Inhutani II, GFTN, WWF and UFS

Posted: 20 October 2006 in IFC, Indonesia, United Fiber Systems (UFS)

From: Chris Lang
To: Margareta Renstrom (WWF)
Date: 17.10.2006 12:23
Subject: Fwd: Fwd: Inhutani II, GFTN and UFS

Dear Maggis,

I thought I should let you know – I’m writing an article about United Fiber Systems in Kalimantan, in particular about the supply of raw material to its various proposed pulp operations. The article is based on Down To Earth’s “No Chip Mill Without Wood“.

I’ve written to a couple of your colleagues in Indonesia, to find out a bit more about Inhutani II and the GFTN – as announced in a press release in May 2006. The e-mail is below. My question is basically why Inhutani II is looking to sell its timber to furniture makers when the wood chip mill is likely to be desperately short of wood. And what the likely impact of this is on forests in Kalimantan and on Pulau Laut.

If you or your colleagues do reply, please consider your response to be on-the-record as I’d like to quote you in the article – or at least use the information that you send in the article. If you do not want to be quoted please make this clear in your reply.

Thanks and cheers, Chris

 

 

——– Original Message ——–
Subject: [Fwd: Inhutani II, GFTN and UFS]
Date: Mon, 16 Oct 2006 23:09:23 +0200
From: Chris Lang
To: Dewi (WWF)

Dear Dewi,

I just sent this e-mail (below) to Rod Taylor, but it came back with a message saying that he’s on paternity leave. Rod’s e-mail gave your e-mail address. I would be very grateful if either you or Adi could reply to the e-mail below.

The deadline for the article is Friday this week, so please reply by Thursday (19 October).

Thanks! Chris Lang

 

 

——– Original Message ——–
Subject: Inhutani II, GFTN and UFS
Date: Mon, 16 Oct 2006 22:41:12 +0200
From: Chris Lang
To: Rod Taylor (WWF), Nurcahyo Adi (WWF)

Dear Nurcahyo Adi and Rod Taylor,

I am currently writing an article for the World Rainforest Movement (www.wrm.org.uy) about United Fiber Systems’ proposed plans for the pulp sector in Kalimantan. According to a WWF/IFC press release, Inhutani II gained membership of WWF’s Global Forest and Trade Network in May 2006. The press release states that Inhutani II’s 50,000 hectares of acacia plantations on Pulau Laut will be used to provide raw material for the furniture industry in Indonesia.

As you know, UFS is currently building a wood chip mill on Pulau Laut and has stated that it will obtain its raw material for the mill from Inhutani II’s plantations on the island. UFS has other large-scale proposals in the pulp sector in Kalimantan (the existing 525,000 t/yr Kiani Kertas pulp mill and the proposed 600,000 t/yr Satui pulp mill). The source of raw material for all of these ventures is not at all clear.

The area of Inhutani II’s plantations on Pulau Laut is not sufficient to supply the wood chip mill. The plantation area will be even less able to supply the mill if Inhutani II is selling wood for furniture manufacture. IFC has been working with Inhutani II for several years, including (I understand) helping to find buyers for the timber. Could you please explain why Inhutani II is looking for furniture makers to buy its wood when UFS has a wood chip mill on the same island, which will soon be desperate for raw material? I wonder whether you can shed any light on this as a result of your discussions with Inhutani II?

I believe that there is an area of about 40,000 hectares of lowland forest on Pulau Laut which is within Inhutani II’s concession area. Could you please confirm the status of this forest and whether it is to be cleared to make way for plantations, or logged to feed to the wood chip mill. When do you anticipate that Inhutani II will be able to become certified under the FSC system?

For your information, I have sent a similar e-mail to IFC’s Moray McLeish about IFC’s role in supporting Inhutani II’s membership of GFTN.

Please consider your response to be on-the-record. Thank you for your time and I look forward to hearing from you.

Yours sincerely,

Chris Lang

 

 

To: Chris Lang
From: Darius Sarshar
Date: 20.10.06 15:50
Subject: questions about Inhutani II

Dear Mr Lang

Thank you for your request for information about Inhutani II, which, as you know, was admitted to the Indonesian Forest & Trade Network (part of the Global Forest & Trade Network) in May of this year.

The Global Forest & Trade Network is WWF’s initiative to facilitate market-driven forest certification in valuable and threatened forests. It does this by working with the forest industry and providing technical assistance in the implementation of a stepwise approach to both responsible purchasing and forest certification.

Could you please explain why Inhutani II is looking for furniture makers to buy its wood when UFS has a wood chip mill on the same island, which will soon be desperate for raw material?

Inhutani II plantations produce both sawlogs and pulp logs only suitable for chipping. The sawlogs are of larger diameter and better quality, and they fetch a higher price. There is growing demand for acacia as a raw material for furniture production in the region, and therefore any sawlogs they can produce will continue to command higher prices for the foreseeable future. Current approximately 20% of Inhutani II production is of saw log quality, but this percentage could increase with improved management. Pulp log prices will not ever reach those of sawlogs, if they did, any pulp mill would likely quickly go bust. It is therefore in Inhutani II’s commercial interest to maximise its production of sawlogs, and we believe that they will continue to do so.

I believe that there is an area of about 40,000 hectares of lowland forest on Pulau Laut which is within Inhutani II’s concession area. Could you please confirm the status of this forest and whether it is to be cleared to make way for plantations, or logged to feed to the wood chip mill. When do you anticipate that Inhutani II will be able to become certified under the FSC system?

As members of the Indonesia FTN, Inhutani II have committed to a detailed timebound certification action plan that will see them achieve FSC certification on the Semaras plantation license area within 5 years. This action plan covers the entire forest management unit, both plantation and natural forest areas. As part of their certification commitment, the natural forest areas will be maintained under strict protection. As long as they remain members of the Indonesia FTN and maintain progress towards FSC certification, there is no threat of logging or conversion in these areas.

Also on Pulau Laut is are two areas of natural forest with a combined area of approximately 55,000 hectares for which Inhutani II currently has no license. The company is actively seeking a license to carry out selective logging for saw and veneer logs and enrichment planting (with native timber species, not acacia) in these areas. It would be a contravention of the conditions of license being sought if Inhutani II were to attempt to convert this area to plantation and to our best knowledge that is not the intention of the company. As part of its commitment to GFTN, Inhutani II will work towards FSC certification on this area also if a license is issued. Therefore, as long as they remain members of the Indonesia FTN there is no threat of conversion of this area to plantation.

Yours sincerely,

Darius Sarshar
Responsible Forestry Coordinator
Global Forest & Trade Network

 

 

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Comments
  1. […] Darius Sarshar explained that at present about 20 per cent of Inhutani II’s production is of saw log quality. This is […]

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