The world’s forests possess value far beyond any mercantile worth of the timber they contain – indeed, compared to their vital importance for livelihoods, culture and biodiversity, as well as helping in the fight against the climate crisis, their cash value should pale into insignificance. But, unfortunately, it does not.
At the height of the illegal logging era in the 2000s, Indonesia lost, on average, 2.8 million hectares of forests per year (an area nearly the size of Belgium). During that period, 80 per cent of the timber exported from the country was estimated to be illegal.
In simple economic terms, the country lost 40 trillion rupiah (approximately $4.35 billion) of revenue a year.
Beyond the economic concerns, forest crime also has massive environmental and social consequences. For far too long, forest destruction has been regarded as a victimless crime. This was reflected in the approaches of the governments of the period, firstly by not targeting the real criminals, including from within government ministries, and instead focusing on criminalizing local people.
Deforestation and forest degradation in Indonesia eventually drew international attention. Of all those many forestry problems, the international community demanded that Indonesia curb illegal logging and land-use change. As problems persisted, Indonesia’s timber and wood products were blacklisted in many western countries, which demanded sustainability in Indonesian forests. Because of international pressures, the government acted hard against illegal logging and forest degradation. After the year 2000, Indonesia intensified investigations into cases of illegal logging, peaking in 2006 with a total of 1,705 cases being investigated. This figure, however, could not reflect the severity of illegal logging as most cases have never gone to court.
Indonesia started to discuss its own timber legality assurance system or Sistem Verifikasi Legalitas Kayu (SVLK) in 2003. The SVLK was designed to complement law enforcement in the fight against illegal logging by making it difficult to trade illegal logs and timber. The key objective of the SVLK is to ensure the sustainability of Indonesia’s forests, the primary source of the timber-based industry. The SVLK utilizes market forces to fight illegal logging by providing incentives to timber-based industry players to conduct their businesses in a sustainable manner. The system provides incentives for legality by giving market access for verified legal products and blocking access for illegal products.
Eventually, the team of multi-stakeholders consisting of relevant government agencies, forestry industry players and civil society groups managed to translate legality into a set of criteria indicators. As the negotiations progressed, the government officially adopted the SVLK regulation in 2009 through a Ministry of Forestry regulation.
Finally, after years of campaigning, the European Union responded as a responsible consumer by taking the long-overdue step of acknowledging the serious issue of illegal logging. In response, a governing framework built on a series of measures to prevent illegal timber from entering EU supply chains was established, known as the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan.
Crucially, FLEGT seeks to combat illegal logging at its illicit core – rampant corruption, poor governance, lack of transparency and accountability from those managing and utilizing forests in producer countries. Central to the FLEGT Action Plan are Voluntary Partnership Agreements (VPAs) – bilateral trade deals negotiated between timber-producing countries and the EU – which are designed to prevent illegal timber products from entering supply chains and subsequently finding their way to European consumers.
In November 2016, Indonesia became the first country in the world to export timber products under FLEGT – effectively creating the world’s first controlled green supply chain for timber. Initially designed to help combat illegal logging, SVLK has transformed into a globally recognized timber legality assurance system.
However despite all the hard won progress, the threat to Indonesia’s legal timber trade is still ongoing. The latest of which was shown when the Indonesian Government issued Ministry of Trade Regulation 15/2020.
Under the pretence of an economic stimulus in the face of the coronavirus pandemic, the proposed change had sought to substantially weaken the national SVLK system through large scale deregulation. Certainly this would have re-incentivized illegal logging and illicit trade, effectively sweeping away all progress made under Indonesia’s commitment to good forest governance and efforts to halt deforestation.
Kaoem Telapak together with our partner Environmental Investigation Agency (EIA) called on the Indonesian government to rethink the steps that have been taken and encourage the government to immediately revoke P15 / 2020, in which this regulation damages Indonesia’s credibility as a country that supplies legal timber to the international market.
Ultimately, following international and domestic backlashes against P 15/2020, the Government made a sharp U-turn and revoked the regulation through the issuance of Ministry of Trade Regulation 45/2020 (P45 / 2020) effectively turning P15 / 2020 to be invalid. The content of P45 / 2020 is to return to the previous regulation, namely Ministry of Trade Regulation No 84/2016, where every forestry export product is required to use a V-Legal Document.