GOVERNMENT PERSIST TO MAINTAIN THE SLVK WOOD LEGALIZATION SYSTEM

The Ministry of Environmental Affairs and Forestry (KLHK) underscored they would not cancel the SLVK. The Director General of Production Forest Management of KLKH Ida Bagus Putera Prathama stated on Tuesday (28/7) that the discourse on cancellation of SLVK was thrown several times but he made sure that the Regulation would still be in effect

The issue of SLVK Regulation cancellation again emerged, reasoning that small businesspeople were disadvantaged by the rule. The SLVK Regulation was regarded as weakening their competitiveness as they had to pass complicated certification procedure and costly too. In response to the grievances Ida said that she was trying to scheme up a strategy to help small companies undergo the certification process.

Ida further said that today KLKH was even planning to set up a legal trading house for small companies. She said that the process of setting up a Trading House especially for small companies was being discussed with players of the industry, among others The Association of Indonesian Forest Managers (APHI). “The Ministry had not set up the time schedule for establishing this Trading House” Ida said.

This Trading House was expected to jack up wood production and export because all the products traded were legal. The proportion to set up a trading house emerged as President Joko Widodo stated he would cancel SLVK obligation for the downstream wood industry. the Trade Center would guarantee supply of wood for industry players, especially the furniture industry while SLVK would be effective on upstream wood industry including pulp and paper.

Ida also assured that all wood products and by products being SLVK certified could easily enter Uni Europe market by year end. The reason was that the process of negotiation with Uni Europe in the Forest Law Enforcement, Governance and Trade [FLEGT] was entering final stage and to begin next September. When the process of negotiation was completed all SLVK certified wood products would not have to undergo strict due diligence procedures in Uni Europe.

Ida remarked further that in the next negotiation process there were 3 lists to be explained, i.e. Export Declaration (DE), follow up action by the Government on management units which were not in compliance, and periodic evaluation. When the negotiation was ratified, Uni Europe was only committed to accept certified wood.

The Government noted export value of goods increased after certification prerequirements was in effect. Data of SILK unveiled that export of wood in the form of wooden panel, woodworking, pulp, paper, and pre-fabricated materials increased since the SLVK certification requirement was in effect on January 1, 2013.

From January 1, 2013 to June 25, 2015 more than 260,000 V-legal documents had been issued for products exported to 29 countries. Export value also increased gradually. Before SLVK was in effect export of forestry products in 2012 was posted at USD 5.17 billion. In 2013 when SLVK certification was in effect, export value increased to USD 5,74 billion and constantly increased to USD 5.96 billion in 2014. Ida stated that export value would soar up when SLVK was accepted wholly by Un Europe. (SS)

Business News - July 31, 2015