Indonesia gears up to deliver on FLEGT licensing promise

Indonesia issues a V-Legal legality assurance export licence document every minute, according to a live tally on the website of its SILK timber legality information system – www.silk.dephut.go.id

Indonesian forest by MFP3

This and other latest statistics show the continuing rapid development of the country's SVLK timber legality assurance system and framework behind it, all of which ultimately underpins its FLEGT Voluntary Partnership Agreement (VPA) with the EU. 

The figures also reinforce trade forecasts that the EU could soon see significant market presence of FLEGT-licensed goods, which, following Indonesia's full implementation of its VPA, is what its formerly V-Legal-stamped exports there become from November 15.

Among other key SVLK figures, the latest report by the EU-Indonesia VPA Joint Implementation Committee (JIC) in May said the system had certified 23 million ha of forest. All large-scale primary and 82% of secondary processors were audited and over a million SVLK 'supplier's declaration of conformity documents' had been issued to Indonesia's small-scale mills and producers.  

Exporter SVLK certication was at 95%, with the remainder in process. Consequently, since V-Legal documents' introduction under the SVLK in 2013, they had been issued for 194 product types. Sales of these – to 200 countries, including all EU member states – totaled US$23bn.

An update on sales value is not available, but it has clearly risen significantly since, as SILK’s total of V-Legal licences issued rose from 354,000 to May to 462,000 to August. The SVLK’s underlying structures have developed too, with 15,000 central and local government, forestry personnel and community leaders and 700 auditors now trained.

The independent forest monitoring network (JPIK) has also grown to 407 individuals and 51 organisations. With the vast majority of Indonesia’s timber product export categories to the EU covered by the FLEGT VPA and the scale of the SVLK structure and licensing operation, FLEGT national policing bodies in the EU, or Competent Authorities (CAs), expect to be processing significant volumes of FLEGT licensed shipments soon after the first arrive before the end of the year. 

"We've calculated volume against import codes and anticipate being busy quickly," said a CA spokesperson in one of the larger EU member states. EU timber businesses take a similar view due, as one said, to the "combination of the trade value of FLEGT-licensed product and Indonesia's licensing and supply capability". 

“We can see FLEGT licences winning Indonesia business from other suppliers,” said Chris Sutton, Managing Director of UK timber and panel products importer/ distributor James Latham.

"And they can clearly handle demand." Peter Pieper Director of Belgian plywood trader FEPCO agreed that FLEGT-licensed products efficiently-delivered could "bring Indonesia new trade and business lost in the past”. 

Indonesian-EU trade

According to the Eurostat Comext database, Indonesian exports of wood and wood articles, wood furniture, pulp, paper and paperboard to the EU rose 18.6% in 2015. Fastest growth came in wood and wood articles, up 24% to €485m, with paper and paperboard and wood furniture up 12% and 13% to €174m and €107m respectively. Pulp fell 71% to €2.3m. Biggest EU Indonesian wood and wood articles buyer was the UK, at €128m, followed by the Netherlands and Germany. The leading wood furniture importers were Germany at €25.6 million, UK, €21.3 million, and France, €15.9 million.