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10/29/1978 - A Visit to P.T. ITCI by William E. Knowland

NOT FOR PUBLICATION WITHOUT WRITER S CONSENT INSTITUTE OF CURRENT WORLD AFFAIRS WEK I Borobudur Hotel Jakarta A Visit P T ITCI Indonesia October Mr Peter B Martin Executive Director Institute Current World Affairs West Wheelock Street Hanover New Hampshire 03755 USA Dear Mr Martin During weeks I attending World Forestry Congress Jakarta Also present ICWA fellows Deanna Donovan Gary Hartshorn foresters countries dozen international organizations The Indonesian forestry ministry deserves marks organization Congress The papers presentations formal sessions valuable themselves enhanced excellent series study tours various Indonesian forest areas Before congress began Deanna Donovan I joined other delegates these study tours In eight short visited East Kalimantan Bali Java I would share interesting visit P T ITCI company transform timber industry Southeast Asia While nearly national foreign logging companies Indonesia still approach forestry moderated extent government enforce logging policies P T International Timber Company Indonesia P T ITCI investing heavily machinery infrastructure license Even significantly ITCI working closely Indonesian government develop yielding plantations growing tropical trees In U S yield plantations cornerstone timber industry Indonesia major experiment ITCI hectare square timber concession East Kalimantan Indonesian Borneo first congress study To there first Jakarta Balikpapan second largest East Kalimantan The provinces Kalimantan South Central East West cover southern thirds Borneo world third largest island after Greenland New Guinea Most covered swamp jungle Although Kalimantan comprises William Knowiand Institute Forest Man Fellow investigating forests economic development Indonesia Indonesia people In recent years Kalimantan become important source timber Balikpapan become something Offshore beach Pertamina Indonesian national petroleum company Union Oil refineries there Ballkpapan population about doubled decade We gathered Blue Hotel Balikpapan first evening large dinner local Before dancing began however introduced Craig Steggall ITCI manager During Craig became familiar figure brief welcome obvious enthusiasm ITCI exceeded thoughtful concern welfare After promising everything possible visit enjoyable informative Craig warned East Kalimantan strains malaria resistant chloroquine malaria commonly U S He quickly assured however there worry ITCI would provide aneffective alernative those chloroquine Two Danish couples signed Inadvertantly reinforced appreciation careful preparations TCI visit The Danes arrived Jakarta without receiving place Of departure airport already They caught first plane Balik papan morning again We already departed ITCI Kenangan several miles river Balikpapan Undaunted Danes hired small wharf began river Late afternoon return BalikpaPan their Mostly submerged being towed shore They rammed floating Their wooden badly gouged quickly began They clung floundering rescued passing fishermen without encountering sharks crocodiles purportedly inhabit river We awakened board large motor launches would ferry Kenangan A sultry pushed through clouded densely humid atmosphere turning endlessly jungle either shore green green cruised murky river Every miles there would increase traps poles rising water shore metallic gleam mosque smoke rising thatched houses behind trees perhaps people moving among boats canoes pulled shore The overwhelming impression vastness The river forest seemed swallow everything their monotonous hugeness Aside quiet villages signs gulls would appear overhead briefly drift small narrow would suddenly water silently splash later disappearing river As neared Kenangan passed large freighter Timber Leader fully loaded ITCI timber bound river Straits Makassar probably Korea Japan A minutes later disembarked docks where introduced Bryce Webster manager several other management resear employees would accompanying A dozen ITCI employees Americans leave Weyerhaeuser Company In TCI joint venture between Weyerhaeuser Indonesian partner This largely explains ITC typical investment program efforts develop growing plantations One largest forest products companies world WeyerhaeuSer leads American industry research technical innovation intensive management forest holdings It practically High Yield Forestry trademark Although worldwide marketing network Weyerhaeuser investments overseas timber production processing There logging concession sawmill Sabah Malaysian Borneo there logging operation Philippines although abandoned ITCI Weyerhaeuser largest tropical involvement In addition being profitable investment itself ITCI rtunity experience tropical forestry If Weyerhaeuser adapt principles scientific forestry research management tropical forests those East Kalimantan again achieved major technical advance After introductions split busload sized groups about persons assigned guides I purposely joined group comprised almost exclusively Japanese delegates It already become obvious Japanese foresters spoke little English I anticipated little direct competition questioning guide Happily guide turned manager ITCI forestry regeneration research Bob Lowery We began driving through downtown Kenangan Kenangan small wilderness complete schools mosque small modern hospital recreation facilities electricity chlorinated water ITCI employees their families On outskirts Kenangan passed fruit vegetable garden provides several fresh produce community A little farther there number simple along roadside Bob Lowery explained these people living c01ncession before ITCi arrived Most immigrants nearby island Sulawesi Although scattered through hillS practicing shifting cultivation roads constructed Of moved roadside where continue cultiVate bananas papayas other fruits ITCI employees One purpose ITCI vegetable garden permanent cropping system established these slash farmers cease their periodic destruction local forest In addition settlers already living there families recently transmigrated government hectare within TCI concession Under national transmigration program government sponsoring resettlement landless farmers densely overpopulated islands Java Bali populated areas especially Kalimantan Each transmigrant family receives hectares farming initial subsidy government Because Kalimantan soils generally farming ITCI officials possible support people vigorous forest industry agriculture Integrating least settlers ITCI employment might vital defense since transmigrants already encroaching maintained forest several thousand settlers expected We surrounded lowland dipterocarp forest Dipterocarp forests despite images conjured their their appearance equatorial refugia lingering dinosaurs The derived plant family Dipterqcarpacaea Latin double winged seeds Members family seedpods somewhat resemble winged American maples family Aceraceae extending either small seeds The family several dozen species names meranti kapur keruing bankirai They overwhelmingly dominate lowland jungles Southeast Asia numbers economic value foresters commonly refer areas simply dipterocarp forests While drove along Bob described ITCl forestry program Like other private logging companies Indonesia ITCI immediate concern exploit virgin stands dipterocarps within concession ITCI cutting rights period presently cutting about million cubic meters Under official Indonesian select forestry management system logging companies those trees trunk diameter centimeters inches large trees hectare regeneration Theoretically forest regrown original within years logged again In practice however things certain Each hectare dipterocarp forest contain species which commercially valuable The felling large trees unavoidably destroys damages residual trees frequently ITCI tries minimize damage carefully determining least harmful direction But there damage dragging roads where transferred grading sorting stations The tropical soils notorio fragile disturbances inherent logging serious erosion problems reduced fertility Logging conducted large scale Indonesia little decade select system renewable rotation These uncertainties prompted ITCI permission Indonesian government develop plantations growing varieties While hectare natural dipterocarp forest grows timber growing plantations should produce times amount We through logged unlogged areas gradually gaining altitude until first Here highest elevations concession about meters above level lowland dipterocarps giving other species Our first special hectare arboretum large agathis trees Agathis borneensis aside years agofstudy protected sourcef Some agathis stood meters nearly centimeters thick The gathis particularly valuable grows slowly becom areas We buses started cleared trail arboretum For Us first Southeast Asian forest Forest seems better jungle least arboretum between trunks Was unencumbered vines climbers As temperate woodland pleasantly perceptibly cooler outside It surprisingly quiet The wildlife sighted reboarded buses members American delegation unknowingly acquaintance small leeches Needless discovered relationships ended We moved demonstration felling yarding operation A large through crashing while another skidded forest debarked loaded truck large clawed tractor Except jungle backdrop scene could almost forest North America But there cameras clicking might wondered whether these tourist foresters loaded before A substantial quite excellent lunch served under large overlooking agathis arboretum large forest reserve Anti malaria pills served dessert After lunch inspected plantations More hectares nearly square miles planted since being extended hectares More species being tried nearly thirds plantatings varieties Eucalyptus deglupta Pinus caribaea Caribbean A worker peels before carried front loader Since neither deglupta Caribbean native Indonesia seeds imported The deglupta seeds Philippines which nearby similar climate growing conditions But source seeds Caribbean Guatemala world Although pines grown imported already producing fiber faster natural forest might better still enhanced careful genetic selection A visible genetic problem ITCI plantations large number foxtails trees several years When foxtails simply stops sending lateral branches produces bushy exactly suggests The eventually foxtail aberration seriously reduces quality In carefully controlled breeding program foxtails could virtually eliminated plantation within generation There fundamental barrier starting genetic improvement program pines Indonesia however Although climate Southeast Asia excellent growing pines doesn stimulate their reproduction The cones produced small yield disappointingly little Because Weyerhaeuser establishing Caribbean orchards northern Brazil But these producing almost another decade And although seeds grown controlled breeding programs Brazil other regions conducive reproduction greatly improved present stock local breeding population necessary develop optimum varieties Kaiimantan environment A senior Japanese forester having difficulty comprehending English questions answers Finally younger colleagues pines When planted widened there audible Most trees already meters meters The pines should ready cutting within years alyptus within years The abundant tropical sunshine rainfall obviously conducive plant growth The plantations simply concentrate productivity which otherwise would diffused myriad plants kinds sizes shapes jungle uniform stands industrially valuable species trees But ITCI scientists acknowledged means certain plantation scheme Miracle trees South America Africa another region Southeast Asia thrive local environment Becaus plantations monocultures concentrated stands single species unusually vulnerable diseases insects Some promising native species tested turned favored foods monkeys dther lotal Wi dlife Even plantations survive immediate biological threats hitch during first roOation overstrain local soils making heavy chemical fertilizers necessary sustain regrowth Our nursery where seedlings grown plantations Approximately seedings hectare planted nearly million needed Potting tending seedlings occupies persons women A blend thoroughly mixed sterilized little fertilizer added scooped small black polyethylene which stand tubes Tiny seedlings germinated special seedbeds inserted under partial shade watered tended weeks until ready transplanted field Planting seeds transplanting germinated seedlings plasic Transplanting occurs possible after start rainy season An effort logged planted prior planting This temporarily grasses other plants would compete seedlings The ashes provide seedlings initial boost nutrients However rains begin later usual weeds quickly begun reestablish themselves rains early impossible first place All heading where boats waiting return Balikpapan We great still brief glimpse potentials problems ITCI operations Several later ITCI headquarters Jakarta I spoke Norman Johnson president ITCI Weyerhaeuser president Far East He underscored reasons ITCI interest tropical plantations First growing plantations offer potentially higher profits Other things being equal plantation establishment Value rates forestry investment shortest duration offer highest return In addition higher return investment plantations might investment opportunities Assured future supplies uniform quality should greatly encourage investment processing Indonesia Almost billion products exported Indonesia unprocessed This means other countries notably Japan South Korea Taiwan gained profits converting Indonesia timber lumber plywood other products North America Europe To encourage domestic processing Indonesian government earlier doubled exports eliminated processed products The goernment begun cubic meter timber production develop domestic industry But whether revenues channeled large state controlled projects returned private entrepreneurs reinvestment still uncertain ITCI other foreign investors would course prefer latter course After establishing logging operation plantation program ITCI begun develop processing capacity Within several months million sawmill Kenangan capable processing annually This ITCI annual production doubling capacity already planned ITCI begun application plywood factory As processing costs Japan Korea Taiwan especially Indonesia other timber producers increase their export prices Indonesia attract increased investments processing This might accelerated additional government incentives investors But limiting factor investors uncertainties about Indonesia future timber supply Slash agriculture already consumed equal Indonesia remaining forests additi million hectares being Because government begun ambitious replanting reclamation program Norm Johnson feels private companies because already equipment facilities needed conduct plantation program could government reforestation targets In reforested areas might important sources future supply timber companies However companies divert their efforts replant their concessions alone volunteer additional planting least without incentives Therefore ITCI among others proposal incentives national forestry department As JohnSon notes Chile reforestation incentives since early 1930s Brazil enacted plantation incentive Philippines recently began leasing lands plantations All these programs appear highly successful Johnson feels incentives could Indonesia In paper prepared World Forestry Congress concludes Indonesia great greater opportunity start industrial plantation program nation earth In paper Johnson makes final plantations argument gains support ecologists environmentalists otherwise doubts about thedesirability plantation monocultures Plantations would reduce pressure natural forest produce timber Plantations present forest would double total production allow areas aside protection forests natural areas areas managed select basis What potential problems diseases insects fertility concern forest ecologists Johnson other ITCI scientists I spoke cautiously optimistic We learn match environment constantly watch problems develop ITCI clearly feels 1biological opportunities tropical plantations justify anticipated biological risks Outside northern forests Soviet Union tropics basket hungry world Where tropical latitudes plantations started ready harvest years ITCI seems doing right things It takes trouble logging roads crushed continue remove during rainy season other logging companies curtailed their operations But Indonesian government regard cmpany And ITCI capital intensive plantations approach other logging companies Indonesia follow their example Weyerhaeuser partn ITCI venture P T Tri Usaha Bhakti investing company Indonesian In military dominated country Indonesia would expect connection would commercially advantageous ITCI officials however insisted perceive special treatment government They additional cutting license wanted It Indonesian government difficulty first believing logging company desired plant trees At point government expressed concern ITCI might concentrating tmber cutting enough fulfill licensed ITCI takes pains closely relevent government agencies It conducts forestry intern progrmm students Indonesian forestry schools It difficult though government regards ITCI forestry management program Perhaps positive indication ITCI singled shown world forestry community congress study tours Certainly interest positive comments delegates lvisited Kenangan should enhanced ITCI reputation Perhaps publicity motivate other logging companies Indonesia although seems unlikely The existing forest still attractive readily exploitable profitable This situation change rapidly during decade however As mostaccesslble forest consumed world price timber rises there greater incentive develop sustainable yield management programs I suspect other timber companies Southeast Asia already alert ITCI years letting ITCI risks mistakes United States Weyerhaeuser pioneered forestry techniques became standard practice industry Sincerely William E Knowland