Frequently Asked Question :

Timber Legality Verification System (SVLK) and the Voluntary Partnership Agreement (VPA)

1. What is the SVLK?
SVLK stands for Sistem Verifikasi Legalitas Kayu, or Timber Legality Assurance System in English. It is designed to check the legality of timber from forest through to the point of export using independent auditors. Through multi-stakeholder consultation since 2003, finally in June 2009 the governance of Indonesia issued Minister of forestry decree No. P. 38/Menhut-II/2009 on Standards and Guidelines of Performance Evaluation of sustainable Forest Management (SFM) and Timber Legality Verification for Permit holders or Private Forest. This new SVLK regulation, has been in force since September 2009. The regulation were revised and improved by the issuance of Minister of Forestry Regulation No. P68/MenhutII/2011 and No. P45/MenhutII/2012.

2. Why is SVLK needed?
This is an Indonesian effort to assure the legality of its timber product, which is in line with the trend of major timber market globally and will meet this stronger demand legal timber. The government of Japan applies Goho-wood of Green Konjuho which requires that timber imported into country comes from legal sources. The Government of the United States of America amended the Lacey Act, aimed at avoiding import of illegal timber into country. The European Union issued Regulation No. 995/2010 (Timber Regulation) obliging operator to possess irrefutable proofs that timber products that they trade do not come from illegal sources and prohibiting illegal timber.
3. How does the SVLK operate?
P.38/Menhut-II/2009 revised and improved with P68/Menhut-II/2011 and P45/Menhut-II/2012 stipulates that the forestry business unit must get certified for sustainable Forest Management (SFM), or at the minimum be certified for legality. Further, all timber-related industrial units, either primary or secondary industry, have to obtain a legality certificate. Sustainable forest management (PHL) or legality assessment or audit is conducted independently by assessor /verifier institutions accredited by the National Accreditation Body (Komite Akreditasi Nasional or KAN), and are monitored by NGOs or civil society. By mid 2012 auditors had assessed the sustainability of 8,3 million ha of natural and planted forest and the legality of 1,7 million ha of natural and planted forest. In addition auditors have assessed the legality of 3,972 ha of community forest in 9 sites in Java, Sumatera and Sulawesi. By the same time a total of 302 timber-based factories have passed the SVLK chain of custody assessment. It should be noted that the sustainability assessment now includes the legality standard, so all SFM timber products can be considered legal. This progress is broken down as follows: SFM Performance Evaluation on Natural Forest HPH/IUPHHK: 40 Units, total area 4.801.262 Ha. SFM Performance Evaluation on Plantation Forest HTI/IUPHHK: 38 Units, total area 3.475.931 Ha. Legality verification on Natural Forest HPH/IUPHHK: 12 Units, total area 924.419 Ha. Legality verification on Plantation Forest HTI/IUPHHK: 10 Units, total area 803.191 Ha. Legality verification on Right Forest: 9 Units, total area 3.972 Ha. Legality verification on Timber Processing industries:302 Units
4. What is the relationship between the SVLK and VPA?
The European Union adopted the Timber Regulation to halt the circulation of illegal timber in European Market. The Timber Regulation will become effective in March 2013. From then on all imports of timber into any member state of the European Union will have to pass due diligence assessment to prevent illegal timber from entering the market in European Union. However importers will not have to apply this due diligence assessment on FLIEGT licensed timber products from an exporting country like Indonesia that has sign a Voluntary Partnership Agreement (VPA) with the European Union, once this agreement implemented. Such timber is considered zero risk of being illegal under the EU Timber Regulation.
5. How does the SVLK related to the VPA?
Starting 2007, Indonesia and European Union have been negotiating a VPA. There have been Three Senior Official meetings, seven expert level consultations. And the third and Last Senior Official Meeting in Brussels in April 2011 both side concluded the VPA text and its 9 annexes in which the SVLK was approved as the system to be applied to prove the legality of Indonesian timber. The process to finalize the agreement, including co-called legal scrubbing, has now been completed. The European Union must translate all these documents into different languages of its member states before starting the ratification process.
6. When was the negotiation on VPA finished?
The technical discussions were concluded on the 15th April 2011 meeting at the European Commission in Brussels, and then the Indonesian Minister of Forestry Zulkifli Hasan and the EU Trade Commissioner Karel De Gutch initialed the FLEGT VPA on the 4th May 2011 in Jakarta. With this Indonesia followed several African countries (Ghana, Cameroon, Congo PRC) that had already signed a VPA with European Union. Indonesia is the first Asian country with a VPA with the European Union, (and the biggest in terms of the size of timber trade) although negotiations between Malaysia and Vietnam and the European Union are showing some recent progress.
7. What is the benefit to Indonesia of signing the VPA?
By signing the VPA all licensed timber exports from Indonesia to the EU will be considered zero risk of illegality under the EU Timber Regulation and will also not have to go through any due diligence assessment process, saving time and money. The EU Timber Regulation has a specific clause that recognizes FLEGT licensed timber coming from VPA countries as legal. This will increase EU Importers confidence in Indonesian timber products and make their products more attractive compared with non-VPA timber.
8. How about BRIK’s endorsement?
Indonesia has just issued a new regulation to replace the role, function and modalities of the Forest Industries Revitalization Body which, up to the end of 2012, is the institution that endorsed the export of timber products from Indonesia. The new Ministry of Trade Regulation No P64/M-DAG/PER/10/2012 come into operation on January 1st, 2013 replacing the old Ministry Trade Regulation No. 20/2008 and Minister of Trade Decree No. Kep 405/2008. Up to before January 1st, 2013 BRIK still have the mandate to endorse 11 customs codes under the World Trade Organization Harmonized System for forestry products. “Endorsement” will be replaced by the “issuance of timber legality licenses” or the so-called V-legal Documents by the auditors (or “Conformity Assessment Bodies”) for those companies with SVLK legality certificates.
9. What is V-Legal document?
An SVLK (TLAS) license guarantees that the Operator/timber industry has complied with legality standards and criteria. Companies that comply with the SVLK need to attach a V-Legal Document to their shipments for export. The V-Legal Document specifies that the timber products being shipped comply with the legality standard as stipulated in the Indonesian regulation. Thus the V-Legal Document provides assurance that the timber and timber product is legal. V-legal Documents are issued by Conformity Assessment Body (Or “LVLK” in Indonesian) as for SVLK certificates.
10. How is the “V-Legal Document” applied to move towards full implementation of FLEGT VPA for European and Non-European market 2013?
The application of SVLK is mandatory for all forest management units and industries and for all export destinations. Each product to be exported has to be accompanied by a V-legal Document issued by the Conformity Assessment Body (LVLK). Legal requirement for V-Legal Documents prior to export is regulated by Trade Regulation No. 64/2012, any industry that exports its products will have to go through the legality verification process in order to obtain a V-Legal Document. If an industry has not been verified for legality then an inspection needs to be done by Conformity Assessment Body to enable that industry to export its products. Starting March 2013, EU importers will be subject to the requirements of the EU Timber Regulation and all exports to the European Union should legal. It is anticipated that they will consider V-Legal timber from Indonesia as having considerable value in demonstrating compliance with Indonesian legislation, marking SLVK highly relevant for Indonesian exports to the EU market. Once the EU-Indonesia VPA applies, all export to the EU will have to be verified under the SVLK in order to obtain the V-Legal/FLEGT license. All this verified products will be exempt from the administrative requirements of the Due Diligence Regulation, making imports of V-Legal/FLEGT licensed Indonesian timber into the EU easier and automatically legal.
11. How is the issuance of The V-Legal Document?
The registered exporter (auditee) requests issuance of V-Legal Document from the conformity assessment body (“V”). The LV will submit the V-Legal Document through the License Information Unit (LIU) online system in the Directorate General of Forest Utilization, Ministry of Forestry. An online application form of V-Legal Document includes information such as the type of timber, volume of timber and timber product export etc. This information will be checked automatically through the LIU system and will also connect to the INATRADE system in the Directorate General of Foreign Trade at the Ministry of Trade.