Legal or sustainable?

Down to Earth No 67  November 2005

As part of the international campaign to crack down on illegal logging, stop forest destruction and eliminate timber smuggling, the Indonesian government has been pressed to agree a definition of what is and isn't 'legal' in Indonesia's forests. Civil society organisations have lobbied hard to ensure better protection for indigenous communities, whose rights have been largely ignored in the rush to extract maximum profits from the forests.

Last year DTE reported on a legality standard drafted as part of the follow-up to a 2002 Memorandum of Understanding (MoU) to combat illegal logging and the illegal timber trade signed by the Indonesian and UK governments - see DTE 62. One year on, negotiations still continue.

The context of Indonesia's legality standard has changed since the European Commission adopted an Action Plan on Forest Law Enforcement, Governance and Trade (FLEGT) in May 2003. This was a response to estimates that around half all imports of tropical timber into the European Union are from illegal sources. The FLEGT Action Plan starts from the premise that moves against illegal logging require co-operation between timber exporting and importing countries. Central to this plan are bilateral treaties called Voluntary Partnership Agreements (VPAs). Under a licencing scheme, customs officers in European countries will be able to confiscate any unlicenced timber entering the EU from a partner country. European ministers backed the policy by passing two regulations in October 2005. The first VPAs will probably be between the EU and Indonesia, Congo and Ghana.

The Indonesian government and the EU have shown a fair amount of interest in this partnership on illegal logging. The European Commission is funding a FLEGT Indonesia Support Project designed to help Indonesia draw up a VPA. This is expected to start in January 2006 but, so far, there is little evidence of understanding or co-ordination between government departments. Indonesian CSOs are rather further ahead. Since June 2004, a series of workshops has been organised by Indonesian forest NGO Telapak, to exchange information about FLEGT developments, discuss relevant issues and decide on a joint position to present to decision-makers in Jakarta and Bruxelles. This Forum met again from 22-23 August to review their activities and prepare for a FLEGT Consultation in Bruxelles in September. The meeting was also attended by representatives of the forestry and foreign affairs departments, the EU delegation and communities.

Threat or opportunity?

Indonesian CSOs are divided as to whether these international initiatives on illegal logging are a threat or an opportunity for Indonesian forests and the communities who depend on them. Some are frustrated that so much time, energy and funding is spent addressing the 'illegal logging' issue primarily to meet the needs of international timber traders and consumers when these resources could have been directed at tackling destructive logging and the conflicts between the government, logging and plantation companies and local communities - especially over customary forests. Others consider that current approaches could end up legalising destructive forestry policies and practices. They also point to the repressive operations initiated in the name of forest law enforcement, including Operasi Hutan Lestari II which took place in West Papua earlier this year (see DTE 65). And even if Indonesia signs a VPA, furniture made from illegally harvested Indonesian timber could still enter the EU via China or Vietnam.

On the other hand, some forest activists see the international 'illegal logging' debate as an opportunity to push for much needed change on contentious issues such as land rights and tenure, corruption and forest law reform. For example, Indonesian representatives at the Bruxelles meeting in September demanded that "All VPA agreements must guarantee that all forest management units obtain free prior informed consent from communities and also improve the livelihoods of local and indigenous peoples".

The definition of legality and the process by which it is agreed are crucial, but highly sensitive issues and Indonesian civil society, the government and logging companies are engaged in a protracted, complex series of inter-related negotiations. The final Legality Standard should specify all the legal requirements relating to the origin, production, transportation, processing and trade of timber - areas covered by some 900 Indonesian laws, regulations and decrees that cover these areas. Yet legal timber is not the same as sustainable forest management.

The MoU team of staff from DFID and the forestry department set up regional and national consultations in 2003. The various stakeholders identified the major 'principles of legality', which were drafted into the outline of a legality standard. Several individuals and organisations have since contributed further to the Standard to develop auditable criteria and indicators from the initial principles, and to produce guidance notes for auditors. Some of the associated work was contracted to the US-based conservation NGO TNC.

By May, it looked as if real progress was being made. The forestry department had more or less agreed to the draft legality standard which had been over two years in the making. The standard had been tested in the field and TNC and the Indonesia-UK MoU team had organised workshops in Samarinda and Bogor on the results. The consultations, entitled 'Field Testing of Legality Verification and Chain of Custody Systems' were meant to update participants on field tests, to get inputs from the stakeholders and to move towards a common understanding of the legality standard. At this point some serious problems became apparent. The workshop revealed that Principle 1 of the standard (the gazettement1 issue) and Principle 3 (free, prior and informed consent/community rights) were difficult to test in the field for technical and administrative reasons. Also, a local NGO that had monitored the field test claimed that the whole procedure was flawed (see box). Moreover, it became clear that there was still a wide range of views about what the legality standard was and what it should be doing.

In fact several legality standards were being developed separately. In addition to the Indonesia-UK MoU initiative, other legality standards were under development by the TFF (Tropical Forest Foundation) and BRIK (Indonesia's Forest Industry Revitalisation Agency. (See DTE 60.) Obviously this situation had to be addressed: Indonesian timber could not be sold internationally with three different definitions of legality. It was therefore decided that these different standards should be 'harmonised'.

The Indonesian Ecolabelling Institute (LEI) was entrusted with this task and has adopted the approach of comparing the principles, criteria and indicators of the various schemes on the basis of attainability, credibility, ability to respond to social problems and links to sustainability. Several consultations and workshops have been held. Solving a problem by discussion until a consensus is reached is a part of Indonesia's culture (musyarawah), yet there are real doubts about using this process to define the legality standard for Indonesian timber exports. There is talk of a 'reformulation of principles'. The Indonesian government is under considerable political pressure from a struggling timber industry. They would like a crude tool which is quick and simple to use in the field. The result could be a dilution of criteria which favour indigenous peoples' rights.

Whatever the outcome, the whole process of creating a legality standard has brought the Indonesian government and forestry industry to sit at the same table with Indonesian civil society groups in a way which was unknown five years ago. The discussions are intense as activists strive to avoid a narrow definition of legality and to ensure that a wide range of groups can participate in the process. They also want to open up debate on land rights. Some gains have been made - for example on the closely-related and highly contentious issues of gazettement, free, prior and informed consent (FPIC) and forest conversion.

Gazettement is a major headache for the government and timber companies. Although required by law, only 15% of forests classified as state forest land, including protection forests and national parks, have actually been gazetted as such. This means that there are no formally agreed boundaries with local communities - hence the large number of conflicts and cases of violations of human and customary rights. It also means most of Indonesia's timber operations would fail to qualify as legal. Companies complained that they would be penalised because of the government's poor performance in processing and measuring production forest land. Now it has been agreed that companies in the process of gazettement should also be eligible for monitoring and evaluation for legality purposes. How local communities are involved in the gazettement process will also be part of evaluating whether or not a company meets the standard.

Progress has also been made towards government acceptance of the principle of free, prior and informed consent. In the past, forestry department officials have always said there was little basis for this in Indonesian law and there was not even an Indonesian expression for this term. However, activists have used the meetings to show how the right to obtain information, the right to participate in development and to make proposals, inputs and raise objections are included in existing laws. As a result, the principle of prior consent (as contained in a new bill on genetic resources) has been extended and the phrase 'Agreement Based on Prior Information Without Force' - better known by its Indonesian acronym PADIATAPA - is to be part of the legality definition.

Some compromises have been made along the way. Everyone is well aware that the policy of issuing permits to clear over-logged forestry concessions in order to grow pulpwood or other cash crops is not compatible with sustainable forest management. Yet if the timber from land clearance is not included in the legality standard, entrepreneurs will use wood utilisation permits (IPK) as means of obtaining wood easily, cheaply and with little responsibility. The government successfully argued that IPK should be covered by the legality standard so that they could be subject to restrictions. But the forum insisted that IPK holders must have a government-approved work plan and the timber procured under the IPK must be traceable back to the forest block where it was felled.

There is still a long way to go. Voluntary partnership agreements depend on independent verification - a concept which is not yet accepted by the Indonesian government.

It is not only in Indonesia that progress is slow. The European Parliament passed a resolution in October criticising the European Commission and Member States for their lack of action on illegal logging and controls on the import of illegal timber into the EU. The Parliament called on the Commission to go beyond the voluntary regime proposed and put forward legislation to criminalise the import of illegal wood and promote sustainable forest management world-wide.

The Parliament also stated that partnership agreements with countries which produce timber, including Indonesia, should enhance forest protection and address social injustice and poverty. It called for civil society and democratically-elected citizens to be involved in the negotiations, which should set an action programme with clear deadlines to review the partner country's forest laws and improve their social or environmental provisions. (Greenpeace press release 25/Oct/05)


The Sumalindo Field Study

The field-testing of the legality standard, by the US-based conservation organisation, The Nature Conservancy (TNC), in the East Kalimantan timber concession of Sumalindo Lestari Jaya II was carried out in early 2005, with legal verification carried out by certifiers SGS/URS.

An independent assessment of the social aspects of the pilot verification was due to be carried out by Marcus Colchester, director of the UK-based NGO, Forest Peoples Programme in July 2004. However, the company insisted that the verification process was delayed and, as a result, no independent monitoring took place.

In July 2005, a member of an East Kalimantan forest activist group, Pokja Hutan, visited the UK and raised concerns over the legality standard field-test at the biannual meeting on illegal logging initiatives held at the Royal Institute of International Affairs. Yoga Sofyar said that the team had spent only five days in the field and had not consulted fully with local communities. (A TNC spokesman denied this.) He also took up this issue with the UK's Department for International Development, which is funding the legality standard initiative. He pressed DFID officials to take active steps to ensure that community rights are addressed in further trials and in the development of the legality standard. Not to do so violates DFID's mandate to prioritise poverty reduction, sustainable livelihoods and a rights-based approach to development. In addition, Sofyar urged DFID to ensure that consultations over the legality standard were inclusive and transparent, citing examples where critical CSOs had been excluded from important meetings.

Pokja Hutan had carried out its own research in the area and found evidence of social conflict and the illegal 'laundering' of timber from outside sources as if it had come from Sumalindo's own concession. Yet, surprisingly, the company's operations had been assessed and were close to receiving FSC certification. This sets a bad precedent for the many Indonesian logging companies nervously watching the legality verification process.

The original legality principles can be found at:;