FLEGT in Indonesia
FLEGT establishes regulatory mechanisms that aim to ensure the trade of legally produced timber and timber products

Indonesia & FLEGT

Read Indonesia’s story of how they became the first ever FLEGT-certified country.

People and the Forest

People and the Forest

 

Naming the Change

Governance of sustainable tropical timber begins not just in the forest but in meeting rooms around the world. Multiple stakeholders have varied interests on forest management, forest governance, sustainable production, local laws and the protection of habits and biodiversity.

 

Like growing a tree, deep change takes time. It took 15 years from the 2001 Ministerial Conference before the first FLEGT license was issued to Indonesia in November 2016. The FLEGT license represents an important step in the journey from sapling to product, guaranteeing the sustainable use of forests that benefits all those connected to it.

 

Producing timber legally has a ripple effect way beyond the wood and products you see around you. FLEGT is designed to incorporate sustainable forest management, improve forest governance, strengthen land tenure and access rights for local communities. It gives a voice to all those connected to the forest when developing strategies and policy. Transforming the infrastructure of timber harvesting and production not only benefits the forest but also local communities and individuals for whom illegal logging casts a long shadow.

Impacts of illegal logging

24 million hectares of forest was destroyed in Indonesia between 1990 and 2010. Many more millions of hectares were degraded. A 2007 report estimated that 73 – 88% of timber logged in Indonesia was illegally sourced.

 

Illegality encourages corruption and undermines governance and civic duties. It affects the economy in three key ways: the economy is deprived of the tax to reinvest in people; distortion of the market by illegal loggers driving down timber prices; and increases the likelihood of conversion to other commodity land use, such as palm oil, cattle or soy.

 

This is why Trade stands for the final letter in FLEGT. Trade is a vital component in addressing the problem of illegal logging. The European Union buys 11%, by value, of timber products and paper exported from Indonesia. Indonesia supplies 33% of the EU’s tropical timber imports by value. Establishing a credible system of production and licensing which guarantees the provenance of timber means sustainable use of re-sources and makes it easier for businesses in the EU to import legal timber products.

People and the forest

Indonesia lost six million hectares of its rainforest between 2000 and 2012.This scale of deforestation from illegal logging was unprecedented in Indonesia. It’s not just the devastation of the forests and the wildlife that depends on it – the impact on human beings is economic, psychological and social.

 

The damage caused by illegal logging goes beyond the immediate and highly visible destruction of the forest. It is the wealth extracted from the local community who don’t benefit from the commerce, taxes and new skills that comes with investment in legal business and trade.

 

Illegal logging also dissolves the social bonds and trust between people, communities and the state. With Indonesia having the world’s third largest area of rainforest, the scale of the illegal logging and its impact on climate change hits twice over. Changing the timber industry with FLEGT had a butterfly effect that rippled change through the economy, society and environment. And for it to work the transformation means creating the intangible but essential material of trust.

 

The benefits are derived not just from enforcing law – it needs to be good and fair law, because the enforcement process depends on the engagement of communities. Monitoring and auditing the supply chain involves local society. Practices are established to oversee the implementation of the SVLK, with a network of monitoring groups set up. Building a legally robust supply chain also develops the durable and meaningful partnerships between people, business and institutions.

 

FLEGT is a response to a whole ecosystem in crisis of forests, wildlife and people. By supporting, protecting and developing the natural ecology, FLEGT helps the human ecology too, from Indonesian forest communities to UK business to the planet.

The system of transformation

To ensure every step of the timber production process is carried out with the highest regard for people and the environment, the system requires a robust and transparent system that is embedded in legal compliance at every point of the supply chain. The process created by the Indonesian government is SVLK (Sistem Verifikasi Legalitas Kayu).

 

The system was produced through multi-stakeholder dialogue, including the government, businesses, non-governmental organisations, labour organisations and local communities.

 

The SLVK system comprises of five key components:

 

  1. Legality –Producers must have all their land ownership documentation, environmental permits and administrative records in legal order
  2. Production –Businesses must adhere to sustainable forest management throughout the production cycle, including forest fire prevention
  3. Environmental –The forest ecosystem, natural resources and biodiversity must be protected
  4. Social – Local communities are embedded within the system, including ownership rights and access to resources and trade
  5. Certification – From January 2013 it became mandatory for wood panel, woodworking, and pulp & paper industries to comply with SVLK. Sawmill, furniture and handicraft businesses had until January 2014.

 

One of the key strengths of the SVLK is the oversight provided by independent monitoring and periodic evaluation. Non-governmental organisations can critically and independently evaluate and verify adherence.

Core pillars of FLEGT

Environment

Forest management aims to guarantee the forest’s sustainable economic, social and environmental purpose. Legal logging reduces carbon emissions from wanton forest degradation and will enhance forest carbon stock. Where the ecosystem has been restored, there is the maintenance and growth of biodiversity with species such as the rhinoceros hornbill, the agile gibbon and the slow loris beginning to thrive again. In order to encourage sustainability, the forest area in Indonesia is divided up between 18% devoted to conservation, 25% that’s protected and 57% to production.

 

Sustainability is also enhanced through the promotion of silviculture. There are many different types of silviculture using different methods of tree cutting – selective cutting, clear cutting, strip cutting – but they are all practised with a view to tending forest rather than seeing it simply as a material resource.

 

Under the SVLK, state forests are certified against the Sustainable Forest Management Certificate (PHPL). PHPL sets out key preconditions for sustainability under SVLK, focusing on the social, production and ecological aspects of forest management. This includes long term forest plans for harvest and regeneration and implementation of protected zones for species and habitats. Social aspects include conflict resolution, labour rights and fair and equitable benefit distribution.

 

Economic

With good regulation in place, the economy benefits, not just from the money that can be reinvested from the taxation of legal timber, or from the earnings going directly to the local communities, but also businesses who can invest in the production process and increased skills and capacity.

 

FLEGT gives access to global markets and helps the economic development of the country.

 

Social

Social forestry tackles the issues of landscape and ownership, improves the skills and knowledge of local people and considers the different scales of community management.

 

The Indonesian Social Forestry Initiative allocated 12.7 million hectares of forests for community-based forest management. This ensures that indigenous communities have a stake in managing sustainable forests, whether that is in state, private or customary law forests. In many developing countries with large forests, official law can sometimes conflict with customary law that has developed within forestry communities over time. This initiative helps balance those interests.

Forestry in practice

FLEGT helps to create circular, local economy, boosting investment, providing jobs and enabling a sense of ownership.

 

Social forestry encompasses many strands, from involving communities in mapping to improving their capacities in forest management. Non-governmental organisations facilitate training on participatory mapping to delineate social forestry area in partnership with local communities and Forestry Management Units. They provide training in sustainable forest management for communities and FMU managers in business planning.

 

Genesis – an Indonesian NGO – facilitates farmer groups in processing permits for their community-based forest management.

 

The Forest Management Units were established by the Ministry of Environment and Forestry to ensure local communities have the skills to implement these sustainable forest management practices locally. The issue of skills is a practical, managerial and social issue.

 

Social forestry doesn’t just happen in the forest, it extends its social connection right through the supply chain – consider the work supported by a UK timber agent purchasing door blanks. Working with the Indonesian mill PT Kutai Timber to support growth of commercial timber species within community forests. The mill supplies saplings to local community groups, these saplings are then grown on within local community forests. Tree growing is part of a wider sustainable ecology, as the trees provide shade for other crops that are grown underneath such as coffee, ginger, cassava, mangoes, chilli, sweet potato and bananas. The mill will then buy back the trees, and profits from these products are used to fund bursaries at a local school.

Making sure standards are met

The standards set out by SVLK ensure timber legality and sustainable practices by formally controlling the chain of custody. This includes barcode tracking of timber and timber products, as one means of legal evidence.

 

In order to maintain these standards, the individuals and organisations involved in this process are audited by verified assessment bodies.

 

In addition to monitoring these components, there is a secondary layer of oversight provided independently by civil society groups. This independent monitoring offers a necessary oversight of the private sector and government involved with SVLK and forms an integral part of SVLK. It consists of 111 Independent Monitoring Organisations and 1,941 Individual Independent Monitors made up of NGOs with legal status and communities living in proximity of the forest. Monitoring is undertaken throughout the supply chain and acts to guarantee that SVLK implementation and the timber and timber products produced are in accordance with the applicable regulations.

 

Alongside this, periodic evaluation maybe conducted annually or biannually (depending on the type of forest or scheme). These regular checks are carried out by the government and act as an assurance measure that all aspects of the SVLK are functioning properly.

 

Establishing this extensive body of knowledge requires archiving and recording and the Ministry of Environment has developed an online database, SILK. SILK validates each transaction through the supply chain for the government, customs, trade and forestry.

Transparency

All these new kinds of relationships between people, businesses, forests, timber, products, audits and compliance are dynamic.

 

To understand what is and isn’t, it requires sophisticated methods of gathering and tracking data. The Ministry of Environment and Forestry developed the Sustainable Production Forest Information System (SIPHPL), a publicly accessible tracking and assessment tool. SIPHPL reassures and strengthens forest governance and provides transparency and accountability in managing forest resources.

 

SIPHPL gathers and shares information at every point of production and creation of value, from the data produced by the logging of timber to the assessment of data that makes the policy that shapes how the data transforms the system again.

 

There are six main points of interaction in which data is formed and transformed:

 

  1. Forest concession and permit holders or owners of private/community forests report all transactions of timber, from inventory, harvesting, trading and transportation
  2. Downstream timber processing industries, traders or timber depots
  3. The bodies verifying reports from forest concession permit holders or private forest owners and industries. This verification is essential for the documentation required for export.
  4. The Production Forest Management Agency (BPHP) co-ordinates with Provincial and District Trade and Industry offices to gather and supply data on primary and processing timber industries.
  5. The Provincial Forestry Offices access the data from the system to monitor the circulation of timber product within their jurisdiction
  6. The Director General for Sustainable Production Forest manages the data to develop policies on the use and access of the system

Measuring success

FLEGT has had an impact that begins with maintaining forests while developing and building a sector where wealth is more distributed.

 

Indonesia’s success so far:

  • More than 2700 industries
  • 23 million hectaresof production forests are SVLK certified – this is 100% of active concessions
  • 1 million Supplier’s Declaration of Conformitydocuments were used by small-scale private forest owners
  • Almost 1800 exporters are SVLK certified – this includes 96% of all timber & timber product exporters
  • The SVLK issues 354,169 v-legal export licencesto 194 types of timber products.
  • Licensed timber products had a net weight of 33.25 million tons and were worth 94 billion
  • Indonesia exported SVLK-licensed timber products to 195 countries including 25 EU countries
  • Licensed timber products were exported from 86 Indonesia portsto 2538 overseas ports