FOREST PRODUCT INDUSTRIES IN INDONESIA:SECURING TIMBER FROM LEGAL SOURCES
1Hadi Daryanto1 and Jimmy Purwonegoro2
Secretary of Director General of Forest Production Management, Ministry of Forestry of the Republic of Indonesia.
2Vice Chair of BRIK (Forest Industry Revitalization Body)

GOI recently reforms some regulations linked to promoting legal timber as part of combating illegal logging, enhancing
Sustainable Forest Management, and increasing competitiveness of wood products.
Indonesia's Forests
Indonesia's forests are among the most extensive,
diverse and valuable in the world. These forests do not
only provide habitats for a wide range of flora, but also
play a pivotal role in supporting economic development,
the livelihoods of the rural people and the provision ofenvironmental services. Indonesia's forests cover 120.35
million ha. or approximately 70% of Indonesia's total land
areas, and are divided into three categories: production
forests, conservation forests, and protection forests.
Production forests are designated for commercial purpose,
while conservation forests are assigned for conservation
forest biodiversity and protection forest for hydrologicalservices
Indonesia's forests have long been managed insustainable based forest management system. For
example, forests in Java, managed by state-owned
enterprise (Perum Perhutani), are predominantly teakplantation have been managed in a sustainable way
according to forest planning system. While in the outerisland of Java due to different types of forests and thevariety of species composition and richness, the forests
have been managed based on the cutting block systemwith cutting cycle of 35 years. The forests are also
managed in a certain cutting quota with limit diametercutting is the same or above 50 cm dbh, named as
Indonesian Selective Cutting and Replanting System.
This system has mandated not only selective cutting to be
implemented but also required to replant forest area assoon the harvesting completed. Ideally with all thesesystems the forests could be managed in a sustainableway.
Illegal Logging and Its Associated Trade
Illegal logging and its associated trade (mainly logssmuggling) have threatened Indonesia's forests because
they undermine good forest governance and the rule oflaw; and result in deforestation, forest degradation, lost
government revenues and conflicts. The government ofIndonesia has shown seriousness in combating illegal
logging and its associated trade by issuing a Presidential
Instruction No. 4 in March 2005 to speed up efforts tocurb illegal logging.
Other efforts related to combating illegal logging andits associated trade are bilateral agreements between
Indonesia and other countries such as United Kingdom,Norway, China, Japan, South Korea, Philippines andUSA. In addition the GOI established BRIK (ForestIndustry Revitalization Body) on 13 December 2002 tomonitor and control the legality of wood products export
through endorsement system, MOU between Ministry ofForestry and PPATK (The Center for Analysis andReporting Financial Transaction), and posting special
forest police (SPORC) in 10 provinces. In general theactivities combating illegal logging consist of pre-emptive(eg. PR and capacity building to local people), preventive(forest control and surveillance), and repressive (fieldoperation conducted by national police) measures.
Recent Development
On January 8th, 2007 in Brussels the Government ofIndonesia (Minister of Forestry) and EU (Commissionerfor Development and Commissioner for Environment)
took a step further by releasing a joint statement to curb
illegal logging and its associated trade through a FLEGT
partnership. They agreed to initiate formal negotiations
towards conclusion of a voluntary partnership agreement(VPA) on Forest Law Enforcement, Governance andTrade (FLEGT), which will provide assurance thatIndonesian forest products imported to EU are verified tobe legal. The agreement will also provide for cooperation,
including capacity building, market and technical studies
and knowledge-sharing.
On April 4th, 2006 the Ministry of Forestry stipulated
decree No. 70/Menhut-II/2006 to set up national steeringcommittee and multi-stakeholder working groups decree
No. 63/Kum-II/2006 concerning Wood Legality Standard
Harmonization. Development and harmonization oflegality standard have been facilitated by Indonesian
Ecolabelling Institute (LEI) through extensive multistakeholder consultations (the Ministry of Forestry,Business Association, Academicians, Certification Body,and NGOs). LEI finalized the harmonization process andformally submitted the draft of harmonized standard to theMinistry of Forestry in mid January 2007.
The draft derived from the result of MoU IndonesiaUK and TFF's draft on legality standard, which was a
result of comparative study from:
1)

2)
3)

Keurhout Protocol for the Validation of Claims ofLegal Timber in Particular with a View On Legal
Origin (TFF);
The Requirements for “Verified Legal” in WWF's
Nusa Hijau Conditions of Participation (NTTA);
The “OLB (Origine et Legalite des Bois)
Certification and Control System: Origin and
Legality of Timber” (Eurocertifor).
The Latest Regulation in Forestry Sector

In January 2007 and the second semester 2006 theGovernment of Indonesia issued the following regulation:
1)

2)

Government Regulation No. 6/2007 regarding
Forest Management and Preparation of Forest
Management Plan and Forest Utilization
replaced Government Regulation No. 34/2002.
These regulation has been mandated by Law No.
41/1999 regarding Forestry;
Minister of Forestry decree No. P.51/MenhutII/2006 regarding the Use of the Certificate ofOrigins (SKAU) for Transporting Timber Forestry

3)

Products from Community Forests in conjunction
No.
P.62/Menhut-II/2006
regardingtheAmendment to the Decree of the Minister ofForestry No. P.51/Menhut-II/2006;
Minister of Forestry decree No. P.55/MenhutII/2006 regarding the Administration of theForestry Products from the State Forests inconjunction with No. P.63/Menhut-II/2006
regarding the Amendment to the Decree of theMinister of Forestry No. P.55/Menhut-II/2006.
The decrees replaced the Minister of Forestry
decree No. 126/Menhut-II/2003.

The above regulation guarantee the legality of logs
harvested and also play as a technical guideline of chainof custody, since they include the document as follows:1)

2)

skshh (forest products legality letter is used as a
general term) which will be discussed by BRIK;LHC (cruising report); RKT (annual workingplan); LHP (Cutting Report); SKSKB (round loglegality letter); FA (transportation invoice);
Chain of custody is mandatory.
BRIK in Brief

BRIK was established based on a joint decree of theMinister of Industry and Trade and the Minister ofForestry No. 803/MPP/Kep/12/2002; 10267/Kpts-II/2002
inconjunctionNo.
495.1/MPP/Kep/9/2004;
SK355.1/Menhut-I/2004. As stated in the decrees, theestablishment of BRIK is a mutual understanding and joint
actions between private forestry industry and the related
government institutions in order to implement sustainableforest, sustainable raw material supply, creating job aswell as business opportunities.
On January 16th, 2003 the Minister of Forestry andthe Minister of Industry and Trade approved BRIK Action
Program and Establishment Deed. The Action Program
includes among other things:•••

Ensuring timber supply from legal sources;
Development of timber industrial data base;
Providing inputs to the government in preparing
regulations;• Implementation of ETPIK (registered forestry
industrial product exporter) to all forestry
industries;
1) Establishment of serving mechanism, monitoring,and evaluation of ETPIK;
2) Others: efficiency and product diversification,evaluation
ofregulations
thatburdencompetitiveness.
Export Procedures
To be acknowledged as exporter of wood products,
forest industry must have legal permits based onIndonesian law and regulation. After completing
requirements stipulated in the Minister of Trade decree
No. 02/M-Dag/Per/2/2006, the industry will then beeligible to have an ETPIK license issued by the Director
General of Foreign Trade, the Ministry of Trade. The
decree also mentioned that export of forest industry
products within HS. 4407, 4408, 4409, 4410, 4411, 4412,
4413, 4415, 4418, 4421.90.50.00, and 9406.00.92.00
must be endorsed by BRIK. The endorsement document
is attached to commodity export declaration (PEB).
Export of certain products under Ex. HS. 4407 (S4S,end jointed), HS. 4409, Ex..HS. 4415 (pallet), Ex.HS.
4418 (door and window frame), and HS. 9406 are verified
by independent surveyor assigned by the Minister ofTrade with the objective to ensure wood product export
fulfills all the government regulations and provides morevalue-added.
Of the total existing ETPIK 4,500, BRIK has been
given authority by the government to endorse two groupsof products: Wood Panel and Woodworking. Other
products such as pulp and paper, furniture, and handicraft
can still export without BRIK endorsement. The twoendorsed products represented less than 40% of total
forestry industrial export.
Indonesian Law and Regulation Related toVerification and Endorsement
BRIK verification and endorsement, based upon
those government mandatory process, is attached to thispaper. The following law and regulations are related to
the verification and endorsement:Law No. 41/1999 regarding Forestry;
Government Regulation No. 34/2002 replaced
by Government Regulation No. 6/2007;
The Minister of Forestry regulation No. 126/KptsII/2003 replaced by P.55/Menhut-II/2006 inconjunction with No. P.63/Menhut-II/2006.
The Minister of Forestry regulation No.
P.51/Menhut-II/2006 in conjunction with No.
P.62/Menhut-II/2006;
The Minister of Industry and Trade decree No.
32/MPP/Kep/1/2003 regarding Requirements forForestry Industrial Products Export, replaced bydecree No. 647/MPP/Kep/10/2003 replaced by
the Minister of Trade regulation No. 02/MDag/Per/2/2006;The Director General of Foreign Trade regulation
No.
01/Daglu/Per/3/2006
regardingtheProcedures for the Endorsement from theForestry Industry Revitalization Body (BRIK);
LetterNo.
452/VI-Edar/2003,
948/VIBPPHH/2004, and S.675/VI-BPPHH/2006 fromthe Director General of Forest Production
Development concerning Recovery Factors ofWood Products.

Endorsement system is electronically processed andfree of charge. Of 2,124 ETPIK (panel and woodworking)endorsed by BRIK around 41% still actively export theirproducts, while the rest have ceased permanently or
temporarily to operate.
BRIK Endorsement and Green KonyuhoAs can be in the Verification and Endorsement Chart
attached, there is similarity between BRIK Endorsement
and Green Konyuho. BRIK Endorsement is based onIndonesian forest laws and other regulations in industry
and trade sector. BRIK verifies legalized copied
documents (LMK, SKSKB, FA-KB, FA-KO, SAL, andSKAU) to make sure that the legality of timber.
Verification steps are mentioned in BRIK Circular Letter
No. 713/BRIK/XII/2006 and summarized in Appendix A(Summary of the verification scheme).
References
All references are from
Ministerial Regulations.

GovernmentRegulations,=ROUND LOGSLEGALITY LETTER= ROUND LOGSINVOICE

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PLANTATIONLOGS(SMALL ROUNDLOGS)(SMALL ROUNDLOGS)LAND
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FACTORY= ROUND LOGSINVOICEORIGINALGROWTHCERTIFICATE= ROUND LOGSINVOICE(SMALL ROUND LOGS)= ROUND LOGSINVOICE( ROUND LOGS)=ROUND LOGSLEGALITY LETTERCOMMUNITY
FORESTSLOGS