City, Country Date, 2013

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1 City, Country Date, 2013

2 Overview Today s Plan Introduc)on and Opening Remarks Timber Trade Flows from Producers and Processing Countries to Major Markets Interna)onal Policies and Conven)ons Impac)ng the Timber Trade The Lacey Act Australia Illegal Logging Prohibi)on Act Lunch Due Care / Due Diligence in Establishing Legality Q & A, Further Needs and Gap Assessment Discussion Introduc)on to the Global Forest Trade Network Supply Chain Management Further Informa)on

3 TRAFFIC This course was prepared by TRAFFIC, the wildlife trade monitoring network TRAFFIC works to ensure that trade in wild plants and animals is not a threat to the conservation of nature.

4 TRAFFIC To encourage changes in behaviour (policy and practice) of specific target groups who are in a position to reduce that threat and, ensure that wildlife trade contributes to meeting human needs. To Encourage Change Policy Practice Solutions linked to trade in wild animals and plants

5 TRAFFIC TRAFFIC International TRAFFIC Europe TRAFFIC South Asia TRAFFIC North America TRAFFIC East Asia TRAFFIC TRAFFIC Central Africa South America TRAFFIC Southeast Asia TRAFFIC East and Southern Africa TRAFFIC Global marine program

6 Timber Trade Flows from Producers and Processing Countries to Major Markets

7 Indonesia s Role in the International Timber Trade Indonesia is one of the world s biggest global exporter and consumer of timber and timber products Sources wood from some countries with big legality issues Imported wood is a risk

8 International Trade in Forest Products The demand for legal timber is increasing in recent years due to environmental sustainability concerns arise by importing countries. The International efforts in achieving environmental sustainability are existed and have been implemented by some countries thru Policies and Conventions such as :- CITES FLEGT EUTR & VPA LACEY AUSTRALIAN ACT

9 Indonesia s International Trade in Forest Products Indonesia is one of the world s biggest global exporter, consumer and importer of timber and timber products Indonesia covers about million ha, spread over 17,000 islands, about the same area as France, Spain, Germany and the UK together. In the last 5 years the value of Indonesian export from timber and timber products grew from US$ 8.3 billion to US$ 9.7 billion per annum. Indonesia exports a wide variety of forest products, ranging from plywood, pulp and a variety of paper products to furniture and handicrafts. The main export markets for Indonesian timber products are the EU. Within the EU the main market destinations for Indonesian timber are: Germany, UK, the Netherlands, Belgium, French, Spain and Italy.

10 Indonesia s International Trade in Forest Products Estimated Indonesia s Timber Product Exports in

The Indonesian Forest Area as of April 2011 designation More than 17,000 islands 181.157 million ha land area 130.

11 The Indonesian Forest Area as of April 2011 designation More than 17,000 islands million ha land area million ha forestland Func1on Areas (Mill.Ha) Conserva1on Forest 26,8 Protec1on Forest 28,8 Produc1on Forest 32,6 Limited Produc1on Forest 24,4 Conver1ble Produc1on Forest 17,9 Total 130,68

12 Indonesia s International Trade in Forest Products Leading Commodity Source Estimated Indonesia s Timber Product Exports in (By Product Group)

13 Indonesia s International Trade in Forest Products Certified sustainable and verified legal natural production forest in producer countries,2006 and 2009 Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

14 Indonesia Forest Product Exports to EU Countries Top Exporter s Market Share of U.S. imports (YTD) Total U.S. Imports of Tropical Lumber ($000 s) Country YTD 2012 Brazil 29% Ecuador 9% Malaysia 10% Cameroon 8% Congo 4% Ghana 5% Indonesia 5% YTD 2012 Imports: +12% value, +8% volume

15 Indonesia Forest Product Exports to US Top Exporter s Market Share of U.S. imports (YTD) Total U.S. Imports of Hardwood Plywood ($000 s) Country YTD 2012 China 62% Indonesia 11% Russia 9% Canada 5% Malaysia 5% Ecuador 2% Brazil 1% YTD 2012 Imports: +23% value, +2% volume

16 Indonesia Forest Product Exports to Australia Estimated percentage Indonesia forest product exports to Australia in New Zealand 15% Timber Import from Indonesia to Australia is 8% of total imports Other 38% China 19% Finland 3% Germany 4% Malaysia 6% Germany 4% Forestry : $4.2 Billion Sources of Australian merchandise imports

17 Indonesia Forest Product Exports to Australia Estimated Value Indonesia forest product exports to Australia in Value ($ million )

18 Indonesia, Illegal Timber Imports and Corruption Relationship between illegal logging and corruption in Indonesia Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

19 Indonesia and Illegal Timber Exports Discrepancies in trade data for logs shipped from Indonesia to China, Source : Comparison of official trade statistics Note: Trade volumes reported at both export and import for China and Hong Kong are combined to eliminate discrepancies resulting from transit trade Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

Indonesia and Illegal Timber Exports Estimates of illegal exports of Indonesian sawn timber to China, 2004-08 based on trade data discrepancies Source : Official trade statistics Note: Trade volumes

20 Indonesia and Illegal Timber Exports Estimates of illegal exports of Indonesian sawn timber to China, based on trade data discrepancies Source : Official trade statistics Note: Trade volumes reported at both export and import for China and Hong Kong are combined to eliminate discrepancies resulting from transit trade Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

21 Global Illegal Timber Exports The European Union is the prime destination of Illegal wood

22 Global Illegal Timber Exports

23 Global Illegal Timber Exports Where is illegal timber coming from? Trading Partner s Concern Indonesia has progressed since this chart was prepared in 2004 WORLD BANK 2006; Data source: SENECA CREEK 2004

24 Consumers Countries and Illegal Timber Imports Estimated illegal wood product consumption per capita in consumer countries Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

25 Consumers Countries and Illegal Timber Imports Estimated illegal wood imports by consumer and processing countries studied from all producer countries, by product group, Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

26 Indonesia and Illegal Timber Exports Estimated percentage of illegal timber exports from producer countries

27 Indonesia and Illegal Timber Exports Estimated proportion of illegal timber exports from countries in 2007

28 Indonesia and Illegal Timber Exports Estimated volumes of illegally exported sawn timber from Indonesia destined for consumer countries, based on trade data discrepancies Source : Country trade data. Based on discrepancies between reported exports of sawn timber by Indonesia (where exports of almost all forms are banned) and reported imports of sawn timber from Indonesia by consuming countries. Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

29 Indonesia and Illegal Timber Exports Estimated illegal wood imports by consumer and processing countries studied from all producer countries, by source country, Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

30 Indonesia and Illegal Timber Exports Estimated imports of illegally sourced wood products by the UK, Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

31 Indonesia and Illegal Timber Exports Estimated imports of illegally sourced wood products by the Netherlands, Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

32 Indonesia and Illegal Timber Exports Estimated imports of illegally sourced wood products by France, Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

33 Indonesia and Illegal Timber Exports Estimated imports of illegally sourced wood products by the US, Lawson, S. & MacFaul, L Illegal Logging and Related Trade. Chatham House

product 9% of Total Import Bill /AUD400 million The major problem areas for

34 Indonesia and Illegal Timber Exports Estimated percentage Of Illegal Timber Import in Australia The potential volume of illegally sourced forest and wood product 9% of Total Import Bill /AUD400 million The major problem areas for Australia appear to be South East Asia, particularly Indonesia, Malaysia and possibly China.

35 Indonesia and Illegal Timber Exports Estimated percentage Illegal forest production from China into Australia Percentage %

36 Protest against destruction of the forest

How Indonesia Tackle the Illegal Logging Problem To Combat illegal logging, the Government of Indonesia, through the Ministry of Forestry (MOF) has established eight policy priorities for the

37 How Indonesia Tackle the Illegal Logging Problem To Combat illegal logging, the Government of Indonesia, through the Ministry of Forestry (MOF) has established eight policy priorities for the forestry Sector in order to achieve sustainable forest management ( SFM ). Indonesia has signed MOUs with UK, China, Etc to collaborate on combating illegal logging and associated timber trade. In 2011, Indonesia has entered into a Voluntary Partnership Agreement (VPA) with the EU to ensure only legal timber is exported to EU. The government developed and implemented a Timber Legality Verification system ( SLVK ).

38 Introduction of certification system Indonesia booked a 114 percent increase in sales of timber product exports to the European Union during the first quarter of the year, following the introduction of a self - made certification system to help the country comply with international regulations. The country s exports of timber products, especially furniture, to the European Union reached $416 million from January through March, up from $193.9 million in the same period of last year (Ministry of Trade)

FLEGT s Influence on Markets, Trade

FLEGT s Influence on Markets, Trade and Economic Development Shaping forest policy: Global Initiatives and the European Arena Dr. Ed Pepke, Senior Timber Trade & Policy Analyst Dr. Alex Hinrichs, Senior