At Kendal, central Java on October 23, Indonesian deputy minister of trade Bayu Krisnamurthi and EU ambassador to Indonesia Julian Wilson witnessed the first official departure of timber products from the country under an export shipment test for its new "V-Legal" verified legal licence scheme.

The day before, the minister signed a decree making it illegal to export unlicensed timber products, sealing the demise of Indonesia’s old "BRIK" endorsement scheme.

"In this trial, we expect to identify if there are any weaknesses in the system and address them, so that exports of our timber products can go smoothly once the V-Legal Document export requirement comes into force on January 1, 2013," he said. "At the same time, this export shipment test also shows the readiness of Indonesia to supply certified legal timber product to world timber markets."

The shipment test and new trade legislation are important because they represent substantive control measures on the ground in Indonesia to stop illegal timber exports. For three years it has been rolling out its Sistem Verifikasi Legalitas Kayu (SVLK) timber legality assurance system and it now covers about seven million of Indonesia’s 35 million ha of productive forest, and 326 of its factories. Around 300 independent auditors are now trained to assess forests and companies against its legality definition and they, in turn, are under surveillance from the Independent Forest Monitoring Network (JPIK).

The SVLK [under which the V-legal licences are issued], is based on the principles and practice of certification schemes such as the PEFC and FSC. The big difference with forest certification is that, under Indonesian trade legislation, the SVLK will be compulsory for all timber exports, raising the bar and driving illegal loggers out of business.

Its so-called consignment-based timber legality system design is probably the only way Indonesia could hope to cover its 17,000-plus islands – and is markedly different from African timber legality assurance systems to date, which are generally highly centralised and government controlled.

This is a far cry from the beginning of the millennium, when Indonesia topped world league tables for deforestation and illegal logging. Both it and the EU hope these latest steps reverse this reputation and bring fruits in terms of better market access, both in the EU and other sensitive markets such as the US and Australia.

First licence due next year
Following successful implementation of the SVLK scheme, next year should see the first Indonesian timber licensed by the EU under its Forest Law Enforcement, Governance and Trade Voluntary Partnership Agreement (FLEGT VPA) system. Indonesia concluded its VPA in May 2011, making it the first country in Asia to do so. It is also the biggest so far, covering business with Europe worth over US$1bn a year. The FLEGT VPA licence is the only timber certificate, apart from CITES, that is fully compliant with the EU Timber Regulation (EUTR), which comes into force next March. It will give Indonesian exports "zero risk" status under the regulation, which means they will not have to undergo further due diligence illegality assessment by EU importers.

So it was at the Kayu Lapis Indonesia factory in Kendal, near Semerang, that we watched the first containers of SVLK plywood departing Indonesia for Europe. Audited by Mutu Hijau Indonesia, the shipment is part of a three-month trial of VPA licensing arrangements.

The tests involve shipments from a total of 17 factories, supplying a range of products. exported via four Indonesian ports: Belawan Medan, Tanjung Priok Jakarta, Tanjung Emas Semarang and Tanjung Perak Surabaya. They are headed to 32 importers in nine EU countries, five of which have so far confirmed involvement in the trial; the UK, Germany, Netherlands, Cyprus and Denmark.

During the test run, consultants in Indonesia and the EU will monitor shipments to see where the system can be improved. Importers will receive dummy FLEGT licences from their exporters to pass on to the competent authorities and customs, who will then check them against standard criteria supplied by the European Commission.

If the bodies administering the EUTR in each EU country (called competent authorities) do find inconsistencies in the FLEGT licences, they can raise a query with the Indonesian Licensing Information Unit (LIU) at the Ministry of Forestry. This will then determine if the licence is genuine. Only when the Indonesian VPA is fully operational will these checks result in shipments being stopped at the point of entry into the EU.

The reason Indonesia is doing all this is clear. When the VPA with Europe is fully implemented, all the work will result in recognition from a significant and discriminating market that Indonesia, with its SVLK system, is really winning the war against illegal timber. The SVLK is also expected to enhance the competitive advantage of its timber products in the wider international market and form part of the country’s contribution to global environmental protection.

And ultimately these developments will not only benefit Indonesian forestry, but the reputation of the tropical timber industry as a whole.