Gaps in Indonesia’s forest legality verification system: paper importers at risk

Indonesia’s wood products audit and certification system remains inadequate in assuring legality, a new briefing released by rhe Raininforest Action Network finds. The briefing provides detailed recommendations about how the system can be improved to address these shortcomings. Buyers wishing to avoid products that violate community legal rights, as well as authorities charged with enforcing import legality legislation, should refrain from relying solely on the verification system for assurance that products certified by the system comply with Indonesian law.

Known as the Indonesian Timber Legality Verification System, or Sistem Verifikasi Legalitas Kayu (SVLK), the certification system was put into place to regulate Indonesia’s forestry sector. However, the briefing finds that rigorous, enhanced due diligence into the sourcing of forest products is still needed, even when those products bear a SVLK “legality” or “sustainability” certificate, before buyers can be confident that Indonesian forestry companies are upholding communities’ legal rights.

The report finds that loopholes in the SVLK auditing standards and weaknesses in its application result in a failure to provide adequate safeguards against endemic corruption and violations of community rights. In one example, the SVLK standard so undervalues community rights that companies may be certified as “sustainable” even when an audit finds a company in violation of all of their legal obligations to local communities. Further, SVLK audits rely heavily on “desk study” of documents without any requirement for unannounced field evaluations to assess implementation. In this way, the report finds, companies are attaining legal and “sustainable” certifications even while violating human rights.

“Certifying forest products as legal, even while they are associated with significant violations of communities’ legal rights, contributes to the continued abuses of communities and misleads buyers about risks associated with forest products,” said Rainforest Action Network’s Lafcadio Cortesi. “Perversely, this false veneer of legality and sustainability may increase the market share of these forest product companies. What’s needed is for buyers to conduct enhanced due diligence and engage their suppliers, as well as the government of Indonesia, to improve practices, the SVLK standard and its application, so that communities’ legal rights are respected and enforced.”

The briefing recommends that forest product buyers and investors make it known to producer companies, home governments and the Indonesian government that communities’ legal and human rights are an important part of the legality of the supply chain and that the SVLK should be strengthened in order to provide better assurance that community rights are respected. Further, it calls on buyers to engage the EU government to refrain from offering a “green lane” to shipments with SVLK certificates until the weaknesses described in the briefing are addressed. The report also recommends that buyers and investors engage the Japanese government to further clarify and enforce Green Purchasing laws and to not accept SVLK as adequate assurance of legality until the weaknesses in the SVLK have been addressed.