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Jakarta Post

Govt plan to lift ban on log exports questioned

  • The Jakarta Post

    The Jakarta Post

  /   Mon, December 16, 2013   /  10:22 am

After a decade-long fight against illegal logging, the idea of resuming log exports is heating up following a recent proposal by the Forestry Ministry.

Under the proposal, logs sourced from productive forests, either community plantation forests (HTR) or industrial forest concessions (HTI), by firms holding certificates under the timber legality verification system (SVLK) can be shipped overseas.

'€œThe exports will be limited to companies fulfilling the certification requirement, thereby it will not happen on a massive scale,'€ Forestry Ministry'€™s secretary-general Hadi Daryanto told The Jakarta Post.

No quota would be imposed and the log trading would be mainly driven by market demand, he added.

The proposal came up as a follow up to a demand from the Association of Indonesian Forest Concessionaires (APHI) for better prices and wider market access. Domestic sales alone have so far led to lower prices and in turn, have resulted in weakening the upstream industry. At present, logs taken from local industrial forests only sell for US$30 per cubic meter, almost one-third less than the regional price of $80 per cubic meter, the industry group has claimed.

Indonesia, the world'€™s largest log exporter since the 1970s, has had its ups and downs in its fight to combat illegal logging. Home to the world'€™s third-biggest tropical rain forest after the Amazon and Congo basins, it has been a center of attention of global environmental groups due to rampant illegal logging that has caused not only expansive deforestation, but also losses in biodiversity and harmful smog caused by the burning of vegetation.

Massive exports of logs occurred between 1998 and 2001 when Indonesia substantially reduced export taxes on logs from 200 percent to 10 percent. The relaxation of log exports, which was part of a deal with the International Monetary Fund (IMF) to reform its ailing economy for a sizeable bailout package, encouraged loggers to ship their logs overseas to obtain hard currency, while the weak regulations resulted excessive illegal logging.

Over the past decade, the country has been struggling to address this concern. At the end of 2001, the country banned all log exports and later in 2003, it introduced the SVLK certification to ensure the legality of traded timber, which became mandatory in 2010. Environmental activists maintain that resuming the log exports will provide a way for uncontrollable illegal logging to resume, a view shared by a downstream industry group.

'€œThis is one step back. While in the past the government has halted log exports to avert environmental damage, it now wants to bring added value and develop the downstream industry,'€ said Soewarni, the chairwoman of the Indonesian Sawmill and Wood Working Association (ISWA).

'€œIf we resume the exports, who will be able to guarantee an end to illegal log exports?'€ she questioned, citing poor supervision and legal enforcement despite the planned limited exit gates for log exports. The legal shipments as well as potential smuggling of logs can be a threat to the domestic processing industry as they will cut the available local supply, according to Soewarni.

Despite its seemingly hard efforts to reform its forestry policies, which the government touts as a model for sustainable '€œgreen growth'€, corruption and mismanagement are still plaguing Indonesia'€™s forestry sector with serious impacts on human rights and the environment.

Illegal logging and forest-sector mismanagement caused $7 billion in losses of state revenue from 2007 to 2011, according to a report recently released by the Human Rights Watch. The ongoing debate on the possibility of resuming log exports probably still has a long way to go before a compromise can be reached.

'€” JP/Linda Yulisman