Helping Indonesian craftsmen go global, sustainably

Mechanisms to ensure wood is legally sourced are essential to conserve forests, and can also help small businesses expand exports, thereby increasing income. CIFOR scientist Herry Purnomo discusses the importance of this pioneering certification system for small industry, livelihoods and forests in Indonesia.

Women sand chairs in Jepara, Central Java, in 2009 by Murdani Usman/CIFOR

Why is FLEGT so important for small and medium-sized enterprises (SMEs) in Indonesia?

The FLEGT license certifies that wood has been legally sourced and eases exports to the European Union (EU). It is new for Indonesia, as it was just approved at the end of last year. What we need is to maximize the use of these licenses, particularly for SMEs, because this is a great opportunity for Indonesia to boost its exports of timber, not only to the EU but to other countries that develop the mechanism. Timber legality is the first prominent step to ensure the sustainability of forests.

What is happening with FLEGT licensing currently, for example in Jepara where you have been working for many years?

We hope more and more people will get FLEGT licenses. In Jepara, which is a center of the wooden furniture trade in Indonesia, I know about 300 enterprises that have obtained the license. But there are thousands of artisans and small industries in that part of Central Java and we need to figure out how to spread this kind of opportunity.

From a government perspective, they should facilitate SMEs to get certified because some are lacking the capacity and the money to obtain certification on their own. So there are two ways to approach this, from the SMEs to see this as an opportunity to improve their livelihoods, and from the government to be more proactive.

How is the FLEGT licensing process working now?

The government has a small program to motivate SMEs to get certification that the wood they are using was harvested legally – a first step in FLEGT licensing. In Jepara about 4-5 years ago CIFOR and other parties facilitated a certification for some small enterprises as a group, but now those companies do so more often individually.

What I’m suggesting is that it is good for the government to take the lead at the initial stage of such ventures, and once these small business owners see the benefit they can proceed on their own.

How does a small business get a FLEGT license? Who needs to be brought to the table in these discussions?

The Ministry of Forestry and the Environment maintains the database and processes the permits. But the local government supports the certification as well, which is why we are working together with the Ministry and local government to help SMEs get FLEGT licensing. The National Development Planning Agency (BAPPENAS) also has a role to play as they support planning and financing of SMEs in the country.

If a business has fulfilled all the legal requirements, like possessing permits that they use legal timber, then the process won’t take too long. But many small enterprises don’t keep good documentation so it can take quite awhile. Once that is done, SMEs will also find it is easier to access bank loans because they will have the necessary supporting documentation. So there is an indirect benefit of getting such licensing with better access to finance.

Can you point to any FLEGT success stories?

Pak Abdul Latief started as a very small business owner but his enterprise has now grown, and Pak Yoyok’s business was small and is now becoming bigger and bigger. Several larger companies we’ve observed have also grown, with their primary consumers now in Europe.

The total exports of wooden Jepara furniture also increased from USD 115 in 2014 to USD 150 million in 201 due to, among other things, the Timber Legality Assurance System or SVLK, which was the Indonesian name for the FLEGT license before FLEGT started. So the evidence is there that FLEGT can boost livelihoods. But businesses need to be prepared for the licensing process.

At the national level of course not all exports are going to the EU but to countries like Australia or the US that have their own requirements, or to India or China that do not. FLEGT helps to ensure the sustainability of Indonesia’s forests, but such regulations are not yet applied across the board.

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Read the full interview on CIFOR's blog Forest News

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