Indonesia appreciates legality assurance value

30 June 2020

Indonesia’s decision not to drop obligatory export legality assurance is key to combating the illegal timber trade, writes TTF FLEGT communications executive Lucy Bedry

The Indonesian government’s decision to maintain strong social and environmental forest governance via the SVLK (Sistem Verifi casi Legalitas Kayu – the country’s timber legality assurance scheme) and Forest Law Enforcement, Governance and Trade (FLEGT) timber legality assurance system is a welcome relief for the timber trade and all who care about the future of the forests.

Earlier this year many Indonesian businesses, particularly in the furniture sector, called for these measures to be scrapped for timber products being exported to non-EU destinations.

This, of course, would be in direct contradiction to the FLEGT Voluntary Partnership Agreement (VPA) that Indonesia signed with the EU and a great deal of pressure has been exerted by governments and the private sector alike to keep SVLK in place. The TTF has been at the forefront of co-ordinating a private sector response from trade associations across Europe, as well as writing to the Indonesian Embassy and government ourselves.

However, one can have a degree of sympathy with Indonesian firms that were against the system. They have seen a whole new legal framework implemented – to which they must comply – as well as being audited by an international third-party to make sure standards are being maintained throughout the supply chain, from forest to export.

All this massively improves standards, but also increases costs. Indonesian businesses then have to compete with firms from other countries, which have no such positive measures in place, and can undercut them on price.

Despite this, a survey within Indonesia by Palladium Group found that there was enormous support for the SVLK system from the majority of businesses in the supply chain, with 71% saying it had a ‘positive’ or ‘very positive’ effect on operations. Meanwhile, 64% said it had a ‘positive’ or ‘very positive’ effect on exports to their main markets.

This was the TTF message to the Indonesian government – that without SVLK measures in place and the FLEGT-licensed goods that come from it, it was unlikely our members would be so supportive of trade. If we want to see the FLEGT system succeed globally – as we do – the UK and EU countries need to do more to support it.

Two simple steps would help reduce costs and improve the benefits for SME producers in the supply chains. First, develop a common audit system for certification and FLEGT. Currently SMEs pay twice when the majority of the criteria is identical for both audits. This would reduce costs enormously for forest businesses in tropical countries.

Second, encourage more governments and private sector end-users in importing countries to accept FLEGT licences in their procurement frameworks. The UK Timber Procurement Policy is clear that FLEGT-licensed material meets its criteria, but too many contractors and others only accept certified.

Every day we hear more stories about how forests are vital for meeting our climate targets. The FLEGT action plan is a key tool for doing this in a sustainable and economically viable fashion.

But, until we learn to accept its benefits, all that producer countries will see are costs.

Lucy Bedry