MINISTRY OF FORESTRY OF INDONESIA IS READY TO

MINISTRY OF FORESTRY OF INDONESIA IS READY TO SUPPLY LEGAL TIMBER TO THE WORLD MARKET Updating SVLK Interactive Market Dialogue Joint Presentations by: Dr. Dwi Sudharto, Mr. Achmad Edi Nugroho, and Dr. Willistra Danny Seoul, November 26 th, 2013

Presentation Structure THE POLICY (Dr. Dwi Sudharto) Why is Indonesia committed to promote legal timber? How does Indonesia meet the commitment? How did Indonesia develop its SVLK? THE SYSTEM (Mr. Achmad Edi Nugroho) How credible is SVLK to provide assurance to Indonesia Timber Legality? EXPORT MECHANISM AND THE PROGRESS (Dr. Willistra Danny) How is the progress ? CLOSURE (Dr. Dwi Sudharto) What’s Next?

Why is Indonesia committed to promote legal timber? Promoting legal timber sustain Indonesia’s forests Sustainability of the forest resources enables to: Ø Support sustainable development of the country (economics, social/cultural and environmental) Ø Contibute to tackle climate change Ø Meet increasing demand for legal products from sustainable managed forests Ø Alleviate poverty

The Indonesian Forest Area Function as of December 2012 designation More than 17, 000 islands 181. 157 million ha land area 134. 430 mi ha of forest land (70% of landmass) Areas (Mi. Ha) Conservation Forests 27. 19 Protection Forests 30. 54 Production Forests 30. 81 Limited Production Forests 27. 97 Convertible Production Forests Total 17, 92 134. 43

How does Indonesia meet the commitment?

H FT AC SO O PR AP A H PP A R RD O A C H ILLEGAL LOGGING AND ILLEGAL TRADE

A H P A PR R O D A C H Illegal Logging Cases (2005 – 2012) 1705 720 478 220 2005 2006 2007 Sumber: Dit. PHH (2013) 2008 151 2009 98 59 75 2010 2011 2012

Why TLAS/SVLK? q. To tackle illegal logging and associate trade promote legal wood trade. q. To support sustainable economic development. q. To conserve uniquely mega-biodiversity in Indonesia and address climate change (REDD+) q. To support poverty eradication

Principles of SVLK Good Governance Representativeness Transparency (Credibility)

Objects of SVLK 6 Forest Concession/ Forest Management Right Holder (ie. Perum Perhutani) 2 Communitybased forests 3 4 Other Permits 5 SFM 10 VLK VLK 1 Small-scale Private Forestland VLK INDUSTRY HANDICRAFTER EXPORTER 6 Timber Marketer VLK

Scope of SVLK Stateowned forests Privatelyowned forestland Finish Products Primary industry Secondary industry/ Finish products V-Legal Export Confiscated timber 11

How credible is SVLK to provide assurance to Indonesia Timber Legality?

Institutional of SVLK KAN/NAC • accreditation body, independent • based on ISO 17011 (International Accreditiation - PAC, IAF, APLAC, ILAC) NGO/CSO • independent forest monitoring (IFM) • 23 -09 -2010, JPIK (IFM Network) was established consisting 29 NGOs, perform monitoring public service in forestry sector. CAB (LP&VI) • Independent Assessment/Verification Bodies. • Accreditated by ISO 17021 & ISO/IEC Guide 65 Business Unit Management • On Farm & Off Farm Government • Regulator & facilitator

Example of a certificate

SFM Audit Bodies(accredited using ISO 17021) No. Name No. Accreditation 1. PT. Ayamaru Certification LPPHPL-001 -IDN 2. PT. Sarbi International Certification LPPHPL-004 -IDN 3. PT. SUCOFINDO SBU (SICS) LPPHPL-005 -IDN 4. PT. Almasentra Certification LPPHPL-006 -IDN 5. PT. Rensa Global Trust LPPHPL-007 -IDN 6. PT. Forescitra Sejahtera LPPHPL-009 -IDN 7. PT. Mutuagung Lestari LPPHPL-008 -IDN 8. PT. Nusa Bakti Mandiri LPPHPL-010 -IDN 9. PT. Equality Indonesia LPPHPL-013 -IDN 10. PT. Multima Krida Cipta LPPHPL-015 -IDN 11. PT. TUV International Indonesia LPPHPL-016 -IDN 12. PT. Global Resource Sertifikasi LPPHPL-017 -IDN 13. PT. Transtra Permada LPPHPL-018 -IDN 14. PT. Trustindo Prima Karya LPPHPL-019 -IDN

Legality Verification Bodies (Accredited using ISO/IEC Guide 65) No. Name No. Accreditation 1. PT. BRIK LVLK-001 -IDN 2. PT. Sucofindo LVLK-002 -IDN 3. PT. Mutuagung Lestari LVLK-003 -IDN 4. PT. Mutu Hijau Indonesia LVLK-004 -IDN 5. PT. TUV International Indonesia LVLK-005 -IDN 6. PT. Equality Indonesia LVLK-006 -IDN 7. PT. Sarbi Moerhani Lestari LVLK-007 -IDN 8. PT. SGS Indonesia LVLK-008 -IDN 9 PT. Trastra Permada LVLK-009 -IDN 10 PT. Trustindo Prima Karya LVLK-010 -IDN 11 PT. Ayamaru Certification LVLK-011 -IDN 12 PT. PCU Indonesia LVLK– 012 -IDN 13. PT. Global Resources Sertification LVLK-013 -IDN 14. PT. SCS Indonesia LVLK-014 -IDN

The Progress of SVLK ?

FOREST PRODUCT EXPORT MECHANISM ISSUANCE of V-Legal Document See our website: http: //silk. dephut. go. id 5 V-LEGAL Document PRINTED BY LVLK 4 6 I – VB /LVLK 1 Competent Authority SILK/TLIS ONLINE / LIU - M O F 1 2 3 2 7 EXPORTERS 1 2 3 Customs at COUNTRY DESTINATION 3 IMPORTERS

V-Legal Document Export license document for timber products Valid for 26 HS-Codes since 1 st January 2013, and all over 40 HS-Codes starts on January 1 st, 2014 (Trade Minister Regulation No. 64/2012) Issued by Legality Verification Bodies Issued for every invoice to exporters having an official legality certificate (or through inspection for exporters who have not yet held certificate) 19

SILK ONLINE : http: //silk. dephut. go. id

Tabel 1. Progress of Certification ( Nov. 18 th, 2013) No. Type of Certification Certified (unit&ha) Failed (unit&ha) Process (unit&ha) Total (unit&ha) 1. SFM Certificate (Natural forest, plantation forest, forest mgmt unit) 137 (14, 471, 038) 41 (1, 665, 946) 20 (1, 360, 535) 193 (17, 497, 519) 2. Legality Certificate (Natural forest, plantation forest) 77 (3, 118, 735) 0 0 77 (3, 118, 735) 3. Legality Certificate in Community Forest 19 (9. 729) - 1 (324) 20 (10. 053) 4. Legality Certificate for timber-based industry 618 28 120 765

ISSUANCE OF V-Legal DOCUMENTS (as of Nov 26 th, 2013: 8 am) TOTAL ISSUANCE COUNTRY OF DESTINATION DESTINED TO THE UE HS CODE PORT OF LOADING PORT OF DISCHARGE WEIGHT VALUE (USD)

Value of Export per Region (USD) ( January – October 2013) North America US$ : 383, 701, 983 (7. 74%) Europe US$ 8, 730, 350 (0. 18%) European Union US$ : 478, 356, 246 (9. 65%) Asia US$ : 3, 759, 981, 871 (75. 89%) Oceania US$ : 226, 731, 528 (4. 58%) South America US$ : 14, 813, 665 (0. 30%) Africa US$ : 82, 498, 330 (1. 67%) Total : US$ 4, 954, 813, 975

10 Biggest Export Destination by Weight (Kg): Jan– Oct 2013 SAUDI ARABIA, 172, 800, 065 2. 65% TAIWAN, 212, 530, 413 3. 25% BANGLADESH, 137, 120, 281 2. 10% USA, 282, 283, 271 4. 32% INDIA, 288, 172, 477 4. 41% 6 7 AUSTRALIA, 124, 341, 794 1. 90% MALAYSIA, 106, 776, 215 1. 64% 8 5 9 10 4 3 1 REPUBLIC OF KOREA, 630, 233, 325 9. 65% JAPAN, 735, 604, 121 11. 26% 2 CHINA, 2, 779, 278, 100 42. 56% Total : 6, 530, 287, 778

10 Biggest Export Destination by Value (USD): Jan– Oct 2013 SAUDI ARABIA, 162, 853, 760 3. 29% TAIWAN, 174, 564, 308 3. 52% AUSTRALIA, 191, 368, 991 3. 86% 6 UNITED STATES OF AMERICA, 337, 518, 714 6. 81% INDIA, 150, 737, 248 3. 04% 7 9 4 3 GERMANY, 98, 048, 897 1. 98% 8 5 UNITED KINGDOM, 113, 406, 606 2. 29% 10 1 2 REPUBLIC OF KOREA, 376, 392, 084 7. 60% JAPAN, 867, 084, 566 17. 50% CHINA, 1, 392, 203, 216 28. 01% Total : US$ 4, 954, 813, 975

% Product type of export to Korea by value (US$) : Jan. Oct 2013 Total Value : USD 376, 392, 085

WHAT NEXT AND EXPECTATIONS: SVLK is a credible system that provides assurance to the legality of imported timber. We trust SVLK will lead our country to attain a sustainable legal timber supply. We need market recognition and acceptance of SVLK certified timber, plus V-Legal (export license) document We will continue to promote and negotiate SVLK system that complies with the importing countries timber trade law. Hence, will minimize trade obstacles to both exporting and importing countries. Major markets to adopt regulation to avoid the entrance of illegally harvested timber products to their countries. Considering Japan as a major importer country pay a great concern on the issue of illegal timber, Indonesia expects to discuss and negotiate trade instrument. Together both countries can lead the world to the new era of legal timber trade.

Closing Message If you are concerned about Deforestation Climate change Combating illegal logging Stopping the trade in illegal timber Please buy legal timber

Thank You INDONESIAN WOOD = LEGAL WOOD