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What lies behind a FLEGT license?

Exploring Indonesia's timber legality assurance system that underpins FLEGT licencing, and the wider impacts for industry, communities and the environment.

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  1. November 2017 marks the one-year anniversary of FLEGT licensing in Indonesia. Indonesia is the first country in the world to export FLEGT-licensed timber and timber products to the European Union.
  2. Key figures

    Within the EU, the UK is the largest importer of Indonesian forest products – approximately £200m, a quarter of EU imports by value

    UK imports have been trending upwards since 2013, with increase distributed across a range of product groups including paper, plywood, and wooden doors and furniture

    Latest total export volumes from Indonesia valued at around $10 billion (annually)
  3. The TTF visited Indonesia in October 2017 to gain a better understanding of the legality assurance system that underpins FLEGT to help raise awareness amongst UK buyers, to try and answer the questions: what is FLEGT, and what does it mean for sustainability? This trip also offered the opportunity to add a different perspective to the current dialogue surrounding timber legality, and to begin to assist in exploring what the next steps in the process might be for Indonesia, now that licensing has been achieved. This visit was supported and organised by the UK Multi-stakeholder Forestry Programme (MFP) and the Indonesian Ministry of Environment and Forestry.
  4. Indonesia’s timber legality assurance system is known in Indonesia by its acronym ‘SVLK’, the Sistem Verifikasi Legalitas Kayu. SVLK was developed through a multi-stakeholder consultation process made up of civil society groups, government departments (e.g. Ministry of Environment and Forestry) and private sector groups. The aim was to develop a system that helped principally to combat illegal logging by strengthening forest governance and ensuring local communities have a voice. The system needed to introduce supply chain controls, along with necessary oversight and management processes through auditing mechanisms and standards setting.
  5. Indonesian Timber Legality System Assurance (SVLK) - Overview
  6. The core strength of the SVLK system is that is it mandatory across Indonesia for all timber production. This means that all exports of wood products now have to be SVLK certified. If exporting to Europe, a FLEGT licence must be issued to allow passage into EU markets. SVLK has helped to strengthen sustainability in forest management, traceability and oversight. At the forest level, sustainable forest management and community forestry initiatives provide a basis for this first core element. All state production forest currently permitted to concession holders must be certified as compliant with mandatory standards for sustainable forest management (known in Indonesia as ‘PHPL’). Timber from state production forest is barcoded and fully traced through an online tracking system, known as SI-PUHH. A strong chain of custody combined with independent auditing and traceability provides necessary oversight of the system, enabling FLEGT licenses to be attached to these products when sold and exported. As a result, SVLK provides strong, robust supply chain control – this process is outlined in the infographic below.
  7. Supply Chain Control infographic
    Supply Chain Control infographic
  8. During this trip to Indonesia, the team witnessed first-hand how community engagement acts as a powerful tool in ensuring sustainability through community and private forests. Areas set aside for community forests can be independently managed and maintained by local community groups and villages. These community members can receive saplings as part of the wider community forest association, which are incorporated into multi-crop systems within these plots. This benefits communities as they can profit from these timber species which are grown alongside their food crops.
  9. SVLK is comprised of three main channels of supply:
  10. - Community and private owned forests – requires SVLK certification
    - Production/state owned forests – managed through PHPL standards and the SI-PUHH wood tracking system, and requires SVLK certification
    - Imports– due diligence is declared to the Ministry of Forestry for auditing
  11. *after the products are audited all products enter the wood tracking system.
  12. Traceability and auditing from forest to product ensures that all processes and products conform and comply with the regulations and requirements of SVLK. The team were given an example overview of supply chain control, observing elements of the entire process during their trip.
  13. Following the flow of raw material, we tracked the next stage of the wood tracking system and visited several small and larger scale production facilities, observing the production and manufacturing of handcrafted furniture, light-weight panels, and door products. Here the group had the opportunity to ask businesses about the direct impacts of SVLK, how it works in practice, the reality of the auditing processes, and what they saw as the benefits of going through this process.
  14. Auditing and evaluation is a cornerstone of the SVLK process. Each actor in the chain is audited at least annually by Conformity Assessment Bodies (CABs). These CABs are licenced and audited through KAN, the ISO-certified national accredited body.
  15. Independent monitoring by a network of civil society groups is a key strength of SVLK, and an important additional check to complement formal auditing. The independent monitors provide vital oversight and a critical eye in evaluating the system, by reporting any suspected infringements to the relevant authorities. Independent monitoring is being continually strengthened, including recently by the establishment of an Independent Forest Monitoring Foundation (forestfund.or.id/) to coordinate monitoring activities and funding. Independent monitoring acts to provide objective feedback on this system and their role is crucial to the success of the SVLK.
  16. The trip concluded with an opportunity to sit in on a Joint Expert Meeting for the Indonesia-EU FLEGT-VPA. This meeting provided a platform to exchange feedback and discussion on the observations made during the trip, as well as to provide suggestions for actions points and changes as the scheme continues to progress and develop.
  17. Joint Expert Meeting (JEM), Indonesia - EU, October 2017
    Joint Expert Meeting (JEM), Indonesia - EU, October 2017
  18. The TTF would like to thank the MFP team and the Indonesian Ministry of Environment and Forestry for their support and for organizing this trip, and to Tom ter Horst of the European Forestry Institute (EFI) for allowing us to use his photos.
  19. 1 SVLK Implementation_Timber Traceability
    1 SVLK Implementation_Timber Traceability
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