Three years of FLEGT licensing: EU and Indonesia take stock of forest governance progress

The EU and Indonesia embarked on an ambitious journey to improve forest governance and promote trade in legal timber over a decade ago. This month, the two parties celebrated the third anniversary of a key result in that work, the launch of the world’s first ‘FLEGT’ licensing scheme, guaranteeing the legality of timber products exported from Indonesia to the EU.

General view of Sunteak Furniture Company Jepara, Indonesia by EU FLEGT Facility

Indonesia’s timber legality assurance system that issues the FLEGT licences ensures that the country exports only verified legal timber and timber products. In 2018 alone, Indonesia issued almost 39,000 licences for shipments going to EU Member States, worth over USD 1.2 billion. 

The licensing scheme is a result of the Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT) that the EU and Indonesia ratified in 2014. The EU and Indonesia jointly oversee the VPA’s implementation and work to continually improve its systems and procedures. 

The lessons from Indonesia’s FLEGT licensing experience, focusing on system design, implementation, capacity and communications, have been outlined in a new EU FLEGT Facility briefing.

Expert and stakeholder opinions collected show evidence on the positive impacts of the Indonesian timber legality assurance system known as SVLK and the partnership between Indonesia and the EU. The VPA process has been found to have positively contributed to a more coherent legal framework across Indonesia’s timber sector, with actions to combat illegal activity being more strongly enforced and more credible today than they were before VPA implementation. 

The VPA process has also had a positive contribution to improving collaboration between members of Indonesia’s civil society and government, which has been key to strengthening transparency, accountability, awareness, more systematically enforced sanctions and the fight against corruption.

Findings are also that the voices and opinions of many local communities and indigenous people in Indonesia are not only better listened to, but also receive more consideration when decisions are adopted and implemented on the forests where they live. Transparency across the timber industry has considerably improved since VPA implementation, and the VPA process contributing to these trends.

Research conducted by the Indonesian Network of Independent Monitoring (Jaringan Pemantau Independen Kehutanan or JPIK) in East Kalimantan and Central Kalimantan in 2015 to 2017 shows that the Indonesia’s sustainability standard PHPL, which is part of the VPA, contributes to reducing deforestation rates in both regions. Areas that are complying with PHPL standards have a significantly lower deforestation rate compared to other areas.

On 18 November EU and Indonesia held the 7th VPA Joint Implementation Committee (JIC) meeting in Jakarta. During the meeting the two parties discussed the results of the second Periodic Evaluation, which is a regular assessment of the functioning of the timber legality assurance system under the VPA agreement, undertaken by a team of independent experts. The assessment concluded that the timber legality assurance system is functioning as intended by the Agreement. The assessment also noted significant improvements in its implementation over the last two years since the first assessment in 2017. The Ministry’s role in controlling and overseeing timber supply chains has strengthened, and there is active involvement of civil society and businesses. 

Based on the recommendations of the evaluation, Indonesia and the EU developed a plan with priority actions for 2020, which they approved at the JIC meeting. The plan focuses on ensuring that SVLK certification and FLEGT licensing continue to benefit all operators, especially SMEs, along with improved effectiveness of supply chain control, licensing, monitoring and law enforcement.