Learning lessons to promote certification and combat illegal logging in Indonesia: September 2003 to June 2006

Abstract

This report focuses on two broad topics: (i) facilitating market links to create incentives for Indonesian timber producers to invest in sustainable forest management; and (ii) defining legal timber in the Indonesian context. This report is based on information provided by Alliance participants and stakeholders through interviews and written comments from September 2005 to April 2006, as well as a review of literature on market links, certification, legality verification, timber trade, and timber tracking. Section 2 of the report provides a brief overview of the Alliance's activities in the period between September 2003 and April 2006. This section is divided into four headings that correspond to four of the five activity areas in which the Alliance is active: Strengthening Market Signals to Produce Certified and Verified Legal Timber; Increasing Supply of Certified Indonesian Wood Products; Demonstrating Practical Solutions to Achieve Certification and Differentiate Legal and Illegal Wood Supplies; and Reducing Financing and Investment in Companies Engaged in Destructive or Illegal Logging in Indonesia. Sections 3 and 4 of the report respectively deal with facilitating market links and defining legality. These topics are explored in some detail based on Alliance activities as well as background material. Section 3 has two parts. The first details the nature of demand for certified and legal verified timber products in the import markets where the Alliance has been active (Europe, USA, China and Japan). The second part looks at the impact of this demand on the Indonesian forest sector and details the barriers that prevent market signals from leading to greater supply of certified and legal verified timber products from Indonesia. Lessons that have emerged from Alliance activities related to facilitating market links and defining legality are detailed within the respective sections. Section 5 provides the broader lessons that Alliance activities have helped bring to light. The report concludes with a series of recommendations that are aimed at informing the activities of the Alliance as well as those of other actors that wish to improve forest management practices in Indonesia.