Country Risk Profiles

This page looks different to the other pages on the Sourcing Hub as material from Indonesia is licensed under the FLEGT licensing scheme. FLEGT licensed timber and timber products are considered to comply with the requirements of the EU Timber Regulation (EUTR), so you do not need to exercise due diligence on these products.

This means:

1. If you are importing timber from Indonesia (i.e. you are the Operator according to the EU Timber Regulation), you will receive a FLEGT Licence from your supplier prior to the export of the product from Indonesia.
2. You must then submit the electronic FLEGT licence you receive from your suppliers (exporters) to your Member State Competent Authority for verification before the shipment arrives in the EU and before any customs declaration is made. You do not need to wait for the shipment to reach the EU to submit the FLEGT License for verification. 

If it's valid, the FLEGT licence automatically meets the requirements of the EU Timber Regulation. 

The United Kingdom's FLEGT Licensing Process

If you are an operator in the UK importing Indonesian timber, you must submit the electronic FLEGT licence for verification to Competent Authority via email to: flegtenquiries@beis.gov.uk before the timber arrives in the UK. The form to submit the licence can be found here, and further information is available on the Competent Authority's website. There is a £9.60 fee associated with the verification. 

Other EU Member State Processes for FLEGT Licensing

The exact process in each member state is different, and you should check with your competent authority to be sure to comply. There is an IT system called FLEGIT that enables EU operators to submit FLEGT licences to Competent Authorities electronically. Some member states will have established their own electronic system for Operators to submit their licences through, check with the competent authority prior to using the FLEGIT platform.

We provide more information on forestry in Indonesia and the FLEGT scheme below, for those interested.  

Forestry in Indonesia

Indonesia has been, for many years, one of the most significant players in the international trade of tropical timber. Nearly half of the country is covered by forests, and the timber extracted from this resources is converted into many products, including plywood, furniture, pulp and paper. Indonesia’s main export markets are China, the EU, Japan and Korea. 

Forests in Indonesia are categorised as hutan negara (state forests) and hutan hak (forests subject to rights). Ownership is split between:

• the state, which owns 72% of the forest lands. Half of this land is managed by the state and the other half is managed by private companies, individuals or communities, most commonly through concession permits. 
• communities and individuals, which own 28% of the forest lands.

Indonesia was the first country in Asia to sign a voluntary partnership agreement (VPA) with the EU in 2013. In November 2016, the VPA came into full effect when the European Commission endorsed the country's timber legality assurance system, the 'Sistem Verifikasi Legalitas Kayu (SVLK)'. Since then, Indonesia has been able to issue FLEGT licenses to verified legal timber products it exports to the EU. The licenses are issued in the form of 'V-Legal Documents'. 

Indonesia also applies the SVLK to exports to non-EU countries. These are also accompanied by 'V-Legal Documents'. 

FLEGT Licenses for Indonesian Timber 

V-Legal Documents are Indonesian export licences attesting legality. As the Indonesia-EU Voluntary Partnership Agreement (VPA) has been fully endorsed, Indonesia now issues V-Legal Documents as FLEGT licences for timber bound for the EU. 

Companies that comply with the timber legality assurance system (SVLK) need to attach a V-Legal Document to their consignments for export to any international market. The V-Legal Document specifies that the timber products being shipped comply with the legality and sustainability standard and the supply chain control requirements as stipulated in Indonesian regulations and the VPA. Thus the V-Legal Document provides assurance that timber or timber products are legal. V-Legal Documents are issued by bodies authorised by the Indonesian government to act as licensing authorities.

The FLEGT licence format is set out in Annex IV of the Indonesia-EU Voluntary Partnership Agreement (VPA). It looks similar to the V-Legal Document, but has ‘FLEGT licence’ clearly stated on the top right of the licence, in the box marked 'B'. V-Legal Documents continue to be issued for exports to other markets for the products covered in the VPA. Indonesia has developed an annex to the FLEGT licence that will be used if more than one product is shipped under one licence.

Indonesian legal framework

The Forestry Law (Law No. 41 of 1999) is the primary legislative instrument that governs forestry in Indonesia. It replaced the Basic Forestry Law (Law No. 5 of 1967) that had been in effect for more of the New Order period (1965–1998). The Constitution does not mention forests explicitly, but does refer to the state’s control over all natural resources of the country. Although the Basic Agrarian Law (BAL, Law No. 5 of 1960) purports to apply to all land in Indonesia, since 1967, the government has regarded all areas designated as forest as being regulated exclusively by these forestry laws. 

There are three main administrative forest categories for state forests in Indonesia:

1. Production Forest “Hutan Produksi”, covering 58% of the state forests, with sub-categories such as: 
   1. Permanent Production Forest called HP “Hutan Produksi Tetap”
   2. Limited Production Forest, called HPT “Hutan Produksi Terbatas”
   3. Production Forest, which can be temporarily converted (e.g. for mining), called HPK “Hutan Produksi yang dapat di Konversi".
2. Protection Forest “Hutan Lindung (HL)”(e.g. for watershed), covering 24% of the state forests, called HL 
3. Conservation Forest “Hutan Konservasi (HK)”, covering 18% of the state forests. This category includes Nature Reserves, Nature Conservation areas and Hunting Parks.

The following forest management permits are legal in Indonesia: 

• IUPHHK-RE “Izin Usaha Produk Hasil Hutan Kayu-Restorasi Ekosistem” which translates into Business Licence of Forest Timber Production for a Restoration Ecosystem, 
• IUPHHK-HA “Hutan Alam” which is a Permit for Natural Forests, 
• IUPHHK-HTI “Hutan Tanaman Industri” is an Industrial Plantation Permit, 
• IUPHHK-HD “Hutan Desa” is a Village Forest Management Permit without commercial timber sales
• IUPHHK-HTR “Hutan Tanaman Rakyat” which is Community Plantation Forest, up to 700 ha

A moratorium on granting new concession licenses has been in place in Indonesia since 2011 (renewed in 2014). Harvesting on concessions is regulated according to these various types of Concession Permits and Licenses (IUPHHK), issued by the Ministry of Environment and Forestry (MoEF), which defines boundaries, areas, duration and harvestable timber species. The Annual Work Plan (known as RKT) and Ten Year Work Plan (called RKUPHHK or simply RKU) – both of which have to be approved by the MoEF – specify harvesting volumes and logging areas. Receipts relating to tax payments as well as roundwood transport documents (SKAU) are retained by the company, as well as a registration number and the Forest Product Legality Documentation (FAKO) for processed logs issued by the District Forest Office. 

Harvesting by State Forest companies requires Ten Year Work Plans, followed by Annual Work Plans, specifying harvesting block, a Stand Inventory Before Felling document (called ITSP “Inventarisasi Tegakan Sebelum Penebangan”) and a Logging Plan. For harvesting in Private Forests (known as HR “Hutan Rakyat” and defined as a minimum area of 0.25 ha), both land certificates as well as roundwood transport documents (SKAU) are needed. The type and volume of timber to be harvested has to be reported to the Chief of Village for approval and issuing of the SKAU.

Apart from the MoEF, the District Forest Office and the Chief of Village, mentioned above, there are technicians of Sustainable Forest Management, called GANISPHPL “Tenaga Teknis Pengelolaan Hutan Produksi Lestari”, who have 19 types of qualification (trained by the authorities) for writing standardised work plans, checking/approving harvesting plans, measuring logging volumes/area, etc. The Government employs experts, called WASGANISPHPL (15 types) for GANISPHPL supervision. 

The VPA and the SVLK

There is a mandatory Indonesian timber legality verification system, called SVLK "Sistem Verifikasi Legalitas Kayu", which forms the basis of the ratified 2013 Voluntary Partnership Agreement (VPA) between the EU and Indonesia – developed following the 2005 Forest Law Enforcement, Governance and Trade (FLEGT) Regulation. This policy is mandatory for all businesses ranging from upstream to downstream sectors where regulatory compliance is verified by the acquisition of certificates based on criteria and standards appropriate to the type of business. 

The Indonesian regulation on the “Standards and Guidelines on the Assessment of Performance of Sustainable Forest Management and the Verification of Timber Legality in the State and Privately-owned Forests” (Forestry Minister's Regulation P.38/Menhut-II/2009) establishes the Timber Legality Assurance System (TLAS). TLAS is the basic system used to assure the legality of timber and timber products produced in Indonesia for export to the Union and to other markets (EU/Indonesia VPA, Annex V).

The TLAS comprises the following elements: 

• Legality Standards, 
• Control of Supply Chain, 
• Verification Procedures, 
• Licensing Scheme, 
• Monitoring.

The TLAS also includes the Indonesian sustainability scheme and targets to improve forest governance, to suppress illegal logging and the associated timber trade to ensure credibility and to improve the image of Indonesia's timber products (Council Decision 2014/284/EU and Commission Decision (EU) 2015/1158 known here after as the ‘EU/Indonesia VPA’, Annex V)

Key actors:

1. Conformity Assessment Bodies (CAB) - The CABs are authorised by the Ministry of Forestry and contracted by individual operators to verify the legality of the production, processing and trade activities of individual operators in the supply chain, including the integrity of the supply chain. There are two types of CABs: assessment bodies (Lembaga Penilai / LP) which audit the performance of Forest Management Units (FMUs) in state forests against the sustainability standards as well as the requirements of the legality standard; and verification bodies (Lembaga Verifikasi / LV), which audit FMUs, forest-based industries, traders and exporters against the legality standards. LVs can also act as Licensing Authorities. In this case the LVs issue export licences to cover timber products destined to international markets. For non-Union markets, the Licensing Authorities will issue V-Legal Documents, and for the Union market, FLEGT licences will be issued in accordance with the requirements as outlined in Annex IV.
2. The LP and LV are required to develop the necessary management systems addressing competency, consistency, impartiality, transparency, and assessment process requirements as outlined in ISO/IEC 17065. These requirements are specified in the TLAS Guidelines. The conformity assessment bodies (CAB) are accredited by the Indonesian National Accreditation Body (KAN).
3. Indonesian National Accreditation Body (Komite Akreditasi Nasional / KAN) is an independent accreditation body established through Government Regulation (Peraturan Pemerintah / PP) 102/2000 concerning National Standardisation and Presidential Decree (Keputusan Presiden/Keppres) 78/2001 regarding the National Accreditation Committee. It operates under the guidance of ISO/IEC 17011 (General Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies
4. Auditees - Auditees are operators which are subject to legality verification. They include forest management units (concessionaires or timber utilization permit holders, community-based or village based forest permit holders, private forest/land owners), registered timber depots, forest-based industries, non-producer registered exporters.
5. Independent monitor (IM) - Civil society groups, individuals and communities acting as Independent Monitors have the right to assess and report on the compliance of operations against legality requirements, as well as on accreditation, verification and licensing activities. Findings from an Independent Monitor can also be used as part of the Periodic Evaluation (PE) which is required under the VPA Agreement (Annex VI).
6. The Government - The Ministry of Forestry (as of October 2014, the Ministry of Forestry was merged with the Ministry of Environment to become the Ministry of Environment and Forestry) regulates the TLAS and authorises the accredited LPs to undertake SFM assessment and LVs to undertake legality verification. The Ministry of Forestry also authorises the LVs to issue export licences (V-Legal Documents or FLEGT licences).
7. Licence Information Unit (LIU) - an information management unit which validates information concerning V-Legal Document/FLEGT licence issuance. The LIU is also responsible for general information exchange on the TLAS, and receives and stores relevant data and information on the issuance of certificates of legality and V-Legal Documents/FLEGT licences.
8. Technical governmental field supervisors (Wasganis) and technical company field staff (Ganis) – Registration is controlled by the Ministry of Forestry. Wasganis are tasked to carry out the supervision and control of log measurements. They also terminate the mandatory transport documents and carry out data reconciliation (for further details refer to the Appendix of this Annex). Ganis prepare the production and transport documents from all production in state forests. Ganis can also terminate the mandatory transport documents in the case of Wasganis' absence for more than 48 hours. Both Wasganis and Ganis are registered with the Ministry of Forestry. On a yearly basis, they are evaluated by the Ministry of Forestry through an official examination.

Operation of the SVLK

Indonesia’s SVLK is designed to verify the legality of timber from the forest or the point of import through the entire supply chain to the point of final sale or export. See Annex V of the VPA. The application of SVLK is mandatory for all forest management units and industries, traders and timber depots, and for all export destinations.

The VPA includes different legality standards for timber and timber products from different types of permits and rights holders. For each legality standard, the VPA lists criteria, indicators and verifiers that can be used to prove compliance. In addition, the underlying Indonesian legislation describes agreed upon verification methods. See Annex V of the VPA and the SILK website’s page on regulations.

Auditors called Conformity Assessment Bodies (CABs) verify the compliance of timber producers, traders, processors and exporters with the relevant legality standard. Operators that pass the audit are issued with a legality certificate. The legality certificate is valid for three years for large companies and for up to ten years for small-scale operators or low risk operators. Surveillance visits take place every year (large companies) or every two years (small-scale operators or low risk operators).

Licensing authorities issue FLEGT licences to accompany each consignment of verified legal timber exports from registered operators that hold a valid legality certificate. This assessment and licensing are continuously monitored and informed by civil society actors acting as independent monitors of the timber legality assurance system.

In addition ‘periodic evaluation’ (termed ‘independent audit’ in other VPAs) assess the functioning of the legality assurance system at least once a year. 

To get certified, timber-based industries, timber depots, traders including exporters, and small-scale privately owned (household or cooperative) forests must conform to the relevant legality standard.

An alternative procedure called Supplier’s Declaration of Conformity (SDoC) can be used to enter SVLK supply chains under certain conditions. This alternative procedure is only open to small and medium enterprises and smallholders who deal only with low-risk timber from privately-owned forests and/or SVLK-certified plantation timber from state-owned company (Perhutani).

A sustainability standard is also mandatory for state owned forests managed by companies (natural and plantation forest concessions). Companies must conform to this standard no later than the end of the three-year validity period of their first legality certificate.

All operators working on the basis of permits included in the VPA need to be SVLK certified (or provide a Supplier’s Declaration of Conformity), regardless of whether they export or place timber products on the domestic market. Only exporters need also to have a V-Legal Document for each consignment or a FLEGT licence if the export is destined to the EU (once FLEGT licensing starts). Public summaries of all audits and surveillance visits are available on the Ministry of Environment and Forestry’s SILK website and the respective sites of the Conformity Assessment Bodies.

Problems / issues raised with SVLK

Christine Overdevest & Jonathan Zeitlin in their 2016 report Experimentalism in Transnational Forest Governance: Implementing EU Forest Law Enforcement Governance and Trade (FLEGT) Voluntary Partnership Agreements in Indonesia and Ghana take a comprehensive look at the issues/shortcomings of the SVLK that have been identified and the actions taken to address these issues. We have extracted key points from this report:

• The slow and uneven pace of SVLK certification. The quality of the audits, issues include variability in the stringency of accredited auditors, opportunities to shop around for more lenient auditors, follow-up of complaints raised by the IMs, and loopholes for the entry of illegally harvested wood into the supply chain. 
• The civil society Independent Monitor’s ability to perform their function effectively in the system’s initial roll-out. JPIK monitors have reported difficulties in accessing necessary information about each stage of the certification process, from planned audits and required consultations through audit reports to follow-up actions taken in response to complaints (JPIK 2014). JPIK has also drawn attention to the lack of human and financial resources that limit civil society’s capacity to carry out independent monitoring.
• The status of indigenous peoples’ rights to their traditional lands. The dispute goes back to the 1999 Law 21. At one point during the multi-stakeholder negotiations over the SVLK, it appeared as if the legality standard for timber harvested on state-owned lands would include an instruction to auditors ‘to look at community documentation of traditional/customary rights, agreements between companies and communities, and documentation of how land conflicts have been resolved’. But these criteria were deleted from the final version included in the VPA, though NGOs were hopeful that these issues would be addressed to some extent in the environmental and social impact assessment required by law and included in the legality standard (Bartley 2014: 99-100; EU-Indonesia 2014: Annex I).
• Deeper land and resource governance challenges, including inadequate spatial planning capacity, bureaucratic silos, and corruption
• Independent monitors have also complained that the VPA fails to tackle the legality of permit allocation. CABs are required to consider only ‘the existence of a permit document, without examining the process of the issuance of the permit’ (Indonesia NGO interview 2014). JPIK has therefore argued that the SVLK needs to be revised to oblige auditors to check whether permits are issued in violation of officially designated area functions, and/or in response to side payments or other forms of corruption (JPIK 2014).
• Three key critical reports: March 2014, Anti Forest-Mafia Coalition’ SVLK Flawed: An Independent Evaluation of Indonesia’s Timber Legality Certification System; JPIK in November 2014: SVLK in the Eyes of the Monitor; and Human Rights Watch's 2013 report The Dark Side of Green Growth in Indonesia

Actions taken to address these problems/issues Overdevest and Zeitlin discuss, at length, the actions taken to address the issues mentioned above, in the lead up to the endorsement of the SVLK system by the EC.

The European Parliament resolution - Responding to criticisms of the SVLK raised by Human Rights Watch (whose report is explicitly cited) and the Anti-Forest Mafia Coalition (the publication of whose report was carefully timed to feed into the debate), the European Parliament resolution:

• Calls upon the European Commission to press the Indonesian government to ensure that auditors, verification bodies, and independent monitors receive ‘adequate funding and training so that they can carry out regular field monitoring, spot checks and audits.’ 
• Demands that the Indonesian government ensure that independent monitoring complaints about legality infringements are responded to adequately and that ‘effective and dissuasive enforcement action is taken by relevant authorities’
• Calls upon the Commission to urge the Indonesian government to ensure that ‘stakeholder involvement in the implementation and operationalisation of the SVLK is continued and enhanced’, and that the SVLK’s audit requirements ‘are subject to periodic review by Indonesian stakeholders with a view to their continuous improvement’.
• Asks the Commission to report back to it on progress in meeting these requests (some of which it acknowledges go beyond the original terms of the VPA) before approving the Indonesian licensing system, as well as to report regularly on progress made in implementing the VPA and addressing its concerns (European Parliament 2014).

The Joint Technical Assessments - The VPA stipulates that joint technical assessments had to occur before SVLK timber could receive a FLEGT export licence. These assessments were intended to inform both parties about the fitness for purpose of the TLAS system, based on a review of implementation on the ground, including how information is shared among auditors, independent monitors, local government, and licensing authorities, resulting in recommendations for changes needed to the VPA and/or the SVLK regulation to ensure the credibility of FLEGT licences. 

Stage I of the joint assessment, concluded in September 2013, involved field visits to three provisions, a stakeholder workshop, meetings with official representatives from both parties, and a report co-authored by experts from Indonesia and the EU. This assessment resulted in a joint Action Plan which identified 17 timetabled actions needed for Indonesia to move from SVLK certification to the issuance of FLEGT licences.

The Action Plan committed Indonesia to:

• improve the effectiveness of SVLK oversight through ‘active use of the data collected, including reconciliation analyses throughout the whole supply chain’
• impose sanctions on certifiers and companies who fail to deliver audit reports on time
• oblige certification bodies to outline in their own procedures how they act on reports of infringements detected in ‘regulatory controls’, e.g. by local governments. 
• 'identify through a multi-stakeholder process how the function of the Independent Monitors and its sustainability can be secured’, including access to information, security, capacity-building and funding (the latter to be partly supported by the EU); to make the results of these stakeholder meetings publicly available and to integrate the revised standards and metrics into the procedures of the verification bodies
• develop procedures for identifying SVLK and non-SVLK certified timber, and to draft a new regulation for controlling the legality of imported wood, and to update the already agreed VPA legality matrix to incorporate these revisions. 

The Action Plan listed a number of specific areas needing additional discussion, including: ‘allocation of forest resources and permitting, environmental requirements, labor rights, and respect for use rights of other parties and application scope’ (Indonesian Ministry of Forestry 2014).

Stage II of the joint assessment, which took place in the fall of 2014, included a review of progress in carrying out these commitments as well as further field testing of the SVLK, and resulted in a revised Action Plan outlining the steps that still needed to be taken before FLEGT licensing could be approved. 

Between September 2014 and January 2016, EU and Indonesian officials, accompanied by representatives of domestic civil society and private business, convened regularly in the Joint Implementation Committee to monitor the process and follow up on action items, supported by Joint Expert Meetings to evaluate progress on the SVLK and multi-stakeholder Joint Working Groups (JWGs) to resolve outstanding problems (Indonesia-EU 2014). 

The participation of both EU officials and civil society representatives in the meetings ensured that sensitive issues raised by the EP Resolution and NGO reports would be addressed, including not only the roll-out of the SVLK itself, but also the availability of information, the effectiveness of independent monitoring, and the enforcement of certification requirements for all new conversion permits.

• The SVLK has been revised to allow small producers to establish cooperatives to obtain group certification and receive financial assistance from the government for this purpose (European Commission 2015). To accelerate the certification process among small primary and secondary producers, the Ministry of Environment and Forestry (MoEF) established a network of independent facilitators or focal points in 21 provinces to map their location, assess gaps in meeting SVLK requirements, and assist them in achieving group certification (Indonesia-EU 2015). The revised VPA annexes explicitly include forest conversion (IPK) permits and the JIC has agreed that all new forest conversion concessions must be SVLK certified (European Commission 2015; Indonesia-EU 2015). As mandated by the VPA, a Periodic Evaluator has now been appointed to review the operation of the SVLK, and the methodology has been drafted for monitoring its socio-economic impacts (Indonesia-EU 2016).
• There has been an intensive process of capacity building and training for public officials, third-party auditors, and private businesses, orchestrated though collaboration between the MoEF, the UK-supported Multistakeholder Forestry Programme (MFP), and a variety of domestic and international trade associations and conformity assessment bodies.
• The roll-out of the SVLK has greatly increased (Indonesia-EU 2015). In early 2016, the SVLK information system listed 1,386 certificate holders, compared to 637 in December 2013.34 As of August 2015, SVLK certification had attained 100% coverage among state forest concessions and large primary timber processors and 52% among medium-sized primary timber processors. 904 secondary processing firms had also been certified, though the coverage rate could not be assessed. The JWG estimates that by the end of 2015, 98% of all timber exports covered by the VPA (including both primary and secondary products were equipped with an SVLK legality certificate (Indonesia-EU 2016).
• There has been a significant increase in the number of accredited Conformity Assessment Bodies (from 14 in 2014 to 21 in early 2016), as well as in the number of trained auditors to 980 by mid-2015 (Indonesia-EU 2015, 2014). Revised procedures for filing and addressing complaints shift responsibility for oversight of the CABs from the National Accreditation Body (KAN) to the Ministry of Forestry and Environment. The revised SVLK regulations stipulate that if local communities and NGOs do not get a satisfactory response to complaints raised with a CAB for illegal activities detected in connection with an SVLK license, they can file complaints directly to the MoEF (Indonesia-EU 2014; European Commission 2015). 
• There are signs that Indonesian police and courts have begun to move aggressively to crack down on illegal logging, at least in some provinces such as Riau and North Sumatra.
• The JPIK representative at the July 2015 JIC meeting reported ‘good progress’ on options for ensuring security and sustainable funding for their activities, a goal which was also included in the third joint Action Plan (Indonesia-EU 2015, 2015). The UK DfID has supplied capacity-building support for independent monitoring through the MFP and the EIA by organizing experiencesharing workshops for NGOs involved in the JIC, and training local journalists in the SVLK monitoring process (Indonesia-EU 2015). The Joint Working Group reports that independent monitoring organizations have carried out gap analyses of their own needs, provided training to their members, and integrated local communities into their capacity-building activities. They also report that there are now 629 people from 95 organizations involved in independent monitoring, covering over 60 companies, twice as many as in 2013. The security and funding of IMs have been addressed in the latest revision of the SVLK regulations, but detailed mechanisms and implementing protocols still remain to be developed. IM organizations themselves are currently developing monitoring guidelines and internal safety protocols for eventual discussion with the government (2016). 
• Inadequate public disclosure and sharing of information about the SVLK verification process has been a recurrent complaint of the Independent Monitors. The revised SVLK regulations include guidelines obliging CABs ‘to publicly announce and inform stakeholders about audits and share information about the verification results’. The CABs are now required to send copies of all audit reports to the MoEF, including information on non-compliances, which the Ministry may follow up with law enforcement actions based on their findings. The next revision of the SVLK regulation will establish a formal procedure for dealing with companies that have not passed an audit, including ‘information sharing with all relevant authorities at central and local levels’ and follow-up of the verifiers ‘not passed’. The JWG reports that the availability of publicly available data needed for the IMs to perform their tasks effectively ‘has improved recently but is not yet considered adequate’.
• The Joint Assessment of the SVLK and associated Action Plans failed to require specific measures to corruption in the permit allocation process. Instead, the Joint Assessment merely acknowledged this concern, and requested Indonesia to ‘elaborate…its reasons why the description of processes to allocate forest resources and to issue rights to harvest are not included in the standards in the SVLK regulation’ (Indonesia-EU 2014). According to one EU interviewee, this request was ‘batted back on the grounds that the historical corruption that went on in the distribution of licences, there’s very little you can do about that without raising so many skeletons in cupboards that you’d need to have a major and wholesale review of licences…’ (EU advisor interview 2016). Nevertheless civil society organizations continue to pursue this issue using another platform, namely the 2008 Public Information Law. After the MoEF rejected requests from Forest Watch Indonesia and ICEL for information on permits, claiming that this fell outside the law, FWI submitted a complaint to an administrative court, the Central Information Commission, and won the case, with the court ruling in May 2015 that such information must be made public. The MoEF appealed the decision, and on August 26 the Commission rejected the appeal reaffirming the ministry’s obligation to release permit information publicly.

Conclusion

The review and endorsement of the SVLK system, undertaken over a number of years by the European Union has considered these issued specifically raised by stakeholders, concluded with the endorsement of the SVLK system by the EC. 

Preferred by Nature will continue to monitor the progress of Indonesia very closely, and note the following conclusion of this report, completed in 2015 prior to the final endorsement of the SVLK by the European Commission, but still relevant today:

We found that the VLK legality standards consist of an easily auditable document checklist, and examined the implications of this approach for addressing the key issues of corruption and land and resource tenure. This revealed how the focus on documentation ignored the issue of whether concessions, plan approvals, or harvest or transport permits were issued through corrupt practices. This is perhaps not surprising, given the limited authority, capacity, and incentive for private auditors, hired by private companies, to uncover either government or private-sector corruption. Regardless of the justification, verifying operations as “legal” that have engaged in corruption obscures its significance relative to the issues that are covered in the standards, and risks further entrenching and legitimating that corruption (Abidah Setyowati & Constance L. McDermott, 2017).   VIEW LESS