Mongabay Series: Indonesian Forests
In Indonesia, a flawed certification scheme lets illegal loggers raze away
by Hans Nicholas Jong on 16 May 2019
- he seizure of more than 400 containers of illegally logged timber in a series of busts since last December has shone a spotlight on Indonesia’s mechanism for certifying legal timber.
- Some of the wood has been traced back to companies certified under the country’s SVLK scheme. That’s the same scheme that the EU relies on to ensure that its imports of Indonesian timber are legally harvested.
- The seizures and findings by activists highlight increased illegal logging in the relatively pristine eastern Indonesian regions of Maluku and Papua.
- Companies engaged in illegal logging exploit a variety of methods, from cutting in abandoned concessions to using farmers’ groups and indigenous communities as fronts for harvesting in areas that would otherwise be off-limits for commercial logging.
JAKARTA — A massive series of seizures of timber from rare tree species has thrown into question the effectiveness of Indonesia’s existing mechanisms to tackle illegal logging.
Officials have in recent months confiscated 422 containers packed with illegally harvested timber from the eastern regions of Papua and Maluku. The latest seizure, in February, comprised 38 containers filled with highly prized merbau, also known as Borneo teak and Moluccan ironwood, from the Aru Islands of Maluku province.
Prior to that, officials seized 384 containers loaded with timber from Papua worth an estimated 105 billion rupiah ($7.2 million) in four separate sting operations since last December.
None of the shipments carried valid documentation, said Rasio Ridho Sani, the head of law enforcement at the Indonesian Ministry of Environment and Forestry, which coordinated the seizures.
“This brings the total number of containers we’ve seized to 422. This is a huge number,” Rasio told reporters in Jakarta.
Illegal logging cost Indonesia 170 trillion rupiah ($11.7 billion) between 2004 and 2010, according to a study by the NGO Indonesia Corruption Watch (ICW). Historically the illegal timber trade has targeted the precious hardwoods of Borneo, Sumatra and Java, in particular teak. But as the forest cover on those islands fast diminishes, illegal loggers are increasingly turning to the less-developed eastern regions of Maluku and Papua.
Mufti Barri, a campaign manager with the NGO Forest Watch Indonesia (FWI), says the recent seizures signal an increasing trend of illegal logging in those regions.
“Illegal logging in Papua and Maluku isn’t something new. In North Maluku, illegal timber has been sent out of the islands since 2014,” he told Mongabay. “But in terms of quantity, there’s indeed been an increase in the past few months.”
Rasio confirmed a similar trend out of Papua. “We handled around 21 cases [of illegal logging] in Papua in the past three years, but they were small in terms of quantity, usually just three to four containers at a time,” he said. “The recent ones were big.”
Working with prosecutors, the ministry has charged at least 21 individuals from various companies in connection with the illegally logged timber.
These cases provide strong evidence that Indonesia’s timber legality certification system, or SVLK, approved for timber exports to the European Union, isn’t working, says Syahrul Fitra, a legal researcher with the environmental NGO Auriga Nusantara.
The SVLK system aims to track the chain of custody of timber products and ensure that timber is harvested in compliance with Indonesian law. Introduced a decade ago, it’s been criticized for its apparent shortcomings since then. In 2013, Auriga and a coalition of forestry NGOs identified what they said were a host of loopholes in the certification system.
“We found some industrial plantation companies in Riau [province, in Sumatra] which were implicated in corruption to be certified [under the SVLK system],” Syahrul said. “There were also problematic companies in West Kalimantan and Central Kalimantan [in Indonesian Borneo] which got certification. That means their timber is perceived as legal.”
Since then, the NGOs have been pushing for the government to improve the system to prevent illegal logging.
When the EU approved of the SVLK in 2016 as the basis for importing timber into its market, after years of intense negotiation, the NGOs monitoring the implementation of the scheme expressed hope that there would be an improvement in the system.
“But to date, the system has never been revised,” Syahrul said. “And the loopholes are huge. Illegal logging keeps happening and there’s no change at all. Maybe now the SVLK system is perceived to be more stringent because it has already been approved by the EU, but in reality there’s no change.”
One of the loopholes is the lack of what’s known as chain of custody verification. This means that sawmills that are SVLK certified aren’t required to source their timber exclusively from similarly certified logging concessions.
This allows ostensibly certified companies to essentially launder products from uncertified operations through their certified concessions, making it likely that illegally logged wood is being shipped abroad as legal exports.
An official in the environment ministry’s sustainable forest product department said separately that his office had found evidence of this loophole being exploited by at least three logging companies.
Farming out certificates
Auriga’s Syahrul also questioned the credibility of the certification agencies responsible for issuing SVLK certificates to timber companies. He said investigations by Auriga and other NGOs between October 2017 and December 2018 had found timber firms involved in illegal logging were still being certified.
In March this year, Auriga reported five such timber companies operating in the Papua region; two of them were among those whose shipments were caught up in the recent seizures. Even so, their SVLK certification hasn’t been revoked, according to Syahrul.
He said the fact that such companies continued to be certified despite all the evidence of their illegal activity pointed to a serious flaw in the way the certification agencies worked. He cited the case of PT Ayamaru Sertifikasi, a company that was ordered in January by the environment ministry to carry out an audit of 15 certificates it had issued to eight logging companies.
Some of the audited companies, such as PT Sijax Express Unit 2, were found to be repeat offenders, Syahrul said. Sijax was previously audited by Ayamaru after a coalition of NGOs found indications that the company had received illegally logged timber. Based on findings of that earlier audit, Ayamaru froze Sijax’s certificate between January and March 2018. Following the freeze, Sijax applied for another certificate, which Ayamaru duly approved.
Sijax was later among the companies implicated in the recent seizures of illegal timber.
“That means that when the company was reassessed [by Ayamaru], no improvement had been made on the ground,” Syahrul said. “So the reassessment wasn’t comprehensive because the illegal practice was repeated. So how does Ayamaru certify companies? How did something like this go undetected? It’s obvious that the quality of the certification agencies is subpar.”
After Ayamaru audited the 15 certificates as ordered by the ministry, it suspended 14 of them.
Syahrul said that in many of the cases, the SVLK certificates should have been revoked outright. With a simple suspension, the logging companies can reapply indefinitely for another certificate. Some continue to operate regardless of their certificates being operating even though their certificates have been frozen.
“That’s one of the weaknesses of the SVLK system,” Syahrul said, adding that the certification agencies were paid by the companies to certify them, effectively making them beholden to issuing the SVLK papers.
He also said the certification process was flawed because it only checked for the validity and completeness of companies’ documents, instead of being an actual verification of the timber processed by the applicant company.
“These agencies only certify the companies, not the product,” Syahrul said.
Farmers as a front
The blind spot in monitoring the legality of Indonesia’s timber is in that initial stage of logging, says Mufti of Forest Watch Indonesia.
“Most of the logs coming out of Maluku are disguised as timber owned by locals,” he said. “But in reality, there are cukong [brokers] behind them.”
The trend emerging in Maluku is of these well-connected brokers using farmers as a front to log trees outside designated forest areas.
Under Indonesian law, commercial logging is only permitted on land designated as forest area. But not all forest area holds sufficient tree cover to make logging commercially feasible, while plenty of non-forest areas contain large numbers of commercially valuable timber trees — the case for much of the Malukus.
Logging in non-forest areas is allowed for individuals under what’s known as a timber utilization permit, or IPK.
“A lot of timber outside forest areas in Maluku is extracted using the IPK permit scheme,” Mufti said.
Businesses looking to log such areas on a large scale typically put together a farmers’ association, which is then entitled to apply for an IPK. Mufti said such associations were merely fronts, with the farmers not benefiting from the scheme.
“If these businesses apply for the permit under their own names, there will be resistance from the locals,” he said. “That’s why they hide behind the farmers’ groups. They also enjoy lower taxes.”
Mufti said it was unlikely the farmers would establish their own groups to apply for permits without a business pulling the strings.
“There’s no way these farmers could draw up the timber utilization maps” needed to apply for the permit, he said. “When we did some digging, we found that all of the administrative work is done by the businesses behind these farmers.”
Activists have even unearthed a case in North Maluku where a farmers’ group was established on the basis of falsified signatures, according to Mufti. He added the activists had reported the matter to the local police.
Another ploy commonly used by loggers in Papua is to exploit abandoned logging concessions. A lot of timber continues to be generated from concessions that have been neglected by their permit holders for years, according to Auriga’s Syahrul.
There were at least 56,000 square kilometers (21,600 square miles) of selective logging concessions in the Papua region in 2017, according to environment ministry data. A seventh of that area is classed as inactive.
Syahrul said no one was really monitoring these concessions, and that as a result, companies were going in and logging there. He said these companies typically paid off local communities to cover for the logged wood until it could be taken to a sawmill.
“So if there’s a security checkpoint on the road, these indigenous peoples will say that the timber is theirs,” Syahrul said, adding that they were typically paid about $10 per cubic meter (30 cents per cubic foot) of merbau.
The market price for merbau timber is between $200 and $350 per cubic meter, or $5.70 to $10 per cubic foot.
Illegal logs in Papua also come from customary forests managed by indigenous communities. An investigative report by the Indonesian magazine Tempo found a steady stream of logs going from one such forest, in Angkasa Dua village, to the timber company PT Mansiman Global Mandiri (MGM) in 2018.
This flow of wood wasn’t recorded in an official document called the Industrial Material Fulfillment Plan (RPBBI), a part of the SVLK system that’s supposed to identify timber sourced from natural forests. Instead, the document stated only that MGM got the wood from another company, PT Hanurata Unit Jayapura.
Asked by Tempo about the findings, MGM director Daniel Garden acknowledged that his company sourced its timber from Angkasa Dua’s customary forest. He said there wasn’t enough timber from commercial logging concessions in Papua to meet demand from Java, which was why he bought timber from local communities.
“Other companies also [do] the same [thing], taking timber from locals,” he told Tempo.
“Did we steal anything? We paid the porters. We also paid [for other things] during the transportation. We didn’t harm anyone. If [the government] wants to catch [me], then all have to be arrested as well.”
Daniel was among the 21 people charged by the environment ministry in connection with the recent timber seizures. He was one of four suspects who sought to have the charges dismissed in a pretrial motion that was ultimately quashed.
Syahrul said this boded well for the anticipated spate of trials. “The ministry won the pretrial motions, so they have a pretty solid case,” he said. He added it was important that the ministry prosecute each suspect to the fullest extent of the law.
A jungle river in Indonesian Papua. Image by Rhett A. Butler.
Shoring up the system
Simply confiscating shipments of illegally logged timber isn’t a solution unless the government addresses the root causes of illegal logging, activists say.
Concessions in places like Papua need to be closely monitored, and if they were found to be abandoned, the permits revoked immediately to prevent logging taking place under the radar, Syahrul said.
“The government has to make sure that the logging concessions are truly operated [by the permit holders] and monitor them strictly,” he said. “And if there are inactive concessions, then the government should revoke the permits. If not, then cases like this will repeat.”
He also called on the government to provide access to local communities in Papua to selectively log trees in their surrounding forests in a sustainable manner. He said this would make them less likely to be exploited by illegal logging companies while at the same time improve their livelihood.
“That’s the ideal solution,” Syahrul said. “A logging concession managed by indigenous communities means that it’s clear who’s managing the forest. On top of that, the indigenous people will protect the forest as well, they won’t cut down trees carelessly.”
A scheme that allows indigenous peoples in Papua to manage their forests as logging concessions is already in place, known as customary forest concessions. It was introduced by the local government in 2008, aimed at promoting the sustainable management of forests in Papua as well as the protection and management of natural resources by the region’s indigenous peoples.
To date, however, the Papua provincial government has issued just 18 permits for customary forest concessions, covering a combined 780 square kilometers (300 square miles) of forest. Applications for another four permits are being considered.
None of the indigenous communities that received a permit has been able to use it. The local government says they’ll have to wait until the national government, in this case the environment ministry, recognizes the scheme first. The ministry says guidelines need to be drawn up before the scheme can get up and running.
Another thing the government can do is address the weaknesses in the current SVLK system and improve the quality of certification agencies, Syahrul said. This includes the environment ministry conducting its own audits of timber firms suspected of involvement in illegal logging, and following up on audits carried out by certification agencies.
“The ministry could use the certification agencies’ findings as a basis for further audit or to freeze or revoke SVLK certificates,” Syahrul said.
He added there was also a need to hold certification agencies accountable for their work.
“What hasn’t been done is a verification of the certification agencies. How can they issue certificates when the sources of the timber are unclear, like the cases in Papua?” he said.
Banner image: A coast in Nechiebe village of Ravenirara district, Papua province. Photo by Christopel Paino/Mongabay-Indonesia.