EC - Indonesia FLEGT SP- � -

EC - Indonesia Forest Law Enforcement, Governance and Trade Support Project

This project is funded by the European Union

The Project is implemented with financial assistance from the Commission of the European Commu-nities. The views expressed herein are those of the consultant and therefore not necessarily reflect the official opinion of the Commission.

Consultant: Indufor Oy in association with Cowi AS, WWF Indonesia, IHSA IndonesiaPrepared by: Stepi Hakim

Certification & Verification of Timber Legality System

A new phase of timber legality in Indonesia

2 0 0 9

Ref. Activity: 3.4.1

EC - Indonesia FLEGT SP- � -

INTRODUCTION

Definition of timber legality standard, develop-ment of its institutional arrangement, and verifi-cation system has been started since 2003 based

on MoU between United Kingdom and Government of Indonesia regarding combating illegal logging.

In June 2005, it was recommended by multi-stakehold-ers to harmonize the standard into the existing relevant regulations in forestry sector. It was also decided that Indonesian Eco-label Institute (LEI) as a lead organization to facilitate the development process of the standard and ensuring involvement of NGOs, indigenous people, and representative businesses during the consultation

processes.

In September 2005, the workshop was carried out in order to discuss institutional arrangement and imple-mentation scheme for the standard. The issue between mandatory and voluntary system applied for the sys-tem was debated. Thus, it was recommended that the establishment of small working group consisting of multi-stakeholders is required to outline more detail the standard and its procedures. The Ministry of Forestry through decree No. 70/Menhut - II/2006 legalized the working group in order to speed up the process of the standard and its verification.

EC - Indonesia FLEGT SP- � -

In 2006, the standard was further detail discussed with wide stakeholders in Jakarta, Jambi, East Kalimantan, South Sumatra, and Riau. Field tests were carried out in order to test the standard. The field tests were carried out in as follows (a) Sanggau/HTI, (b) Balikpapan/HTI, (c) Malinau/nature forest, (d) Tarakan/wood primary indus-try, (e) Jawa Tengah/CBFM, (f) Bogor/wood secondary industry, (g) Lampung/Private Forest, (h) Surabaya/wood primary and secondary industry.

In early 2007, the working group submitted to the Min-istry of Forestry the legality standard in order to legalize it as the formal regulation (or Ministry Decree). During this year, most of discussions regarding the standard were done internally within Ministry of Forestry.

In September 2008, the proposed institutional arrange-ment for the standard from the multi-stakeholders was finalized and presented to the Ministry of Forestry. Since then, the discussions regarding the harmonized standard and its institutional arrangement had not been carried out with the wide stakeholders.

In June 2009, finally Ministry of Forestry issued a decree regarding timber legality standard of sustainable forest management and verification of timber legality for State Forest and Private Forest (P.38/Menhut-II/2009). The standard for SFM and verification for timber legality sys-tem were outlined through Director General BPK Decree No. P.6/Vi-Set/2009

...IN 2007, MOST OF DIS-CUSSIONS REGARDING THE STANDARD WERE DONE INTERNALLY WITHIN MINISTRY OF FORESTRY

EC - Indonesia FLEGT SP- � -

P.38/Menhut-II/2009 INSTITUTIONAL ARRANGEMENTS

June 2009, Ministry of Forestry issued P.38/Menhut-II/2009 outlining arrangements for the institutions

that deal with standard for sustainable forest manage-ment and verification system for timber legality.

There are two certificates, namely certification for sus-tainable forest management, and certification of tim-ber legality verification. It states that if concessionaire already has a SFM certification, then the concessionaire is not necessary to have timber legality (TL) certification. In addition, all wood industries (up and down stream industries) should have a TL certification.

Both certifications would be granted if the companies have been assessed by independent assessor and veri-fiers (LP&VI). However, those assessor and verifiers have to be accredited by National Accreditation Committee (KAN).

The final result of the assessment done by LP&VI is reported directly to the company. If the company ac-cepts with the result, the certificate is granted with the

criteria as follows:

1. “Bad” or “Good” for PHL Certification 2. “Compliance” or “not compliance” for TL Certifica tion

On the other hand, if the company disagrees with the result, the company can complain to the LP&VI within 10 days. The LP&VI will set up “ad-hoc” team. The team would analyze the report and improve the assessment in order to fulfill certification requirements.

Non Governmental Organizations (NGOs) and Civil Soci-ety Organizations (CSOs) are able to monitor the pro-cesses of certifications. If NGOs or CSOs doubt with the result of certification, the NGOs or CSOs could complain to the LP&VI within 20 days.

If the LP&VI could not settle the objection, the NGOs or CSOs would request National Accreditation Commission (KAN) to clear up the complaint based on KAN’s conflict resolution procedure. The KAN would give Corrective Action Request (CAR) to the company. If the company fails to fulfill the CAR, the certification would be frozen until the validation date of the certification is expired.

EC - Indonesia FLEGT SP- � -

tion includes checking concession permit, vision and mission of the owner regarding forest utiliza-tion, modality of the company, the use of regula-tions/policies regarding timber utilization, and the use of professional foresters in the concession.

Assessment in Production includes operational plans, rotation harvesting, the use of forest tech-nology in exploitation, financial liquidity of the company, realization of harvesting versus annual harvesting plan, and allocation budget for research and development

Assessment in Ecology includes checking reserva-tion of protected areas, forest protection, envi-ronmental management on forest extraction, and management of wild and endangered or threat-ened species (flora and fauna).

Assessment in Social Economy includes acknowl-edgement of indigenous rights living surround the concession areas, clear defining boundary between the concession and the village, the avail-ability of solving dispute mechanism, involvement of indigenous people or local community in forest management, ensuring fairness benefit distribu-tions to local community, and improving roles of community in order to improve local economy activities.

P.6/Vi-Set/2009 STANDARDS & GUIDELINES

P.6/Vi-Set/2009 is a decree issued on 15 June 2009 by Director General of Management

of Forest Production (BPK), Ministry of Forestry. It is a follow up regulation from P.38/Menhut-II/2009 regarding certification for sustainable forest management and verification for timber legality.

The decree outlines criteria and indicators for certification and verification systems for sus-tainable forest management and timber legality. It consists of 6 (six) annexes.

Annex 1 outlines standard and guideline for sustainable forest management. This standard is used to assess performance of concessions in State Forests (IUPHHK-HA/HT/HTI). The conces-sions would gain whether ‘Good’ or ‘Bad’ after it is assessed by the LP&VI.

The assessments cover pre-production, produc-tion, ecology, and social economy. Pre-produc-

EC - Indonesia FLEGT SP- 6 -

Annex 2 outlines standard and guideline for timber legality verification applying for timber products har-vested from State Forests. The assessment covers certainty of the concession area and its utilization right, compliance with legal felling system and procedure, and environmental assessment on social factors. If the assessment is done by LP&VI, the certification of timber legality can be granted to forest concessionaires (nature forests/IUPHHK-HA, plantation forests/IUPHHK-HTI, or ecosystem restoration/IUPHHK-RE).

Annex 3 outlines standard and guideline for timbers sourced from State Forests Managed by Community. The assessment covers checking documentation of com-munity right to manage the forest, and forest manage-ment plan and payment of government retributions in forestry sector. The certification of timber legality can be granted to IUPHHK – HTR (community based State Tree Plantation) and IUPHHK- HkM (community based forest management).

Annex 4 outlines standard and guideline for timber legality verification applying for down and up-stream wood industries (IUIPHHK and IUI Lanjutan). It means that wood products such as sawn timber, veneer, chip, plywood, laminated veneer lumber, moldings, dowels, doors, windows, furniture, pulp and paper and other end products (finger joint for flooring or wall) would have to have certification of timber legality.

Annex 5 outlines standard and guideline for timber legality verification applying for private forest. All timber products from private forests such as sawn timbers or round woods have to be certified by timber legality. The assessment covers verification of forest’s right and originality of timbers.

Annex 6 outlines standard and guideline for timber legality verification applying for the holder of forest conversion. The assessment covers verification of forest conversion right and originality of timber documenta-tion (administration).

All timber products from private for-ests such as sawn timbers or round woods have to be certified by timber legality.

EC - Indonesia FLEGT SP- 7 -

Annex 4 outlines standard and guideline for timber legality verification applying for down and up-stream wood industries (IUIPHHK and IUI Lanjutan). It means that wood products such as sawn timber, veneer, chip, plywood, laminated veneer lumber, moldings, dowels, doors, windows, furniture, pulp and paper and other end products (finger joint for flooring or wall) would have to have certification of timber legality.

EC - Indonesia FLEGT SP- 8 -

EC - Indonesia FLEGT SP- 9 -

EC - Indonesia FLEGT SP- 10 -

EC - Indonesia FLEGT SP- �� -

Independent Observation is done by Civil Society. It helps to moni-tor the implementation of the system in effective and efficient way.