Indonesian Agricultural Sciences Association (IASA)

This paper is prepared for the IUFRO Special Project on World, Forests, Society and Environment.

Illegal logging, and associated trade, has been identified as one of the major drivers of forest loss and degradation in Indonesia. Various studies and reports (Scotland, 1999; Palmer, 2001, Brown, 2002; Brown et al., 2005; Tacconi et al. 2004) have indicated the scale of illegal logging in the country. They have concluded that illegally harvested timber is well above the legal one and the levels of any sustainable regime, and proved is detrimental to the country economically, socially and environmentally.

While enforcement measures in the forests are often seen as crucial to controlling illegal logging, a Forest Watch Indonesia (FWI) and Global Forest Watch (GFW) report is cautious that the measures cannot be effective without measures on the demand side (FWI/ GFW, 2002). Such bilateral agreement between producer and consumer as FLEGT is therefore recognized as a potential approach to curb illegal logging (Speechly, 2003). This paper briefly presents efforts on curbing illegal logging in Indonesia, with a further emphasis on EU-Indonesian FLEGT agreement.

Ensuring the legality of timber harvested from the Indonesia’s forests is seen as the foremost to curb illegal logging in the country. A spectrum of instruments and measures (highlighted below) have been implemented in recent years, ranging from governmental regulations and control to market-based instruments, notably forest certification and labelling, but they are yet to work meaningfully.

Governmental regulations Domestically, such governmental regulations as moratorium logging and sanction and penalties for companies exceeding harvest limits (see FWI/ GFW, 2002; Casson et al., 2006) have been put in place to control illegal logging. However, they have been limitedly effective due a mixture of such factors as underdeveloped and even contra-productive regulatory frameworks, lack of enforcement, poor expertise and insufficient resources, compounded by corruption and collusion amongst forestry officials and within other state agencies (Scotland 1999, Mitchell et al., 2003; Casson et al., 2006; Maryudi, 2008).

Those limitations also apply to the most recent response from the government of the set up of Badan Revitalisasi Industri Kayu (BRIK, Indonesian Institute for the Revitalisation of the Timber Industry) in 2002. This agency was established to monitor and verify the legality of timber. It issues a legal certificate (ETPIK) only to forest companies which provide all required documents, including transportation permits. Despite the government’s claims on the sufficiency of the ETPIK certificates for verifying timber legality, many are in doubts, as evidence shows that transportation certificates –on which the BRIK system relies- are readily available on the black market (Colchester, 2006).

Unfortunately, certification has not yet gained a strong foothold and significant support in Indonesia. Notwithstanding efforts of some companies’ efforts on certification, many of the country’s forest companies remain uninterested. Currently, less than 1% of the country’s forests have been certified by either of the two operating scheme, the Forest Stewardship Council (FSC) and the Indonesian Ecolabelling Institute (LEI). The low interests in certification are due a combination of reasons such as the less apparent signals for premium prices -compared with the obvious certification-associated costs- (Mitchell et al., 2003; Maryudi, 2005), negative exposure of being certified -some certified companies experienced constant pressure that their performance yet to meet certification standards-, and uncertainties over the continuity of forest business (Maryudi, 2005).

In the view of the persistent illegal logging in the tropics, the European Union (EU) has adopted Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan to contribute in the global effort to control the trading of illegally-harvested timber in the region. This plan links good governance in developing countries with the legal trade instruments and leverage offered by the EU’s internal market to combat illegal logging. Voluntary Partnership Agreements (VPA) with timber-producing countries that wish to eliminate illegal timber from their trade with the EU is at the core of the Action Plan.

Although FLEGT is said a voluntary mechanism, it constitutes a significant shift back towards forestry reform through state regulation and control. FLEG and FLEGT policies are endorsed through regional intergovernmental statements and promoted through bilateral government to government agreements (Colchester, 2006).  

EU-Indonesian FLEGT

EU- Indonesian FLEGT is well positioned in the efforts to control the trade of illegal timber harvested in Indonesia and traded in the EU since Indonesia is one of the main sources of tropical timber for the EU. With the total exports to the EU of about two million cubic meter, Indonesia is the second contributing country after Brazil, with a share of nearly 15% of the total EU imports of tropical forest products (Micski, 2008). More importantly, a report of Friends of the Earth (FOE) estimates that illegally sourced timber imported by the EU from Indonesia amounts to nearly two million cubic meters (FOE, 2001). Those two reports therefore suggest that almost all EU imported timber from Indonesia is illegally sourced.

Recent development Each VPA will require a system of controls -which includes a legality definition, chain of custody control, verification system, issuing of licenses and independent monitoring- to be adopted by each partner country to verify legality of shipments. This system is framed within timber legality assurance systems (TLAS).

The Indonesian TLAS (SVLK, Standar Verifikasi Legalitas Kayu) has been developed since 2003, but was just submitted to the Ministry of Forestry for the approval by the end of 2008. The long process is mainly due a spectrum of views and definitions on ‘illegality’, whether of merely associated with the distribution and trades of timber products or the whole forest management to include planning, execution and harvesting as well.

The final draft submitted to the Ministry appears to adopt the latter. This raises concerns of the overlaps between SVLK and forest certification. One of the most common concerns is the double costs paid by forest companies, which are also mandated to adopt forest certification. In addition, the overlapping approaches are thought to be contra-productive as it can even ‘enrich’ the corrupt behaviour, which was highlighted to be one of the underlying causes of illegal logging.

Addressing this issue, FLEGT (and SVLK) can be nicely placed within the context of forest certification, as most of all certification schemes place special emphasis on illegal logging. In fact, some schemes adopt phased-approaches, through which a company are required to improve their forest management step by step accordingly to the agreed timelines.  SVLK can clearly fit with this approach.

A hybrid model of governance? A briefing note the European Commission further elaborates EU’s position on the TLAS (EC, 2007). The verification of legal compliance and supply chain control elements of the TLAS could, inter alia, be operated by qualified private sector verification organisations (e.g. providers of inspection services) acting on a Partner Country government’s behalf or by verification bodies contracted by market participants. The briefing note elaborates that verification can be through certification to a recognised external standard that includes relevant principles and criteria.

In Indonesia, the LEI has been managing the development above and seems to be well positioned in terms of its expertise and systems to supply legal compliance and supply chain control for the TLAS both under contract to the government and as demanded by market participants. The briefing note explains that where a certification scheme is used for legality assurance, it must be subject to approval by the Partner Country’s Licensing Authority.

Assuming the LEI is approved by the Ministry to act as legal verification body using its standards, a hybrid model of governance is to emerge. Its certification is a non-governmental approach to promote wise forest management, but LEI on the other hand is to manage a governmental program.  

 

The far-reaching issue is not who should act as a verification body, but rather quick and effective efforts in controlling illegal logging. The Indonesian SVLK is yet to be approved.  It is now the government to show its commitments on tackling down on illegal logging in the country. Illegal logging clearly has a magnitude which requires quick and effective efforts. Approving SVLK and signing the VPA will provide a major boost in reducing illegal logging in the country.


References

Brown, D. 2002. Analysis of Timber Supply and Demand in Indonesia. Prepared for the World Wide Fund for the Nature (WWF) and the World Bank

Brown, T.H., B. C. H. Simangunsong, D. Sukadri, D. W. Brown, Subarudi S., A. Dermawan and Rufi'ie. 2005. Restructuring and Revitalization of Indonesia’s Wood-Based Industry: Synthesis of Three Major Studies. Ministry of Forestry, CIFOR, and DFID-MFP. Jakarta.

Casson A.C., A. Setyarso, M. Boccucci and D.W. Brown. 2006. A Multistakeholder Action Plan to Curb Illegal Logging and Improve Law Enforcement in Indonesia, WWF Indonesia, World Bank, DFID-Multistakeholder Forestry Program, Jakarta

Colchester, M. 2006. Reflections on the Social Dimensions of Verification in FLEGT processes: Issues, Risks and Challenges. Thinkpiece for Verifor Experts Meeting, 27-28 April 2006, Palma de Mallorca

 

European Commission(EC). 2007. Forest law enforcement, governance and trade: Market participant-based legality assurance and FLEGT licensing. FLEGT Briefing Note No. 7. Series 2007.

Friends of the Earth (FOE). 2001. Briefing: European League Table of Imports of Illegal Tropical Timber. (Ed Matthew, ed.) Friends of the Earth, London.

FWI/GFW. 2002. The State of the Forest: Indonesia. Bogor, Indonesia: Forest Watch Indonesia, and Washington DC: Global Forest Watch.

Maryudi, A., 2005. Politics within Markets: Convergence and divergence in Indonesian and Malaysian forest certification governance. Unpublished. School of Resources, Environment and Society, the Australian National University, Canberra.

Maryudi, A. 2008. How to crack down on rampant illegal logging. The Jakarta Post 22 August 2008. http://www.thejakartapost.com/news/2008/08/22/how-crack-down-rampant-illegal-logging.html

Micski, J. 2008. Analysis of the Trade Impact of the VPA for Indonesia. EC-Indonesia Forest Law Enforcement, Governance and Trade Support Project.

Mitchell, A., J. Elliott and de La Rochefordiere. 2003. Independent verification of legal timber: complementing certification and encouraging positive governance? International Forestry Review, 5(3): 268-277

Palmer, C. 2001. Extent and causes of illegal logging: An analysis of a major cause of tropical deforestation in Indonesia, CSERGE Working Paper, pp. 33, University College London/CSERGE/University of East Anglia

Scotland, N. 1999. Illegal Logging in Indonesia. Report PFM/EC/99/03, Indonesia–U.K. Tropical Forest Management Programme (ITFMP), Jakarta

Speechly, H. 2003. Bilateral agreements to address illegal logging. International Forestry Review, 5(3):219-229

Tacconi, L., K. Obidzinski, and F. Agung. 2004. Learning Lessons to Promote Forest Certification and Control Illegal Logging in Indonesia. Year One: 1 October 2002 to 31 September 2003. Report for the Alliance to Promote Forest Certification and Combat Illegal Logging in Indonesia, The Nature Conservancy, and World Wide Fund for Nature, Center for International Forestry Research, Bogor, Indonesia.

 

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Ahmad Maryudi
Lecturer at the Gadjah Mada University
PhD Candidate at the Chair of Forest and Nature Conservation Policy
Goettingen University
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