Pulp companies criticized for crisis excuses

EoF News / 17 November 2008

PEKANBARU (EoF News)—Pulp and paper companies in Riau province were criticized for compelling the government for their own interest following their announcement publicly that they were hit by globally financial crisis and needed to dismiss employees.

Media reported last week that two pulp companies in the province which respectively affiliated to Asia Pulp & Paper (APP) and Asian Pacific Resources International Limited (APRIL) planned to lay off employees due to financial crisis hit them as they suffered shortage of raw material for pulp production (Riau Pos, 10/11/2008).

Executives of PT Riau Andalan Pulp & Paper (RAPP, affiliated to APRIL) held a meeting with Riau Government where they complained to the government saying that they planned to lay off thousands of employees if the economic condition deteriorates.

The pulp industry lobbied the acting Riau Governor Wan Abu Bakar as well as the elected Riau Governor Rusli Zainal to help the companies to avoid lay-offs at their companies. One of recommendations that they uttered to Riau Government is to use confiscated logs in concessions that under custody of police as they claimed they lack of raw materials for pulp production.

Mansyur, chairman of Riau branch Forestry Faculty Graduates Association, said companies pressured the government to obtain facilities by pretending that they faced bankruptcy due to globally financial crisis.

“It seems there is political condition [supported the companies’ excuses], it is political economy,” Mansyur told Tribun Pekanbaru daily today (17/11/2008) referring to the companies’ reasons to plan dismiss employees and demanded an immediate intervention by the government.

Meanwhile, Johny Setiawan Mundung, Walhi Riau director executive, said separately that it is not the first time the pulp industry threatened to lay off workers to keep up their bargaining position with the government.

“That is why there is no relevance between decreasing selling of pulp and paper products and the shortage of raw material suffered by the companies,” he told EoF website today (17/11/2008).

Mansyur said that the pulp industry should be transparent and be honest in explaining the real condition faced by companies to the employees and government. He said the pulp companies had conducted expansion some years ago therefore they were prepared with long-term and mid-term planning for raw material sufficiency.

“Therefore the reason of lay-off or dismiss employees sounds political, there must be something they want,” Mansyur told Tribun Pekanbaru as saying.

Tribun Pekanbaru reported today that deputy head of Riau Forestry Service Dedi Purwanto said that the Minister of Forestry would send its team to help the pulp companies to regain logs that seized by the police during the anti-illegal logging operation last year.

He said the Ministry of Forestry team would socialize the agreement to use seized logs which are out of the police line.