Work Plan on Legality

Developing Minimum Standards of Legality,
Timber Tracking and Chain of Custody Systems,
Verification Systems Among Asia Forest Partnership (AFP) Partners

Built on a Legality Standard Developed by the Indonesia-UK MOU

The most prominent initiative, in terms of establishing a legality standard, is the agreement between the Government of Indonesia and the United Kingdom to work together to reduce illegal logging and to discourage international trade in illegally-logged timber and timber products.⁹ The Memorandum of Understanding (MOU) sets forth provisions for the development, testing and implementation of systems of verification of legal compliance based on independently verified chain-of-custody and identification systems (Article 1). Under the MOU, the development of a legality standard was carried out under the auspices of the Indonesian Ministry of Forestry in close partnership with TNC, and with contractors SGS and URS Forestry. ¹⁰

The Stakeholder Consultation held in Jakarta, June 2003, identified that “Timber is legal when the validity of its origin, logging permit, logging system and procedures, administration and transport documentation, processing, and trade or transfer are verified as meeting all applicable legal requirements.”

This report examines the legality standard for timber products based on the “Principles, Criteria and Indicators of Legality for Forestry Operations and Timber Processing in Indonesia” as prepared by the TNC with the endorsement of both governments. The legality standard for timber products from Indonesia comprises seven principles, each supported by several criteria and indicators linking the principle to existing forest law and related legislation.

The principles are:

• Principle 1 Land Tenure and Use Rights
• Principle 2 Physical and Social Environment Impact
• Principle 3 Community Relations and Workers Rights
• Principle 4 Timber Harvesting Laws and Regulations
• Principle 5 Forest Taxes
• Principle 6 Log Identification, Transfer and Delivery
• Principle 7 Timber Processing and Shipping

Matrix for Comparison of Legal Requirements

In order to provide a system to consider legality, “the Principles, Criteria and Indicators for Forestry Operations and Timber Processing in Indonesia” were structured in the form of a matrix. This matrix is designed to evaluate country regulations and timber tracking systems with respect to the critical elements that are considered in determining the legality of forest management, forestry operations and timber processing.

This generic matrix has been applied to evaluate forestry regulations among different countries and regions, and among voluntary schemes. As for forestry regulations, Peninsular Malaysia, States of Sabah and Sarawak were selected as examples of how the matrix could be used to compare similarities and differences within a country. The principles and criteria have been adapted to the legal requirements specific to these regions. As for the voluntary schemes, the Forest Stewardship Council (FSC), the MTCC, the Global Forest and Trade Network (GFTN), the Global Forestry Services (GFS), and the Tropical Forest Trust (TFT) were selected among schemes that are currently being used to verify legality of forest management practices and traceability of timber from a forest to processing and sales.

The matrix is comprised of general principles, followed by criteria and indicators to better define and guide the principles. Principles 1 through 6 followed the elements identified as critical for Indonesia to evaluate legality. Principle 7 has been revised to reflect the requirements used by the voluntary schemes as a means to identify critical elements for the chain-of-custody, to ensure the traceability of timber.

Each indicator is scored for compliance to verify the degree to which the criteria of a particular scheme comply with the legal requirements. The compliance score ranges from 0 to 2: Adequate = 2; Inadequate = 1; and Not Addressed = 0.

For the analysis of government regulations, each indicator in the matrix is further classified into three categories to verify the “Clarity of Laws,” “Level of Enforcement” and “Level of Knowledge.” In this case, the compliance score also ranges from 0 to 2: Adequate = 2; Inadequate = 1; and Not Addressed = 0.

Overview of Regulatory Regimes

The agency responsible for forest law enforcement is generally the forestry department at the national and sub-national levels. In some countries, the civil police take part in its enforcement as well. In many developing countries, there are often laws regulating forestry operations (Appendix 14) that make it difficult to comply with and enforce those laws.

All four regulations analyzed in this report require the identification and transport of logs. While these require the tagging and identification of logs to some extent, this may not be sufficient to provide assurances of legality of timber sources. The requirements for log tagging vary among the 4 regulations. For instance, in Permanent Forest Estates in Peninsular Malaysia, a log can be traced back to the stump since there is a matching tag on the stump and the log. In Sarawak, tagging is not required until a log reaches the log yard, and after that it would only identify the harvest block the log came from.

The flowcharts (Appendix 13) show five different log-tracking systems that are currently being used in Malaysia and Indonesia. They are based on the legal requirements of current forest regulations (see Table 1 and Appendix 14 for the list of regulations). In some cases, an individual log can be traced back to the stump, but in other cases, a log can be only traced back to a log yard.

Table 1. List of legal requirements regarding management of natural forests and plantations in Peninsular Malaysia, Sabah, Sarawak and Indonesia.

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