The EU-Indonesia Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA) was signed on 30 September 2013. It is the first FLEGT VPA the EU has made with an Asian timber-exporting country; VPAs with Malaysia and Vietnam are likely to follow.
Indonesia hosts the world’s third-largest rainforest after the Amazon and the CongoBasin. Its forestry sector features widespread corruption and has seen rapid deforestation as a result of large-scale illegal logging and conversion of rainforest in carbon-rich peat-lands for palm oil and pulp plantations. Dramatically increasing greenhouse-gas emissions have been the most obvious detrimental consequences. A regulatory environment in major consumer markets prohibiting imports of illegally harvested timber (Japan’s Green Purchasing Law, the US Lacey Act, the EU Timber Regulation, and Australia’s Illegal Logging Prohibition Act) has added to Indonesia’s interest in concluding a VPA with the EU. Indonesia is the EU’s fourth-largest source for tropical wood imports in terms of value. With about 15%, the EU is the second-biggest export destination for Indonesian forest products. Indonesia hopes to boost its EU exports twofold thanks to the VPA.
Purpose of the VPA
The VPA seeks to curb trade in illegal timber by establishing an operator-based licensing system which ensures that all wood products exported from Indonesia to the EU come from verified legal sources. It also aims to contribute to improving forest governance and forest-law enforcement. The VPA includes provisions on supply-chain control, independent auditing, licensing of exports and civil-society monitoring. Indonesia’s timber legality assurance system (SVLK) is intended to certify that export timber was harvested legally and can be imported into the EU under a FLEGT licence. Hence, SVLK-certified timber will automatically comply with EU importers’ due diligence requirements under the EU Timber Regulation in force since March 2013.
Challenges to the VPA’s implementation
The SVLK, which is mandatory for all timber exports, has been implemented since early 2013. But the overall roll out of SVLK certification has been slow, with SMEs criticising the cost for business permits and impact assessments and the potential need for multiple certification. The SVLK’s credibility as a whole could be seriously undermined, as non-SVLK certified timber could enter the supply chain. A case in point is conversion timber. It is produced from legitimate land conversion permits (IPK), which account for large parts of forest logs. Currently, it is allegedly not audited and is said to partly provide a cover for illegal logging. Critics say the SVLK fails to address the unconstitutional practice of issuing permits to companies for disputed customary forestland (previously classified as state forest) in violation of land tenure/use rights of indigenous communities. Monitoring of the SVLK is still difficult, since there appears to be no operational information system with accessible up-to-date forest data and maps. Due to lack of capacity independent monitors lag heavily behind in checking SVLK certifications. Follow up to complaints has been inadequate. Forest law enforcement has remained weak, with illegal logging rarely being prosecuted or sanctioned.
On 21 January 2014, the Committee on International Trade (rapporteur Yannick Jadot, Verts/ALE, France) unanimously adopted a draft recommendation in favour of the VPA’s conclusion. Despite some shortcomings in SVLK’s functioning, the Committee suggests that the progress made by Indonesia in fighting illegal logging should be commended. Nonetheless, as set out in the accompanying motion for resolution, the EP would expect the country to make further progress, and in particular improve SVLK.