Timber Legality Research Articles

Revenue loss from legal timber in Indonesia

The link between forest revenue administration and under performance of revenues from legal timber has received little attention in the literature. This article analyzes revenues from the timber royalty and reforestation fund fee, two important forest non-tax revenues in Indonesia whose tropical forest has been under threat of extensive deforestation particularly from commercial timber logging. It shows that revenue realization does not reflect potential with two key findings: first, timber royalty revenues represent only 52% of their potential, and second, revenues from reforestation fund fee suggest a counter-intuitive pattern – revenue realization is 34% above its potential. We provide plausible explanations from the perspective related to features of revenue collection. We further consider policy relevance in terms of forest revenue administration.

Protecting “First world” markets and “Third world” nature: The politics of illegal logging in Australia, the European Union and the United States

Abstract Global forest governance has recently seen the emergence of a timber legality regime. In an aim to regulate global timber trade flows, the US, the EU and Australia adopted laws prohibiting illegally harvested timber from entering their markets. While some view this as a milestone for environmental and social stewardship in the global forest sector, the effects of the regime remain contested. In order to better understand likely effects of the regime, we apply the Discursive Agency Approach to analyze discursive dynamics of policy making among the stakeholders involved in the creation of each law and their effects on governance design and implementation. Based on 120 interviews in the US, Australia, the EU and with global organizations/institutions, as well as 19 informal conversations, 300 documents, and participant observation data, our results show that legality is a powerful concept in forest governance. Drawing attention away from sustainability, it enables discursive divides between the global North and South as well as between wood producers and importers. These divides were crucial for the emergence of the legality regime. While some forest industry groups perceived the new laws as an opportunity, others saw them as a threat. In all three regions this led to coalitions between supportive industry factions and environmental groups. These coalitions were based on a complementarity of goals; environmentalists aimed to protect “Third World” forests while industry groups aimed to protect “First World” markets against growing competition from these former regions. Yet each coalition was composed differently and employed distinct – albeit related – discursive strategies in policy making. This affected the design of each law and its implementation. The shift from sustainability towards legality re-surfaces prominently in implementation. Stakeholder discussions range from coercive “threatening” to more learning-oriented “educating” approaches. We conclude by discussing the effects these discursive struggles in Australia, the EU and the US have on the global timber legality regime.

Deforestation and timber production in Congo after implementation of sustainable forest management policy

Over 400 million hectares of tropical forests are managed for timber production, comprising more than half of the remaining global permanent tropical forest estate. A growing proportion of tropical production forests are managed under Sustainable Forest Management (SFM) principles. The objective of SFM is to achieve multiple benefits, including forest protection, biodiversity conservation and income enhancement. However, the outcomes resulting from the implementation of SFM in tropical forest ecosystems have seldom been examined rigorously. In this paper, we present a methodological approach to assess broad-scale impacts of SFM policy in tropical forest ecosystems. As a case study, we investigated deforestation and timber production in logging concessions in the Republic of Congo after the implementation of its SFM-based forestry law in 2000. Compliance with the forestry law was incomplete, allowing a unique opportunity to compare deforestation and legal timber production outcomes in concessions that implemented SFM-based policy compared to those that did not. Quasi-experimental matching analysis indicated that deforestation in matched parcels in compliant concessions was up to 2-times higher than matched parcels in non-compliant concessions, equivalent to 67km2 of forest loss for the period 2005–2010. Annual deforestation data demonstrated that deforestation was stable or increased in all six concessions following the respective date of compliance in each concession. Legal timber production increased (by 5%, from 0.18 to 0.19 CBM/ha/yr) and became more stable, in compliant compared to non-compliant concessions. Our results suggest that the presence of SFM in a concession does not immediately lead to less deforestation. Rather, SFM policy may be associated with higher deforestation, because SFM is also associated with higher legal timber production, foreign capital, and international timber demand. Our findings measure short-term associations between SFM and deforestation in the Congo, and underscore the need for empirical evaluation of long-term impacts of SFM in tropical forest ecosystems worldwide.

A categorical modeling approach to analyzing the impacts of the Lacey Act 2008 amendment on Chinese companies’ export cost and the implications on their sourcing behaviors

The United States (US) Lacey Act 2008 amendment (LAA) is a timber legality regulation that requires US importers to monitor and minimize the risk of illegally harvested wood products within their supply chains. This paper empirically examines the effect of the LAA on Chinese companies’ export costs to the US. The study uses 138 responses from two surveys in Shanghai, China, in 2013, i.e., 5 years after the LAA was implemented. Given the high proportion of zero export increase indicated by the Chinese companies, a zero-inflated ordered probit model was used to model Chinese companies’ export cost increases to the US. The research results demonstrate that pre-LAA raw material sourcing patterns are primary indicators of the respondents’ export cost increase to the US as a result of the LAA. From the results, it can be inferred that log and lumber importers from suspect regions are taking additional measures, by changing their procurement practices, to ensure the legality of their raw material, which is adding to their cost structure. The results also indicate that smaller companies, given their flexibility with raw material procurement, were less likely to experience a post-LAA cost increase relative to their larger counterparts.

Effects of national community-based forest certification on forest management and timber marketing: a case study of Gunung Kidul, Yogyakarta, Indonesia

SUMMARY This study clarified the changes in forest management and timber marketing after acquisition of the Indonesian Ecolabelling Institute's community-based forest certification through a case of Gunung Kidul, Yogyakarta, Indonesia. The certification had good effects to improve forest management, although any apparent effects on timber marketing were not observed. Meanwhile, this study observed the potential of certification to help with the acquisition of the Indonesia Timber Legality Assurance System certification under the Voluntary Partnership Agreement of Forest Law Enforcement, Governance and Trade. In order to disseminate the forest certification to small-scale forestry it is necessary to promote selling certified timber and generate a premium price for smallholders. In particular, the challenges of Chain of Custody and the inherent nature of small-scale forestry should be addressed. The dissemination of national forest certification, which provides more appropriate benefits for smallholders and...

Choosing timber legality verification as a policy instrument to combat illegal logging in Indonesia

The Ministry of Environment and Forestry (MoEF) of Indonesia has recently started to implement legality verification as a policy instrument to combat illegal logging. Using theories of policy instrument choice, this paper attempted to shed light on the conditions under which the instrument choice takes place. Over the past few years, there has been a significant change in political perception on illegal logging. In fact, the problem has been brought forward as one of the most chronic forest problems in the country. At the same time, there has been growing dissatisfaction on the previous range of instruments and measures. In addition, MoEF decision to use legality verification heavily interacts with the trend on import legislations in a number of countries. In fact, the trend is still “more friendly” for Indonesian timber products than boycotts. Legality verification was also preferred due to its streamlined requirements, compared to the more comprehensive standards of sustainability certification.

Forensic timber identification: It's time to integrate disciplines to combat illegal logging

The prosecution of illegal logging crimes is hampered by a lack of available forensic timber identification tools, both for screening of suspect material and definitive identification of illegally sourced wood. Reputable timber traders are also struggling to police their own supply chains and comply with the growing requirement for due diligence with respect to timber origins and legality. A range of scientific methods have been developed independently with the potential to provide the required identification information, but little attention has been given to how these tools can be applied synergistically to support the legal timber trade. Here we review the use of visual identification methods (wood anatomy, dendrochronology), chemical methods (mass spectrometry, near infrared spectroscopy, stable isotopes, radio-carbon), and genetic methods (DNA barcoding, population genetics/phylogeography, DNA fingerprinting) each with potential application to forensic timber identification. We further highlight where future research and development are required to identify illegal logging crimes using these methods and suggest ways in which multiple methods can be used together to answer specific identification questions. We argue that a new integrated field of forensic timber identification should be a global investment priority, for which the ongoing collection, curation and taxonomic study of appropriate reference material is a critical part. Consideration of the specific legal requirements for method development and the application of identification methodologies to criminal evidence are also imperative to achieve robust scientific support for illegal logging crime prosecutions and prevention.

Проведение отдельных видов судебных экспертиз по уголовным делам, связанным с незаконной лесозаготовкой

The article highlights the problem of illegal logging of forest plantations in Russia, the scientific and procedural component of the systematic work of the various organizations and agencies to develop mechanisms for combating crime in the forest industry, representing the author´s vision of a separate investigation of the type of environmental crime under the economic security of the state.
 The author notes that a variety of disorders related to forest management are not new types of offenses in the country. Even in the XIX century, the Russian Empire basic directions of state activity to prevent violations of forest law were enshrined in the Charter of the Forest, which listed offenses and crimes and defined punishment for their commission. The annual growth in the number of offenses detected by law enforcement agencies in terms of violations of forest law, entails the need to create the most effective ways to detect, capture and examinate evidence. In this examination of the scene, primary investigative actions must be paid special attention. It is, in our opinion, should be done at a high level, carefully and accurately, which would continue to form the evidence base to carry out a sufficient number of different examinations, including forensic botanical using dendrochronology methods. The conclusion of the forensic botanical examination may serve as confirmation of the legality of timber, as well as a means of quality control of products of wood.

Formalizing the Logging Sector in Indonesia: Historical Dynamics and Lessons for Current Policy Initiatives

This article reviews the Indonesian central government's efforts to regulate logging activities in historical perspective to draw lessons for the new timber legality verification system called SVLK. It shows that throughout history, illegal logging networks have been a fixture in Indonesia's forestry sector and that the involvement of local and national power holders has given logging activities a formal backing. The SVLK is expected to help improve forest governance, but since it is primarily an administrative tool there is a risk that preexisting trends and practices will continue. This underlines the need for anticorruption measures and independent monitoring to make the legality adherence system more robust and reliable.

Actor Positions on Primary and Secondary International Forest-related Issues Relevant in Indonesia

Over the last 20 years a considerable number of international forest-related policies has evolved, collectively referred to as the international forest regime complex. The objectives of this study are to identify the most relevant international forest-related issues discussed in Indonesia as well as the most active actors and their positions on these issues. The empirical methods used include content analysis of Indonesian newspapers, national expert journals, expert mailing lists, and international organizations’ position papers. In addition, experts were interviewed to verify and complement the data. As a result, three primary forest-related international issues in Indonesia are identified, namely: timber legality; climate change including REDD initiative; and oil palm plantation and its environmental aspects; and the other four considered as secondary issues, namely: harmonization of wood and forest certification schemes; land use change; forest and species conservation; and deforestation and decentralized forest governance. Public and expert deliberations are found to differ regarding the depth of information as well as their immediate importance for the people and their long-term objectives. The Ministry of Forestry and, surprisingly, the Ministry of Trade are the most active actors in these issues. The main lines of conflict lie between forest utilization interests which are supported by the Ministry of Forestry, Ministry of Trade, oil palm and wood industry associations face-to-face with forest conservation interests powered by WWF and Greenpeace.

Verified Legal? Ramifications of the EU Timber Regulation and Indonesia's Voluntary Partnership Agreement for the Legality of Indonesian Timber

The recent entry into force of the EU Timber Regulation (EUTR) completes the EU's policy framework designed to curb trade in illegal timber. In light of the imminent ratification of a Voluntary Partnership Agreement (VPA) between the EU and Indonesia, the Timber Regulation raises questions about the role that Indonesia's timber legality assurance system—the SVLK—will play in securing access for Indonesian timber to the European market. We performed a regulatory analysis and found that the SVLK will serve as the basis for licensing direct exports of timber to the EU under the VPA, but that it has weaknesses which the VPA may be unable to address. The Timber Regulation, which requires due diligence for timber imports, might have helped address these weaknesses, but it explicitly excludes VPA timber from these requirements. However, trade data indicates that the size of the timber trade that the VPA will govern is not large. Further, the Regulation will apply to Indonesian timber that enters the EU via third countries. Its ability to address gaps in the SVLK as regards this timber depends on two contingencies: (1) whether the SVLK meets the Timber Regulation's certification scheme reliability criteria; and (2) whether the due diligence provision can be construed as permitting regulators to demand proof of legality beyond certification. We argue that the EUTR will continue to play an important role in regulating imports of Indonesian timber even after the VPA is ratified.

Empirical Analysis on the Practical Feasibility of Timber Legality Verification Work in China

With the acceleration of economic globalization and trade liberalization, illegal logging and timber trade, which are closely related to the ecological environment and climate change, have aroused extensive concern within the international community. Based on the authors’ long-term experience and accumulated knowledge, as well as extensive field investigation, this article offers a range of observations. Firstly, it analyzes the worldwide significance and annual changes of China’s forest products trade; secondly it reviews China’s legal timber logging, transport and management systems and major challenges; thirdly, it compares timber legality verification schemes and methods around the world and summarizes experience of their implementation; fourthly, it proposes countermeasures and suggestions on strengthening the timber legality management in China; finally, the paper discusses the practical feasibility of timber legality verification work in China. The results of the authors’ research show that strict forest logging quota management means the risk of illegally logging in China is relatively low, that legality verification in China can meet the international market demand for legal timbers and that launching timber legality verification work in China is therefore feasible. This would make a significant contribution to breaking through green trade barriers, enhancing China’s position in negotiations, and promoting the standardization of the timber international trade.

Sistem Verifikasi Legalitas Kayu Dan Perbandingannya Dengan Sertifikasi Sukarela Pada Level Industri

Indonesia memiliki sistem verifikasi legalitas kayu (SVLK) yang bertujuan untuk menjamin pembalakan dan perdagangan kayu legal. Pada bulan Januari 2013, beberapa jenis produk kayu yang diekspor harus memenuhi syarat-syarat SVLK. Dalam rangka penyempurnaan SVLK, penelitian ini bertujuan untuk mengkaji peraturan-peraturan dan pihak-pihak yang terkait dengan pelaksanaan SVLK, dan membandingkan profil dan biaya SVLK dengan sertifikasi sukarela pada level industri. Metode pengumpulan data adalah wawancara dengan pihak terkait (insitusi pemerintah, LSM dan auditor), focus group discussion dan rapat. Data dianalisis secara deskriptif dan kualitatif. Hasil studi menunjukkan bahwa SVLK perlu disempurnakan terkait dengan sinkronisasi aturan, koordinasi, sosialisasi, dukungan dana dan pembinaan bagi industri kecil serta kriteria penilaian bagi industri yang memiliki sumber bahan baku yang beragam. Biaya standar sertifikasi SVLK yang direvisi telah relatif sama dengan biaya sertifikasi sukarela namun dikhawatirkan adanya pungutan liar pada pelaksanaannya di lapangan.

Changes in Chinese wood-based exports to the U.S.: Post Lacey Act amendment

The recent adoption of timber legality legislation in the U.S. (the Lacey Act 2008 amendment) requiring timber imports be sourced from legally harvested wood could have profound impacts on China's re-exports of manufactured wood products to the U.S. This study examines empirically how Chinese wood manufacturers’ sales to the U.S. have changed in response to the Lacey Act. A sample of 225 Chinese wood manufacturers was drawn from two trade shows in Shanghai, China in 2013. The results reveal that Chinese companies’ awareness of the Lacey Act has played an important role in their decision to export to the U.S. over the last five years. The companies who are less familiar with the Lacey Act tend to withdraw from the U.S. market and focus on domestic market. Also the smaller Chinese companies were more likely to withdraw from the U.S. market in the aftermath of the Lacey Act as compared to their larger counterparts. Finally, the Chinese companies that have increased their imports of raw materials from the U.S. were found to have increased their sales to the U.S. market over the last five years.

The impact of timber legality regulations on business practices in Vietnam

Reports that nearly half of Vietnam's roundwood imports come from illegal sources has drawn criticism from major consumer countries who have recently implemented timber legality regulations. These regulations, which include the U.S. Lacey Act and EU Timber Regulation, restrict the import of illegally harvested wood and are expected to have a direct impact on major wood-processing countries such as Vietnam and China. Surveys were conducted at trade shows in Ho Chi Minh City to assess how these regulations influence firms’ use of chain-of-custody certification, and impact their material sourcing and export market decisions. Vietnamese firms which sell to the United States and the European Union had higher awareness of timber legality regulations and were more likely to take steps to eliminate illegal products from their supply chain by sourcing raw materials from the U.S. and Canada or by increasing their use of certified wood. However, smaller firms were generally unaware of timber legality regulations and were much less likely to use certified products. Our findings suggest that the Vietnamese market has become segmented, with smaller firms using materials which are at a higher risk of containing illegal wood, and exporting to less regulated markets, such as China.

The effects of the 2008 Lacey Act amendment on international trade in forest products

Despite international efforts, illegal logging continues on a scale that is of global concern, with significant volumes of illegally harvested wood entering into international trade flows. Recently, major importers of forest products have implemented timber legality legislation prohibiting the possession and/or importation of wood and wood products that are of illegal origin. Drawing on bilateral trade data and using a quantitative, regression-based comparative case study methodology, the effects of the 2008 Lacey Act amendment on the international trade of forest products were evaluated. A data-driven method was used to create aggregate control groups for comparisons with countries affected by the policy. If the policy has been effective in reducing the volume of illegally harvested forest products being imported into the U.S., we would expect to see some unique differences in post-policy U.S. imports of wood and wood products from areas with high levels of suspicious wood in their supplies. Results from these analyses show few substantial differences in post-policy imports of wood products of suspicious origins into the U.S. However, the results suggest that the policy may be affecting wood imports by major exporters of finished wood products to the U.S.

Contesting national and international forest regimes: Case of timber legality certification for community forests in Central Java, Indonesia

The Government of Indonesia (GoI) and the European Union (EU) have signed a Voluntary Partnership Agreement on Forest Law Enforcement Governance and Trade (FLEGT-VPA), which aims to prevent illegal timber products from entering the EU. This agreement recognizes a certification for timber products exported from Indonesia based on FLEGT-VPA standards and implemented through the timber legality verification system, Sistem Verifikasi Legalitas Kayu (SVLK). While the implementation of SVLK complies with the FLEGT-VPA, it has not dissolved pre-existing national systems for forest management and timber trade. Implementing SVLK standards amid multiple forest regimes causes redundancy of administrative procedures in forest management and timber trade in Indonesia. This redundancy, in turn, leads to decrease in cost efficiency, weak legitimation, and low effectiveness of the system, especially in community forests.

Forest Law Enforcement, Governance and Trade (FLEGT) in Cameroon: Perceived private sector benefits from VPA implementation

This paper broadly defines the private forestry sector to include timber enterprises ranging from small-scale chainsaw loggers to industrial timber producers, all of which will be directly affected by VPA implementation in Cameroon. This paper argues that certain international forest policies, although aiming at fostering well-intentioned reforms, may cause further expansion and power concentration of the already dominant large concession groupings and simultaneous marginalization and fragmentation of smaller forestry enterprises in the Congo Basin. We explore this argument through twenty-four semi-structured interviews with large and small scale enterprises to better understand how they think they may benefit (or not) from the changes foreseen by VPA implementation. The perceived benefits include the elimination of illegal players, a reduction in corruption and poverty, the promotion of business opportunities, and the valorization of investments. The way in which some of these benefits are expected to materialize may suggest a lack of congruence between the aims of Cameroon's VPA and private sector expectations. Not only may this lead to disappointment and a sense of demotivation among some of the main stakeholders, it also may lead to further fragmentation in the forest sector. The results therefore indicate that the success of VPA implementation in Cameroon depends on its ability to go beyond the timber legality verification for European markets argument and uphold its stated socioeconomic development objectives.

The timber legality verification system and the voluntary partnership agreement (VPA) in Indonesia: Challenges for the small-scale forestry sector

Indonesia is at the forefront of countries implementing voluntary partnership agreements (VPA) with the EU in order to meet legal requirements under the EU Timber Regulation. Since 2009, the forestry authorities have been working to establish a timber legality verification system called SVLK. This system became mandatory for large-scale forestry enterprises on 1 January 2013, while small-scale operators had until 1 January 2014 to comply. While the progress with SVLK certification among large-scale timber enterprises has been considerable, timber legality verification in the small-scale sector lags behind. There continues to be a significant degree of illegality in small-scale forestry operations and stakeholders' understanding of SVLK and the VPA is limited. Many small-scale timber businesses are reluctant to pursue certification and formalize their operations because of concerns about additional costs and uncertainty about the benefits.Achieving timber legality compliance in the Indonesian forestry sector will not be easy. However, by applying a phased approach, providing more information to stakeholders, expanding verification bodies' capacity, simplifying the SVLK process and making it more financially attractive it is possible to make progress.

ANALISIS STRATEGI KEBIJAKAN MUTU DAN STANDAR PRODUK KAYU LAPIS DALAM RANGKA MENINGKATKAN DAYA SAING EKSPOR

<em>Developed countries use a standard as instrument to conduct trade barriers. The issues about quality and standard are also applicated to Indonesian plywood exports. Consumer countries led to the requirements of the international timber legality, for example USA with Amandemen Lacey Act, Uni Eropa with EU Timber Regulation, Australia with Prohibition Bill, and Japan with Green Konyuho. Standard is a main instrument to increase of competitiveness. The aims of this study are: (1) to analyze the competitiveness of Indonesia plywood in the major export destinations, (2) to analyze strategy of policies to improve the quality and standard of plywood in order to increase competitiveness. The analytical methods used in this study are Revealed Comparative Advantage and Analytical Hierarchy Process. The result of study shows that an average value RCA between Indonesia and UK is high. According to AHP, government should facilitate exporter to solve the problem in the cost of certificate of plywood legalcy (SVLK).</em>