Published 31 March 2014

Legal timber trade leads to more business opportunities for Indonesian timber producers

Jakarta, Indonesia, 31st March 2014—The Indonesian Timber Legality Assurance System (Sistem Verifikasi Legalitas Kayu - SVLK) is poised to gain recognition in the European Union (EU) and generate more trade for certified companies with the recent signing of a Presidential Regulation.

Panellists at the Dialogue and workshop on timber legality for forest products companies exporting to the EU, US and Australia. © TRAFFIC

The Regulation, signed on 14th March 2014 by President Susilo Bambang Yudhoyono, legally binds Indonesia to requirements under an Indonesia/EU Voluntary Partnership Agreement (VPA).

A VPA is a legally binding trade agreement between the European Union and a timber-producing country outside the EU. It is one of the key components of EU Forest Law Enforcement, Governance and Trade (FLEGT) action plan to ensure only legally sourced timber and wood products are allowed onto EU markets from a VPA partner country.

This means Indonesia’s SVLK will soon be recognized in the EU and will benefit some 1,011 companies and community enterprises that have committed to sustainable harvest and trade of timber under the scheme through creating an opportunity to corner an increased market share in the EU.

The news came at the “Dialogue and workshop on timber legality for forest products companies exporting to the EU, US and Australia”. The event was attended by 69 participants from 36 companies related to the forest and timber products industry, six NGOs, five government agencies and two local associations.

Bachrul Chairi, Director General for Foreign Trade, Ministry of Trade Indonesia, in his opening remarks stressed that timber assurance systems are very important to comply with international demand for green products.

Currently, timber importers in the US, EU and Australia respectively have to comply with the US Lacey Act, EU Timber Regulation (EUTR) and, from November 2014, the Australia Illegal Logging Prohibition Act (AILPA). 

TRAFFIC’s Timber Trade Programme Leader, Chen Hin Keong, said: “It is crucial for companies to have comprehensive understanding of the relevant national and international timber trade regulations. Producing and exporting companies need to step-up their efforts to comply with the legal requirements as assurance to importers.”

To assist companies through the transition, TRAFFIC and WWF’s Global Forest & Trade Network (GFTN) have held a series of Legality Training Workshops in China, Indonesia and Russia since October 2013.

The “Dialogue and workshop on timber legality for forest products companies exporting to the EU, US and Australia” was held in conjunction with the International Furniture and Craft Fair Indonesia (IFFINA) 2014. It was organized by WWF GFTN Indonesia, TRAFFIC and ASMINDO. This event was one of the outreach programmes under "Local Forests. Global Markets – GFTN" funded by IKEA.