Ministry of Trade Secretary-General, Oke Nurwan
If Things Are Strict Upstream, Why Do We Fear Illegal Timber Downstream?
TRADE Minister Regulation No. 15/2020 regarding export provisions on forestry industry products has been widely criticized. There is concern that the elimination of the requirement of the V-Legal document—which is a part of the Timber Legality Assurance System (SVLK) arrangement—in this new regulation issued at the end of last February, will lead to an increase in illegal logging in Indonesia’s forests. Some believe it poses a threat to cooperation in trade, management and law enforcement between Indonesia and the European Union.
However, Trade Ministry Secretary-General Oke Nurwan disagrees. He assured that this regulation is a part of the effort to increase the competitiveness of export products from the downstream forestry industry. Speaking to Tempo, this former director-general of foreign trade explained the reasons for issuing this policy which takes effect this coming May.
Why was the V-Legal requirement for exports from the downstream forestry industry eliminated?
In principle, the SVLK is too rigid. Perhaps when it was made there was no consultation with the association and so forth. Now the association is protesting because to export to several countries which have not set any conditions, it is actually our own country that has set a condition.
Which association are you talking about?
Members of the AMKRI (Indonesian Association of Furniture and Handicrafts). They have continuously been causing a commotion, asking for it to be freed up, to not use the SVLK. We do not agree with the AMKRI, because it will lead to illegal logging, and as such a government policy was to set that only the upstream business needs to use the SVLK, because raw materials will apply to all parties.
(The AMKRI has recently been merged into the Indonesian Furniture and Crafts Association.)
What did they complain about?
The SVLK regulates everything, from A to Z, right down the line, right down to its application for those running small, medium and micro-sized businesses (UMKM). This complicates things because they must all use the SVLK. It is said that there is assistance for the UMKMs to pay SVLK administrative costs, but this cannot be for all of them. There are many UMKMs, while the government budgets are limited.
How did the deliberations on this regulation begin in 2019?
Based on a limited coordination meeting, at that time led by Darmin Nasution (former coordinating minister for the economy), the application of the SVLK was considered would disrupt exports and decrease product competitiveness. Some countries which do not require legalized documents could receive our products. However, our products cannot leave ports because there is the requirement to have the SVLK. On the principle of preserving the environment, forests cannot be managed haphazardly, so it was then decided that the requirement for the SVLK was shifted to the upstream segment of the industry. No need for it at the downstream level.
Is it not the case that the traceability guarantee of the timber on the SVLK actually increasing the attractiveness of those forestry products?
The commitment to maintain that traceability is still there. We will surely strengthen upstream supervision of the industry. In this way, it can be assured that the products from the upstream come from certified SVLK materials. The port of exit does not need to be limited as to what country it is to go to, except for Europe, for instance, which requires the SVLK. Exporters are still required to provide that document. If the destination country does not require the SVLK, then what need is there to have it? The SVLK is more directed towards just Europe, is it not?
This means that the condition to meet the V-Legal requirements will be adjusted according to demand...
It depends on the country of destination. If it does not have such a condition, then it will be fine without it. However, Indonesia must still manage this in a regulated manner. Even if the products are being exported to countries which do not require such legal documentation, the goods will still be made from materials which fulfill SVLK requirements. There are regulations for the downstream sector of the industry, namely the product standard conformity certificate, so it will be sufficient for the downstream segment to have to meet the SNI (Indonesian National Standard) or the standard of the country of destination. This is related to issues of health, safety, security, and the environment.
If this is the case, how can we guarantee that illegally logged wood will not be mixed in with the legal ones in downstream businesses?
Through monitoring. If it is done strictly for upstream businesses, why would we need to be worried that producers were using illegal wood? There would not be any illegal wood. For that reason, things must be strictly monitored upstream, and logging must not be done haphazardly. There are appropriate regulations in place so that products upstream are properly tracked. If illegal wood is in circulation then upstream oversight is to blame. Don’t blame downstream segment producers.