Forest Product Industry Indonesia

In summary: My decision in this case is that I would choose scenario 2 and discard scenario 1 and

To find out all available options and their pros and cons my team has put together the following analysis:

Amazon timber is found in the Amazon rainforest, South America. The Amazon is home to many diverse species of both flora and fauna, timber being a valuable resource harvested from making room for crops, farms and roads as well as logging. 95% of all loggings are done within a 5km radius of a road, both legal and illegal. As the dense Amazon rainforest is difficult to infiltrate, loggers resort to illegally cutting trees down to form roads in which they can use to gain access to more trees. As a consequence of this, out of the 170,000kms of road in the Amazon, for every 1km of legal road there is a least 3km of illegal. Once cut down to trees are cut into smaller pieces (see figure a) and shipped to warehouses

The case I will analyze and discuss in this case study is “IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labor”. I will begin with the vision, values, and strategy of IKEA and an internal analysis of the issues that they have faced as of the time of the case. Next, I will detail the issues IKEA faced in the years prior to the Indian rugs and child labor challenge. Then I will describe the Indian rug and child labor problem that IKEA faced

It is highly recommended to undertake option 1b as it has the greatest benefit to users. As well as option 1b is less risk. Option 1a is the second feasible scenario. It is also suggest that option 2 should be rejected. And base on the sensitivity analysis, preference of option 1b will maintain the same no matter how the variables change.

The Indonesian government has shown, through its interactions with Bre-X, that it is easily influenced by the demands of President Suharto’s family and by pressures from respected individuals. For example, the Barrick proposal received endorsement from the government only after Barrick hired Suharto’s daughter (Tutut) and encouragement from former U.S. President George Bush and former Canadian Prime Minister Brian Mulroney. Despite making an alliance with PT Panutan Duta in late October, Bre-X was late in recognizing the importance of relationship building in conducting business in Indonesia. With only eight days to negotiate the deal with Barrick, Bre-X does not have time to develop the necessary connections to succeed in Indonesia without a competent partner.

a. Investigate the original calculation of Setup Cost (denoted by “S” in the case), is there

Accounting for 11% of Indonesia’s export earnings, palm oil is the most valuable agricultural export. Creating many environmental problems, including globally, cultivating large quantities of palm involves clearing substantial areas of virgin tropical rain forest. Additionally, local communities, indigenous people, and small landowners are driven from their own land. Leading to more than 700 land conflicts, human rights violations are increasingly breached, even on ‘sustainable’ plantations. Palm oil companies are regulated by the Roundtable on Sustainable Palm Oil (RSPO), however, corruption and illegal practice are widely identified.

Forest plays an essential role for local livelihood practices and considered as an important source of national revenue as well. However, in developing countries such as Indonesia, forest degradation has become at an alarming rate as a result of the over-exploitation, unsustainable practices, forest fires, and non-eco-friendly development projects in the forested areas like forest conversion into mining and monoculture plantation. Massive deforestation naturally results in biodiversity losses and in many places leads to soil erosion, siltation and damage of the forests’ hydrological functions, thus worsening food security and compromising forests’ future economic and environmental attributes [1] and it has been reported that Indonesia lost more than 6 million hectares of natural forest between 2000 and 2012 [2]. Not only rich in biological resources (10% of the world's remaining flowering plants species, 12% of mammal species, 16% of reptile species, 25% of fish species and 17% of bird species), these forests are also home to tens of millions of Indonesian citizens. Many, if not most of these citizens are indigenous people with culturally rich and diverse customs and traditions [3].

Deforestation is the process of clearing substantial areas containing forests or trees, to alter the land for another use. Whether it’s burning or cutting down the trees, deforestation is the second leading cause of climate change. Trees store carbon dioxide, shield us from rising and dropping temperatures, and protect the soil from erosion. Half of Indonesia contains rainforests, making it a big contributor to climate change. Oil palm trees are the main reason for the deforestation occurring, due to them containing a nut where palm oil is extracted. Steering away from the use of palm oil, using other alternatives to firewood, and the most obvious is to plant more trees. The destruction of the rainforest in Indonesia does climate change no favors.

Mr. Fisher, President of Central Steel Door, made many mistakes in his efforts to hire a sales manager in Europe. First, advertising in the International Herald Tribune is only going to attract Americans who lack the intelligence and in-country expertise the company needs to successfully compete in unfamiliar markets. Second, he fails to make the most of these candidates that these ads generate by asking them for referrals and offering an incentive. He fails to use the limited success of the ads to successfully network into the international community. Third, the lack of sensitivity ot living costs in Belgium and Germany for sales manager led to them quickly resigning. Fourth, Mr. Fisher didn't coordinate with the Belgian government to ensure employment taxes were paid on time, leading to a bill for back taxes of thousands of dollars. Fifth, the hiring of ten local people to staff distribution centers and the firing of five of them not only had to be communicated months in advance to local government authorities, Central Steel Door is legally obligated to pay them for a full year of their salaries based on German law. Sixth, the ignorance of local, regional and national laws ends up costing the company more than it made on any sales in the region ruing the case study's timeframe. Seventh, Mr., Fisher neglected to consider how the cultural differences between the Untied

The goal of this committee for many years for sustainable economic development has been to rapidly increase productivity and trade without overusing resources or sacrificing the future economy. Developing a country can get messy and the people at the top hungry for fast results or in this case looking to develop quickly to compete on a global scale will completely disregard workers human rights, strip citizens of their land, resources and destroy the environment. That is why Indonesia firmly believes people who are in poverty are affected most by unstainable development, therefore industrializing and trade must be done in a controlled and thoughtful manner. With Indonesia being the world’s largest producer of palm oil this billion dollar business is also mixed with corruption and inadequate law enforcement from our government. With vast amounts of deforestation occurring from various companies for the creation of plantations less than 10% of palm oil produced a year is actually sustainable. To be exact between 2000 – 2010 52 million cubic meters of wood have been cut down for plantations with an additional 39 million cubic meters being cut illegally. Indonesia urges ECOFIN to help workers sustain their human rights and dignity to the poor innocent

This paper examines the economic environment of doing business in Indonesia. It takes into account several dimensions such as political, legal, economics, social and technology factors. However, economics and political factors are covered in depth as they have a greater impact on establishing advantages and challenges when a firm might decide to set up a business in Indonesia. The results show that not only legal origins have an impact on corporate finance, ownership and structure, but also politics. The poor quality of the judiciary and legal system and the bureaucracy is much more a legacy of the Soeharto government than of the Dutch colonial system (and French civil law). From the analysis of

What is the UNFF? UNFF is the United Nations Forum on Forests. The UN Economic and Social Council created the UNFF in 2000 with the goal to promote “the management, conservation and sustainable development of the world’s forests, and to strengthen long-term political commitment to this end” Basically, the idea was to get the worlds to agree to a long term plan to help preserve the world’s forests. Unfortunately, the first talks tanked and discussion of a forests convention really did not resume until UNFF5 in 2005. Many of the proponents for a global convention already conceded it was probably not possible to get all the world’s nations to agree on this matter. Canada, the EU and Malaysia played the role of lead states during the negotiations, while developing countries were split as to the need for an international convention, but united in a call for industrialized countries to implement financial assistance and technology transfer. In the end it was recognized no treaty was possible without the support of two key players in the veto coalition – the US (largest timber industry) and Brazil (largest tropical forest). It wasn’t until UNFF6 that the UN finally secured the next step in regime strengthening by developing a voluntary instrument to be followed. Here, delegates agreed on four global objectives on forests; reversing the loss of forest cover and increasing efforts to prevent forest degradation, enhancing forest benefits and their contribution to international

The Conservation Reserve Program (CRP) is a program administered by the Farm Service Agency (FSA) under the United States Department of Agriculture. The United States Department of Agriculture was created by President Abraham Lincoln, the U.S.D.A was originally created to do research. The Hatch Act further expanded the powers and funding of the U.S.D.A.. According to Free Agriculture Restore Markets (2017) “today the USDA governs the way millions of Americans are fed daily, controls what food is available for our purchase, and decides what crops receive federal funding.”