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Indonesia is the first, and currently, only, country in the world with an operational Forest Law Enforcement Governance and Trade (FLEGT) licensing scheme. This means that the Government of Indonesia has made significant efforts to develop a mandatory national system to track and verify legality and control illegal timber, called the Sistem Verifikasi Legalitas Kayu (SVLK), which was established in 2009. Indonesia began issuing FLEGT licenses on 15 November 2016. The SVLK covers 99 percent of the total concession area as of 2019. While Indonesia has put in place a national system to track and verify legality and control illegal timber imported into the country, corruption in Indonesia across the board, particularly at the local level, remains an issue that can undermine the system. Some early challenges should be expected given that this is a new system and the first such FLEGT licensing scheme operating globally.
In Europe, the SVLK has been recognized as meeting the standards set by the European Union Timber Regulation (EUTR) since November 2016 and EU and UK importers are no longer required to conduct due diligence checks on timber from Indonesia. While SVLK / FLEGT licensing denotes complete compliance with the EUTR for European importers, a FLEGT licence may not in and of itself guarantee compliance with timber import regulations in other jurisdictions, such as the U.S. Lacey Act in the United States.
- Much of the timber used in Indonesian-made wood products has been sourced domestically.
- Indonesia has developed a mandatory system to verify the legality of timber production and trade called the SVLK.
- Despite an operational SVLK, challenges remain with its full and effective functioning.
- Government of Indonesia figures suggest enforcement action is growing rapidly but reportedly still lacks clout and consistency.
- There are continued reports of illegal logging.
- Imports have tended to come from relatively lower-risk sources, with some exceptions.
Read more by downloading the Indonesia Timber Legality Risk Dashboard here.
Bloomberg reports on the growth of palm oil production in Latin America where new, highly traceable supply chains are being established as traditional palm oil giants Malaysia and Indonesia have run out of land for further expansion without deforestation.
All nations have some unmapped or unofficial roads, but the situation is especially bad in biodiversity-rich developing nations, where roads are proliferating at the fastest pace in human history.
When ghost roads appear, local deforestation soars—usually immediately after the roads are built. We found the density of roads was by far the most important predictor of forest loss, outstripping 38 other variables.
Also reported here: Scientists find vast numbers of illegal ‘ghost roads’ used to crack open pristine rainforest (phys.org)
The overall rate of primary forest loss across the tropics remained stubbornly high in 2023, putting the world well off track from its net-zero deforestation target by 2030, according to a new report from the World Resources Institute.
The few bright spots were Brazil and Colombia, where changes in political leadership helped drive down deforestation rates in the Amazon.
Elsewhere, however, several countries hit record-high rates of forest loss, including the Democratic Republic of Congo, Bolivia and Laos, driven largely by agriculture, mining and fires.
New research using Trase data shows that supply chain divergence to meet different consumer requirements already is a reality. Brazil’s exporters, for example, sell soy to Denmark and Norway that is four-times less exposed to deforestation than soy sent to China or used domestically.
The researchers interviewed companies from the Brazilian soy sector and confirmed such segmentation is both predictable and standard practice. While physical segregation of soy grains can be challenging, it has not been difficult for certain traders and regions exposed to very different levels of deforestation to specialise in markets that demand higher or lower levels of sustainability.
The ITTO MIS reports that the Government of Indonesia has stated that geolocation information will be integrated into various forest product utilisation systems managed by KLHK, such as the Forest Utilisation Business Control Information System (SIPASHUT), the Forest Product Administration Information System (SIPUHH), the Raw Material Utilisation Plan Information System (SIRPBBPHH) and the Timber Legality Information System (SVLK).
In related news, the founder of the Indonesian Forestry Certification Cooperation (IFCC), is developing a draft document and scheme that exporters can use as a reference that enables exporters to obtain a geolocation after a certification audit. The aim is to assist exporters adapt to the EUDR regulations.
Ministry of Environment and Forestry (KLHK) praised the ruling of East Java’s Surabaya District Court that awarded imprisonment and imposed fines of billions of rupiah on five companies’ directors for illegal logging distribution from Papua.
The international trade body backed the EU’s decision to impose rules against palm oil as a biofuel due to emission risks but said the bloc failed to properly implement them, validating complaints by trade partner Malaysia.
The report summarizes the use of biofuels in Indonesia and Malaysia as well.
This report by Global Witness shows how the 20 biggest banks in the EU have provided billions to companies linked to deforestation since 2016. This review shows that voluntary guidelines and individual commitments by financial institutions are unlikely to stop the financing of forest destruction.
Last November, French NGO Sherpa filed a complaint with the National Prosecutor’s Office against French banks BNP Paribas, Crédit Agricole, BPCE, and Axa. It called for a criminal investigation into money laundering and concealment, arguing that the banks’ financial support for Brazil’s biggest beef companies was contributing to illegal deforestation in the Amazon.
RAN’s investigators have once again documented illegal expansion into nationally protected areas in the Leuser Ecosystem in the district of Aceh Tamiang on the island of Sumatra.
RAN indicates no government or supply chain interventions taken during this period to stop the destruction even though the district government of Aceh Tamiang has public commitments to end deforestation and PepsiCo, Unilever and others claim that collaborative forest monitoring systems are being used to identify and respond to deforestation across the district.
Deforestation for oil palm plantations has increased for the second year in a row in Indonesia, the world’s biggest producer of palm oil, bucking a decade-long decline in forest loss.
A third of the 2023 deforestation occurred on carbon-rich peatlands, raising the potential for massive greenhouse gas emissions as these areas are cleared and drained in preparation for planting.
Historically, deforestation for plantations in Indonesia was concentrated on the island of Sumatra, but the surge in the past two years has been mostly on the islands of Indonesian Borneo and Papua.
The EUDR’s geolocation requirement is equivalent to Indonesia’s plantation cultivation permit (STDB), which must be obtained through registration with the Agriculture Ministry’s Plantations Directorate General.
“We estimate that of the 3.2 million hectares of people’s plantation land, only 10,000 ha already have the STDB,” Erwin said, urging the government to facilitate the registration of smallholder farmers, who produce 90 per cent of Indonesia’s natural rubber. Plantations Director General Andi Nur Alam Syah said the ministry would push regional governments to expedite data collection, mapping, verification and issuance of STDB for rubber farmers by the end of the year, when the EUDR will begin to apply.
From 2016-2018, 94% of Germany’s directly imported deforestation risk was linked to just five key commodities: soy, coffee, palm oil, cocoa and cattle. More than 90% of this comes from nine countries, including Brazil Colombia, and Indonesia. Deforestation risk in Germany’s supply chains has varied over time, but has recently begun to emerge in particular hotspots, such as Colombia.
Deforestation risk can be concentrated in particular areas within hotspots: more than half of Brazilian soy deforestation risk comes from just three municipalities in the Matopiba region.
The government has planned to build a special economic zone (SEZ) for the wood industry to increase the wood production and competitiveness of Indonesian timber and furniture products. All regulations and facilities will be integrated in the wood industry SEZ, including the wood downstreaming industry.
Mongabay presents a short summary of status of illegal logging and forest governance in SE Asia.
Wilmar International’s No Deforestation, No Peat, No Exploitation policy, announced ten years ago, marked a significant milestone in environmental conservation by prohibiting deforestation, peatland destruction, land-grabbing, and labor abuses in their global supply chain, impacting thousands of palm oil companies.
The policy, a result of global campaigning and intense negotiations, contributed to a dramatic reduction in deforestation for palm oil by over 90%, influencing other industries and contributing to the lowest deforestation levels in Indonesia, as well as progress in Malaysia, Papua New Guinea, and tropical Africa, argues Glenn Hurowitz, the Founder and CEO of Mighty Earth, who led the negotiation with Wilmar.
Hurowitz says this “success story” highlights the importance of private sector involvement, effective campaigning, diligent implementation, the necessity of continuous effort, and the insufficiency of data alone in driving change.
Malaysia and Indonesia want to bring other Southeast Asian countries on their side amid ongoing disputes with the European Union over environmental and deforestation regulations that are set to take effect in late 2024, with the two nations worried about the regulations’ impact on the region’s agriculture exports. Both Southeast Asian states have independently initiated complaints against the EU to the World Trade Organization (WTO).
Indonesia and Malaysia, which together account for around 85% of global palm oil production, argue that the EU Deforestation-Free Regulation is discriminatory and unfairly punishes small-scale farmers who will struggle to cope with the bureaucratic demands set by Brussels.
But an investigation by nonprofit newsroom The Gecko Project reveals how First Resources’ majority shareholders, the billionaire Fangiono family, have breached their company’s pledge of “sustainable” production by secretly controlling companies that environmental analysts found had cleared large areas of rainforest in Indonesia.
The investigation in collaboration with the International Consortium of Investigative Journalists also spotlights a loophole in the Singapore Exchange’s reporting rules that allows listed companies to publish so-called sustainability reports, without requiring that an independent firm audits the company’s green claims.
With enforcement of a new deforestation law on the horizon, stakeholders along the food supply chain and working to ensure compliance. We look at the new tools and services being developed that promise enhanced traceability and due diligence.
The news article highlights how a park in Indonesia is a beneficiary of the Lindu community’s distinctive approach to forest conservation, which stems from customary law.
The state has a buy-in, and helps impose these customary laws, or rules. Administration officials work with a customary council of elders and village representatives, called Totua Ngata, to ensure that rules are respected and enforced.
The food industry says it is running out of time to prepare for new EU rules to cut carbon emissions from the supply chains of several key commodities, accusing Brussels of issuing proposals that lack detail and will fail to stop deforestation.
Investigations by ICIJ partners and others have previously linked Paper Excellence to Asia Pulp & Paper, a Chinese-Indonesian forestry company accused of deforestation and human rights abuses.
New Global Witness report indicates that the UK’s two-year old environmental legislation has not affected deforestation due to lack of follow-up by the government.
Also covered here: Beef, soy and palm oil products linked to deforestation still imported into UK | Deforestation | The Guardian
The Netherlands is Europe’s largest importer of deforestation-linked products with a surge in wood and wood-based products from China and Brazil. The Dutch are the largest importer of soy, palm oil and cocoa and, most significantly, the region’s second-largest importer of wood products. Of the total imports that transition through the port, 28% are re-exported abroad, 33% are traded into European markets after processing, and 39% remain in the country for direct consumption or secondary processing.
As a result of its place in the global trade, the government of Netherlands has been urged by some producer countries to push back on the EUDR.
For the past 11 years, Global Witness has documented and denounced waves of threats, violence and killings of land and environmental defenders across the world, and 2022 marks the beginning of our second decade documenting lethal attacks. The world has changed dramatically since we started documenting these in 2012. But one thing that has not changed is the relentlessness of the killings.
Last year, at least 177 defenders lost their lives for protecting our planet, bringing the total number of killings to 1,910 since 2012. At least 1,390 of these killings took place between the adoption of the Paris Agreement on 12 December 2015 and 31 December 2022.
Negotiations have begun between the world’s top two palm oil producers and the EU to address sticking points in a deforestation law that would make it harder for the commodity to enter European markets.
Indonesia and Malaysia account for 85% of global palm oil exports, and would be heavily impacted by the EU Deforestation-Free Regulation (EUDR), which prohibits imports into the EU of commodities sourced by clearing forests.
At the first joint meeting of an EU-Indonesia-Malaysia task force, delegates discussed risk designations for producer countries as well as the role of certification schemes like the RSPO to help meet EUDR requirements.
Indonesian officials say their main issue with the EUDR is that it discriminates against small farmers, who manage 41% of the total plantation area in the country and would have difficulty complying with the new regulation’s requirements.
Palm oil farmers in Indonesia have established a new foundation to help farmers around the country in protecting forests and selling their sustainable products to the global market.
This opinion piece by HSBC Indonesia President Director summarizes not just the recent EUDR, but also some potential opportunities .
The EU-Indonesia Comprehensive Economic Partnership (CEPA), is currently being discussed and hopefully will be signed this year. It has the potential to transform what looks like a potential export blocker into an opportunity to strengthen trade and disclosure between the two parties. Also, Indonesia’s Green Taxonomy 1.0 launched by the Financial Services Authority (OJK) in 2022 is one of the first policy attempts to encourage the private sector to prioritize green investments and further incentivize businesses to comply with environment, social and governance (ESG)-related regulations that can otherwise become barriers to access sustainable finance. The taxonomy can eventually help the commodities sector to access sustainable financing to help their companies integrate ESG practices and standards into their supply chain, which allows them to access EU market.
While this article is a basic summary of recent reports on the trade of Myanmar teak and sanctions, it also lists a few countries where some FSC-certified or “ethical teak” can be found (Indonesia, Vietnam, Laos, Costa Rica, Brazil, Columbia)
Thailand, Laos and Myanmar are at the frontlines of illicit trade in Asia dominated by transnational organized crime syndicates.
The trafficking in illegal narcotics, precursor chemicals, timber and wildlife, people and illicit goods across Southeast Asia is being tackled thanks to the support of the specialized UN agency focusing on drugs and crime.
The revelations mirror Deforestation Inc. findings from around the world, which showed how auditing firms hired as environmental verifiers often ignore or fail to identify serious transgressions by their clients.
Audit firms in Finland, Indonesia, Chile, India, and Germany are also mentioned.
This article provides background on the EUDR and potential for technology to monitor deforestation rates and help farmers provide information about their farming practices. A pilot in Indonesia is described, as well as potential future projects in Bolivia, Colombia and Honduras.
The hugely controversial law, deemed unconstitutional in a court challenge yet somehow still in force, did away with criminal punishment for illegal plantations and their operators, and instead allowed them to be legalised by paying fines and applying for rezoning of the land to non-forest area.
The amnesty scheme has drawn criticism from activists and some lawmakers. Critics say the scheme whitewashes the crimes of setting up plantations inside areas zoned as forest, where deforestation, wildfires and land conflicts are rife.
And while the Ministry of Environment and Forestry says the amnesty program is also geared toward small farmers who manage illegal smallholdings, most of the plantations that have benefitted to date are run by companies, according to Uli Arta Siagian, forest and plantation campaign manager at environmental NGO Walhi.
Barclays has published new supply chain sustainability requirements for clients in forest-risk commodity sectors including beef and palm oil.
Barclay’s has added a new Forestry and Agricultural Commodities statement to its website this week. The statement stipulates that Barclays has “no appetite” to support companies directly involved in illegal forest clearance.
From the beginning of July, beef producers will not be able to undertake work in areas of the Amazon rainforest cleared or converted after 2008.
Those producing beef in South America will also need to prove that they gave deforestation-free supply chains by 2025. By the end of 2025, these firms will need to update their policy commitments on deforestation and human rights, and to monitor and report on deforestation-free product volumes.
Barclays (BARC.L) has told beef sector clients they must prevent deforestation in their South American supply chains, in a policy document seen by Reuters that toughens the bank’s stance but stops short of campaigners’ demands.
The Sustainable Jurisdictions Indicators measure the commitment of a commodity-producing region that is sustainable and inclusive. Twenty-three indicators build on Indonesia’s legal framework as well as various international commitments, especially the Sustainable Development Goals (SDGs).
These indicators are expected to provide an enabling environment for accelerating the fulfilment of various certification schemes such as the Indonesian Sustainable Palm Oil (ISPO) and the Roundtable on Sustainable Palm Oil (RSPO).
The Indicators will be displayed on a platform that allows various parties to view and picture the situation, committments and performance of the regions nationally.
Indonesian plywood producers are considering the IFCCPEFC certification scheme in order to strengthen penetration into the export market as well as to support sustainable forest management.
See: https://forestinsights.id/2023/03/24/produsen-kayu-lapislirik-sertifikasi-ifcc-pefc-akreditasi-kan-jadi-satu-alasan/
The European Union’s decision to impose new rules regulating the timber trade has pushed Indonesia to act. On 1 March 2023 the Ministry of Environment and Forestry (KLHK) finalised a ‘new’ SVLK. The SVLK has changed to the ‘Legality and Sustainability Verification System’ with the same abbreviation, SVLK. This new regulation deals with the legality of timber sources and identifies the sources that are sustainably managed.
The Director General of Sustainable Forest Management in the KLHK, Agus Justianto, when speaking at a seminar held by the Indonesian Timber Panel Association (Apkindo), said the previous SVLK also had sustainability aspects in its criteria and indicators. With the word sustainability (for the new SVLK), now emphasises legality and sustainability, he said. According to Agus, the SVLK has evolved to include, for example, a longer validity period for certificates for cultivated wood. There are also financing facilities for certification for micro, small and medium enterprises. He added that the government’s quick action in rebranding the SVLK should be appreciated as it deals with market requirements as the EU wood product market is large and Indonesia must act to capture a greater market share. See: https://agroindonesia.co.id/svlk-baru-perkuat-kelestarian/
Indonesia’s furniture and crafts exports reached US$2.8 billion in 2022 and the government hopes that exports will increase to US$5 billion in 2024.
The Ministry of Industry has two strategies to improve profitability in the sector. First, greater emphasis on the domestic market as the size of this market, especially the middle class segment, continues to expand. The second is exports to non-traditional markets for example India and the Middle East where growth in the property sector is relatively stable.
The Indonesian Furniture and Craft Association (HIMKI) chairman, Abdul Sobur, revealed that exports to the EU declined in 2022 so HIMKI members are now investigating the Middle East markets such as Qatar, Israel and the United Arab Emirates.
The Director General of Sustainable Forest Management, Ministry of Environment and Forestry (KLHK), Agus Justianto, is reported as saying Indonesia is ready to challenge the European Union (EU) at the World Trade Organisation (WTO) regarding the enactment of the deforestation-free law which, Indonesia considers, will become a trade barrier for wood products.
In March 2023, the ICIJ and 39 media partners published Deforestation Inc., a global investigation that exposed flaws in environmental auditing and certification programs intended to promote responsible forestry and combat illegal logging and deforestation. For this month’s episode of the Meet the Investigators podcast, we recorded a special live panel featuring reporters who had visited ravaged forests, tracked shipments of timber around the world, and trawled through corporate documents, leaked files and more to uncover the many ways in which a system designed to protect the environment, consumers and investors is failing with concerning frequency.
The situation in Myanmar, Romania, Indonesia, Germany is featured, as well as with the extent and nature of problems with falsified documents and certification systems more broadly.
The forest loss was driven by clearing for oil palm plantations by well-connected local elites, rather than smallholders, according to advocacy group Rainforest Action Network (RAN).
RAN’s investigation found that palm oil from these illegal plantations had wound up in the global supply chains of major brands like Procter & Gamble, Nestlé, PepsiCo and Unilever, among others.
The International Consortium of Investigative Journalistts and partners uncovered hidden links between Canada’s Paper Excellence and troubled Indonesian company Asia Pulp & Paper.
Lawmakers in Canada are calling for an investigation into one of North America’s largest pulp and paper manufacturers, following revelations in Deforestation Inc., a cross-border investigation led by the International Consortium of Investigative Journalists.
The parliamentarians said they are seeking answers into who is behind Paper Excellence, a company headquartered in British Columbia, after journalists revealed extensive links between the company and entities in Indonesia and China.
As Indonesia gears up for legislative and presidential elections in less than a year, authorities have warned of the pattern of dirty money from illegal logging, mining and fishing flowing into past campaigns.
As Indonesia gears up for legislative and presidential elections in less than a year, authorities have warned of the pattern of dirty money from illegal logging, mining and fishing flowing into past campaigns.
JAKARTA, Feb 9 (Reuters) – Indonesia and Malaysia, the world’s biggest palm oil producers, plan to send envoys to the European Union to discuss the impact of the bloc’s new deforestation law on their palm oil sectors, ministers from the Southeast Asian countries said on Thursday.
Brazil, Indonesia, and the Democratic Republic of the Congo have the largest area of rainforests in the world. On November 14th, at the G20 summit in Bali, the three countries agreed to create the Rainforest Protection Pact, which will work to stop deforestation and regrow forests. The countries plan to ask for funding to help with monitoring and preventing deforestation, although it is uncertain who will provide this funding.
- A significant portion of orangutan habitat in Indonesia lies within corporate concessions, but industrial tree companies, like pulp and paper, don’t have strong enough safeguards and commitment to protect the critically endangered apes, a new report says.
- According to the report by Aidenvironment, there are 6.22 million hectares (15.37 million acres) of orangutan habitat within corporate oil palm, logging, and industrial tree concessions.
- Of the three types of concessions, industrial tree companies are the “key stakeholder” as they operate with much less transparency and scrutiny than the palm oil sector, Aidenvironment says.
- A World Bank-funded conservation project in Indonesia led to higher rates of deforestation after the project ended, a new study shows, serving as a cautionary tale about the risks of failing to sustain such initiatives over a long enough time period.
- The payment for ecosystem services project was supposed to reward villages for halting deforestation and taking up sustainable livelihoods from 1996-2001.
- In the years after the project ended, however, participating villages that had received the payments lost up to 26% more forest cover from 2000-2016 than non-participating villages, the study shows.
A court filing reveals lucrative timber exports were a strong focus of forest-clearing by a part-Kiwi-owned firm operating in an area with substantial tropical rainforest in West Papua
Documents tabled in a New Zealand court case show how a Kiwi developer and a company which has cut down Papuan rainforest intend to make around $110 million from the timber to make floors and decks – in stark contrast to statements made in a recent Newsroom investigation.
Newsroom has secured the documentary evidence that lays out in detail how an Indonesian company linked to a New Zealand property developer intends to make close to A$100 million from clearing trees in an area of primary rainforest in Papua.
Indonesia will reimpose a domestic sales requirement on palm oil, the government said on Friday, a day after the world’s biggest producer of the key edible oil reversed a ban on its export.
President Joko Widodo’s government has made several reversals on palm oil policy since November. The late-April export ban, an attempt to control high domestic cooking oil prices, shocked global edible oil markets and angered farmers as their product prices fell.
JAKARTA, April 27 (Reuters) – Indonesia widened the scope of its export ban on raw materials for cooking oil to include crude and refined palm oil, its chief economic minister said on Wednesday, leaving markets in shock over the latest policy reversal.
The announcement flipped the minister’s statement a day earlier, in which he had said the export ban would only cover refined, bleached, and deodorized palm olein.
JAKARTA — Indonesia, the world’s largest producer of palm oil, on Friday announced an export ban of the commodity amid a continuing cooking oil crisis in the country.
Indonesian President Joko “Jokowi” Widodo said the ban on shipments of “raw materials for cooking oil and cooking oil” will take effect next Thursday for an indefinite period.
A subsidiary of South Korean paper company Moorim has cleared natural forests a tenth the size of Seoul in Indonesia’s Papua region over the past six years, a new report alleges. The report, published by various NGOs, alleges that the cleared areas consisted of primary forests serving as a habitat for threatened species and a source of livelihood for Indigenous Papuans.
An investigation by the Rainforest Action Network (RAN) indicates that a palm oil company in Sumatra has been clearing forests illegally since at least 2016. The extent of the clearing by PT Nia Yulided Bersaudara (NYB), nearly two and a half times the size of New York City’s Central Park, makes it the top deforester among companies that have an oil palm concession in Sumatra’s Leuser Ecosystem.
The water patrol police of Meranti Islands, Riau Province, arrested two illegal loggers found transporting 13 cubic meters of wood using a boat in the waters near Dedap Village, Tasik Putripuyu Sub-district, on Monday night.
Police in Indonesia’s Riau Islands have reported a 280% increase in seizures of mangrove wood from would-be smugglers this year.
Police said much of the wood was cut from the main island of Batam, and destined for nearby Singapore and Malaysia.
Indonesia is targeting the rehabilitation of 630,000 hectares (1.55 million acres) of mangrove forests across the country by 2024.
Indonesia, the world’s biggest palm oil grower, lets a three-year moratorium on new plantations lapse but says it won’t give new permits. Will the move weaken forest protection?
A monitoring exercise by Indigenous peoples and local communities of Indonesia’s “certified legal” timber industry has found myriad violations.
The group reported, among other findings, logging companies cutting down trees outside their concessions, woodworking shops manipulating delivery records to obscure the origin of the wood, and exporters selling forged export eligibility certificates.
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