Indonesia’s trade ministry has scrapped a requirement for wood exporters to obtain licenses verifying their wood comes from legal and sustainably managed sources. The SVLK verification system took a decade to develop and implement and has been accepted by some of the most stringent market regulators for timber legality, including the EU.
Scrapping the licensing requirement constitutes a major setback for Indonesia’s timber industry and could open the door to more illegal logging and trade, experts have warned. The forestry ministry, which oversees the logging industry and the SVLK system, was not consulted about the trade ministry’s decision, and says it will ask for the new rule to be revised.
Under the new regulation issued by the Ministry of Trade late in February 2020, Indonesian timber companies won’t have to obtain export licenses that certify the wood comes from legal sources. The policy scrapping the so-called v-legal (verified legal) licenses takes effect 27 May 2020.
“The black market [for illegally logged timber] is opened up again with the scrapping of the v-legal license,” said Soelthon Gussetya Nanggara, the executive director of the environmental NGO Forest Watch Indonesia (FWI). “There might be greater impacts for our forests, [with] deforestation and illegal logging increasing.”
The government’s decision follows years of lobbying by furniture producers, who complained that obtaining the v-legal license was costly and time-consuming, and hurt their business. The licensing requirement had been developed over the course of a decade as the integral part of Indonesia’s timber legality verification system, or SVLK, which was first rolled out in 2009.
The SVLK system was meant to ensure all parties in the timber supply chain obtain their wood and timber products from sustainably managed forests and conduct their trading operations in accordance with existing laws and regulations.
Today, 100% of timber from both natural forest concessions and plantation forest concessions are SVLK-certified, although a small amount of timber from illegally logged areas still enters the supply chain.
The SVLK system also helped improve the reputation of Indonesian timber, for decades widely known to come largely from illegal logging. In 2016 the European Union, one of the key markets for Indonesian timber and finished wood products, approved the SVLK as the basis for importing timber into its market. That made Indonesia the first country in the world to have its timber legality system recognized by the EU.
Abandoning this painstakingly developed system constitutes a massive setback, said Togu Manurung, a forestry economics expert from the Bogor Institute of Agriculture (IPB).
“This is a regression and could make the origin of timber unclear once more,” he adds. He warned that without certified verification, potential buyers had every reason to suspect that timber now coming from Indonesia might be illegal, “stolen from Indonesian forests that have been battered. So, if this [regulation] is implemented, it’s a massive setback and will tarnish Indonesia’s image,” Togu said.
Legal and illegal logging add to carbon emissions not only via the removal of the cut trees’ carbon storage capacity, but also by fragmenting forests. Forest edges release more carbon than undisturbed forest.
A key feature of the SVLK system is that it aims to verify the provenance of timber at every point along the supply chain, using independent third-party certification agencies to issue the v-legal licenses.
Buyers in importing countries can then trace the origin of every piece of wood on the Indonesian government’s SVLK information platform. All wood exporters in Indonesia are currently obliged to obtain v-legal licenses, even if they’re shipping to countries that don’t require legal verification for the origin of the wood.
But with v-legal documents no longer required for timber export products, there’ll be no SVLK system in place at the downstream level to make sure that there’s no illegal timber mixed with legal timber in the process.