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Jakarta Post

Trade Ministry defends new timber export policy

Khoirul Amin
Jakarta   ●   Fri, October 30, 2015

The Trade Ministry has defended its stance on a revised regulation annulling the timber legality verification system (SVLK) requirement for exporting 15 downstream products of timber, saying that exporters are still obliged to show proof of environmentally certified material.

Trade Ministry'€™s expert for foreign trade policy, Arlinda, said on Thursday her ministry strongly supported the SVLK system, meaning that every exported wood product had to be sourced from timber with legal certification.

'€œFor certain products, small to medium-sized exporters are required to prove that their raw materials are sourced from legal timber [without SVLK],'€ she said, adding that the new regulation was aimed at simplify the previous one.

Arlinda, who chairs the ministry'€™s deregulation team, however, did not elaborate on how exporters could prove their compliance with the new requirement.

As part of the government'€™s deregulation and de-bureaucratization measures to boost the investment climate in the country, the Trade Ministry has so far overhauled five and cut 13 out of a total 32 regulations to be revised or annulled, including the regulation on exports of timber products.

Under the revised regulation on forestry product exports, which was signed by Trade Minister Thomas Lembong on Aug. 27, small to medium-sized exporters are exempted from an obligation to provide SVLK certification and are only required to an provide export declaration without an expiry date.

Export declarations can be made by small to medium-sized exporters themselves by filling in an export declaration form as required by the Environment and Forestry Ministry.

The export declarations can be used for any export destination country, with or without any bilateral agreement on timber certification with Indonesia.

Under the previous regulations, small to medium-sized exporters were only allowed to use export declarations until the end of this year.

The previous regulation also stipulated that the exemption of legal certification did not apply to those exporting to countries that have a Forest Law Enforcement Governance and Trade (FLEGT) agreement.

Indonesia and the European Union signed a voluntary partnership agreement on FLEGT last year. Indonesia is currently negotiating with the 28-member bloc to exempt its SVLK certified timber products entering the union'€™s markets without undergoing due diligence processes.

The value of Indonesia'€™s timber product exports to the EU went up by 8.9 percent from US$593 million in 2013 to $645.9 million last year, accounting for around 9 percent of the total export value of the country'€™s timber products, according to data from the FLEGT-VPA annual report.

A number of environmental groups have previously stated that the revised regulation could promote illegal logging, which made the country lose an estimated $2 billion in 2011 from uncollected fees and underestimated royalties.

The relaxation of the regulation has also sparked concerns from the EU, with a representative of the union demanding clarification on the matter, according to the Multistakeholder Forestry Program (MFP), which is a partnership program between the Indonesian government and the British government to support the reformation of forestry governance through SVLK.

The Environment and Forestry Ministry'€™s director general of sustainable forest products management, Ida Bagus Putera Parthama, said previously that the SVLK [should] still be implemented as a soft approach to stop the extraordinary crime of illegal logging.

He added that fees for SVLK certification were affordable and that small to medium-sized companies could obtain the certification in groups.