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The Indonesian Forest Concessionaires Association said on Friday that the possible inclusion of production forest areas in the planned two-year logging moratorium could threaten local industries by drastically reducing timber supply.

Last month President Susilo Bambang Yudhoyono signed an agreement not to log in natural forests and to preserve peatlands for two years in exchange for a $1 billion grant from the Norwegian government.

However, according to a recently released draft regulation to implement the agreement, the moratorium may also apply to natural woods within production forest areas.

About 63 million hectares of Indonesia’s total 134 million hectares of forests are deemed production forests. These supply much of the timber used in the country.

Nanang Roffandi Ahmad, executive director of the association, also known as the APHI, said the inclusion of production forests in the moratorium would have a major impact on forestry-related industries, which depend on them for raw materials.

“We agreed to the suspension of conversion of protected or conservation forest, but for the production forest, it will really cause problems for us,” Na­nang said. “If this point of the draft is approved, how can industry get access to raw materials for production?”

He said the government had not consulted that APHI when drafting the regulation. It was written by WWF Indonesia together with the Ministry of Forestry, the Environment Ministry and the Bogor Institute of Agriculture (IPB), Nanang said.

He said the APHI was also concerned about the possibility, mentioned in the draft regulation, that the moratorium, planned for 2011-12, could be extended beyond two years.

“We should follow the letter of intent as it is, not adding to it or reducing it. If it was only for two years, then why should we add the possibility of an extension?” he said.

Aditya Bayunanda, Global Forest and Trade Network coordinator at WWF Indonesia, said the moratorium was aimed at protecting all natural forest, especially primary forest, no matter if it is within conservation or production forest areas.

Primary forest has high conservation value because it is often habitat for endangered species such as orangutans, elephants and tigers, he said.

Aditya said an extension of the moratorium could be used to fix the confusing forestry licensing and zoning system.

The draft regulation also states that companies with existing licenses to develop peatlands, which are affected by the moratorium, may be offered other areas to develop as compensation.