Indonesian legality verification system enters into force

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ITTO's Tropical Timber Market Report
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Indonesia and the European Union have finalised an agreement aimed at ending trade in illegally-sourced wood through the implementation of the Voluntary Partnership Agreement (VPA).

Indonesia has introduced the mandatory Timber Legality Assurance System (TLAS) or in Bahasa Indonesia, Sistem Verifikasi Legalitas Kayu (SVLK), which is defined in Forestry Regulation Number P.38/Menhut-II/2009 (amended by P.68/Menhut-II/2011).

Under the new arrangements Indonesian exports will be covered by a V-Legal/FLEGT license which verifies that the timber products conform with the timber legality assurance system (TLAS).

The new Indonesian legality regulation, which is now in effect, applies to 26 products defined by their HS Codes with a further 14 products to be included in January 2014.

These additional 14 categories of wood products are mainly manufactured by small and medium enterprises producing handicrafts and secondary wood products.

V-Legal test shipment concluded Indonesia and EU have conducted a test shipment of some products for which a V-Legal documents/ FLEGT-License is mandatory.

The test run will be conducted in two phases, the first was during the period of October-December 2012 in Indonesia and the second in some EU countries during November-February 2013.

The first test shipment test from Indonesia was made from PT Kayu Lapis Indonesia (KLI) a company in Central Java .

The test run launch was attended by Deputy Minister of Trade Mr. Bayu Krisnamurti who explained that shipment tests of V-Legal products will be conducted by 17 Indonesian registered exporters of industrial forest products.

The Deputy Minister anticipated that this trial would identify any deficiency in the system so that exports of timber products from Indonesia will run smoothly and comply with the EUTR as well as demands formproof of legality from other countries.

The export shipment test was aimed at demonstrating the readiness of Indonesia to supply verified legal timber product to world timber markets.

Three certification schemes operate in Indonesia
Forest management certification plays a significant role in sustaining Indonesian forest resources and three schemes are currently operational in the country namely; FSC, LEI, and PEFC.

The implementation of certification in Indonesia has been supported by many agencies and organisations such as The Borneo Initiative (TBI), WWF, Ford Foundation, ITTO, Tropical Forest Foundation (TFF), the Multi-stakeholder Forestry Programme (MFP) and many local consultants.

The TBI has supported certification in 19 forest management units (FMUs) covering some 1.2 mil.ha. TFF has supported 7 FMUs and the FSC has certified six FMUs in a period of 12 months.

The certified forest under LEI system amounts to around 0.4 mil. ha. of natural forests; 0.97 mil. ha .of plantations and 26.7 thousand ha. of community forests.

PEFC certification is new to Indonesia and PEFC recently inaugurated a national governing body called the Indonesian Forest Certification Cooperation (IFCC).

This body is now developing, with stakeholders, a consensus based standard and guidance for forest certification.

Domestic Log Prices

Indonesia logs, domestic prices US$ per m³
Plywood logs
Face and core logs
240-270
Sawlogs (Meranti) 229-292
Falcata logs 115-270
Rubberwood 94-125
Pine 78-160
Mahoni (plantation mahogany) 125-396


Domestic Ex-mill Sawnwood Prices

Indonesia, construction material, domestic US$ per m³
Kampar (Ex-mill)
AD 3x12-15x400cm
KD
AD 3x20x400cm
KD

729
781
750
802
Keruing (Ex-mill)
AD 3x12-15x400cm
AD 2x20x400cm
AD 3x30x400cm

417
469
480


Export Plywood Prices

Indonesia ply MR BB/CC, export FOB US$ per m³
2.7mm 625
3mm 600


Domestic Plywood Prices

MR Plywood (Jakarta), domestic US$ per m³
9mm
365-397
12mm
365-402
15mm
301-330


Export and Domestic Other Panel Prices

Indonesia, Other Panels, FOB US$ per m³
Particleboard
Export 9-18mm
Domestic 9mm
12-15mm
18mm

175-205
225-275
215-233
205-224
MDF
Export 12-18mm
Domestic 12-18mm

278-293
210-280


Export Added Value Product Prices

Indonesia, Mouldings, FOB US$ per m³
Laminated Boards
Falcata wood

370-450
Red Meranti Mouldings 11x68/92mm x 7ft up
Grade A
Grade B

520-551
478-500
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