Timber Legality Verification Research Articles

Effect of the Timber Legality Requirement System on Lumber Trade: Focusing on EUTR and Lacey Act

This study provides novel insights into the policy effects of timber legality verification methods, specifically Due-diligence (under the European Union Timber Regulation (EUTR)) and Due-care (under the Lacey Act), on coniferous and non-coniferous lumber trade, highlighting their significance in the context of global lumber trade. Timber legality verification plays a pivotal role in the global timber trade. We comprehensively assess the impact of verification methods on coniferous and non-coniferous lumber trade, utilizing two decades of trade data (1997–2017) across approximately 160 countries. We employ the difference-in-differences method based on the gravity model of international trade, utilizing robust export–import data and demographic profiles. Our findings demonstrate that the effect of EUTR on coniferous lumber imports ranged between −0.32% and −0.05%, and that on non-coniferous lumber imports ranged between −0.44% and −0.05%, whereas the effect of the Lacey Act on coniferous lumber imports ranged between −0.93% and −0.09%. Non-coniferous lumber imports remained unaffected. The Voluntary Partnership Agreement (VPA) led to decreased exports to the EU and US. Our findings hold two key implications. First, Due-diligence exhibits more consistent policy effects than Due-care. Second, supporting VPA-participating countries is crucial for facilitating timber trade. These insights inform timber trade policies and sustainable practices.

Economic and environmental upgrading after a policy reform: The case of timber value chain in Myanmar

Commitments to curb illegal logging and deforestation have proliferated in recent years with the increase of global trade in tropical timber and wood products. While they reflect international sustainability demands, the employed mechanisms to assure timber legality verification may not reflect conditions faced by local private sector actors. Facing rapid forest loss and limited foreign market access, government of Myanmar started reforming its forest policy to include a system of timber legality verification. Drawing on policy analysis and mixed-methods field research, we evaluate the feasibility of the policy reform to achieve economic and environmental upgrading in the timber value chain. Our findings question the transformative capacity of this policy reform. Not only that it failed to meet its sustainability goals, it has also created favourable conditions for a race to the bottom and concentration in the timber value chain. Economic and environmental upgrading take place at the expense of private smallholders who are expected to address a range of obstacles, including limited access to inputs, quality downgrading, and increased operational costs, which hamper their performance. To prevent socio-environmental losses, forest-sector regulatory reforms should be particularly mindful of these challenges in the midstream segment of the value chain.

Implementation of Timber Legality Verification System (SVLK) Policy Post Free Certification Costs in the Small-Scale Timber Products Industry in North Luwu Regency

The Government implements the SVLK to ensure that all wood products circulating and traded in Indonesia have a credible legal status. In large-scale industries, the implementation of the SVLK system has progressed quite well. In contrast, small-scale industries have various obstacles, such as the cost of certification. In 2019 the Government facilitated the Micro, Small and Medium Enterprises (MSMEs) Industry by providing free certification. However, after the SVLK certification fee was waived, the South Sulawesi Provincial Forestry Service data stated that in North Luwu Regency, only a small number of industries already had Timber Legality Certificates (S-LK) because they were still experiencing some obstacles in its implementation. This study aims to identify the actors involved and their power relations in the SVLK certification process, analyze the response of small-scale timber forest product business license holders to the SVLK certification-free incentive policy, and analyze the factors driving and inhibiting SVLK implementation in Luwu Regency. North. This research was carried out in North Luwu Regency, and the object of the study was a timber forest product utilization business unit. The method used is descriptive qualitative and quantitative by using the FGD (Focus Group Discussion) approach. The results of this study indicate that the SVLK in North Luwu Regency has not been responded to well by business actors because the timber trade is locally originating from Community Forests and does not provide added value, so they consider SVLK unnecessary.

Improving Indonesia’s timber legality and sustainability verification system: Proposals based on case studies of natural forest-, corporate tree plantation- and smallholder-based value chains

All Indonesian wood value chains are regulated by a national Timber Legality and Sustainability Verification System (SVLK), based on timber legality and forest sustainability standards. We draw on three prior case studies, of natural forest-, corporate plantation-, and smallholder- based wood products value chains, to investigate SVLK architecture, implementation and compliance; and on regulatory theory to interpret these results and suggest how SVLK might be improved. Case study results demonstrate that SVLK has fostered legality and sustainability compliance in the natural forest- and corporate plantation-based value chains dominated by large-scale actors, but not in the smallholder-based chain in which the majority of actors are also small-scale. Results also reveal problematic elements of SVLK related to the roles of both large- and small- scale actors, legality and sustainability standards, a fragmented wood traceability system, inadequate independent monitoring and witness auditing, ineffective compliance mechanisms, and small-scale actors. Recent revisions of SVLK have not addressed these limitations, and we propose improvements: revisiting national legality and sustainability standards, placing more emphasis on field performance in sustainability assessments, limiting auditors’ flexibility, integrating all online wood systems and limiting access to only SVLK-verified actors, adopting a product classification, and increasing resources for and the frequency of witness audit and independent monitoring. Stronger cooperation between responsible Ministries and agencies is necessary to improve compliance. SVLK could learn from and cooperate with voluntary certification systems to develop more ‘joined up’ timber legality and forest governance regimes in Indonesia.

Daya Saing Industri Furnitur Indonesia dalam Perdagangan Global (Studi Komparasi dengan Vietnam)

Furniture products with significant value added are increasingly being seen as a strategic objective for the industry of forest product. Furniture is one of the strategic commodities for the Indonesian economy. One of the pillars which determines the competitiveness of export furniture products is marketing. This study aims to determine the competitiveness of the Indonesian furniture industry in terms of marketing. In this case, Vietnam used as an object of comparison since they has been Indonesia's main competitor in the furniture trade for decades. The data was obtained by using literature study method. This research used mixed method 5P marketing analysis which consists of position, product, place, promotion, and price. The competitiveness of Indonesian furniture industry was still relatively low compared to Vietnam’s. In terms of position, Indonesia and Vietnam have market segments which are sensitive to illegal timber such as the United States and the European Union. Even though Indonesia already has a timber legality assurance system through the Timber Legality Verification System (SVLK), the export values of Indonesian furniture is still less than Vietnam. From a product perspective, Indonesian furniture industry is slightly greater than Vietnamese furniture industry. Indonesia has reached the level of augmented product, greater than Vietnam, which is mostly still a core product. However, Vietnam's furniture industry is experiencing a fairly rapid development. Currently, Vietnam's timber products are in demand with the international market due to their innovative designs. In terms of location (distribution), both countries are being assisted from easy access to global shipping. In terms of promotion, Indonesia needs to emulate Vietnam by facilitating the furniture industry (especially small and medium industries) to participate in international exhibition activities, so as to expand the furniture market network. In term of price, Vietnam is greater in offering lower prices since it was supported by the availability of abundant labor at low prices and investment support. Meanwhile, Indonesia has the advantage of the large availability of raw materials from production forests.

Pembuatan Barcode Produk Industri Meubel dan Furniture untuk Mendukung Ekspor Produk Ber-Sertifikat Legalitas Kayu

Timber Legality Certificate is to meet the requirements of the legality of timber for the forest industry. Application of timber legality verification system allows Indonesia opened wider timber market, especially European market, through the signing of the Voluntary Partnership Agreement (VPA) in September 2013. The forestry industry, timber legality certificate must fulfill in order to be able to do eskport product. Must to get the V-legal documents in any export activity forestry product timber legality certified consequences must be applied to production management system and marketing system. The research objective is to create a system of production information via barcode for small industries that already have a certificate of Timber Legality. The results showed that the ability to prepare the production and marketing of information systems to support the administration of V-legal documents in the export activities for small industries, a serious problem in meeting the document export goods. Therefore, barcode software development program to help solving the problems facing SMEs in the furniture industry and furniture administrating V-legal documents.

Sustainability certification and legality verification in Indonesian natural forest-based wood products value chains

Indonesian natural forest concessions and value chains are governed by a mandatory Timber Legality Verification System (SVLK), which includes assessment of Sustainable Production Forest Management (PHPL). Concessionaires and processors may also pursue voluntary forest certification. This study explores actors' compliance with these instruments along wood product value chains originating primarily from natural forests. Empirical results demonstrate that SVLK fostered legality compliance in domestic as well as export value chains, but still allows some possible loopholes. It is easier for actors to comply with SVLK than with Forest Stewardship Council (FSC) certification, because SVLK has less stringent requirements, and uses an assessment system that allows poor field performance and does not foster continuous improvement of practices. These results identify weaknesses in the architecture and implementation of the regulatory instruments, and suggest measures to strengthen Indonesia's sustainable forest management and timber legality systems.

Application of Timber Legality Verification System (SVLK) Policy as Ecolabel Implementation in the Indonesian Timber Industry

Ecolabel is an international environmental standard that has been set by the World Trade Organization (WTO). The application of ecolabel is expected to be a solution for environmental problems. Ecolabeling is carried out with an approach of internationally agreed standards. In the timber industry in Indonesia, ecolabeling is implemented with the Timber Legality Verification System (SVLK) policy. This policy is proven to overcome illegal logging and illegal trade and improve forest governance.Keywords: Ecolabel; SVLK; and Environment.

Implementation of Timber Legality Verification System for Forest Processed Wood Products Based on Ecological Justice

This study aims to analyze the application of the Timber Legality Verification System (SVLK) for forest processed wood products, namely furniture in Jepara Regency. SVLK is enforced to maintain harmony between environmental ecosystems and business ecosystems, this is in accordance with the concept of environmental justice which harmonizes environmental, economic and social in Jepara Regency. The research method used is normative-empirical (applied law research). The results showed that the importance of implementing SVLK on furniture in the Jepara Regency can increase the selling value in the global market and guarantee its legality. SVLK is regulated in the Regulation of the Minister of Forestry of the Republic of Indonesia Number: P.38/Menhut-II/2009 concerning Standards and Guidelines for Assessment of Performance of Sustainable Production Forest Management and Verification of Timber Legality in License Holders or in Private Forests. The implementation of SVLK in Jepara Regency for processed forest timber has not been optimal, because many IKMs do not yet have SLKs due to high costs and complicated procedures

Mandatory legality licensing for exports of Indonesian timber products: Balancing the goals of forest governance and timber industries

The government of Indonesia implements a Timber Legality Verification System (Sistem Verifikasi Legalitas Kayu/ SVLK) as an instrument to improve forest governance and secure better trade linkages to foreign markets. It obliges all exports to be legally verified. Nonetheless, legality licensing has become increasingly controversial in the past decade because export policies keep changing whether to require the licensing for all types of products and scales of manufacturing. This paper discusses the pros and cons of mandatory legality licensing for exports. While overall there is a compelling argument that Indonesian exports have tended to increase in aggregate terms, different types and scales of forest industries have had different experiences with legality licensing. More specifically, small and medium-sized enterprises (SMEs) are experiencing with significant technical and financial burdens in contrast with the consummate ease with which larger manufacturers engage in legality. However, a complete termination of legality licensing for all exports, as was promoted and ruled on in early 2020, might not be the best viable solution. We argue that the termination will not necessarily result in a boost for SMEs, nor will such a decision solve challenges faced by small operators in engaging in global markets. Such a measure could also be viewed as a violation of the country’s Voluntary Partnership Agreement with the European Union (EU). Instead, we recommend revisions to the legality systems and its policies, addressing the key issues and challenges that SMEs face and identifying support mechanisms for SMEs to navigate adverse impacts. In deregulating the legality policy, the Government of Indonesia will also need to establish communication and dialogues with the EU to explore the potential of opening new negotiations on any recommended amendments.

Estimation Carbon Storage of Community Forest through Timber Legality Assurance System

Community forests play an important role in reducing greenhouse gas emissions because forests can absorb carbon dioxide in the air, which then stored in trees. The measurement of the amount of C stored in plant life in a community forest can illustrate the amount of CO in the atmosphere absorbed by plants. The research activity aims to estimate carbon stocks in community forests certified by TLAS (Timber Legality Verification System). The method used is the making of allometric equations by logging methods of commercial tree species (Melia, Mahagony, Tectona grandis, and Paraserianthes). The location of the research conducted in the community forest area managed by Lawu Lestari People's Law Enforcement Community (PPHR), Panekan, Magetan. With an area of 192.16 hectares scattered in three (3) villages, namely Ngiliran, Jabung, and Bedagung, and obtained certified SVLK on December 4, 2013. The average percentage of biomass per part of the main tree for community forest the largest is Stem 50.28%, 28.00% Branches and twigs, root 14.26%, leaves 7.46%. Equation model to estimate the amount of carbon content Melia azedarach Y = 246,123 d 1,986 (R2 = 0,999 and SEE = 0,053), Swietenia mahagony Y = 48,389 d 2,443 (R2 = 0,997, SEE = 0,083), Tectona grandis Y = 65,019 d 2,370 (R2 = 0.995 and SEE = 0.122) and Paraserianthes falcataria Y = 52.726 d 2.116 (R2 = 0.993, SEE = 0.123). The amount of carbon content amounted to community forest is 2558.69 tons.

Imposing legality: hegemony and resistance under the EU Forest Law Enforcement, Governance, and Trade (FLEGT) initiative

Timber legality trade restrictions and verification are a bundle of contemporary mechanisms triggered by global concerns about forest degradation and deforestation. The European Union Forest Law Enforcement, Governance and Trade initiative is a significant effort to not only screen out illegal timber and wood products from the EU, but also support trading partner countries to improve their legality definitions and verification processes. But by using bilateral agreements (Voluntary Partnership Agreements) as a key mechanism, the EU legitimizes trade partner nation-states as the authority to decide what is legal. We engage in a theoretical debate about the complexities of the meaning of legality, and then analyze empirical data collected from interviews in Ghana, Indonesia, Vietnam and Europe with policy, civil society and industry actors to understand how different actors understand legality. We find hegemonic notions of Westphalian statehood at the core of 'global' notions of legality and often contrast with local understandings of legality. Non-state actors understand these hegemonic notions of legality as imposed upon them and part of a colonial legacy. Further, notions of legality that fail to conform with hegemonic understandings are readily framed by nation-states as immoral or criminal. We emphasize the importance of understanding these framings to elucidate the embedded assumptions about what comprises legality within assemblages of global actors.Key words: FLEGT, timber legality, hegemony, power, globalization

Avoiding legality: Timber producers’ strategies and motivations under FLEGT in Ghana and Indonesia

Large-scale illegal logging and associated trade in illegally sourced wood products are recognized as pervasive drivers of deforestation and forest degradation in many developing countries. To address the problems, the European Union (EU) adopted the Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan in 2003 with the Voluntary Partnership Agreements (VPAs) and the EU Timber Regulation (EUTR) as key components. Following the introduction of these initiatives, concerns have been raised about the potential of timber producers to avoid the new legality requirements. Based on interviews with timber actors in Ghana and Indonesia, this paper explores the practices of timber producers, identifying various strategies they undertake to circumvent timber legality requirements. It also explores their motivations for doing so. The study found that timber legality verification presents challenges to timber producers in Ghana and Indonesia. They therefore engage in a number of practices to avoid timber legality. These practices entail a range of actions that bypass EU market legality requirements and/or domestic laws. Motivations included instrumental, normative and contextual factors, such as the costs associated with complying with the legality requirements, and the perception that the new regulations are overly burdensome. Moreover, for many operators, there is the feeling that timber legality as it is unfolding in the countries is an imposition that fails to take into account local realities; as such, evading legality becomes a legitimate response. Through their focus on legal formalisation and strengthened enforcement, the VPA and EUTR implicitly stipulate an instrumental perspective to compliance. The paper, therefore, contends that, for the FLEGT Action Plan to achieve its objective of addressing illegal logging and, ultimately, deforestation and forest degradation in developing countries, FLEGT policy makers and implementers must also pay attention to the normative and contextual factors of compliance.

Cleaner production in the Indonesian pulp and paper sector: Improving sustainability and legality compliance in the value chain

Indonesia’s internationally- and domestically-significant pulp and paper industries source their feedstock from tree plantations. A suite of regulatory (Indonesian Sustainable Production Forest Management Certification and Timber Legality Verification) and market instruments (forest certification) have been introduced to promote sustainability and legality of production from tree plantations, and some producers have also adopted other voluntary sustainability measures. This study investigates sustainability and legality compliance by actors in an Indonesian pulp and paper value chain as a case study of environmental innovation. Results are based on primary fieldwork along segments of the value chain, and analysis of audit reports and other publicly-available information. The value chain sources fibrewood from tree plantation concessions and pallet wood from a variety of suppliers. Audit reports suggest high levels of compliance with sustainability and legality requirements, but our research suggests that these reports might not reflect some area of poor performance and non-compliance. We identify weaknesses in the design of regulatory systems, and in auditing and monitoring processes, as the principal reasons for these deficiencies. Drawing on relevant theory and on practice elsewhere, we suggest that compliance and sustainability can be improved by addressing key areas of regulatory silence, by shifting auditing to be more performance-than paper-based, by strengthening independent monitoring from civil society, by increasing the frequency of witness auditing from the National Accreditation Board, and by fostering synergies between regulatory instruments and voluntary forest certification. These changes would improve the effectiveness of regulatory and voluntary instruments to promote cleaner production in Indonesian pulp and paper value chains.

Research trend: Bringing the private to the public: Private actors in timber legality systems

Illegal logging and trade are one of the most important issues in world politics, strongly connected with deforestation and forest degradation, especially in developing countries with tropical forests. As a result, many different international policies designed to tackle these issues have been developed over the years, led both by state and non-state actors. Although the role of state actors in certification mechanisms has been previously analyzed, the response of non-state forest certification actors to potentially competitive systems of legality has not yet been analyzed. The case of Argentina presented in this paper shows how a coalition between international actors such as the Inter-American Development Bank (IDB) and land owners, with great power in the country, gathered through forestry associations have managed to create a timber legality verification mechanism, even with financing from the national state. In this case, the state gives up its regulatory power and the possibility of increasing its institutional capacities vis-à-vis private actors. Addressing the response of private certification actors to legality mechanisms will allow for important and in-depths insights into the relationship between state and non-state actors and potential future joint mechanisms designed to address illegal logging and deforestation.

Challenges facing independent monitoring networks in the Indonesian timber legality assurance system

The Indonesian timber legality verification system was launched ten years ago with the objective of eradicating illegal logging and improving domestic forest governance. At the heart of the legality system, independent monitoring (IM) was designed as an innovation to ensure its credibility and legitimacy. This paper analyzes the challenges facing IM networks in the Indonesian timber legality assurance system and examines what lessons can be learned to further develop ideas and strategies that strengthen the effectiveness of their activities. The current experience in Indonesia suggests that IM still faces some major structural challenges to fulfill high expectations. Above all, the existence and roles of IM bodies within the legality system are not yet fully understood and are often questioned by other stakeholders. There has been some degree of skepticism about their impartiality. IM is also constrained by the limited personnel available to manage it. This situation is not aided by the complex administrative requirements to become involved in IM activities. Access to data and information is another challenge that may hinder the role IM can play in fostering good forest governance. Furthermore, IM relies heavily on donor funding to finance their project-based activities. IM bodies need to explore models and schemes for more sustainable funding for their activities.

IMPLEMENTASI KERJASAMA INDONESIA – INGGRIS DALAM KERANGKA MULTISTAKEHOLDER FORESTRY PROGRAMME 3 (MFP 3) TERHADAP PENINGKATAN PRODUK KAYU INDONESIA

This study discusses the Implementation of Indonesian and British Cooperation in the Elite Cooperation of Multistakeholders Forestry Program. In this collaboration Indonesia and the UK have rules regarding the existence of illegal logging in Indonesia. Indonesia's policy is Certification of Timber Legality Verification. The United Kingdom or the European Union has a policy that is Law Enforcement and Forest Law Governance (FLEGT). This research was conducted on the Implementation of MFP 3 on Indonesian wood products. The Thinking Framework of this model uses the theory of International Cooperation, the Concept of Sustainable Development. This research uses descriptive method with a qualitative approach. The collaboration between Indonesia and the UK produces several impacts on Illegal Logging and timber production and forest management in Indonesia in 2014-2016.

Questioning the competitiveness of Indonesian wooden furniture in the global market

Indonesia is one of the top-ten most dominant manufacturers of wooden furniture in the world, exporting approximately $ 1.34 billion of wooden furniture in 2015, with a market share 2.09%. However, in the last decade, the volume of wood furniture exports has gradually decreased. Additionally, the wooden furniture industry in Indonesia must now implement the timber legality verification system (SVLK) to ensure raw materials come from legal sources. Given the importance of the wooden furniture industry and recent timber legality mandates, this study: 1) analyzes the competitiveness of Indonesian wooden furniture in the international markets and 2) investigates the relationship between the timber legality assurance system (TLAS) and the competitiveness of Indonesian wooden furniture in the global market. This research uses economic trade data and revealed comparative advantage (RCA) to analyze the comparative advantage of wooden furniture from Indonesia in the global market, as well as export product dynamics (EPD) methods to determine the market position of Indonesian wooden furniture. The RCA index shows that Indonesia has a comparative advantage, but its competitiveness is lower than China, Vietnam, and Malaysia. The EPD methods indicate that the competitiveness of Indonesian wood furniture continues to decline. These analyses point to a potential weakness in SVLK in relation to the competitiveness of Indonesian wood furniture in key international markets.

Compliance of smallholder timber value chains in East Java with Indonesia's timber legality verification system

The Indonesian Timber Legality Verification System (SVLK) has been developed primarily to address illegal logging in Indonesia, and is licensed under the European Union's Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan. While SVLK was catalysed by concerns about the legality of wood originating from natural forests, it applies to all wood production in Indonesia, including smallholders harvesting planted trees. This study investigates SVLK implementation in value chains originating from smallholder forests planted on private land in East Java Province, where these forests are important assets for both farmers and the forest industries. It follows value chains for two manufactured wood products, blockboard and plywood. There are specific SVLK requirements for each value chain actor, other than the market brokers in these chains. Results reveal the limitations of SVLK architecture in relation to smallholder value chains, variation in compliance practices, and points of ‘illegalisation’ and legalization within the value chains. The blockboard and plywood products from each case study chain claimed SVLK compliance. However, only one of the two case study chains for each product was compliant up to the blockboard or plywood manufacturing stage; and no distinction was made at this stage between SVLK-compliant and non-compliant wood. Consequently, none of the final products from any case study chain are SVLK-compliant. These results illustrate the challenges of designing and implementing timber legality systems for smallholder value chains, and suggest areas of focus to improve SVLK for smallholder value chains.

Policy on Timber Legality Verification System for Sustainable Public Procurement and Green Products

Forest natural resources in Indonesia are one of the contributors to the fulfilment of human life and development capital. However, the use of forest resources without regard to aspects of sustainability will cause damage and even extinction of the forest. Therefore, green products today have become stronger demands from various groups. The procurement of goods/services within the government has been implementing a Sustainable Public Procurement that fulfils 3 (three) aspects, namely, economic, social and environmental interests. This paper observes Timber Legality Verification System policies in supporting the provision of green products for the forestry sector and Sustainable Public Procurement that will support the achievement of sustainable development. Timber Legality Verification System policy guarantees the provision of wood products by wood processing industry that contributes to realizing good forest governance to combat illegal logging and illegal trade, as well as support improvement in environmental quality. One strategy in fulfilling green products and implementing a Sustainable Public Procurement is to use timber products that have been certified with timber legality. The policy for the use of certified wood products needs to be supported by the implementation rules and information on the list of green products and technical guidelines for the procurement.