Firm paid billions for illegal logs: Witness

JakartaPost:

Firm paid billions for illegal logs: Witness

The Jakarta Post , Jakarta | Sat, 06/14/2008 11:07 AM | Headlines

PT Riau Andalan Pulp and Paper (RAPP) paid at least Rp 6.4 billion (US$684,800) to exploit forests using illegal permits issued by Pelalawan Regent Tengku Azmun Jaafar, a court heard Friday.

Hambali, a former official of the Pelalawan forestry office, testified that he and his partner had received money from PT Persada Karya Sejati (PKS), a subsidiary of RAPP that allegedly took over two plots of forest land illegally allocated for their two companies in 2005.

"One of the companies, PT Harapan Jaya, is mine. The regent told me to use the company's name in applying for a forest resource utilization permit he was to issue later," Hambali told the Corruption Court in Jakarta in a trial against the regent.

"RAPP then took over the companies through PKS. We agreed because we didn't have any capital or equipment to cut down the trees. They later paid us with some of the money gained from the exploitation," he said.

Hambali told the court that he and his partner, Budi Surlani, had received a total of Rp 2.8 billion in early installments from Rosman, a general manager at RAPP who is at large, after the takeovers in July 2005.

Hambali said at least Rp 1.5 billion went to Azmun and Rp 600 million to Asral Rahman, head of the Riau forestry office.

Azmun has been suspended as Palelawang regent as he stands trial for illegally issuing authorization letters to 15 companies for the utilization of more than 120,000 hectares of forest in Pelalawan, Riau, in 2002 and 2003.

The authorization letters, which gave permission to utilize planted forest resources, were later used to exploit natural forest by the companies.

Prosecutors of the Corruption Eradication Commission (KPK) said the exploitation of the forest resources by the companies caused a total of Rp 1.2 trillion (US$128 million) in losses to the state.

Seven of the companies were established by Azmun's relatives and acquaintances, and none of them met the criteria necessary for forestry enterprises in terms of financial and technical qualifications.

Six of the seven companies belonging to Azmun's relatives and cronies were taken over by PKS/RAPP soon after their authorization letters were issued.

Prosecutors said RAPP gained more than Rp 930 billion from the exploitation of forest resources.

Azmun received more than Rp 19 billion from the companies since he issued the letters; while Azmun's brother, Tengku Lukman Jaafar, who was involved in establishing some of the companies in 2001, earned more than Rp 8 billion, the indictment says.

A total of Rp 240 million also went to Fredrik Suli and Sudirno, both senior officials with the Riau forestry office, it says.

Presiding judge Kresna Menon adjourned the trial until next Friday to hear testimony from more witnesses. (dre)