The VPA voyage is validated

The launch of Indonesian FLEGT licensing may not be a ‘magic bullet’ against illegal timber, but deserves recognition as a key step in the right direction, say participants in the initiative. Mike Jeffree reports

Andy Roby (left) discusses legality assurance issues with mill owners by MFP3

Getting to the point of issuing the first FLEGT licences has been a long journey for Indonesia – technically taking over a decade of forestry and timber sector reform. But those involved say the destination was worth the time and effort. They include Agus Sarsito, a former FLEGT Voluntary Partnership Agreement (VPA) negotiator for Indonesia, and Andy Roby, senior forestry advisor at the UK Department for International Development (DFID) and former FLEGT facilitator for the EU-Indonesia VPA.

“We’ve seen a wide range of stakeholders work hand-in-hand to a common goal: legal forest management,” said Mr Sarsito. “It’s important not just for Indonesia and the EU, with its due diligence exemption for FLEGT-licensed wood under the EU Timber Regulation, but globally, as another advance against illegal trade.”

“Licensing isn’t the magic bullet to eradicate Indonesian illegal logging overnight,” said Mr Roby. “But it’s a significant step and structural and legislative improvements and stakeholder engagement levels achieved are impressive.” When Mr Roby first visited Indonesia in 2003, tackling illegal timber looked daunting.

“I was supporting a UK Timber Trade Federation on a bilateral legality assurance initiative. But then Greenpeace launched a campaign on UK-Indonesian illegal trade and a government audit stated Indonesian logging was 80% illegal. More urgent measures were clearly needed.”

Subsequently, he added, building on a huge groundswell for action from Indonesian community groups and NGOs, plus export boycott threats, new initiatives emerged. “What was needed wasn’t just improved governance, but greater definition of timber legality too,” he said. “With hundreds of laws applying to one stick of wood, regulatory complexity was an added enforcement issue.”

Successive Indonesian and EU-Indonesian multi-stakeholder collaborations followed, including the ongoing UK-backed Multistakeholder Forestry Programme, aimed at improving forest management, environmental performance and community participation. But perhaps best known was the EU-supported Timber Trade Action Plan, run by TFT and involving European trade bodies, Indonesian civil society groups, NGOs and sustainability organisations.

Critically, this provided the testing ground for the NGO-developed Indonesian Timber Legality Standard. Subsequently an auditing system was developed for this to create a template for a regulation: the breakthrough SVLK (Sistem Verifikasi Legalitas Kayu, or timber legality assurance system). Simultaneously the EU was developing its own Forest Law Enforcement Governance and Trade (FLEGT) Action Plan, including VPAs to facilitate EU market access for supplier countries which introduced timber legality assurance systems.

Supply and demand-side action

Indonesia's VPA negotiations with the EU began in 2007, but, said Mr Roby, there could be no final Agreement for the country without complementary EU demand-side steps to block illegal wood and incentivise legal timber procurement.

“With lobbying from EU NGOs, politicians and industry, plus the example of the US anti-illegal timber Lacey Act, that probably added impetus for the EUTR’s introduction in 2010,” he said. Meanwhile Indonesia had made the SLVK a regulation. “With its V-Legal export licence system, this formed the basis for Indonesia’s VPA timber legality assurance system and FLEGT licensing,” said Mr Roby. “But it was implemented independently, emphasising the Indonesian government’s own growing determination to tackle illegal logging, even if NGOs demanded some revisions.” “And SVLK created effective systems, including a clear template for managing legality licence flow via the SILK licensing information unit,” said Mr Sarsito.

With these elements in place, Indonesia and the EU signed their VPA in 2012 and ratified it in 2014. That it took to 2016 for full implementation and first V-Legal documents to be ‘rebranded’ FLEGT licences for exports to the EU, understandably caused frustration in both EU and Indonesian timber trades.

VPA a demanding process

“But given the industry’s scale and the spinoff regulation and stakeholder consultation required, developing legality assurance systems that satisfied all sides inevitably took time,” said Mr Roby. 

However, said Mr Sarsito, delays weren’t due to lack of commitment to engage with the VPA process, as the potential benefits were becoming increasingly recognised. “Our motivation for signing the VPA wasn’t just to get market access and consumer country support against illegal logging, but to be internationally recognised for our legality enforcement and assurance efforts,” he said. “Some businesses resisted the multistakeholder participation required, but that changed too and we’re now in a new era for communication between Indonesian industry, NGOs and communities.”

Further refinement of SVLK legality assurance via the VPA has also helped to streamline enforcement. “It’s no longer hundreds of laws per stick of timber, so even the police like it!” said Mr Roby. “Remarkably, we’ve also seen 700 SVLK auditors trained.” But with Indonesia’s VPA now implemented and legality assurance firmly embedded, the hard work isn’t over. “Legality assurance must be a live system, constantly adapting to change,” said Mr Sarsito.

Mr Roby agreed, but said Indonesia’s commitment to continuous improvement so far indicates this won’t be an issue. “They started the legality assurance journey with square wheels, but consistently accepted criticism until they were round and ready to accelerate,” said Mr Roby. “They know that approach must continue.” Meanwhile Indonesia’s first FLEGT licences are also expected to create added interest and momentum in the wider international FLEGT initiative.

“Licensing is FLEGT’s ultimate proof of concept,” said Mr Roby. “So I'm sure Indonsia will now get more delegations from other supplier countries coming to learn from its FLEGT experience, having already had groups from Vietnam, China and Myanmar.” The other key for FLEGT going forward, said Mr Sarsito, is for the market impacts of licensing to come through. So he urged EU authorities and the timber sector to support Indonesia’s first licensed shipments, both for their own value and to show other countries FLEGT licensing’s "real benefits".

“The EU should also focus even more on EUTR implementation to minimise illegal and unlicensed timber market access,” he said. “Ultimately trade statistics will sell this for Indonesia and other supplier countries,” agreed Mr Roby. “And I would urge EU businesses to reappraise Indonesia. It’s a dynamic, fast-developing timber producer, now with this added assurance which should settle any EUTR-compliance or reputational concerns that held buyers back before.”