Indonesia and the European Union have finalised an agreement aimed at ending trade in illegally-sourced wood through the implementation of the Voluntary Partnership Agreement (VPA).
Indonesia has introduced the mandatory Timber Legality Assurance System (TLAS) or in Bahasa Indonesia, Sistem Verifikasi Legalitas Kayu (SVLK), which is defined in Forestry Regulation Number P.38/Menhut-II/2009 (amended by P.68/Menhut-II/2011).
Under the new arrangements Indonesian exports will be covered by a V-Legal/FLEGT license which verifies that the timber products conform with the timber legality assurance system (TLAS).
The new Indonesian legality regulation, which is now in effect, applies to 26 products defined by their HS Codes with a further 14 products to be included in January 2014.
These additional 14 categories of wood products are mainly manufactured by small and medium enterprises producing handicrafts and secondary wood products.
V-Legal test shipment concluded Indonesia and EU have conducted a test shipment of some products for which a V-Legal documents/ FLEGT-License is mandatory.
The test run will be conducted in two phases, the first was during the period of October-December 2012 in Indonesia and the second in some EU countries during November-February 2013.
The first test shipment test from Indonesia was made from PT Kayu Lapis Indonesia (KLI) a company in Central Java .
The test run launch was attended by Deputy Minister of Trade Mr. Bayu Krisnamurti who explained that shipment tests of V-Legal products will be conducted by 17 Indonesian registered exporters of industrial forest products.
The Deputy Minister anticipated that this trial would identify any deficiency in the system so that exports of timber products from Indonesia will run smoothly and comply with the EUTR as well as demands formproof of legality from other countries.
The export shipment test was aimed at demonstrating the readiness of Indonesia to supply verified legal timber product to world timber markets.
Three certification schemes operate in Indonesia
Forest management certification plays a significant role in sustaining Indonesian forest resources and three schemes are currently operational in the country namely; FSC, LEI, and PEFC.
The implementation of certification in Indonesia has been supported by many agencies and organisations such as The Borneo Initiative (TBI), WWF, Ford Foundation, ITTO, Tropical Forest Foundation (TFF), the Multi-stakeholder Forestry Programme (MFP) and many local consultants.
The TBI has supported certification in 19 forest management units (FMUs) covering some 1.2 mil.ha. TFF has supported 7 FMUs and the FSC has certified six FMUs in a period of 12 months.
The certified forest under LEI system amounts to around 0.4 mil. ha. of natural forests; 0.97 mil. ha .of plantations and 26.7 thousand ha. of community forests.
PEFC certification is new to Indonesia and PEFC recently inaugurated a national governing body called the Indonesian Forest Certification Cooperation (IFCC).
This body is now developing, with stakeholders, a consensus based standard and guidance for forest certification.
Domestic Log Prices
|Indonesia logs, domestic prices||US$ per m³|
Face and core logs
|Mahoni (plantation mahogany)||125-396|
Domestic Ex-mill Sawnwood Prices
|Indonesia, construction material, domestic||US$ per m³|
Export Plywood Prices
|Indonesia ply MR BB/CC, export FOB||US$ per m³|
Domestic Plywood Prices
|MR Plywood (Jakarta), domestic||US$ per m³|
Export and Domestic Other Panel Prices
|Indonesia, Other Panels, FOB||US$ per m³|
Export Added Value Product Prices
|Indonesia, Mouldings, FOB||US$ per m³|
|Red Meranti Mouldings 11x68/92mm x 7ft up