Indonesia

In May 2019, Profundo conducted a public consultation to gather input related the second Periodic Evaluation, and gathered information on the ground throughout June and July. Results of the second Periodic Evaluation (PE) were presented in November 2019.

The second PE assessed the control measures carried out throughout the supply chain and indicated that the system functions as expected, and that licensing has generally improved over the past year. Some issues must nonetheless be addressed. Improvements are needed to the Ministry of Environment and Forestry’s (MoEF) online information systems, and particularly to automation. Certain parts of the supply chain receive greater scrutiny than others. Spot checks by MoEF and provincial forestry agencies need to be more frequent and thorough. Their Timber Legality Assurance System (SVLK) has improved transparency, but instances of noncompliance must be followed up in a timely manner. SVLK data management is functioning but dispersed across various systems: an integrated data management system must be quickly field tested. Better access to information and transparency is needed to allow Independent Monitors to monitor effectively, and due diligence for timber import must improve.

In November 2019, Indonesian and EU representatives held a Joint Implementation Committee (JIC) meeting in Jakarta to discuss the results of the second PE, as well as issues related to:

SVLK: In September 2019, the Ministry of Economic Affairs, Ministry of Industry, Ministry of Trade, and Ministry of Marine Affairs indicated that SVLK was only implemented in the forest. This was in response to claims by the HIMKI (an association of Small and Medium Enterprises (SME)) that the cost of implementing the SVLK was too high, and that not all the market needed to implement it. (Other SME associations such as ASMINDO did not feel that SVLK was a burden for their business or export process.)

Yet SVLK is a mandatory system, applicable to every timber-related business in Indonesia, which all must implement. It ensures the timber industry uses legal raw materials, and is required for export to all countries, not just the EU. Demands such as HIMKI’s have long undermined the SVLK, which is FLEGT’s backbone of credibility. If the legality system is implemented only upstream, the credibility is damaged.

During a November 2019 press conference celebrating the third FLEGT Licence anniversary, however, the MoEF insisted that SVLK must be implemented both in upstream processes (forest) and downstream (industry). NGO Kaoem Telapak has called on the government to begin the multi-stakeholder process to remedy several problematic aspects of SVLK systems and regulation, such as improving the standard

of legality, the control of timber, verification and accreditation activities and law enforcement. In order to keep it on the government agenda, Kaoem Telapak repeatedly raise the issue of transparency of timber data and information that would allow effective independent monitoring to take place.

Indeed, improving the SVLK has been the focus of multi-stakeholder discussions since April 2019. Meetings have been hosted, in turn, by various parties: Kaoem Telapak (April), Forum Auditor (May), MoEF (June), and MFP4 (Multi-stakeholder Forestry Programme 4, under UKAID; October). Stakeholders agree that four SVLK issues require improvement: implementation of the SVLK must be strengthened; SVLK rules and enforcement must be improved; and SVLK’s acceptance must be broader.

EUTR: Concerns included that some countries are exporting to the EU market despite not having due diligence processes in place to issue FLEGT licences. Independent market monitoring, carried out by FLEGT IMM: The JIC provided materials to support existing timber promotion campaigns and to show public procurement decision-makers evidence of FLEGT benefits. They developed materials that demonstrate the functioning and impacts of the VPA process, indicating that FLEGT is working and effectively policed. This is in part to clarify the status of FLEGT licences as compared to third-party certification, and to increase demand for licences by urging EU Member States’ public procurement policies to accept FLEGT licences as equal to voluntary certification, as FLEGT licences are evidence of more far-reaching improvements in governance and apply to the entire country rather than to particular forest stands or operations. This is also an endeavour to make the concept FLEGT licensing more visible with EU buyers. VPA countries wish to lead the process of communicating the beneficial impacts of the agreement.

Impact Monitoring: The JIC heard that in September 2019, Hatfield Consultants, hired by Food and Agriculture Organisation (FAO)-FLEGT, conducted a public consultation on the VPA’s impact on the timber industry and on the livelihoods of Indigenous and local communities. Impact Monitoring activities should be finished by April 2020 and NGOs have asked that they learn from activities carried out for the 2017 evaluation.

Finally, regarding accountability, the government has taken action to enforce rules against timber operators. The directorate responsible for law enforcement under MoEF (DG Penegakan Hukum – DG Gakkum) seized a container of merbau timber from Papua and West Papua earlier this year. Regarding court cases mentioned last update, in Makassar, South Sulawesi, four directors of timber companies from Papua were condemned in July 2019 to one year in prison and fines of Rp 500 million. Regarding the legal case in Sorong, West Papua, one director of a timber industry company was sentenced to five years in prison and fines of Rp 2.5 billion.

The government says that it is addressing issues raised in the PE. For its part, civil society acknowledges that some issues have been properly addressed, but many others remain to be resolved – and keep reminding authorities of this.

Last updated in January 2020.