Monday, 7 January 2013


During the remaining period between now and December 22, 2012, there are many members of Indonesian Forest Concessionaires Association (APHI) who have not been able to meet Wood Legality Verification System (SVLK) requirements. Raharjo Benjamin, Vice Chairman of APHI, stated this matter.

Currently, there are 70 concessionaires who are unable to pass SVLK standards, so they will be imposed with sanctions. And, 12 concessionaires have received a third reminder letter (SP3). And, there are also 35 concessionaires who will probably receive SP3.

From result of APHI’s analysis, a majority number of APHI members, whether those who mange plantation forests or natural forests, will be unable to implement SVLK in accordance with the requirements of the Forestry Minister where they are required to obtain SVLK certificate by December this year.

During a period from September to December, in addition to being required to make a General Work Plan (RKU) based on Periodic Comprehensive Forest Inventory (IHMB), they are also required to pass SVLK. So, there will be many of our members who will be sanctioned, and consequently there will be many layoffs, Raharjo said.

I already requested the Forestry Minister to give time extension for our members who have difficulty in implementing the requirements, he said. APHI members are still handling problems, such as cost problem and appraisal institution problem. The reason is that there are only eight independent SVLK appraisal institutions. While, there are at least 250 APHI members who have not implemented the requirements.

It is impossible for all our members to be appraised by these 8 institutions in the remaining 3 months, he said. Based on APHI’s data, data on achievement of Sustainable Production Forest Management (PHPL) certification/VLK of holders of Timber Forest Product Exploitation Permit (IUPHHK) has not been according to expectation. Currently, there are 41 holders of IUPPK for Natural Forest/IUPHHK-HA (15 percent) and IUPHHK for Plantation Forests/IUPHHKHT (9.5 percent) as members of APHI who have obtained mandatory PHPL certification scheme.

This condition is quite concerning as the government sets December 22, 2012 as deadline for PHPL/VLK certification. We requested the deadline to be extended. Based on circular letter of Director General of Forestry Business Development, the deadline is postponed until July 2012. Then, regarding cost, we postponed Dana Reboisasi/DR (Reforestation Fund) to be returned not in the form of cash, but in the form of trainings for the preparation for obtaining SVLK ?, he said.

His party feels concerned with low achievement of PHPL/SVLK certification. Moreover, there is an increasing number of national wood productions. This condition is deteriorated by high cost of production due to long-distance transportation and high cost of levies and escalating social problems.

We asked for a postponement of deadline. Besides that, our members must be urged. The problem is mainly in the owner of the company. The orientation of the company is to make his or her business flourish in order to get profit.

Imposition of cost mandatory PHPL and VLK certification on business operator is a heavy burden. The scheme is mandatory, and it is part of government’s surveillance program. There should be sufficient fund from the government because cost of appraisal and certificate surveillance each year in the midst of declining performance of forestry business becomes an additional cost which is burdening. The on which is required is RKU based on IHMB which cost is quite high, reaching Rp1 billion per management unit. To manage it, we must prepare Rp1 billion in cash. The range is between Rp500 million to 1 billion, but there is also cost of accompaniment and other, he said.

The burden of business operators is additional cost and time. On the other hand, price of log and plywood is in decline. So, cost of production increases, but selling price decreases, therefore profit continually decreases, he said. Raharjo also questioned about SLVK and non-SLVK incentive because whether timber is certified or uncertified, the price is the same, while the cost is higher. So, there has to be another incentive for business operators who have obtained SLVK. 

BUSINESS NEWS - September 26, 2012

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