Decree of the Minister of Forestry No. 326/Kpts-II/2003 on guarantee for sustainable supply of raw material and plan for fulfilment of raw material of primary forest-product industry

13A GUARANTEE FOR SUSTAINABLE SUPPLY OF RAW MATERIAL AND PLAN FOR FULFILLMENT OF RAW MATERIAL OF PRIMARY FOREST-PRODUCT INDUSTRY (Decree of the Minister of Forestry No. 326/Kpts-II/2003 dated September 19, 2003) THE MINISTER OF FORESTRY, Considering: a. that based on the provision in Article 59 paragraph (1) of Government Regulation No. 34/2002, applica tion for business license of primary forest-product industry and/or expansion must be completed by guarantee for sustainable supply of raw material; b. that in the framework of guaranteeing forest con servation, guarantee for sustainable supply of raw material to primary forest-product industry needs to be adjusted to the supporting potential of forest re sources; c. that based on the provision in Article 66 of Govern ment Regulation No. 34/2002, holders of business licenses of primary forest-product industry are obliged to formulate and convey plan for fulfillment of raw material every year; d. that in connection with the above mentioned mat ters, it is deemed necessary to stipulate guarantee for sustainable supply of row materials and annual plan for fulfillment of raw materials of the industry by a decree of the Minister of Forestry; In view of: 1. Law No. 5/1984 on Industry, 2. Law No. 5/1990 on Conservation of Biological Re sources and their Ecosystems; 3. Law No. 9/1995 on srnalt-scete Business; 4. Law No. 22/1999 on Regional Administration; 5. t,..aw No. 41/1999 on Forestry; .e . government ~eguJation No. 2~/2000 onAuthority of "~News7457/5-1-2007 the Government and Authority of Provinces as Au tonomous Regions; 7. Government Regulation No. 28/1985 on Forest Pro tection; 8. Government Regulation No. 34/2002 on Forest Ar rangement and Formulation of Planfor Managing for est, Exploiting Forest and Using Forest Area; 9. Presidential Decree No. 102/2001 on Status, Tasks, Organizational Structures and Working Arrangements of Ministries; 10.Presidential Decree No. 228jM/2001 on the Estab lishment of Mutual Cooperation Cabinet; 11.Decree of the Minister of Forestry No. 123jKpts-II/ 2001 on the Organization and Working Arrangement of the Ministry of Forestry; 12.Decree of the Minister of Forestry No. 6884jKpts-II/ 2002 on Criteria and Procedures for Evaluating Pri mary TImber Forest~ProductIndustry, 13;Decree of the Minister of Forestry No, 6887/Kpts-II/ 2002 jls Decree ofthe Minister of Forestry No. 10031/ Kpts-IIj2002 and No. 59/Kpts-IIj2003 on Procedures for Imposing Administrative Sanction on Violation of Business License to Utilize Forest Products, License to Collect Forest Products and Business License of Primary Forest Product Industry; DECIDES: To stipulate : THE DECREE OF THE MINISTER OF FORESTRY ON GUARANTEE FOR SUSTAINABLE SUPPLY OF RAW MA TERIAL AND PLAN FOR FULFILLMENT OF RAW MATE RIAL Of PRIMARY FOREST-PRODUcr INDUSTRY Q1APTER ,\ • I II l4A CHAPTER I GENERAL PROVISION Article 1 Referred to in this decree as: 1. Primary Forest Product Industry (IPHH) shall be the processing of logs and/or chip materials into semi finished goods or finished goods. 2. Primary Non-Timber Forest-Product Industry shall be the processing of non-timber forest products into semi-finished goods or finished goods. 3. Kind of Industry shell be part of an industry branch having specific characteristics with certain prodUcts resulting from production. 4. Forest Products shall be biological materials, non biological materials and their derivatives as well as service coming from forest. 5. Raw Material of Industry shall be forest product pro cessed or not processed and usable as production materials in industry. 6. Guarantee for Supply of Raw Material of Industry shall be a plan containing guarantee for supply of raw material in primary forest-product industry. 7. Plan for Fulfillment of Raw Material of Primary for est-Product Industry, hereinafter abbreviated to RPBBI t shall be a plan containing the need of raw material and supply of raw material in accordance with the permitted capacity of prtrnary forest-prod uct industry and availability of guarantee for supotv of raw material for one year. 8. Permitted Capacity is the annual maximum produc tion capacity permitted on the basis of license from the authorized official. 9. Installed Capacity shall be capacity of the main pro duction machines stipulated in layout of the primary forest-product industry, which is submitted andstipu lated in business licenseof IOdustry. I BuSfness News 7457/5-1-2007 lO.Director General shall be the Director General in charge of .Forestry Production Development. 11.Provincial Service shall be service in charge of for estry affairs in a province. 12.Regental/Munidpal Service shall be service in charge of forestry affairs in a regency/city. 13.Center shall be the Forest Product Inspector Certifi cation Center (BPSHH). CHAPTER II GUARANTEE FOR SUSTAINABLE SUPPLY OF RAW MATERIAL Article 2 (1) Every applicant of business license of primary timber or non-timber forest- product industry shall formu late and convey proposal of guarantee for sustain able supply of raw material. (2)The proposal of guarantee for sustainable supply of raw material as meant in paragraph (1) shall be in the form of book as meant in the format in Attach ment I to this decree. (3)The book of the guarantee for sustainable supply of raw material as meant in paragraph (2) shall be the main requirement, which must be enclosed in the proposal of the establishment of business license of new primary forest-product industry and/or expan sion. Article 3 The book of the guarantee for sustainable sup ply of raw material shall be formulated by considering: a. raw meterlel from legeI source or origin; b. kind of industrial products; c. permitted capacity and installed capacity of primary forest-product industry for. the respective kinds of products. Article ..... Article 4 (l)The raw material from the legal source or origin as meant in Article 3 letter a shall come from produc tion of: a. natural forest; b. timber estate; and/or c. concession forest also called communal forest. (2) Besidesthe raw material as meant in paragraph (1), source of raw material as supporting can co!'"e from: a. result of utilization of timber coming from renewal of plantation plants; b. import; and/or c. auction of confiscated, found and/or seized for est products. CHAPTER III ANNUAL PLAN FOR FULFILLMENT OF RAW MATERIAL OF INDUSTRY Part One Proposal of RPBBI Article 5 (l)Every holder of business license of primary timber and non-timber forest~product industry shall formu late and convey proposal of RPBBI for the current year, starting from January 1 to December 31. (2)The proposal of RPBBI as meant in paragraph (1) shall bereceived by the authorized official in not later than October 31 of the previous year for evaluation and legalization, (3)The authorized official as meant in paragraph (2) shall be: a, gover-nors in the case of primary timber forest product industry having a production capacity of up to 6,000 (six thousand) cubic meters perannum or large/medium/small-scale non-timber rorest product industry; or b. the Director General in the case of primary tim ber forest-product industry having a production capacity of above 6,000 (six thousand) cubic meters pcr annum. Article 6 The proposal of RPBBI as meant in Article 5 shall be conveyed to: BUsinp.ss Np.w~ 7457/5-1-2007 15A a. governors, in the case of primary timber forest-pro duct industry haVing a production capacity of up to 6,000 (six thousand) cubic meters per annum or large/medium/small·scale non-timber forest-product industry with a copy made available to: 1) the Director General; 2) Head of Provincial Service; 3) Head of Regental/Municipal Service; 4) Head of center. b. the Director General in the case of primary timber forest-product industry having a production capacity of above 6,000 (six thousand) cubic meters per annum with a wpy made available to; 1) Governor; 2) Head of Provincial Service; 3) Headof Regental/Municipal service; 4) Head of center. Part Two Formulation of RPBBI Article 7 (l)The proposal of RPBBI shall be formulated properly in accordance with the format stipulated in this de cree on the basis of: a. Book of guarantee for sustainable supply of raw material; b. Potential of natural forest referring to sustainable forest exploitation; c. Potential of timber estate; d. Stipulation of annual felling quota and annual pro duction allotment; e. Permitted capacity of primary forest-product in dustry. (2)The proposal as meant in paragraph (1) shall be ac companied/enclosed with documents supporting guarantee for raw material in the form of: a. transaction contract of raw materials with man agement of source of raw material from both state forest and concession forest; b. in the case of raw material coming from business license to utilize result of timber forest or non timber forest in the previous year, the proposal is accompaniecl by copy of decision on annual ac tion plan or annual working chart in the previous year and Protocol of Stock Opname in not later than one month before RPBBI is submitted. c. in ..... c. In the case of raw material comingfrom business license to utilize timber forest products in natu raj forest In the current year, the proposal is ec companied by stipulation of annual felling quota and/or annual production allotment based on re port on result of cruising of felling in the current year from Regental/Municipal Service and in the case of raw materials coming from the previous year, the proposal is accompanied by Protocol of Stock Opname. d. In the case of source of raw materialcoming from other legitimate license, the proposal is accom panied by copy of decision on other legitimate license, namely license to utilize timber resulting from other utilization area, business license to utilize timber from the use of forest area and/or areahaving its status(designation)changed from forest area into non-forest area. e. In the case of source of raw materialcomingfrom areaof concession right or non-forest area(plan tation), source of the raw material should be ac knowledqed by Regental/Municipal Service. f. In the case of source of raw material coming from auction in the previous year, the proposal needs to be accompanied by evidence of auction par ticipantsandauctionwinners fortified by minutes of auction from the local State Receivership and Auction Board. g. In the case of sourceof raw material coming from the import, the proposal needs to be accompa nied by agreementon import contract in the cur rent year, which is legalized by executive of pri mary forest-product industty and/or evidence of supply of imported raw material in the previous year, acknowledged by the Head of Local Provin cial Service. Article S (l)The proposal of RPBBI shall be formulated in the form of a book containing: a. General data about the relevant primary forest product industry; b. Kind of industry, permitted capacity and installed capacityj Business News 74S7/5-1~2007 16A c. Resume of guarantee for supplyof raw material; d. Production plan; e. Plan for fulfillment of raw material; f. Realization of waste resulting from the utilization of raw material; g. Marketing plan; h. Remainder of stockof raw material; l, Remainder of production stock; j. The planned number of permanentanddaily em ployees, in the case of expatriate, it must be ac companied by certificate from the institution au thorIzed to issue llcense: k, Educational and training plan for forest product inspectors. .(2)The format of book of proposal of RPBBI as sub stance of evaluation and ratification of RPBBI shall be as contained in Attachment 11 to this decree. PartThree Evaluation and RatifICation of RPBBI Article 9 (l)Based on copy of the proposal of RPBBI as meant in Article 6 letter a point 3 (three), the Head of Re~ gental/Municipal Service, in not later than Novem ber 30 of the previous year, shall have conveyed technical consideration to the Head of Provincial Service. (2)Based on the proposal of RPBBI and technical con siderationfrom the Head of Regental/Municipal Ser vice, the Head of Provincial Service shall subsequently evaluate RPBBI. (3)In the case of the technical consideration from the Head of Regental/Municipal Service being not con veyed in the deadlinealreadystipulated in paragraph (1), the Head of Provincial Service shall continue evaluating. (4)Result of the evaluation, in not later than December 15 of the previous year shall be conveyed to gover nor with a copy made avaiJalable to the Director General. (5) Based ..... (5)Based on the resUlt oftheevaluatiOn andafter fUlfiII .ng the requirement in aocordance with the provi sions in this deci'ee, governor shaH tssue decision on approval or ratification of RPBBI in not later than December 31 of the previoUsyear with a ceopy made available to: 1) the Director General; 2) Head of Provindal5ervice; 3) Head of Regental/Municipal Service; 4) Head of Center. (6) Governor can assign the Head of Provincial Service to issue approval or ratification of RPBBI. Article 10 (1) Based on copy of the proposal of RPBBI as meant in Article 6 letter b point 2 (two), the Head of Provincial Service, in not later than November 30 of the previ ous year, shall have conveyed technical consideration to the Director General. (2)Based on the proposal of RPBBI and technical con sideration from the Director General shall subse quently evaluate RPBBI. (3)In the case of the technical consideration from the Head of Provincial Service being not conveyed in the deadline already stipulated in paragraph (i), the Di rector General shall continue evaluating. (4) Basedon the result of the evaluation and after fulfill~ ing the requirement in accordance with the provl sions in this decree, the Director General shall issue decision on approval or ratification of RPBBI in not later than December 31 of tbe previous year with a copy made available to: a. Governor; b. Head of Provincial Service; C. Head of Regental/Municipal Service; d. Head of Center. (5) The Director Generalcan assign the Director in charge of processing and marketing of forest products to .issue approval or ratificatiOn of RPBBI. 17A Part Four Change/Revision of RPBBI Article 11 (l)Any change/revision for RPBBI can be suom'tted by holders of business license of primary timber and non-timber forest-product industry if source of raw material changes with the provision that the total volume does not exceed the volume of raw material contained in RPBBI already approved/ratified. (2)Proposal of change/revision for RPBBI as meant in paragraph (1) shall be submitted in accordance with the provision in Article 6 letters a and b and only permitted once in the current year period. (3) Format of book of proposal of revision for RPBBI as substance of evaluation and ratification shall be as contained Attachment III to this decree. (4)The change in source of raw material usable in revi sion for RPBBI shall be as contained in Article 4 para graphs (1) and (2). Article 12 (l)Based on copy of proposal of revision for RPBBI, the Head of Regental/Municipal Service in not later than 14 (fourteen) working days after receiving the copy of proposal of revision shall convey technical consid eration to the Head of Provincial Service. (2)In not later than 14 (fourteen) working days after receiving the proposal of revision for RPBBI and tech nical consideration from the Head of Regental/Mu nicipal Service as meant in paragraph (1), the Head of Provincial Service shall evaluate RPBBI and the result shall be conveyed to governor with a copy made available to the Director General. (3)In the case of the Head of Provincial Service not re ceiving technical consideration from the Head of Re gental/Municipal- service after 30 working days as from the date of receipt of proposal of revision for RPBBI, the Head of ~cial service shall continue evaluating. (4) In ..... (4)ln not later than 14 (fourteen) working days after receiving result of evaluation and fulfilling the re quirement in accordance with the provisions in this decree, Governor shall issue dedsion on approval or ratification of revision for RPBB1 with a copy made available to: 1) the Director General; 2) Head of Provincial Service; 3) Head of Regental/MunIcipal Service; 4) Head of Center. (5)Governor can assign the Head of Provincial Service to issue approval or ratification of revision for RPBBI. Article 13 (1) Based on copy of proposal of revision for RPBB1, the Head of Provincial Service in not later than 14 (four teen) working days after receiving the copy of pro posal of revision shall convey technical consideration to the Director General. (2)ln not later than 14 (fourteen) working days after receiving the proposal of revision for RPBBI and tech nical consideration from the Head of Provincial ser vice as meant in paragraph (1), the Director General shall evaluate RPBBI, (3)ln the case of the Director General not receiving tech nical.consideration from the Head of Provincial Ser vice after 30 working days as from the date of re ceipt of proposal of revision for RPBBI, the Director General shall continue evaluating. (4)Based on result of'evaluation and after fulfilling the requirement in accordance with the provisions in this decree, the Director General shall Issue deosion on approval or ratification of revision for RPBBI with a copy made available to: 1) Governor; 2) '-lead of Provincial Service; 3) Head of Regental/Munidpal Service; 4) Head of center. (5)The Director General can assign the Director in charge BusinessNews 7457/5-1-2007 18A of processing and marketing of forest products to issue approval or ratification of revision for RPBBI. Part Five Reporting of Realization of RPBBI Article 14 Holders of license of primary forest-product in dustry shall make monthly report on the realization of fulfillment and use of raw materials in not later than the 10th of the ensuing month, to be conveyed to: a. governors in the case of the Head of Provincial Ser vice, in the case of primary timber forest-product industry having a production capacity of up to 6,000 (six thousand) cubic meters per annum or large/ medium/small-scale non-timber forest-productindus- , try with a copy made available to the Director Gen eral, Head of Provincial Service, Head of Regental/ Municipal Service and Head of Center. b. the Director General in the case of primary timber forest-product industry havlnq a production capacity of above 6,000 (six thousand) cubic meters per annum with a copy made available to Governor, Head of Provincial Service, Head of Regental/Municipal Service and Head of Center. Part Six Fostering and Controlling Article 15 (l)The Director General and/or Head of Provincial Ser vice shall undertake technical control and fostering related to source of raw material for holders of li~ cense of primary forest-product indUStry. (2}The Head ofRegental/Municipal Service and/or Head of Center ~hall provlde technical counseling for for mutation of guarantee for sustainable supply of raw material and RPBBl for holders of license of primary forest-product industry. (3)The Director General shall monitor and evaluate the implementation of RPBBI for Timber IPHH having a production capacity of 6,000 (six thousand) cubic meters per annum by referring to guarantee for sus tainable supply of raw material, monthly report on fulfillment . . . . . 19A fulfillment as well as the use of raw material of Tim ber IPHH and report result to the Minister of for estry. (4)The Head of Provincial Service on behalf of the gov ernor shall monitor and evaluate the implementa tion of RPBBI for primary timber forest-product in dustry having a production capacity of up to 6,000 (six thousand) cubic meters per annum or large/ medium/small-scale non-timber forest-product in dustry by referring to guarantee for sustainable supply of raw material and monthly report on fulfill ment as well as the use of raw material of the pri mary forest-product industry and report the result to governor, and the Minister of Forestry in this case the Director General of Forestry Production Devel opment with a copy made available to Regent! Mayor, Head of Regental/Municipal service and Head of Center. Article 16 (l)The Director General and/or Head of Provincial Ser vice can issue written warning maximally three times at a time interval of 30 (thirty) working days if on the basis of monitoring of RPBBIas wellas report on monthly realization, holders of license of primary fo rest-product industry really deviate from the formu lated plan. (2) Basedon the written warning as meant in paragraph (1), holders of license of IPHH can give response in writing in not later than seven workinq days before the deadline of warning expires. (3)The Director General or governor can issue nulHfica tion of SPBBI. unilaterallyf unless holder of IPHH fol lows up .until the deadline of warning expires. (4)The Head of Provincial service and/or Head of Re gental/Municipal Service can take legal action and follow up in accordance with legislation in force for primary forest-product industry not implementing RPBBI in accordance with the provisions in this dec ree. Business News 7457/5-1-2007 Part Seven Sanction Article 17 (l)ln the case of the provision as meant in Article 2 and Article 5 being violated, holders of prima.y forest product industry shall be liable to sanction in accor dance with the provisions stipulated in Government Regulation No. 34/2002 Ils Decree of the Minister of Forestry No. 6887fKpts-IIf2002, No. 10031fKpts-Il/ 2002 and No. SO/Kpts-II/2003 until the license hold ers fulfill their obligations as regulated In thiS dec ree. (2)Violation related to forestrytrlrne shall be reported to the authorized institutiQ'n in accor.dance with the provisions of legisl;,tiofl in force. Part Eight Transitional Provision Article 18 In the framework of industrial restructuring, pri mary forest-product industry already operating but not yet formulating guarantee for sustainable supply of raw material shall formulate and convey to the authorized party before December 31,2003 so that it can be used as reference in the formulation of RPBBI in 2004. Part Nine Conclusion Article 19 (l)With the issuance of this decree, Decree of the Min ister of Forestry No. 594/Kpts-II/1996 on Plan for Fulfillment of Raw Materials of Industry and deriva tives shall be declared null and void. (2)The decree shall come into force as from the date of stipulation. Stipulated in Jakarta On september 19,2003 THE MINISTER OF FORESTRY Sgd MUHAMMAD PRAKOSA =eBi(R )===