Indonesia now in forefront of legal timber governance

Siti Nurbaya Jakarta Post 25 Nov 16;

Who would have known that Indonesia, once infamously known for its rampant illegal logging, would today be in the forefront of forest law enforcement and trade?

Last week, in the early hours of Nov. 15, as people from around the world – myself included — were convening the United Nations Convention on Climate Change at the 22nd Conference of Parties ( COP22 ) in Marrakech, Indonesia on its own home front issued the world’s very first Forest Law Enforcement Governance and Trade (or FLEGT) licenses.

In fact, 36 licenses were issued in those first two hours while I was away. They were for timber products whose companies had queued up patiently to get the very first licenses on that historic date.

As it happened, Nov. 15 came and went without much fanfare, but for forest governance, not to mention maintaining forest sustainability for a very long future, it was a red-letter date for Indonesia.

For FLEGT licensing by Indonesia means that, for the first time ever, the European Union is exempting an entire country’s timber exports from the requirements of its EU Timber Regulation (EUTR), which prohibits trade in illegally harvested timber products.

The FLEGT license guarantees that timber from Indonesia has been harvested, processed and exported in accordance with Indonesian laws.

It’s fitting for me to reiterate here that FLEGT licenses serve border control requirements and are not intended as a product label, but as FLEGT-licensed products automatically meet the EUTR requirements, EU-based importers will not need to do further due diligence before placing them on the market.

Here lies the triumph. Indonesia has achieved great progress in bringing its forest sector under control.

By addressing legality, not only have we met the very high and stringent certification standards of the EU — an important market that represents 28 countries — we have also managed to build a foundation for sustainable forest management and made it our contributing action to address climate change.

Long before the EU got into the picture, Indonesia had decided that it would halt illegal logging once and for all, for the terrible environmental degradation that had resulted, the wanton deforestation and, more to the point, the unrecorded state revenues amounting to billions, if not trillions of rupiah that we had lost.

In 2001, Indonesia hosted a regional conference that helped put illegal logging on the map as an issue of global concern. The conference ended with the Bali Declaration on Forest Law and Governance.

By 2003, Indonesia had begun a long — and oft-times painful — process of dialogue and compromise based on a multistakeholder platform to improve transparency, public participation and all aspects of good forest governance.

In the ensuing years, Indonesia developed a system for assuring that all our timber products were harvested or imported, traded, processed and exported in compliance with national laws pertaining to the environment, the economy and all other social issues, as identified by the stakeholders.

The resulting timber legality assurance system, or SVLK (Sistem Verifikasi Legalitas Kayu), is subject to continual independent monitoring by civil society and periodic evaluation by independent monitors. I’m not saying that the path was easy.

When can a multistakeholder platform ever be? However, the results are well worth it.

Indonesia has guaranteed that this improvement mechanism is continuous, based on input from all those stakeholders, data collection from the field, forest monitoring by independent NGOs, law enforcement and monitoring of the market for FLEGT-licensed timber products.

On April 21 in Brussels, President Joko “Jokowi” Widodo and EU President Jean-Claude Juncker signed a joint statement for Indonesia’s issuance of the FLEGT License in this same year. We are now seeing that agreement come to fruition after 15 years of hard work.

This is the direct result of increasing transparency, better accountability and stakeholder participation in decisions about Indonesia’s forests. Today I am proud to say all of Indonesia’s timber products, exports and otherwise, are from independently audited factories and forests.

To round off this piece, allow me to give you some statistics: To date, about 24 million hectares of natural and plantation forest are SVLK-certified, together with 2,843 forest-based enterprises and industries.

Since January 2016, Indonesia exported SVLK-licensed timber products to about 200 countries, including the 28 EU countries, with a total worth of about US$8.2 billion. I’m overjoyed to say that 100 percent of the timber harvested in natural forest concessions and 100 percent of the timber from plantation forest concessions is SVLK-certified.

From Nov. 15 until 10 a.m. on Nov. 23, Indonesia had issued 845 FLEGT licenses for exporters with products destined for 24 countries in the EU, with a total value of $24.96 million. These products included wood panels with a total value of $11.92 million and furniture products worth $7.25 million.

It’s important to note that this is by no means the work of one ministry. The whole deal was a joint effort of many ministries working together, including the Foreign Affairs Ministry, the Trade Ministry, the Industry Ministry, the Finance Ministry, the ministry for cooperatives and small and medium enterprises and my own ministry.

By the end of this year, the first shipments of FLEGT-licensed timber from Indonesia will enter EU ports. The EU countries have completed all their internal procedures to recognize FLEGT licensing from Indonesia.

The competent authorities and timber importers in the member countries are now prepared to receive these shipments.

Very soon, Indonesian timber products will be firmly placed in the EU market, a market that demands zero risk of illegal logging.

Indonesia’s FLEGT-licensed products are 100 percent guaranteed to have zero risk of having been illegally logged.
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The writer is minister of environment and forestry.


Indonesia reaches historic milestone in combating illegal logging
Moazzam Malik Jakarta Post 25 Nov 16;

In the early 2000s illegally logged timber was estimated to account for 80 percent of the total national harvest in Indonesia. This illegal trade caused widespread deforestation, impacted the livelihoods of forest-dependent communities, robbed the government of billions in revenues, and destroyed vital habitat for wildlife.

Following campaigns highlighting the environmental and social impacts from illegal logging, many buyers from Europe stopped purchasing Indonesian timber. It has taken 15 years to turn this around.

Just recently, Indonesia officially celebrated a historic achievement: Indonesia has become the first country in the world to qualify under the European Union’s timber licensing scheme known as ‘FLEGT’.

Indonesia is now able to export verified legal timber products to the EU without hindrance. Indonesia’s timber industry — large producers of paper and construction timber as well as small producers of bespoke furniture — can now access lucrative European markets much more easily.

Previously European importers had to prove that wood products from Indonesia had not been illegally logged; a costly and time consuming process.

With the roll-out of the licensing scheme, all wood products sourced directly from Indonesia are now presumed legal under the EU Timber Regulation.

For European importers of timber products, Indonesia has just become cheaper, easier and less risky than any other supplier in the world. And for European consumers, Indonesian timber products have just become more attractive as they are certified as legally sourced.

The first shipment of FLEGT licensed timber left on Nov. 15 bound for ports in the UK, Belgium, and Germany. This is a major step forward in the fight against illegal logging and deforestation.

It will help ensure sustainability for Indonesia’s precious forests and for the millions of people whose livelihoods depend on them. By tackling illegal logging head-on, the introduction of FLEGT is also good for the global environment as it will help Indonesia tackle its carbon emissions.

It also represents a major success for the Indonesian economy. With growing volumes of trade between the EU and Indonesia, the Ministry of Environment and Forestry estimates that furniture exports could grow by 200 percent by 2019 and create thousands of jobs and livelihoods in rural and urban areas.

Indonesia’s success is based on the creation of its own national licensing scheme — the Sistem Verifikasi Legalitas Kayu (SVLK). SVLK was developed over many years with UK support through a series of consultations involving government, the private sector, and civil society.

Today more than 13 million hectares of natural forest are certified legal under SVLK — an area the size of Java. The export value of the forest sector has already risen to almost £10 billion in 2015, creating thousands of jobs and supporting growth amongst small and medium enterprises.

And the number of reported cases of illegal logging has reduced significantly, by 20-fold over the last 10 years according to government figures.

On a visit to Central Java earlier in the year, I saw for myself how SVLK is certifying ‘legal wood’ throughout the supply chain, from the forest to the factory gate. Even more impressively, the scheme is flexible enough to accommodate micro-businesses as well as medium and larger companies.

I met young entrepreneurs, aspiring business men and women, as well as experienced factory owners, all dreaming of becoming exporters or taking growing shares of the global market.

They told me that they had signed up to SVLK individually or in collectives because it was the key to opening the door to exports. And they knew that trade is key to creating profit, employment and better prospects in their communities.

The UK has been a proud supporter of Indonesia’s effort to tackle illegal logging and place its forest sector on a more sustainable footing.

Trust in SVLK and FLEGT could easily be eroded should illegal shipments go undetected.

Working closely with the Ministry of Environment and Forestry through the Multi-stakeholder Forestry Program, the UK helped facilitate the design, development, and roll-out of SVLK, and its recognition under the EU FLEGT certification scheme.

Indonesia’s success in tackling illegal logging has brought important benefits for the UK in return, as FLEGT certification has made it easier for businesses to import from Indonesia.

The UK is the largest importer of Indonesian wood products in Europe, receiving roughly a quarter of the US$1 billion exported to the European Union annually. We are confident that the UK will continue to be a major market for SVLK licensed wood products from Indonesia following our eventual exit from the EU.

But the work does not end here. Trust in SVLK and FLEGT could easily be eroded should illegal shipments go undetected.

All parties involved in this success need to remain vigilant and ensure the scheme continues to cement progress towards better forestry practice.

Although illegal logging may no longer be a major driver of deforestation thanks to SVLK, land conversion and land grabs associated with the booming palm oil sector are a growing cause of concern.

As was the case 15 years ago with illegal logging, NGOs are campaigning for better environmental practices in the palm oil business.

Indonesia is now the world’s biggest palm-oil producer. It is an economically critical sector accounting for $18.6 billion in exports in 2015, or about 2.1 percent of Indonesia’s gross domestic product.

As was the case 15 years ago, the question is can Indonesia balance environmental concerns and secure access to international markets?

In short, can Indonesia learn and apply the lessons from the SVLK experience to the palm oil business through the reform of its International Standard for Palm Oil (ISPO). Can Indonesia create a palm oil standard that is flexible enough to accommodate small holders as well as large producers and be credible internationally? If successful, Indonesia could use international trade to drive reforms in forest and land governance necessary for sustainable economic growth, and in the process boost its economy.

The UK is committed to continuing to work in partnership with Indonesia to address these challenges. We have been an advocate for pragmatic solutions to the world’s environmental issues for decades.

Following the successful international collaboration on SVLK and FLEGT, we stand ready to support Indonesia’s leadership on supporting the emergence of a sustainable palm oil industry.

The future of Indonesia’s forests and the livelihoods of millions of people depend on it.
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The writer is the British Ambassador to Indonesia, ASEAN and Timor Leste.


RI’s timber to get an edge in Europe
Dylan Amirio The Jakarta Post 25 Nov 16;

Certified: Environment and Forestry Minister Siti Nurbaya Bakar (left) and Coordinating Economic Minister Darmin Nasution (second left), hand over Forest Law Enforcement Governance Trade (FLEGT) licenses in Jakarta on Thursday to timber manufacturer Corinthian Industries Indonesia general manager Aminudin Soetara (from left to right), Pindo Deli Pulp & Paper director Suhendra Wiriadinata and woodworking company Aneka Rimba Indonesia Atim Sugianto, the companies being among the first 10 Indonesian timber exporters to receive the certification to export to the European Union. (JP/Wendra Ajistyatama)

As Indonesia has become the first country to receive an exemption from screening to ensure its timber is sourced in accordance with European Union regulations, its wood exports are set to get a major boost on the continent.

Local suppliers made the first shipment last week of wood products with EU-approved Foreign Law Enforcement Governance and Trade (FLEGT) licenses, which certify the timber as being legally sourced.

EU Ambassador to Indonesia Vincent Guerend said Thursday that the licenses helped provide clarity over how the timber was logged, clearing away the major obstacle to enter Indonesia’s key market.

Indonesia, which has the world’s third-largest tropical rain forest area, was once notorious for massive illegal logging and its wood products were heavily stigmatized.

“I think Indonesian timber products now will have a competitive advantage in the EU. Indonesia supplies 10 percent of the world’s timber market and EU imports a third of that,” Guerent said, adding that the deal was beneficial for both parties.

With the new certification, Indonesian wood products sales may increase in primary European destinations such as Germany, France and the United Kingdom.

Exporters can enjoy reduced time normally spent for due diligence, which means lower business costs and faster delivery of products to customers.

From November 15 to 23 as many as 845 FLEGT licenses for timber products have been issued to selected exporters. Overseas shipments of these products to 24 European countries has amounted to US$24.96 million, according to official data.

Valued at $11.92 million, wooden panels make up the majority of the exports, followed by furniture with US$7.25 million, according to Coordinating Economic Minister Darmin Nasution.

Speaking at the Environment and Forestry Ministry on that day, Darmin said that Indonesian timber products would now have better access to the competitive European market, suggesting that business players should seize the opportunity.

“Indonesia’s achievement in developing a specific certification system for timber legality must act as the guide toward improving our competitiveness in the global market and also to prove Indonesia’s commitment in guaranteeing the sustainability of our natural resources,” Darmin said, referring to the national timber legality assurance system known as SVLK, which preceded the FLEGT certification.

The value of Indonesian timber exports has risen to US$10.6 billion in 2015 after the SVLK standards were implemented in 2013.

At present, the forestry sector contributes 1 percent to the nation’s gross domestic product (GDP).

Now that trade barriers for Indonesian timber exports have been lifted in Europe, new challenges arise for Indonesia’s exporters to cater to European tastes and standards.

“Innovation in the field of design, such as figuring out how to build more sustainably made furniture, will now become more important. That has to be done alongside supervising the illegal export activities that have tainted the industry for so long,” said Indonesian Institute of Sciences (LIPI) economist Latif Adam.

Earlier, Indonesian Sawmill and Woodworking Association (ISWA) chairwoman Soewarni explained that with the FLEGT license, Indonesian timber exporters would be more confident in selling their products overseas.

Vietnam and Ghana may follow Indonesia’s lead and seek to obtain FLEGT certification in the near future.