pulpwood plantations and the pulp and paper industry in Indonesia.
2. To extend recognition of local and indigenous communities’ sustainable forest practices
3. To close down pulp and paper factories that cause environmental pollution and damage communities interests; to oppose the construction of new plants and to stop the expansion of pulpwood plantations.