The government will have to revoke a freeze on operating permits for more than 900,000 hectares of industrial forest or the local pulp and paper industry will lose its competitiveness due to a disruption in the suply of raw materials, business groups and analysts have said. 

Executive director of the Indonesian Forest Concessionaries Association (APHI), Purwadi Suprihanto, recently demanded that the government lift its ban, arguing that it would hamper the supply of raw materials to the local pulp and paper industry. 

“We’re very much concerned about the government’s actions. The pulp and paper industry is one of the country’s most prominent industries and instead of supporting it the government has created an obstacle,” he said.

According to Purwadi, the Environment and Forestry Ministry has suspended the operating permits of 23 companies alleged to have had a hand in causing recent forest fires. The total area of forest with frozen permits has reached 901,189 hectares despite the fact that not all of the area had been burnt, he said. The pulp and paper industry has been included as one of the government’s priority industries for the period between 2015 to 2035.