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Research Report

Timber legality verification system and the Voluntary Partnership Agreement in Indonesia: The challenges of the small-scale forestry sector

Krystof Obidzinski
Ahmad Dermawan
Agus Andrianto
Heru Komarudin
Dody Hernawan
Emily Fripp
Copyright Date: Jan. 1, 2014
Pages: 59
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Table of Contents

  1. (pp. 1-3)

    The commercial forestry sector has been operating in Indonesia for more than four decades. Since the forest utilization concession system was introduced in 1970, Indonesia has gone through several phases of forestry development. The 1970s was marked as the logging era, where Indonesia became a leader in tropical log exports. Since the Government of Indonesia (GoI) introduced a log export ban in 1985 to promote timber-based industries, Indonesia became the global leader in plywood production and export. This policy shift did succeed in making Indonesia a leading producer and exporter of tropical plywood, but it was not accompanied by measures...

  2. (pp. 4-6)

    Indonesia has a total forest estate of 132 million ha (Ministry of Forestry 2012). After several decades of scientific forest management in Indonesia, the rate of deforestation remains at approximately 1 million ha/year (Hansen et al. 2009, 2013; Miettinen et al. 2012; MoF 2012). Degradation of the country’s forests and a decline of biodiversity have also occurred on a large scale due to unsustainable forest management, forest fires, illegal logging and forest conversion. Conversion to oil palm plantations (and illicit use of fire to clear debris) is one of the most significant drivers of deforestation/peatland degradation and sources of greenhouse...

  3. (pp. 7-11)

    The attention toward curbing illegal logging as one of Indonesia’s key forest governance challenges has increased following the political changes of 1998 and the transition to democracy. The Government of Indonesia (GoI) developed regulatory frameworks, including the enactment of Law 41 of 1999 on Forestry that revokes the 1967 Basic Forestry Law, and established an inter-agency team to combat illegal logging and illegal forest product trade (Scotland et al. 2000). A number of joint operations among the Ministry of Forestry, National Police and Army have been carried out in many provinces in Indonesia (Luttrell et al. 2011). The Indonesian government...

  4. (pp. 12-15)

    The system was launched in 2009 through a multistakeholder process, where the involvement of government in certifying timber legality is moved to verification bodies (VBs). The VBs are monitored by the National Accreditation Committee (Komite Akreditasi Nasional, KAN) This system has adopted a mechanism similar to voluntary certification, but with legal mandate. Therefore it can be seen as a combination of market-based certification and government-sponsored legality framework (cf. Cashore and Stone 2012). SVLK is seen as an addition of the existing Timber Administration System (Tata Usaha Kayu, TUK) used in Indonesia since the 1980s. There are concerns that the existing...

  5. (pp. 16-26)

    This section looks more specifically at the challenges facing small-scale enterprises to comply with SVLK and at a more basic level in operating legally, drawing on the case studies of Papua, Borneo and Java.

    The area of forest in Papua province is 30.4 million ha or approximately 74% of the province (Minister of Forestry Decree No. 458/Menhut-II/2012). Papua, together with Aceh, is a province with special autonomy, where an important element of it is the recognition of the existence and importance of indigenous communities. There is a Papua People Assembly (Majelis Rakyat Papua – MRP) in addition to the ‘standard’...

  6. (pp. 27-32)

    Drawing on the generic issues outlined in Section 4 and the specific issues shown in the case studies in Section 5, for compliance with and implementation of SVLK verification, lessons learnt are presented in this section along with recommendations for practical policy options. These policy options could be considered by the Ministry of Forestry, forestry offices and related institutions to ensure timber legality and encourage small-scale forest enterprises to be prepared for the implementation of SVLK.

    The cost of the SVLK assessment process is estimated to be IDR30–114 million (US$3000–$11,000) per verification, depending on the type and size...

  7. (pp. 33-34)

    What are the potential implications in terms of opportunities / successes and challenges of the mandatory implementation of SVLK on the smallscale forestry sector of Indonesia? Is a mandatory approach to legality verification likely to achieve a greater impact in terms of assuring legality than voluntary certification? How does mandatory differ from voluntary certification? These points are all considered below.

    The Indonesian government has decided that SVLK will be mandatory for large companies by the beginning of 2013, while small enterprises are expected to be compliant by the beginning of 2014. In light of this and the results of the...