2014A2520 — EN — 01.08.2015 — 001.001

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

Amended by:









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VOLUNTARY PARTNERSHIP AGREEMENT

between the European Union and the Republic of Indonesia on forest law enforcement, governance and trade in timber products into the European Union







THE EUROPEAN UNION hereinafter referred to as "the Union" and THE REPUBLIC OF INDONESIA hereinafter referred to as "Indonesia" hereinafter referred to together as the "Parties", RECALLING The Framework Agreement on Comprehensive Partnership and Cooperation between the Republic of Indonesia and the European Community signed on 9 November 2009 in Jakarta; CONSIDERING the close working relationship between the Union and Indonesia, particularly in the context of the 1980 Cooperation Agreement between the European Economic Community and Indonesia, Malaysia, the Philippines, Singapore and Thailand - member countries of the Association of South-East Asian Nations; RECALLING the commitment made in the Bali Declaration on Forest Law Enforcement and Governance (FLEG) of 13 September 2001 by countries from the East Asian and other regions to take immediate action to intensify national efforts and to strengthen bilateral, regional and multilateral collaboration to address violations of forest law and forest crime, in particular illegal logging, associated illegal trade and corruption, and their negative effects on the rule of law; NOTING the Communication from the Commission to the Council and the European Parliament on a European Union Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT) as a first step towards tackling the urgent issue of illegal logging and associated trade; REFERRING to the Joint Statement between the Minister of Forestry of the Republic of Indonesia and the European Commissioners for Development and for Environment signed on 8 January 2007 in Brussels; HAVING REGARD to the 1992 Non-Legally Binding Authoritative Statement of Principles for a Global Consensus on the management, conservation and sustainable development of all types of forests, and to the adoption by the United Nations General Assembly of the Non Legally Binding Instrument on all types of forest; AWARE of the importance of principles set out in the 1992 Rio Declaration on Environment and Development in the context of securing sustainable forest management, and in particular of Principle 10 concerning the importance of public awareness and participation in environmental issues and of Principle 22 concerning the vital role of indigenous people and other local communities in environmental management and development; RECOGNISING efforts by the Government of the Republic of Indonesia to promote good forestry governance, law enforcement and the trade in legal timber, including through the Sistem Verifikasi Legalitas Kayu (SVLK) as the Indonesian Timber Legality Assurance System (TLAS) which is developed through a multi-stakeholder process following the principles of good governance, credibility and representativeness; RECOGNISING that the Indonesian TLAS is designed to ensure the legal compliance of all timber products; RECOGNISING that implementation of a FLEGT Voluntary Partnership Agreement will reinforce sustainable forest management and contribute to combating climate change through reduced emissions from deforestation and forest degradation and the role of conservation, sustainable management of forest and enhancement of forest carbon stocks (REDD+); HAVING REGARD to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and in particular the requirement that export permits issued by parties to CITES for specimens of species listed in Appendices I, II or III be granted only under certain conditions, including that such specimens were not obtained in contravention of the laws of that party for the protection of fauna and flora; RESOLVED that the Parties shall seek to minimise any adverse impacts on indigenous and local communities and poor people which may arise as a direct consequence of implementing this Agreement; CONSIDERING the importance attached by the Parties to development objectives agreed at international level and to the Millennium Development Goals of the United Nations; CONSIDERING the importance attached by the Parties to the principles and rules which govern the multilateral trading systems, in particular the rights and obligations laid down in the General Agreement on Tariffs and Trade (GATT) 1994 and in other multilateral agreements establishing the World Trade Organisation (WTO) and the need to apply them in a transparent and non-discriminatory manner; HAVING REGARD to Council Regulation (EC) No 2173/2005 of 20 December 2005 on the establishment of a FLEGT licensing scheme for imports of timber into the European Community and to Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligations of operators who place timber and timber products on the market; REAFFIRMING the principles of mutual respect, sovereignty, equality and non-discrimination and recognising the benefits to the Parties arising from this Agreement; PURSUANT to the respective laws and regulations of the Parties; HEREBY AGREE AS FOLLOWS:







Article 1

Objective

1. The objective of this Agreement, consistent with the Parties' common commitment to the sustainable management of all types of forest, is to provide a legal framework aimed at ensuring that all imports into the Union from Indonesia of timber products covered by this Agreement have been legally produced and in doing so to promote trade in timber products.

2. This Agreement also provides a basis for dialogue and co-operation between the Parties to facilitate and promote the full implementation of this Agreement and enhance forest law enforcement and governance.

Article 2

Definitions

For the purposes of this Agreement, the following definitions shall apply:

(a) "import into the Union" means the release for free circulation of timber products in the Union within the meaning of Article 79 of Regulation (EEC) No 2913/1992 of 12 October 1992 establishing the Union Customs Code which cannot be qualified as "goods of a non-commercial nature" as defined in Article 1(6) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/1992 establishing the Union Customs Code;

(b) "export" means the physical leaving or taking out of timber products from any part of the geographical territory of Indonesia;

(c) "timber products" means the products listed in Annex IA and Annex IB;

(d) "HS Code" means a four- or six-digit commodity code as set out in the Harmonised Commodity Description and Coding System established by the International Convention on the Harmonised Commodity Description and Coding System of the World Customs Organisation;

(e) "FLEGT licence" means an Indonesian Verified Legal (V-Legal) document which confirms that a shipment of timber products intended for export to the Union has been legally produced. A FLEGT licence may be in paper or electronic form;

(f) "licensing authority" means the entities authorised by Indonesia to issue and validate FLEGT licences;

(g) "competent authorities" means the authorities designated by the Member States of the Union to receive, accept and verify FLEGT licences;

(h) "shipment" means a quantity of timber products covered by a FLEGT licence that is sent by a consignor or a shipper from Indonesia and is presented for release for free circulation at a customs office in the Union;

(i) "legally-produced timber" means timber products harvested or imported and produced in accordance with the legislation as set out in Annex II.

Article 3

FLEGT Licensing Scheme

1. A Forest Law Enforcement, Governance and Trade licensing scheme' (hereinafter "FLEGT Licensing Scheme") is hereby established between the Parties to this Agreement. It establishes a set of procedures and requirements aiming at verifying and attesting, by means of FLEGT licences, that timber products shipped to the Union were legally produced. In accordance with Council Regulation 2173/2005 of 20 December 2005, the Union shall only accept such shipments from Indonesia for import into the Union if they are covered by FLEGT licences.

2. The FLEGT Licensing Scheme shall apply to the timber products listed in Annex IA.

3. The timber products listed in Annex IB may not be exported from Indonesia and may not be FLEGT licensed.

4. The Parties agree to take all necessary measures to implement the FLEGT Licensing Scheme in accordance with the provisions of this Agreement.

Article 4

Licensing Authorities

1. The Licensing Authority will verify that timber products have been legally produced in accordance with the legislation identified in Annex II. The Licensing Authority will issue FLEGT licences covering shipments of legally-produced timber products for export to the Union.

2. The Licensing Authority shall not issue FLEGT licences for any timber products that are composed of, or include, timber products imported into Indonesia from a third country in a form in which the laws of that third country forbid export, or for which there is evidence that those timber products were produced in contravention of the laws of the country where the trees were harvested.

3. The Licensing Authority will maintain and make publicly available its procedures for issuing FLEGT licences. The Licensing Authority will also maintain records of all shipments covered by FLEGT licences and consistent with national legislation concerning data protection will make these records available for the purposes of independent monitoring, while respecting the confidentiality of exporters' proprietary information.

4. Indonesia shall establish a Licence Information Unit that will serve as a contact point for communications between the competent authorities and the Licensing Authorities as set out in Annexes III and V.

5. Indonesia shall notify contact details of the Licensing Authority and the Licence Information Unit to the European Commission. The Parties shall make this information available to the public.

Article 5

Competent Authorities

1. The competent authorities shall verify that each shipment is covered by a valid FLEGT licence before releasing that shipment for free circulation in the Union. The release of the shipment may be suspended and the shipment detained if there are doubts regarding the validity of the FLEGT licence.

2. The competent authorities shall maintain and publish annually a record of FLEGT licences received.

3. The competent authorities shall grant persons or bodies designated as independent market monitor access to the relevant documents and data, in accordance with their national legislation on data protection.

4. The competent authorities shall not perform the action described in Article 5(1) in the case of a shipment of timber products derived from species listed under the Appendices of the CITES as these are covered by the provisions for verification set out in the Council Regulation (EC) No 338/97 of 9 December 1996 on the protection of species of wild fauna and flora by regulating trade therein.

5. The European Commission shall notify Indonesia of the contact details of the competent authorities. The Parties shall make this information available to the public.

Article 6

FLEGT Licences

1. FLEGT licences shall be issued by the Licensing Authority as a means of attesting that timber products have been legally produced.

2. The FLEGT licence shall be laid out and completed in English.

3. The Parties may, by agreement, establish electronic systems for issuing, sending and receiving FLEGT licences.

4. The technical specifications of the licence are set out in Annex IV. The procedure for issuing FLEGT licences is set out in Annex V.

Article 7

Verification of Legally-Produced Timber

1. Indonesia shall implement a TLAS to verify that timber products for shipment have been legally produced and to ensure that only shipments verified as such are exported to the Union.

2. The system for verifying that shipments of timber products have been legally produced is set out in Annex V.

Article 8

Release of Shipments covered by a FLEGT Licence

1. The procedures governing release for free circulation in the Union for shipments covered by a FLEGT licence are described in Annex III.

2. Where the competent authorities have reasonable grounds to suspect that a licence is not valid or authentic or does not conform to the shipment it purports to cover, the procedures contained in Annex III may be applied.

3. Where persistent disagreements or difficulties arise in consultations concerning FLEGT licences the matter may be referred to the Joint Implementation Committee.

Article 9

Irregularities

The Parties shall inform each other if they suspect or have found evidence of any circumvention or irregularity in the FLEGT Licensing Scheme, including in relation to the following:

(a) circumvention of trade, including by re-direction of trade from Indonesia to the Union via a third country;

(b) FLEGT licences covering timber products which contain timber from third countries that is suspected of being illegally produced; or

(c) fraud in obtaining or using FLEGT licences.

Article 10

Application of the Indonesian TLAS and Other Measures

1. Using the Indonesian TLAS, Indonesia shall verify the legality of timber exported to non-Union markets and timber sold on domestic markets, and shall endeavour to verify the legality of imported timber products using, where possible, the system developed for implementing this Agreement.

2. In support of such endeavours, the Union shall encourage the use of the abovementioned system with respect to trade in other international markets and with third countries.

3. The Union shall implement measures to prevent the placing on the Union market of illegally-harvested timber and products derived therefrom.

Article 11

Stakeholder Involvement in the Implementation of the Agreement

1. Indonesia will hold regular consultations with stakeholders on the implementation of this Agreement and will in that regard promote appropriate consultation strategies, modalities and programmes.

2. The Union will hold regular consultations with stakeholders on the implementation of this Agreement, taking into account its obligations under the 1998 Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention)

Article 12

Social Safeguards

1. In order to minimize possible adverse impacts of this Agreement, the Parties agree to develop a better understanding of the impacts on the timber industry as well as on the livelihoods of potentially affected indigenous and local communities as described in their respective national laws and regulations.

2. The Parties will monitor the impacts of this Agreement on those communities and other actors identified in paragraph 1, while taking reasonable steps to mitigate any adverse impacts. The Parties may agree on additional measures to address adverse impacts.

Article 13

Market Incentives

Taking into account its international obligations, the Union shall promote a favourable position in the Union market for the timber products covered by this Agreement. Such efforts will include in particular measures to support:

(a) public and private procurement policies that recognise a supply of and ensure a market for legally harvested timber products; and

(b) a more favourable perception of FLEGT-licensed products on the Union market.

Article 14

Joint Implementation Committee

1. The Parties shall establish a joint mechanism (hereinafter referred to as the "Joint Implementation Committee" or "JIC"), to consider issues relating to the implementation and review of this Agreement.

2. Each Party shall nominate its representatives on the JIC which shall take its decisions by consensus. The JIC shall be co-chaired by senior officials; one from the Union and the other from Indonesia.

3. The JIC shall establish its rules of procedure.

4. The JIC shall meet at least once a year, on a date and with an agenda which are agreed in advance by the Parties. Additional meetings may be convened at the request of either of the Parties.

5. The JIC shall:

(a) consider and adopt joint measures to implement this Agreement;

(b) review and monitor the overall progress in implementing this Agreement including the functioning of the TLAS and market-related measures, on the basis of the findings and reports of the mechanisms established under Article 15;

(c) assess the benefits and constraints arising from the implementation of this Agreement and decide on remedial measures;

(d) examine reports and complaints about the application of the FLEGT licensing scheme in the territory of either of the Parties;

(e) agree on the date from which the FLEGT licensing scheme will start operating after an evaluation of the functioning of the TLAS on the basis of the criteria set out in Annex VIII;

(f) identify areas of cooperation to support the implementation of this Agreement;

(g) establish subsidiary bodies for work requiring specific expertise, if necessary;

(h) prepare, approve, distribute, and make public annual reports, reports of its meetings and other documents arising out of its work.

(i) perform any other tasks it may agree to carry out.

Article 15

Monitoring and Evaluation

The Parties agree to use the reports and findings of the following two mechanisms to evaluate the implementation and effectiveness of this Agreement.

(a) Indonesia, in consultation with the Union, shall engage the services of a Periodic Evaluator to implement the tasks as set out in Annex VI.

(b) the Union, in consultation with Indonesia, shall engage the services of an Independent Market Monitor to implement the tasks as set out in Annex VII.

Article 16

Supporting Measures

1. The provision of any resources necessary for measures to support the implementation of this Agreement, identified pursuant to Article 14(5) (f) above shall be determined in the context of the programming exercises of the Union and its Member States for cooperation with Indonesia.

2. The Parties shall ensure that activities associated with the implementation of this Agreement are coordinated with existing and future development programmes and initiatives.

Article 17

Reporting and Public Disclosure of Information

1. The Parties shall ensure that the workings of the JIC are as transparent as possible. Reports arising out of its work shall be jointly prepared and made public.

2. The JIC shall make public a yearly report that includes inter alia, details on:

(a) quantities of timber products exported to the Union under the FLEGT licensing scheme, according to the relevant HS Heading;

(b) the number of FLEGT licences issued by Indonesia;

(c) progress in achieving the objectives of this Agreement and matters relating to its implementation;

(d) actions to prevent illegally-produced timber products being exported, imported, and placed or traded on the domestic market;

(e) quantities of timber and timber products imported into Indonesia and actions taken to prevent imports of illegally-produced timber products and maintain the integrity of the FLEGT Licensing Scheme;

(f) cases of non-compliance with the FLEGT Licensing Scheme and the action taken to deal with them;

(g) quantities of timber products imported into the Union under the FLEGT licensing scheme, according to the relevant HS Heading and Union Member State in which importation into the Union took place;

(h) the number of FLEGT licences received by the Union;

(i) the number of cases and quantities of timber products involved where consultations took place under Article 8(2).

3. In order to achieve the objective of improved governance and transparency in the forest sector and to monitor the implementation and impacts of this Agreement in both Indonesia and the Union, the Parties agree that the information as described in Annex IX shall be made publicly available.

4. The Parties agree not to disclose confidential information exchanged under this Agreement, in accordance with their respective legislation. Neither Party shall disclose to the public, nor permit its authorities to disclose, information exchanged under this Agreement concerning trade secrets or confidential commercial information.

Article 18

Communication on Implementation

1. The representatives of the Parties responsible for official communications concerning implementation of this Agreement shall be:







For Indonesia: For the Union: The Director-General of Forest Utilisation, Ministry for Forestry The Head of Delegation of the European Union in Indonesia

2. The Parties shall communicate to each other in a timely manner the information necessary for implementing this Agreement, including changes in paragraph 1

Article 19

Territorial Application

This Agreement shall apply to the territory in which the Treaty on the Functioning of the European Union is applied under the conditions laid down in that Treaty, on the one hand, and to the territory of Indonesia, on the other.

Article 20

Settlement of Disputes

1. The Parties shall seek to resolve any dispute concerning the application or interpretation of this Agreement through prompt consultations.

2. If a dispute has not been settled by means of consultations within two months from the date of the initial request for consultations either Party may refer the dispute to the JIC which shall endeavour to settle it. The JIC shall be provided with all relevant information for an in depth examination of the situation with a view to finding an acceptable solution. To this end, the JIC shall be required to examine all possibilities for maintaining the effective implementation of this Agreement.

3. In the event that the JIC is unable to settle the dispute within two months, the Parties may jointly seek the good offices of, or request mediation by, a third party.

4. If it is not possible to settle the dispute in accordance with paragraph 3, either Party may notify the other of the appointment of an arbitrator; the other Party must then appoint a second arbitrator within thirty calendar days of the appointment of the first arbitrator. The Parties shall jointly appoint a third arbitrator within two months of the appointment of the second arbitrator.

5. The arbitrators decisions shall be taken by majority vote within six months of the third arbitrator being appointed.

6. The award shall be binding on the Parties and it shall be without appeal.

7. The JIC shall establish the working procedures for arbitration.

Article 21

Suspension

1. A Party wishing to suspend this Agreement shall notify the other Party in writing of its intention to do so. The matter shall subsequently be discussed between the Parties.

2. Either Party may suspend the application of this Agreement. The decision on suspension and the reasons for that decision shall be notified to the other Party in writing.

3. The conditions of this Agreement will cease to apply thirty calendar days after such notice is given.

4. Application of this Agreement shall resume thirty calendar days after the Party that has suspended its application informs the other Party that the reasons for the suspension no longer apply.

Article 22

Amendments

1. Either Party wishing to amend this Agreement shall put the proposal forward at least three months before the next meeting of the JIC. The JIC shall discuss the proposal and if consensus is reached, it shall make a recommendation. If the Parties agree with the recommendation, they shall approve it in accordance with their respective internal procedures.

2. Any amendment so approved by the Parties shall enter into force on the first day of the month following the date on which the Parties notify each other of the completion of the procedures necessary for this purpose.

3. The JIC may adopt amendments to the Annexes to this Agreement.

4. Notification of any amendment shall be made to the Secretary-General of the Council of the European Union and to the Minister for Foreign Affairs of the Republic of Indonesia through diplomatic channels.

Article 23

Entry into Force, Duration and Termination

1. This Agreement shall enter into force on the first day of the month following the date on which the Parties notify each other in writing of the completion of their respective procedures necessary for this purpose.

2. Notification shall be made to the Secretary-General of the Council of the European Union and to the Minister for Foreign Affairs of the Republic of Indonesia through diplomatic channels

3. This Agreement shall remain in force for a period of five years. It shall be extended for consecutive periods of five years, unless a Party renounces the extension by notifying the other Party in writing at least twelve months before this Agreement expires.

4. Either Party may terminate this Agreement by notifying the other Party in writing. This Agreement shall cease to apply twelve months after the date of such notification.

Article 24

Annexes

The Annexes to this Agreement shall form an integral part thereof.

Article 25

Authentic Texts

This Agreement shall be drawn up in duplicate in the Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish, Swedish and Indonesian (Bahasa Indonesia) languages, each of these texts being authentic. In case of divergence of interpretation the English text shall prevail.

IN WITNESS WHEREOF, the undersigned, being duly authorised thereto, have signed this Agreement.

Съставено в Брюксел на тридесети септември две хиляди и тринадесета година.

Hecho en Bruselas, el treinta de septiembre de dos mil trece.

V Bruselu dne třicátého září dva tisíce třináct.

Udfærdiget i Bruxelles den tredivte september to tusind og tretten.

Geschehen zu Brüssel am dreißigsten September zweitausenddreizehn.

Kahe tuhande kolmeteistkümnenda aasta septembrikuu kolmekümnendal päeval Brüsselis.

Έγινε στις Βρυξέλλες, στις τριάντα Σεπτεμβρίου δύο χιλιάδες δεκατρία.

Done at Brussels on the thirtieth day of September in the year two thousand and thirteen.

Fait à Bruxelles, le trente septembre deux mille treize.

Sastavljeno u Bruxellesu tridesetog rujna dvije tisuće trinaeste.

Fatto a Bruxelles, addì trenta settembre duemilatredici.

Briselē, divi tūkstoši trīspadsmitā gada trīsdesmitajā septembrī.

Priimta du tūkstančiai tryliktų metų rugsėjo trisdešimtą dieną Briuselyje.

Kelt Brüsszelben, a kétezer-tizenharmadik év szeptember havának harmincadik napján.

Magħmul fi Brussell, fit-tletin jum ta’ Settembru tas-sena elfejn u tlettax.

Gedaan te Brussel, de dertigste september tweeduizend dertien.

Sporządzono w Brukseli dnia trzydziestego września roku dwa tysiące trzynastego.

Feito em Bruxelas, em trinta de setembro de dois mil e treze.

Întocmit la Bruxelles la treizeci septembrie două mii treisprezece.

V Bruseli tridsiateho septembra dvetisíctrinásť.

V Bruslju, dne tridesetega septembra leta dva tisoč trinajst.

Tehty Brysselissä kolmantenakymmenentenä päivänä syyskuuta vuonna kaksituhattakolmetoista.

Som skedde i Bryssel den trettionde september tjugohundratretton.

Dibuat di Brussel, pada tanggal tiga puluh bulan September tahun dua ribu tiga belas.

За Европейския съюз

Por la Unión Europea

Za Evropskou unii

For Den Europæiske Union

Für die Europäische Union

Euroopa Liidu nimel

Για την Ευρωπαϊκή Ένωση

For the European Union

Pour l'Union européenne

Za Europsku uniju

Per l'Unione europea

Eiropas Savienības vārdā –

Europos Sąjungos vardu

Az Európai Unió részéről

Għall-Unjoni Ewropea

Voor de Europese Unie

W imieniu Unii Europejskiej

Pela União Europeia

Pentru Uniunea Europeană

Za Európsku úniu

Za Evropsko unijo

Euroopan unionin puolesta

För Europeiska unionen

Untuk Uni Eropa

За Република Индонезия

Por la República de Indonesia

Za Indonéskou republiku

For Republikken Indonesien

Für die Republik Indonesien

Indoneesia Vabariigi nimel

Για τη Δημοκρατία της Ινδονησίας

For the Republic of Indonesia

Pour la République d'Indonésie

Za Republiku Indoneziju

Per la Repubblica di Indonesia

Indonēzijas Republikas vārdā –

Indonezijos Respublikos vardu

Az Indonéz Köztársaság részéről

Għar-Repubblika tal-Indoneżja

Voor de Republiek Indonesië

W imieniu Republiki Indonezji

Pela República da Indonésia

Pentru Republica Indonezia

Za Indonézsku republiku

Za Republiko Indonezijo

Indonesian tasavallan puolesta

För Republiken Indonesien

Untuk Republik Indonesia

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ANNEX I

PRODUCT COVERAGE

The list in this Annex refers to the Harmonised Commodity Description and Coding System established by the International Convention on the Harmonised Commodity Description and Coding System of the World Customs Union.

ANNEX IA

THE HARMONISED COMMODITY CODES FOR TIMBER AND TIMBER PRODUCTS COVERED UNDER THE FLEGT LICENSING SCHEME

Chapter 44:







HS CODES DESCRIPTION Fuel wood, in logs, in billets, in twigs, in faggots or in similar forms; wood in chips or particles; sawdust and wood waste and scrap, whether or not agglomerated in logs, briquettes, pellets or similar forms. 4401.21 – Wood in chips or particles - - coniferous Ex. 4401.22 – Wood in chips or particles - - non coniferous (not from bamboo nor rattan) 4403 Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared. (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union). Ex. 4404.10 Chipwood and the like - coniferous Ex. 4404.20 Chipwood and the like - non-coniferous - - Chipwood Ex. 4404 Hoopwood; split poles; piles, pickets and stakes of wood, pointed but not sawn lengthwise; wooden sticks, roughly trimmed, but not turned, bent or otherwise worked, suitable for the manufacture of walking-sticks, umbrellas, tool handles or the like. (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union). 4406 Railway or tramway sleepers (cross-ties) of wood. (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union). Ex. 4407 Wood sawn or chipped lengthwise, sliced or peeled, planed, sanded or end-jointed, of a thickness exceeding 6 mm. Ex. 4407 Wood sawn or chipped lengthwise, sliced or peeled, not planed, not sanded or not end-jointed, of a thickness exceeding 6 mm. (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union). Sheets for veneering (including those obtained by slicing laminated wood), for plywood or for similar laminated wood and other wood, sawn lengthwise, sliced or peeled, whether or not planed, sanded, spliced or end-jointed, of a thickness not exceeding 6 mm 4408.10 Coniferous 4408.31 Dark Red Meranti, Light Red Meranti, and Meranti Bakau 4408.39 Other, except coniferous, Dark Red Meranti, Light Red Meranti, and Meranti Bakau Ex. 4408.90 Other, except coniferous and tropical wood specified in Subheading Note 2 to this chapter (not from bamboo nor rattan) Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, beaded, moulded, rounded or the like) along any of its edges, ends or faces, whether or not planed, sanded or end-jointed. 4409.10 – Coniferous Ex. 4409.29 – Non-coniferous - other (not from rattan) Particle board, oriented strand board (OSB) and similar board (for example, waferboard) of wood or other ligneous materials, whether or not agglomerated with resins or other organic binding substances Ex. 4410.11 – Of wood - - Particle board (not from bamboo nor rattan) Ex. 4410.12 – Of wood - - Oriented strand board (OSB) (not from bamboo nor rattan) Ex. 4410.19 – Of wood - - Other (not from bamboo nor rattan) Ex. 4411 Fibreboard of wood or other ligneous materials, whether or not bonded with resins or other organic substances (not from bamboo nor rattan) Plywood, veneered panels and similar laminated wood 4412.31 – Other plywood, consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm thickness: - - With at least one outer ply of tropical wood specified in Subheading Note 2 to this Chapter 4412.32 – Other plywood, consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm thickness: - - Other, with at least one outer ply of non-coniferous wood 4412.39 – Other plywood, consisting solely of sheets of wood (other than bamboo), each ply not exceeding 6 mm thickness: - - Other Ex. 4412.94 – Other: - - Blockboard, laminboard and battenboard (not from rattan) Ex. 4412.99 – Other: - - Other: - - - Barecore (wood waste glued together) (not from rattan) and - - - Other (not from rattan) Ex. 4413 Densified wood, in blocks, plates, strips or profile shapes (not from bamboo nor rattan) Ex. 4414 Wooden frames for paintings, photographs, mirrors or similar objects (not from bamboo nor rattan) Ex. 4415 Packing cases, boxes, crates, drums and similar packings, of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood (not from bamboo nor rattan) Ex. 4416 Casks, barrels, vats, tubs and other coopers' products and parts thereof, of wood, including staves (not from bamboo nor rattan) Ex. 4417 Tools, tool bodies, tool handles, broom or brush bodies and handles, of wood; boot or shoe lasts and trees, of wood (not from bamboo nor rattan) Ex. 4418 Builders' joinery and carpentry of wood, including cellular wood panels, assembled flooring panels, shingles and shakes (not from bamboo nor rattan) Ex. 4419 Tableware and kitchenware, of wood (not from bamboo and rattan) Wood marquetry and inlaid wood; caskets and cases for jewellery or cutlery, and similawr articles, of wood. Ex. 4420.90 – Other - - Wood in the form of logs or squared logs with simple process in the surface, carved or finely threaded or painted, does not have significant added-value and no significant change in shape (HS Ex. 4420.90.90.00 in Indonesia) (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union). Other articles of wood Ex. 4421.90 – Other - - Match splints (not from bamboo nor rattan) and - - Other - - - Wooden paving blocks (not from bamboo nor rattan) Ex. 4421.90 – Other - - Other - - - Wood in the form of logs or squared logs with simple process in the surface, carved or finely threaded or painted, does not have significant added-value and no significant change in shape (HS Ex. 4421.90.99.00 in Indonesia) (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union).

Chapter 47:







HS CODES DESCRIPTION Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard: 4701 Mechanical wood pulp 4702 Chemical wood pulp, dissolving grades 4703 Chemical wood pulp, soda or sulphate, other than dissolving grades. 4704 Chemical wood pulp, sulphite, other than dissolving grades 4705 Wood pulp obtained by a combination of mechanical and chemical pulping processes

Chapter 48:







HS CODES DESCRIPTION Ex. 4802 Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non-perforated punch-cards and punch tape paper, in rolls or rectangular (including square) sheets, of any size, other than paper of heading 4801 or 4803 ; hand-made paper and paperboard (not from non-wooden nor recycled material) Ex. 4803 Toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose wadding and webs of cellulose fibres, whether or not creped, crinkled, embossed, perforated, surface-coloured, surface-decorated or printed, in rolls or sheets (not from non-wooden nor recycled material) Ex. 4804 Uncoated kraft paper and paperboard, in rolls or sheets, other than that of heading 4802 or 4803 (not from non-wooden nor recycled material) Ex. 4805 Other Uncoated paper and paperboard, in rolls or sheets, not further worked or processed than as specify in Note 3 to this chapter (not from non-wooden nor recycled material) Ex. 4806 Vegetable parchment, greaseproof papers, tracing papers and glassine and other glazed transparent or translucent papers, in rolls or sheets (not from non-wooden nor recycled material) Ex. 4807 Composite paper and paperboard (made by sticking flat layers of paper or paperboard together with an adhesive), not surface-coated or impregnated, whether or not internally reinforced, in rolls or sheets (not from non-wooden nor recycled material) Ex. 4808 Paper and paperboard, corrugated (with or without glued flat surface sheets), creped, crinkled, embossed or perforated, in rolls or sheets, other than paper of the kind described in heading 4803 (not from non-wooden nor recycled material) Ex. 4809 Carbon paper, self-copy paper and other copying or transfer papers (including coated or impregnated paper for duplicator stencils or offset plates), whether or not printed, in rolls or sheets (not from non-wooden nor recycled material) Ex. 4810 Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or without binder, and with no other coating, whether or not surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size (not from non-wooden nor recycled material) Ex. 4811 Paper, paperboard, cellulose wadding and webs of cellulose fibres, coated, impregnated, covered, surface-coloured, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size, other than goods of the kind described in heading 4803 , 4809 or 4810 (not from non-wooden nor recycled material) Ex. 4812 Filter blocks, slabs and plates, of paper pulp (not from non-wooden nor recycled material) Ex. 4813 Cigarette paper, whether or not cut to size or in the form booklets or tubes (not from non-wooden nor recycled material) Ex. 4814 Wallpaper and similar wall covering; window transparencies of paper (not from non-wooden nor recycled material) Ex. 4816 Carbon paper, self-copy paper and other copying or transfer papers (other than those of heading 4809 ), duplicator stencils and offset plates, of paper, whether or not put up in boxes (not from non-wooden nor recycled material) Ex. 4817 Envelopes, letter cards, plain postcards and correspondence cards, of paper or paper board; boxes, pouches, wallets and writing compendiums, of paper or paperboard, containing an assortment of paper stationary (not from non-wooden nor recycled material) Ex. 4818 Toilet paper and similar paper, cellulose wadding or webs of cellulose fibres, of a kind used for household or sanitary purposes, in rolls of a width not exceeding 36 cm, or cut to size or shape; handkerchief, cleansing tissues, towels, tablecloths, serviettes, napkins for babies, tampons, bed sheets and similar household, sanitary or hospital articles, articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres (not from non-wooden nor recycled material) Ex. 4821 Paper or paperboard labels of all kinds, whether or not printed (not from non-wooden nor recycled material) Ex. 4822 Bobbins, spools, cops and similar support of paper pulp, paper or paper board whether or not perforated or hardened (not from non-wooden nor recycled material) Ex. 4823 Other paper, paperboard, cellulose wadding and webs cellulose fibres, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres (not from non-wooden nor recycled material) Note: Paper products originating from non-wooden or recycled material are accompanied by a formal letter from the Indonesian Ministry of Industry validating the use of non-wooden or recycled materials. Such products will not be FLEGT licensed.

Chapter 94:







HS CODES DESCRIPTION Seats (other than those of heading 94.02 ), whether or not convertible into beds, and parts thereof 9401.61 – Other seats, with wooden frames: - - Upholstered 9401.69 – Other seats, with wooden frames: - - Other Other furniture and parts thereof 9403.30 – Wooden furniture of a kind used in offices 9403.40 – Wooden furniture of a kind used in the kitchen 9403.50 – Wooden furniture of a kind used in the bedroom 9403.60 – Other wooden furniture Ex. 9403.90 – Parts: - - Other (HS 9403.90.90 in Indonesia) Prefabricated buildings Ex. 9406.00 – Other prefabricated buildings: - - Of wood (HS 9406.00.92 in Indonesia)

Chapter 97:







HS CODES DESCRIPTION Original engravings, prints and lithographs. Ex. 9702.00 Wood in the form of logs or squared logs with simple process in the surface, carved or finely threaded or painted, does not have significant added-value and no significant change in shape (HS Ex. 9702.00.00.00 in Indonesia) (Prohibited from export under the Indonesian law. In line with Article 3(3) of the VPA, products under this HS code may not be FLEGT licensed and therefore may not be imported into the Union).

ANNEX IB

THE HARMONISED COMMODITY CODES FOR TIMBER PROHIBITED FROM EXPORT UNDER INDONESIAN LAW

Chapter 44:







HS CODES DESCRIPTION 4403 Wood in the rough, whether or not stripped of bark or sapwood, or roughly squared. Ex. 4404 Hoopwood; split poles; piles, pickets and stakes of wood, pointed but not sawn lengthwise; wooden sticks, roughly trimmed, but not turned, bent or otherwise worked, suitable for the manufacture of walking-sticks, umbrellas, tool handles or the like. 4406 Railway or tramway sleepers (cross-ties) of wood. Ex. 4407 Wood sawn or chipped lengthwise, sliced or peeled, not planed, not sanded or not end-jointed, of a thickness exceeding 6 mm. Wood marquetry and inlaid wood; caskets and cases for jewellery or cutlery, and similar articles, of wood. Ex. 4420.90 – Other - - Wood in the form of logs or squared logs with simple process in the surface, carved or finely threaded or painted, does not have significant added-value and no significant change in shape (HS Ex. 4420.90.90.00 in Indonesia). Other articles of wood. Ex. 4421.90 – Other - - Other - - - Wood in the form of logs or squared logs with simple process in the surface, carved or finely threaded or painted, does not have significant added-value and no significant change in shape (HS Ex. 4421.90.99.00 in Indonesia). Original engravings, prints and lithographs. Ex. 9702.00 Wood in the form of logs or squared logs with simple process in the surface, carved or finely threaded or painted, does not have significant added-value and no significant change in shape (HS Ex. 9702.00.00.00 in Indonesia).

ANNEX II

LEGALITY DEFINITION

INTRODUCTION

Indonesian timber is deemed legal when its origin and production process as well as subsequent processing, transport and trade activities are verified as meeting all applicable Indonesian laws and regulations.

Indonesia has five legality standards articulated through a series of principles, criteria, indicators and verifiers, all based on the underlying laws, regulations and procedures. These standards can be further divided into sub-standards as described in the TLAS Guidelines.

The Indonesian legal framework also includes sustainable forest management standards defined for permit holders operating within production forest zones on state-owned land. All permit holders must comply with the criteria of legality as stipulated in the legality standards. Not later than the date when their first legality certification expires, permit holders operating within production forest zones on state-owned land must comply with both the legality standard and the sustainable forest management standard, as stipulated in the TLAS Guidelines.

Indonesia is committed to regularly review and improve the legality standards through a multistakeholder process.

The five legality standards are:

— Legality Standard 1 : the standard for concessions within production forest zones on state-owned lands: Natural Forests, Plantation Forest, Ecosystem Restoration, Forest Management Right (Hak Pengelolaan);

— Legality Standard 2 : the standard for community plantation forests and community forests within production forest zones on state-owned lands;

— Legality Standard 3 : the standard for privately-owned forests;

— Legality Standard 4 : the standard for timber utilisation rights within non-forest zones or from convertible production forest on state-owned lands;

— Legality Standard 5 : the standard for primary and downstream forest based industries and traders.

The five legality standards apply to different types of timber permits as set out in the following table:







Permit type or Right Description Land ownership/resource management or utilisation Applicable legality standard IUPHHK-HA/HPH Permit to utilise timber from natural production forests State owned/company managed 1 IUPHHK-HTI/HPHTI Permit to establish and manage industrial plantation forest State owned/company managed 1 IUPHHK-RE Permit for forest ecosystem restoration State owned/company managed 1 Forest management right (Perum Perhutani) Right to manage plantation forest State owned/company managed (state company) 1 IUPHHK- HTR Permit for community or private forest plantation State owned/community or privately managed 2 IUPHHK-HKM Permit for community forest management State owned/community managed 2 IUPHHK-HD Permit for village forest management State owned/managed by a single village 2 IUPHHK-HTHR Permit to utilize timber from reforestation areas State owned/community or privately managed 2 Private Land No permit required Privately owned/privately utilised 3 IPK/ILS Permit to utilise timber from non-forest zones or from convertible production forest State owned/privately utilised 4 IUIPHHK Permit for establishing and managing a primary processing company Not applicable 5 IUI Lanjutan or IPKL Permit for establishing and managing a secondary processing company Not applicable 5 TPTs (TPT, TPT-KB, TPT-KO) Registered timber/processed-timber depots Not applicable 5 IRT Household industry Not applicable 5 ETPIK Non-Producer Non-producer registered exporters Not applicable 5

LEGALITY STANDARD 1: THE STANDARDS FOR CONCESSIONS WITHIN PRODUCTION FOREST ZONES







No Principles Criteria Indicators Verifiers Related Regulations (1) 1 P1. Legal status of area and right to utilise K1.1. Forest management unit (concessionaires) is located within the production forest zone. 1.1.1. Permit holder can demonstrate that the timber utilisation permit (IUPHHK) is valid. Forest concession right certificate. Government Regulation PP72/2010 Regulation of the Minister for Forestry P12/2010 Regulation of the Minister for Forestry P.30/2014 Regulation of the Minister for Forestry P.31/2014 Regulation of the Minister for Forestry P.33/2014 Regulation of the Minister for Forestry P.76/2014 Proof of payment for the timber forest product utilisation permit. Proof of other legal area utilization permit (if any) 2. P2. Comply with the system and procedures for harvesting. K2.1. Permit holder possesses a harvest plan for the cutting area that has been approved by the competent administrative authorities. 2.1.1. The competent administrative authority has approved the work plan documents: master plan, annual work plan, including their attachments. The approved master plan & attachments (drawn up based on a comprehensive forest inventory conducted by technically competent staff) Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P56/2009 Regulation of the Minister for Forestry P60/2011 Regulation of the Minister for Forestry P.33/2014 The approved annual work plan (drawn up based on the master plan) Maps (drawn up by technically competent staff, which describe the layout and boundaries of the areas covered by the plan of work) Map indicating logging exclusion zones within the Annual Work Plan and evidence of implementation on the ground. Harvesting locations (blocks or compartments) on the map are clearly marked and verified on the ground. K2.2. Work plan is valid 2.2.1. Forest permit holder has a valid work plan in compliance with applicable regulations Timber forest product utilisation master plan document & attachments (on going applications are acceptable). Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P56/2009 Regulation of the Minister for Forestry P60/2011 The location and extractable volumes of natural forest logs within areas to be harvested correspond with the work plan. 3. P3. The legality of the transport or the change of ownership of round logs. K3.1. Permit holders ensure that all the logs transported from a log yard in the forest to a primary forest products industry, or registered log trader, including via an intermediate log yard, is physically identified and accompanied by valid documents. 3.1.1. All the large diameter logs harvested or commercially extracted have been reported in a Timber Production Report Approved Timber Production Report documents Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 3.1.2. All the timber transported out of the permit areas is accompanied by a valid transport document. Valid transport documents and attachments accompany logs from the log yard to primary forest products industry or registered log trader, including via intermediate log yards Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 3.1.3. The round logs have been harvested in the areas set out in the forest utilisation permit Timber administration marks/barcode (PUHH) on logs Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 The application of the timber administration marks/barcode. 3.1.4. All logs transported from Log Yard are accompanied by valid transport document Valid transport document Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 K3.2. Permit holder has settled the payment of applicable fees and levies for the commercial extraction of timber 3.2.1. Permit holder shows proof of payment of Reforestation Fund and/or Forest Resources Fee, which corresponds to the log production and the applicable tariff. Payment Orders for Reforestation Funds and/or Forest Resources Fee. Government Regulation PP22/1997 Government Regulation PP51/1998 Government Regulation PP59/1998 Regulation of the Minister for Forestry P18/2007 Regulation of the Minister for Trade 22/2012 Proof of Deposit made for the Payment of Reforestation Fund and/or Forest Resources Fee and the Payment Slips. Payment of the Reforestation Funds and/or Forest Resources Fee is consistent with log production and the applicable tariff. K3.3. Inter-island transportation and trade 3.3.1. Permit holders who ship logs are Registered Inter- Island Timber Traders (PKAPT). PKAPT documents Regulation of the Minister for Industry and Trade 68/2003 Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003 3.3.2. The vessel used to transport round logs is Indonesian flagged and possesses a valid permit to operate. Registration documents which show the identity of the vessel and valid permit. Regulation of the Minister for Industry and Trade 68/2003 Joint Regulation of the Minister for Forestry, Minister for Transportation, and Minister for Industry and Trade 22/2003 K.3.4. Compliance of V-Legal marking 3.4.1. V-Legal marking implementation V-Legal marking is applied accordingly Regulation of the Minister for Forestry P43/2014 4. P4. Compliance with environmental and social aspects related to timber harvesting K4.1. Permit holder has an approved applicable environmental impact assessment (EIA) document and has implemented measures identified in it. 4.1.1. Permit holder has applicable EIA documents approved by the competent authorities which cover the entire work area. Applicable EIA documents Government Regulation PP27/2012 Regulation of the Minister for Environment 05/2012 4.1.2. Permit holder has environmental management plan and environmental monitoring plan implementation reports indicating the actions taken to mitigate environmental impacts and provide social benefits. Environmental management plan and environmental monitoring plan documents Government Regulation PP27/2012 Regulation of the Minister for Environment 05/2012 Proof of implementation of the environmental management plan and monitoring of significant environmental and social impacts 5. P5. Compliance with labour laws and regulations K5.1. Fulfilment of occupational safety and health (OSH) requirements 5.1.1. Availability of OSH procedures and their implementation Implementation of OSH procedures Government Regulation PP50/2012 Regulation of the Minister for Manpower & Transmigration 8/2010 Regulation of the Minister for Manpower & Transmigration 609/2012 OSH equipment Accident records K5.2. Fulfilment of workers' rights 5.2.1. Freedom of association for workers Workers belong to workers unions or company policies allow workers to establish or get involved in union activities Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011 5.2.2. Existence of collective labour agreements Collective labour agreement documents or company policy documents on labour rights Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011 5.2.3. Company does not employ minors/underage workers There are no underage workers Act 23/2002 Act 13/2003 (1) Indicates main regulations, which also covers subsequent amendments.

LEGALITY STANDARD 2: THE STANDARD FOR COMMUNITY PLANTATION FORESTS AND COMMUNITY FORESTS WITHIN PRODUCTION FOREST ZONES







No Principles Criteria Indicators Verifiers Related Regulations 1. P1. Legal status of area and right to utilise K1.1. Forest management unit is located within the production forest zone. 1.1.1. Permit holder can demonstrate that the timber utilisation permit (IUPHHK) is valid. Forest concession right certificate Regulation of the Minister for Forestry P37/2007 Regulation of the Minister for Forestry P49/2008 Regulation of the Minister for Forestry P12/2010 Regulation of the Minister for Forestry P55/2011 Proof of payment for the timber forest product utilisation permit. K1.2. Business unit in the form of group. 1.2.1. The business group is legally established. Deed or proof of establishment. Regulation of the Minister for Forestry P43/2014 2. P2. Comply with the system and procedures for harvesting K2.1. Permit holder has a harvesting plan for the cutting area that has been approved by the competent administrative authorities 2.1.1. The competent administrative authority has approved the annual work plan document. Approved annual work plan document. Regulation of the Minister for Forestry P62/2008 Map indicating logging exclusion zones in the annual work plan and evidence of implementation on the ground. Harvesting block location are clearly marked and can be verified on the ground. K2.2. Work plan is valid 2.2.1. Forest permit holder has a valid work plan in compliance with applicable regulations. Timber Forest Product Utilisation Master Plan document and attachments (on-going applications are acceptable) Regulation of the Minister for Forestry P62/2008 The location and extractable volumes of logs within the area to be established to timber estate are to correspond to the work plan. K2.3. Permit holders ensure that all logs transported from a log yard in the forest to a primary forest products industry or registered log trader, including via an intermediate log yard are physically identified and accompanied by valid documents. 2.3.1. All logs which have been harvested or commercially extracted are reported in the Timber Production Report. Approved Timber Production Report documents Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 2.3.2. All logs transported out of the permit area are accompanied by a legal transport document. Legal transport documents and relevant attachments from the Log Yard to the Intermediate Log Yard and from Intermediate Log Yard to primary industry and/or registered log trader. Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 2.3.3. The round logs have been harvested in the areas set out in the forest utilisation permit Timber administration marks/barcode (PUHH) on logs. Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 Permit holder applies timber marking consistently. 2.3.4. Permit holder can show the existence of log transport documents accompanying logs transported from log yard. Log Transport Document to which is attached a log list document. Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 K2.4. Permit holder has paid applicable fees and levies required for the commercial extraction of timber 2.4.1. Permit holders show proof of payment of Forest Resources Fee which corresponds to the log production and the applicable tariff. Payment Order for Forest Resources Fee Regulation of the Minister for Forestry P18/2007 Regulation of the Minister for Trade 22/2012 Proof of Payment of Forest Resources Fee Payment of the Forest Resources Fee is consistent with log production and the applicable tariff. K2.5. Compliance of V-Legal marking 2.5.1. V-Legal marking implementation V-Legal marking is applied accordingly Regulation of the Minister for Forestry P43/2014 3. P3. Compliance with environmental and social aspects pertaining to timber harvesting K3.1. Permit holder has an approved applicable environmental impact assessment (EIA) document and has implemented measures identified in it. 3.1.1. Permit holder has applicable environmental impact assessment documents approved by the competent authorities which cover the entire work area. Applicable EIA documents Government Regulation PP27/2012 Regulation of the Minister for Environment 05/2012 3.1.2. Permit holder has environmental management and monitoring implementation reports taken to mitigate environmental impacts and provide social benefits. Relevant environmental management and monitoring documents Government Regulation PP27/2012 Regulation of the Minister for Environment 05/2012 Proof of implementation of environmental management and monitoring of significant environmental and social impacts 4 P4. Compliance with labour laws and regulations K4.1. Fulfilment of occupational safety and health (OSH) requirements 4.1.1. Availability of OSH procedures and their implementation Implementation of OSH procedures Government Regulation PP50/2012 Regulation of the Minister for Manpower & Transmigration 8/2010 Regulation of the Minister for Manpower & Transmigration 609/2012 OSH equipment K4.2. Fulfilment of workers' rights 4.2.1. Company does not employ minors/underage workers There are no underage workers Act 23/2002 Act 13/2003

LEGALITY STANDARD 3: THE STANDARD FOR PRIVATELY-OWNED FORESTS







No. Principles Criteria Indicators Verifiers Related Regulations 1. P1. Timber ownership can be verified K1.1. Legality of ownership or land title in relation to the timber harvesting area. 1.1.1. Private land or forest owner can prove ownership or use rights of the land. Valid land ownership or land tenure documents (land title documents recognized by competent authorities) Act 5/1960 Regulation of the Minister for Forestry P33/2010 Government Regulation PP12/1998 Regulation of the Minister for Trade 36/2007 Regulation of the Minister for Trade 37/2007 Act 6/1983 Regulation of the Minister for Forestry P43/2014 Land Cultivation Right. Deed of Establishment of the Company Business licence for companies engaging in trading business (SIUP) Company registration (TDP) Tax payer registration (NPWP) OSH Document Collective labour agreement documents or company policy documents on labour rights Map of the area of private forest and boundaries delineated on the ground. 1.1.2. Management units (either owned individually or by a group) demonstrate valid timber transportation documents. Log Transport Document Regulation of the Minister for Forestry P30/2012 1.1.3. Management units show proof of payment of applicable charges related to trees present prior to the transfer of rights or tenure of the area. Proof of payment of Reforestation Fund and/or Forest Resources Fee and compensation to the state for the value of stumpage cut. Regulation of the Minister for Forestry P18/2007 K.1.2. Business unit in the form of groups are legally registered 1.2.1. The business groups are legally established. Deed or proof of establishment Regulation of the Minister for Forestry P43/2014 K.1.3. Compliance of V-Legal marking 1.3.1. V-Legal marking implementation V-Legal marking is applied accordingly Regulation of the Minister for Forestry P43/2014 2. P2. Compliance with labour laws and regulations in the case of areas subject to Land Cultivation Rights K2.1. Fulfilment of occupational safety and health (OSH) requirements 2.1.1. Availability of OSH procedures and their implementation Implementation of OSH procedures Government Regulation PP50/2012 Regulation of the Minister for Manpower & Transmigration 8/2010 Regulation of the Minister for Manpower & Transmigration 609/2012 OSH equipment Accident records K2.2. Fulfilment of workers' rights 2.2.1. Freedom of association for workers Workers belong to workers unions or company policies allow workers to establish or get involved in union activities Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2001 2.2.2. Existence of collective labour agreements Collective labour agreement documents or company policy documents on labour rights Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011 2.2.3. Company does not employ minors underage workers There are no underage workers Act 23/2002 Act 13/2003 3 P3. Compliance with environmental and social aspects related to timber harvesting K3.1. Land Cultivation Rights holder or private-forest owners has an approved applicable environmental impact assessment (EIA) document and has implemented measures identified in it. (if required by regulation) 3.1.1. Land Cultivation Rights holder or private-forest owners has applicable EIA documents approved by the competent authorities which cover the entire work area. Applicable EIA documents Government Regulation PP27/2012 Regulation of the Minister for Environment 05/2012 3.1.2. Land Cultivation Rights has environmental management plan and environmental monitoring plan implementation reports Environmental management plan and environmental monitoring plan documents Government Regulation PP27/2012 Regulation of the Minister for Environment 05/2012 Proof of implementation of the environmental management plan and monitoring

LEGALITY STANDARD 4: THE STANDARD FOR TIMBER UTILISATION RIGHTS WITHIN NON-FOREST ZONES OR FROM CONVERTIBLE PRODUCTION FOREST







No. Principles Criteria Indicators Verifiers Related Regulations 1. P1. Legal status of area and right to utilise K1.1. Timber harvesting permit within non-forest zone without altering the legal status of the forest. 1.1.1. Harvesting operation authorised under Other Legal Permit (ILS)/conversion permits (IPK) in a lease area Note: This also applies for area previously categorized as Reforestation-based Plantation Forest (HTHR) ILS/IPK permits for harvesting operations in the lease area (including applicable environmental impact assessment/EIA document of non forestry business) Government Regulation PP27/2012 Regulation of the Minister for Forestry P18/2011 Regulation of the Minister for Forestry P59/2011 Regulation of the Minister for Environment 05/2012 Maps attached to the ILS/IPK permits of the lease area and evidence of compliance on the ground. K1.2. Timber harvesting permit within non-forest zone which leads to a change in the legal status of the forest 1.2.1. Timber harvesting authorised under a land conversion permit (IPK) Note: This also applies for area previously categorized as Reforestation-based Plantation Forest (HTHR). Business permit and maps attached to the permit (including applicable environmental impact assessment/EIA document of non forestry business). Government Regulation PP27/2012 Regulation of the Minister for Forestry P33/2010 Regulation of the Minister for Forestry P14/2011 Regulation of the Minister for Forestry P59/2011 Regulation of the Minister for Environment 05/2012 IPK in conversion areas Maps attached to IPK Documents authorising changes in the legal status of the forest (this requirement applies to both IPK permit holders and business permit holders) 1.2.2. Conversion permit (IPK) for transmigration settlement IPK in conversion areas Regulation of the Minister for Forestry P14/2011 Maps attached to IPK K1.3. Timber harvesting permit within non-forest zone. 1.3.1. Timber harvesting authorised under a land conversion permit (IPK) within non-forest zone. Planning document of IPK Government Regulation PP27/2012 Regulation of the Minister for Forestry P14/2011 Regulation of the Minister for Environment 05/2012 Business permit and maps attached to the permit (including applicable environmental impact assessment/EIA document of non forestry business). IPK in conversion areas Maps attached to IPK 1.3.2. Conversion permit (IPK) for transmigration settlement IPK in conversion areas Regulation of the Minister for Forestry P14/2011 Maps attached to IPK 2. P2. Compliance with legal systems and procedures for tree harvesting and for the transportation of logs K2.1. IPK/ILS plan and implementation complies with land use planning. 2.1.1. Approved work plan for the areas covered by IPK/ILS IPK/ILS work plan documents Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P53/2009 2.1.2. The permit holder can demonstrate that the transported logs are from areas under valid land conversion permit/other use permits (IPK/ILS) Forest inventory documents Regulation of the Minister for Forestry P62/2008 Regulation of the Minister for Forestry P41/2014 Timber Production Report documents (LHP) K2.2. Payment of government fees and levies and compliance with timber transportation requirements 2.2.1. Evidence of payment of charges Payment Order for Forest Resources Fee Regulation of the Minister for Forestry P18/2007 Proof of payment of Forest Resources Fee Payment of the Forest Resources Fee is consistent with log production and the applicable tariff. 2.2.2. Permit holder has valid timber transportation documents Logs Transportation Invoice (FAKB) and log list for small diameter logs Regulation of the Minister for Forestry P41/2014 Log Legality Document (SKSKB) and log list for large diameter logs K2.3. Compliance of V-Legal marking 2.3.1. V-Legal marking implementation V-Legal marking is applied accordingly Regulation of the Minister for Forestry P43/2014 3. P3. Compliance with labour laws and regulations K3.1. Fulfilment of occupational safety and health (OSH) requirements 3.1.1. Availability of OSH procedures and their implementation OSH procedures Government Regulation PP50/2012 Regulation of the Minister for Manpower & Transmigration 8/2010 Regulation of the Minister for Manpower & Transmigration 609/2012 OSH equipment Accident records K3.2. Fulfilment of workers' rights 3.2.1. Company does not employ minors/underage workers There are no underage workers Act 23/2002 Act 13/2003

LEGALITY STANDARD 5: THE STANDARD FOR PRIMARY AND DOWNSTREAM FOREST-BASED INDUSTRIES AND TRADERS







No. Principles Criteria Indicators Verifiers Related Regulations 1. P1. Business units support the realization of legal trade in timber. K1.1. Timber forest product processing industry is in possession of valid permits, in the form of: (a) Processing industry, and/or (b) Exporters of processed products 1.1.1. Processing industry units are in possession of valid permits The deed of establishment of the company and latest amendments to the deed (the Company's Establishment Deed) Act 6/1983 Act 3/2014 Government Regulation PP74/2011 Government Regulation PP27/2012 Regulation of the Minister for Law & Human Rights M.01-HT.10/2006 Regulation of the Minister for Trade 36/2007 Regulation of the Minister for Trade 37/2007 Regulation of the Minister for Industry 41/2008 Regulation of the Minister for Home Affairs 27/2009 Regulation of the Minister for Trade 39/2011 Regulation of the Minister for Environment 05/2012 Regulation of the Minister for Trade 77/2013 Regulation of the Minister for Forestry P9/2014 Regulation of the Minister for Forestry P55/2014 Permit to engage in trading business (Business Licence/SIUP) or trading permit, which may be Industrial Business Permit (IUI) or Industrial Registration Certificate (TDI) Nuisance/disturbance permit (permit issued to the company for affecting the environment around which it operates its business) Company Registration Certificate (TDP) Tax Payer Identification Number (NPWP) Availability of applicable environmental impact assessment documents Availability of Industrial Business Permit (IUI) or Permanent Business Permit (IUT) or Industrial Registration Certificate (TDI) Availability of Raw Materials Stock Planning (RPBBI) for primary industry. 1.1.2. Exporters of processed timber products have valid permits as both producers and exporters of timber products. The exporters have the status of Registered Exporters of Forestry Industry Products (ETPIK). Regulation of the Minister for Trade 97/2014 K1.2. Household industry is an Indonesian legal entity 1.2.1. Household industry owner demonstrates formal identity ID card Regulation of the Minister for Forestry P.43/2014 K1.3. Importers of wood-based forest products are in possession of valid permits and implement due diligence 1.3.1. Importers of wood-based forest products have valid permits The importers have the status of Registered Importers. Regulation of the Minister for Trade 78/2014 1.3.2. Importers have due diligence system The importers have the due diligence guidelines/procedures and proof of its implementation. Regulation of the Minister for Forestry P.43/2014 K1.4. Registered depots or registered non-producer exporters are in possession of valid permits 1.4.1. Registered depots have valid permit Permit document from Head of Provincial/District Forestry office. Regulation of the Minister for Forestry P30/2012 Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 1.4.2. Non-producer registered-exporters have valid permits. The deed of establishment of the company and latest amendments to the deed (the Company's Establishment Deed) Act 6/1983 Government Regulation PP74/2011 Regulation of the Minister for Law & Human Rights M.01-HT.10/2006 Regulation of the Minister for Trade 36/2007 Regulation of the Minister for Trade 37/2007 Regulation of the Minister for Trade 39/2011 Regulation of the Minister for Trade 77/2013 Regulation of the Minister for Forestry P43/2014 Regulation of the Minister for Trade 97/2014 Permit to engage in trading business (Business Licence/SIUP) or trading permit. Company Registration Certificate (TDP) Tax Payer Identification Number (NPWP) Registration of the traders as Non-Producer Exporters of Forestry Industry Products (ETPIK Non-Produsen). Supply agreement or contract with non-ETPIK small-scale industry which has timber legality certificate (S-LK) or Supplier's Declaration of Conformity/SDoC (DKP) 1.4.3. Business units have applicable environmental impact assessment (EIA) documents Applicable EIA documents Government Regulation PP27/2012 Regulation of the Minister for Environment 13/2010 Regulation of the Minister for Environment 05/2012 K1.5. Business units in the form of: groups (of SMEs or artisans/household industries or depots) or cooperatives (artisans/household industries) are legally registered or with proof of establishment Note: Not applicable for non-producer registered-exporters. 1.5.1. The business units in the form of groups or cooperatives are legally established. Deed or proof of establishment Regulation of the Minister for Forestry P.43/2014 Tax Payer Registration (NPWP) in the case of cooperatives 1.5.2. Organizational structure of the cooperatives Cooperative decision on organizational structure Regulation of the Minister for Forestry P.43/2014 1.5.3. Type of the cooperative businesses Documents of the cooperative business plan or document that shown the cooperative type Regulation of the Minister for Forestry P.43/2014 1.5.4. Formal identity of each cooperatives members ID cards Regulation of the Minister for Forestry P.43/2014 2. P2. Business units apply timber tracking system which ensures that the origin of the timber can be traced K2.1. Existence and application of a system which traces timber. 2.1.1. Business units can demonstrate that the timber received comes from legal sources. Sales and purchase documents and or contract of supply of materials and or proof of purchase. Regulation of the Minister for Forestry P30/2012 Regulation of the Minister for Forestry P.9/2014 Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 Regulation of the Minister for Trade P78/2014 Approved report on the transfer of timber and/or proof of transfer and or official report on the examination of timber; letter of attestation of the legality of forest products Imported timber is accompanied by Supplier's Declaration of Conformity or legality certificate (S-LK). Note: Only applicable in the case of artisan/household industry. Timber transport documents Transport documents (Nota) with corresponding official reports from the officer of the local authority with respect to used timber from demolished buildings/structures, unearthed timber and buried timber. Transport documents in the form of Nota for industrial waste wood Documents/reports on changes in the stock of logs/timber/products. Legality certificate (S-PHPL/S-LK) or suppliers declaration of conformity (DKP) Supporting documents for, Raw Materials Stock Planning (RPBBI) for primary industry 2.1.2. Importers have valid documents that proof the imported timber comes from legal sources. Note: Not applicable for artisan/household industry. Import Notification (PIB) President Decree 43/1978 Regulation of the Minister for Trade 78/2014 Packing list Invoice B/L (bill of lading) Import Declaration and Import Recommendation Proof of payment of import duty. Other relevant documents (including CITES permits) for types of wood whose trade is restricted Proof of utilization of imported timber 2.1.3. Business units apply a timber tracking system and operate within permitted production levels Note: Not applicable for depots and non-producer timber registered. Tally sheets on the use of raw materials and on production outputs. Note: Not applicable for artisan/household industry. Regulation of the Minister for Industry 41/2008 Regulation of the Minister for Forestry P30/2012 Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 Regulation of the Minister for Forestry P55/2014 Output reports on the production of processed products. The production of the unit does not exceed the permitted production capacity. Note: Not applicable for artisan/household industry. Segregation/separation of produced products from impounded timbers. 2.1.4. Production process with another party (another industry or with artisans/household industries) provides for tracking of timber. Note: Not applicable for artisan/household industry, depots, and non-producer timber registered. Legality certificate (S-LK) or suppliers declaration of conformity (DKP) Regulation of the Minister for Forestry P48/2006 Regulation of the Minister for Trade 36/2007 Regulation of the Minister for Industry 41/2008 Regulation of the Minister for Forestry P.43/2014 Regulation of the Minister for Forestry P55/2014 Service contract for product processing with another party Letter of attestation of the raw material Segregation/separation of produced products. Documentation of raw materials, production processes, and where applicable if export is conducted through service agreement with other company. K2.2. Transfer of processed wood products from supplier to non-producer registered-exporters 2.2.1. Business units are able to demonstrate that the acquired products are from legal sources. Products are purchased from listed non-ETPIK industries partners that have legality certificate (S-LK) or SDoC (DKP). Regulation of the Minister for Forestry P.43/2014 Transport document. Documents/reports on changes in the stock of products. 3. P3. Legality of the trade or the change of ownership of timber. K3.1. Trade or transfer of timber product for domestic market complies with applicable legislation Note: Not applicable for non-producer registered-exporters 3.1.1. Trade or transfer of timber for domestic market accompanied with transport document. Transport document Joint Regulation of the Minister for Forestry22/2003, Minister for Transportation KM3/2003, and Minister for Industry and Trade 33/2003 Regulation of the Minister for Forestry P30/2012 Regulation of the Minister for Forestry P41/2014 Regulation of the Minister for Forestry P42/2014 K3.2. Shipping of processed timber for export complies with applicable legislation. Note: Not applicable for artisan/household industry and depots. 3.2.1. Shipping of processed timber for export with Export Notification (PEB) documents Products for export Act 17/2006 (Customs) Presidential Decree 43/1978 Regulation of the Minister for Forestry 447/2003 Regulation of the Minister for Finance 223/2008 Regulation of the Directorate-General for Customs P-40/2008 Regulation of the Directorate-General for Customs P-06/2009 Regulation of the Minister of Trade P50/2013 Regulation of the Minister for Trade P97/2014 PEB Packing list Invoice B/L (bill of lading) Export licence documents (V-Legal) Results of technical verification (Surveyor's Report) for products for which technical verification is mandatory Proof of payment of export duty, where applicable. Other relevant documents (including CITES permits) for types of wood whose trade is restricted K.3.3. Compliance of V-Legal marking 3.3.1. V-Legal marking implementation V-Legal marking is applied accordingly Regulation of the Minister for Forestry P43/2014 4. P4. Fulfilment of labour regulations as far as processing industry is concerned K.4.1. Fulfilment of occupational safety and health (OSH) requirements 4.1.1. Availability of OSH procedures and implementation OSH procedures or In the case of artisan/household industry, first aid and safety equipment Government Regulation PP50/2012 Regulation of the Minister for Manpower & Transmigration 8/2010 Regulation of the Minister for Manpower & Transmigration 609/2012 Implementation of OSH procedures. Accident records Note: Not applicable for artisan/household industry. K.4.2. Fulfilment of the rights of workers Note: Not applicable for artisan/household industry 4.2.1. Freedom of association for workers Trade union or a company policy that allows employees/workers to establish a trade union or get involved in trade union activities Regulation of the Minister for Manpower & Transmigration 16/2001 4.2.2. Existence of collective labour agreement or company policy on labour rights Availability of collective labour agreement or company policy documents on labour rights Act 13/2003 Regulation of the Minister for Manpower & Transmigration 16/2011 4.2.3. Company does not employ minors underage workers There are no underage workers Act 23/2002 Act 13/2003

▼B

ANNEX III

CONDITIONS FOR THE RELEASE FOR FREE CIRCULATION IN THE UNION OF INDONESIAN FLEGT-LICENSED TIMBER PRODUCTS

1. LODGING OF THE LICENCE

1.1. The licence shall be lodged with the competent authority of the Union Member State in which the shipment covered by that licence is presented for release for free circulation. This can be done electronically or by other expeditious means.

1.2. A licence shall be accepted if it meets all the requirements set out in Annex IV and no further verification in accordance with sections 3, 4 and 5 of this Annex is deemed necessary.

1.3. A licence may be lodged before the arrival of the shipment it covers.

2. ACCEPTANCE OF THE LICENCE

2.1. Any licence which does not meet the requirements and specifications set out in Annex IV is invalid.

2.2. Erasures in or alterations to a licence shall only be accepted if such erasures or alterations have been validated by the Licensing Authority.

2.3. A licence shall be considered as void if it is lodged with the competent authority after the expiry date indicated in the licence. The extension of the validity of a licence shall not be accepted unless that extension has been validated by the Licensing Authority.

2.4. A duplicate or replacement licence shall not be accepted unless it has been issued and validated by the Licensing Authority.

2.5. Where further information is required on the licence or on the shipment, in accordance with this Annex, the licence shall be accepted only after the required information has been received.

2.6. Where the volume or weight of the timber products contained in the shipment presented for release for free circulation does not deviate by more than ten per cent from the volume or weight indicated in the corresponding licence, it shall be considered that the shipment conforms to the information provided in the licence in so far as volume or weight is concerned.

2.7. The competent authority shall, in accordance with the applicable legislation and procedures, inform the customs authorities as soon as a licence has been accepted.

3. VERIFICATION OF THE VALIDITY AND AUTHENTICITY OF THE LICENCE

3.1. In case of doubt concerning the validity or authenticity of a licence, a duplicate or a replacement licence, the competent authority may request additional information from the Licence Information Unit.

3.2. The Licence Information Unit may request the competent authority to send a copy of the licence in question.

3.3. If necessary the Licensing Authority shall withdraw the licence and issue a corrected copy which will be authenticated by the stamped endorsement "Duplicate" and forward it to the competent authority.

3.4. If no answer is received by the competent authority within twenty-one calendar days of the request for additional information from the Licence Information Unit, as specified in section 3.1 of this Annex, the competent authority shall not accept the licence and shall act in accordance with applicable legislation and procedures.

3.5. If the validity of the licence is confirmed, the Licence Information Unit shall inform the competent authority forthwith, preferably by electronic means. The copies returned shall be authenticated by the stamped endorsement "Validated on".

3.6. If following the provision of additional information and further investigation, it is determined that the licence is not valid or authentic the competent authority shall not accept the licence and shall act in accordance with applicable legislation and procedures.

4. VERIFICATION OF THE CONFORMITY OF THE LICENCE WITH THE SHIPMENT

4.1. If further verification of the shipment is considered necessary before the competent authorities can decide whether a licence can be accepted, checks may be carried out to establish whether the shipment in question conforms to the information provided in the licence and/or to the records relating to the relevant licence held by the Licensing Authority.

4.2. In case of doubt as to the conformity of the shipment with the licence the competent authority concerned may seek further clarification from the Licence Information Unit.

4.3. The Licence Information Unit may request the competent authority to send a copy of the licence or the replacement in question.

4.4. If necessary, the Licensing Authority shall withdraw the licence and issue a corrected copy which must be authenticated by the stamped endorsement "Duplicate" and forwarded to the competent authority.

4.5. If no answer is received by the competent authority within twenty one calendar days upon request of the further clarification as specified in section 4.2 above, the competent authority shall not accept the licence and shall act in accordance with applicable legislation and procedures.

4.6. If following the provision of additional information and further investigation, it has been determined that the shipment in question does not conform with the licence and/or to the records relating to the relevant licence held by the Licensing Authority, the competent authority shall not accept the licence and shall act in accordance with applicable legislation and procedures.

5. OTHER MATTERS

5.1. Costs incurred while the verification is being completed shall be at the expense of the importer, except where the applicable legislation and procedures of the Union Member State concerned determine otherwise.

5.2. Where persistent disagreements or difficulties arise from the verification of licences the matter may be referred to the JIC.

6. EU CUSTOMS DECLARATION

6.1. The number of the licence that covers the timber products that are being declared for release for free circulation shall be entered in Box 44 of the Single Administrative Document on which the customs declaration is made.

6.2. Where the customs declaration is made by means of a data-processing technique the reference shall be provided in the appropriate box.

7. RELEASE FOR FREE CIRCULATION

7.1. Shipments of timber products shall be released for free circulation only when the procedure described in section 2.7 above has been duly completed.

ANNEX IV

REQUIREMENTS AND TECHNICAL SPECIFICATIONS OF FLEGT LICENCES

1. GENERAL REQUIREMENTS OF FLEGT LICENCES

1.1. A FLEGT licence may be in paper or electronic form.

1.2. Both paper-based and electronic licences shall provide the information specified in Appendix 1, in accordance with the notes for guidance set out in Appendix 2.

1.3. A FLEGT licence shall be numbered in a manner that allows the Parties to distinguish between a FLEGT licence covering shipments destined for Union markets and a V-Legal Document for shipments destined for non-Union markets.

1.4. A FLEGT licence shall be valid from the date on which it is issued.

1.5. The period of validity of a FLEGT licence shall not exceed four months. The date of expiry shall be indicated on the licence.

1.6. A FLEGT licence shall be considered void after it has expired. In the event of force majeure or other valid causes beyond the control of the licensee, the Licensing Authority may extend the period of validity for an additional two months. The Licensing Authority shall insert and validate the new expiry date when granting such an extension.

1.7. A FLEGT licence shall be considered void and returned to the Licensing Authority if the timber products covered by that licence have been lost or destroyed prior to its arrival in the Union.

2. TECHNICAL SPECIFICATIONS WITH REGARD TO PAPER-BASED FLEGT LICENCES

2.1. Paper-based licences shall conform to the format set out in Appendix 1.

2.2. The paper size will be standard A4. The paper will have watermarks showing a logo that will be embossed on the paper in addition to the seal.

2.3. A FLEGT licence shall be completed in typescript or by computerised means. It may be completed in manuscript, if necessary.

2.4. The stamps of the Licensing Authority shall be applied by means of a stamp. However, an embossment or perforation may be substituted for the Licensing Authority stamp.

2.5. The Licensing Authority shall use a tamper-proof method to record the quantity allocated in such a way as to make it impossible to insert figures or references.

2.6. The form shall not contain any erasures or alterations, unless those erasures or alterations have been authenticated by the stamp and signature of the Licensing Authority.

2.7. A FLEGT licence shall be printed and completed in English.

3. COPIES OF FLEGT LICENCES

3.1. A FLEGT licence shall be drawn up in seven copies, as follows: i. an "Original" for the competent authority on white paper; ii. a "Copy for Customs at destination" on yellow paper; iii. a "Copy for the Importer" on white paper; iv. a "Copy for the Licensing Authority" on white paper; v. a "Copy for the Licensee" on white paper; vi. a "Copy for the Licence Information Unit" on white paper; vii. a "Copy for Indonesian Customs" on white paper

3.2. The copies marked "Original", "Copy for Customs at destination" and "Copy for the Importer" shall be given to the licensee, who shall send them to the importer. The importer shall lodge the original with the competent authority and the relevant copy with the customs authority of the Member State of the Union in which the shipment covered by that licence is declared for release for free circulation. The third copy marked "Copy for the Importer" shall be retained by the importer for the importer's records.

3.3. The fourth copy marked "Copy for the Licensing Authority" shall be retained by the Licensing Authority for its records and for possible future verification of licences issued.

3.4. The fifth copy marked "Copy for the Licensee" shall be given to the licensee for the licensee's records.

3.5. The sixth copy marked "Copy for the Licence Information Unit" shall be given to the Licence Information Unit for its records.

3.6. The seventh copy marked "Copy for Indonesian Customs" shall be given to the customs authority of Indonesia for exportation purposes.

4. FLEGT LICENCE LOST, STOLEN OR DESTROYED

4.1. In the event of loss, theft or destruction of the copy marked "Original" or the copy marked "Copy for Customs at destination" or both, the licensee or the licensee's authorised representative may apply to the Licensing Authority for a replacement. Together with the application, the licensee or the licensee's authorised representative shall provide an explanation for the loss of the original and/or the copy.

4.2. If it is satisfied with the explanation, the Licensing Authority shall issue a replacement licence within five working days of receipt of the request from the licensee.

4.3. The replacement shall contain the information and entries that appeared on the licence it replaces, including the licence number, and shall bear the endorsement "Replacement Licence".

4.4. In the event that the lost or stolen licence is retrieved, it shall not be used and must be returned to the Licensing Authority.

5. TECHNICAL SPECIFICATIONS WITH REGARD TO ELECTRONIC FLEGT LICENCES

5.1. The FLEGT licence may be issued and processed using electronic systems.

5.2. In Member States of the Union which are not linked to an electronic system a paper-based licence shall be made available.

Appendices

1. Licence Format

2. Notes for Guidance.

Appendix 1

LICENCE FORMAT

Appendix 2

NOTES FOR GUIDANCE

General:

— Complete in capitals.

— ISO codes, where indicated, refer to the international standard two letter code for any country.

— Box 2 is for use by the Indonesian authorities only

— Headings A and B for use of FLEGT licensing to the EU only







Heading A Destination Insert "European Union" if the licence covers a shipment destined for the European Union. Heading B FLEGT licence Insert "FLEGT" if the licence covers a shipment destined for the European Union.







Box 1 Issuing authority Indicate the name, address, and registration number of the Licensing Authority. Box 2 Information for use by Indonesia Indicate the name and address of the importer, the total value (in USD) of the shipment, as well as the name and the two-letter ISO code of the country of destination and where applicable of the country of transit. Box 3 V-Legal/licence number Indicate the issuing number. Box 4 Date of expiry Period of validity of the licence. Box 5 Country of export This refers to the partner country from where the timber products were exported to the EU. Box 6 ISO code Indicate the two-letter ISO code for the partner country referred to in Box 5. Box 7 Means of transport Indicate the means of transport at the point of export. Box 8 Licensee Indicate the name and address of the exporter, including the registered exporter ETPIK and tax payer numbers. Box 9 Commercial Description Indicate the commercial description of the timber product(s). The description should be sufficiently detailed to allow for classification into the HS. Box 10 HS code For the "Original", "Copy for Customs at Destination" and "Copy for Importer" indicate the four-digit or six-digit commodity code established pursuant to the Harmonised Commodity Description and Coding System. For copies for use within Indonesia (copies (iv) to (vii) as set out in Article 3.1 of Annex IV) indicate the ten-digit commodity code in accordance with the Indonesia Customs Tariff Book. Box 11 Common and scientific names Indicate the common and scientific names of the species of timber used in the product. Where more than one species is included in a composite product, use a separate line. May be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board). Box 12 Countries of harvest Indicate the countries where the species of timber referred to in Box 10 was harvested. Where a composite product include for all sources of wood used. May be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board). Box 13 ISO codes Indicate the ISO code of the countries referred to in box 12. May be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board). Box 14 Volume (m3) Indicate the overall volume in m3. May be omitted unless the information referred to in box 15 has been omitted. Box 15 Net weight (kg) Indicate the overall weight of the shipment at the time of measurement in kg. This is defined as the net mass of the timber products without immediate containers or any packaging, other than bearers, spacers, stickers etc. Box 16 Number of units Indicate the number of units, where a manufactured product is best quantified in this way. May be omitted. Box 17 Distinguishing marks Insert barcode and any distinguishing marks where appropriate e.g. lot number, bill of lading number. May be omitted. Box 18 Signature and stamp of issuing authority The box shall be signed by the authorised official and stamped with the official stamp of the Licensing Authority. The signatories' name, as well as place and date shall also be indicated.

▼M1

ANNEX V

INDONESIAN TIMBER LEGALITY ASSURANCE SYSTEM

1. Introduction

Objective: To provide assurance that harvesting, transportation, processing and selling of round logs and processed timber products comply with all relevant Indonesian laws and regulations.

Known for its pioneering role in combating illegal logging and the trade in illegally harvested timber and timber products, Indonesia hosted the East Asia Ministerial Conference on Forest Law Enforcement and Governance (FLEG) in Bali, in September 2001, which resulted in the Declaration on Forest Law Enforcement and Governance (Bali Declaration). Since then, Indonesia has continued to be at the forefront of international cooperation in combating illegal logging and associated trade.

As part of international efforts to address these issues, a growing number of consumer countries have committed themselves to take measures to prevent trade in illegal timber on their markets, whilst producer countries have committed themselves to provide a mechanism assuring the legality of their timber products. It is important to establish a credible system to guarantee the legality of harvesting, transportation, processing and trade of timber and processed timber products.

The Indonesian Timber Legality Assurance System (TLAS) provides assurance that timber and timber products produced and processed in Indonesia come from legal sources and are in full compliance with relevant Indonesian laws and regulations, as verified by independent auditing and monitored by civil society.

1.1. Indonesian laws and regulations as foundation of the TLAS

The Indonesian regulation on the ‘Standards and Guidelines on the Assessment of Performance of Sustainable Forest Management and the Verification of Timber Legality in the State and Privately-owned Forests’ (Forestry Minister's Regulation P.38/Menhut-II/2009) establish the TLAS. The TLAS also includes the Indonesian sustainability scheme and targets to improve forest governance, to suppress illegal logging and the associated timber trade to ensure credibility and to improve the image of Indonesia's timber products.

The TLAS comprises the following elements:

1. Legality Standards,

2. Control of Supply Chain,

3. Verification Procedures,

4. Licensing Scheme,

5. Monitoring.

TLAS is the basic system used to assure the legality of timber and timber products produced in Indonesia for export to the Union and to other markets.

1.2. Development of the TLAS: a multi-stakeholder process

Since 2003, a wide range of Indonesian forestry stakeholders have been actively engaged in developing, implementing and evaluating the TLAS, thereby providing better oversight, transparency and credibility in the process. In 2009, the multi-stakeholder process resulted in the issuance of Forestry Minister's Regulation P.38/Menhut-II/2009, followed by DG Forest Utilization Technical Guidelines No 6/VI-SET/2009 and No 02/VI-BPPHH/2010, which were revised by Forestry Minister's Regulation P.68/Menhut-II/2011, P.45/Menhut-II/2012, P.42/Menhut-II/2013, DG Forest Utilization Technical Guidelines P.8/VI-SET/2011 and P.8/VI-BPPHH/2012.

Based on lessons learned from initial TLAS implementation, the results of the joint assessment in accordance to Annex VIII of this Agreement, and recommendations from various stakeholders, the regulations were again revised through a multi-stakeholder process to become Forestry Minister's Regulation P.43/Menhut-II/2014 in June 2014 and P.95/Menhut-II/2014 in December 2014, followed by DG Forest Utilization Technical Guidelines No.P.14/VI-BPPHH/2014 in December 2014 and No.P.1/VI-BPPHH/2015 in January 2015 (hereinafter referred to as the TLAS Guidelines).

The process of engagement with all stakeholders will be continued during implementation of the TLAS.

2. Scope of the TLAS

Indonesian production forest resources can broadly be divided into two types of ownership: state forests and privately owned forests/lands. State forests consist of production forests for long-term sustainable timber produc