Indonesia’s plywood industry could be decimated by a controversial government ruling aimed at forest rehabilitation.
The Association of Indonesian Wood Panel Producers (APKINDO) warns the ruling, scheduled to be implemented next year, could force 75% of the country’s plywood companies to shut down, leaving about 500,000 people jobless.
The ruling stipulates that forest concessionaires whose licences expire will be granted extensions and allowed to continue felling trees only if the concession area can produce at least 75m3 per hectare of logs with a minimum diameter of 50cm.
Existing rules say concession holders are not allowed to fell trees with a diameter of less than 50cm, though there is no minimum volume requirement.
Apkindo says the ruling effectively means a logging moratorium because few concession areas can meet the requirements. This would lead to log supplies dropping to about 6.8 million m3 next year, compared to 12 million m3 estimated this year, leaving plywood firms with not enough raw material to operate, it says.
The Ministry of Forestry, under pressure from the international community to protect its forests, says the measure is crucial to rehabilitating forests. Deforestation has reached 40.26 million ha out of the country’s total natural forested areas of 119.7 million ha.
The ministry says the plywod industry has not been efficient, with companies needing 2m3 of logs to produce 1m3 of plywood, compared to only 1.6m3 of logs to make the same amount of plywood in other countries.
