THE MINISTRY OF ENVIRONMENT AND FORESTRY DIRECTORATE GENERAL OF FORESTRY ENTERPRISES
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1 THE MINISTRY OF ENVIRONMENT AND FORESTRY DIRECTORATE GENERAL OF FORESTRY ENTERPRISES REGULATION OF DIRECTOR GENERAL OF FORESTRY BUSINESS MANAGEMENT NUMBER: P.13/VI-BPPHH/2014 CONCERNING GUIDELINES OF TIMBER LEGALITY CERTIFICATION IN GROUPS WITH THE BLESSING OF ONE ALMIGHTY GOD DIRECTOR GENERAL OF FORESTRY ENTERPRISES Considering : that in order to implement further provision on timber legality certification as groups as referred in Article 8 paragraph (7) of Regulation of the Ministry of Forestry Number P.43/Menhut- II/2014 concerning performance assessment of sustainable production forest management and timber legality verification to license holders or private forest holders as amended by Regulation of the Minister of Environment and Forestry Number P.95/Menhut-II/2014, it is necessary to stipulate Regulation of Director General of Forestry Enterprises on Guidelines of Timber Legality Certification as groups. Recalling : 1. Law Number 41 of 1999 on Forestry (State Gazette of the Republic of Indonesia Year 1999 Number 167, Supplement to State Gazette of the Republic of Indonesia Number 3888) as amended by Law Number 19 of 2004 on Stipulation of Regulation of Government in lieu of Law Number 1 of 2004 on amendment of Law Number 41 of 1999 on Forestry to become laws (State Gazette of the Republic of Indonesia Year 2004 Number 86, Supplement of State Gazette of the Republic of Indonesia Number 4412); 2. Regulation of Government Number 6 of 2007 on Forest Administration and the Arrangement of Forest Management Planning, and Forest Utilization (State Gazette of The Republic of Indonesia Year 2007 Number 22, Supplement to State Gazette of the Republic of Indonesia Number 4696) as amended by Regulation of Government Number 3 of 2008 (State Gazette of Republic of Indonesia Year 2008 Number
2 -2-16, Supplement to State Gazette of Republic of Indonesia Number 4814); 3. Regulation of the President Number 47 of 2009 on Establishment and Organisation of State Ministry, as amended several time, lastly by Regulation of the President Number 135 of Regulation of the President Number 165 of 2014 on the administration of Task and Function of Working Cabinet; 5. Regulation of the Minister of Forestry Number P.43/Menhut- II/2014 on Performance Assessment of Sustainable Production Forest Management and Timber Legality Verification to License Holders or Private Forest Holders (Official Gazette of Republic of Indonesia Year 2014 Number 883) as amended by Regulation of the Minister of Environment and Forestry Number P.95/Menhut-II/2014 (State Gazette of the Republic of Indonesia Year 2014 Number 1992) HAS DECIDED : to Stipulate : REGULATION OF DIRECTOR GENERAL OF FORESTRY ENTERPRISES ON GUIDELINES OF TIMBER LEGALITY CERTIFICATION AS GROUPS Definition of terms in this regulation: CHAPTER I INTRODUCTION Article 1 1. Certificate of Timber Legality herein after called S-LK is a reference letter given to license holders, concession holders or private forest owners that stated that the license holders, concession holders or private forest owners met the timber legality standard. 2. Group of timber legality certification herein after called group is a group of number of IUIPHHK holders with the capacity of up to 6,000 m3 per year, or TDI, or IUI or home industry/artisan or private forest or IUPHHK-HTR, or IUPHHK-HKM or IUPHHK-HD holders whom will be mentored in preparation of S-LK as group
3 -3-3. Mentoring is an activity to accompany, guide, assist, prepare and ensure that the groups of license holders are ready to undertake S-LK process. 4. The mentor is a competent individual to undertake mentoring to group and it is stipulated by Head of District/City. 5. Business License for Primary Industry of Timber Forest Product herein after called as IUIPHHK is a licence to process logs and or small logs into one or several type of products in a particular location granted to a license holder by competent authority. 6. Industry Business License herein after called as IUI is Business License for Advance Timber Processing Industry that have total investment over IDR 200,000,000 (two hundred million rupiahs), excluding land and buildings. 7. Industry Registered Certificate herein after called TDI is a Business License for Advance Timber Processing Industry that have total investment of up to IDR 200,000,000 (two hundred million rupiahs), excluding land and building of business premises. 8. Private forest is a forest located within a land that burdened with land right outside forest area and it is proven by land title or land right. 9. Private forest owner is the owner of forest located within a land that burdened with land right outside forest area and it is proven by land title or land right recognized by National Land Agency. 10. Business License for Utilization of Timber Forest Product on Community Plantation Forest within Plantation Forest (IUPHHK-HTR) is a business license granted to utilize forest product such as timber within plantation forest at production forest that is built by Individual or cooperative to increase potential and quality of production forest by applying silviculture in order to ensure sustainability of forest resources. 11. Business license for utilization of timber forest product within community forest (IUPHHK-HKm) is a business license granted to utilize forest product such as timber within working area at production forest areas. 12. Business license for utilization of timber forest product in the village forest (IUPHHK-HD) is a business license granted to utilize forest product such as timber within village forest at production forest through the activities of planting, maintaining, harvesting and marketing.
4 Home industry/artisan is a small industry of household scale with the investment value of up to IDR 5,000,000 (five million rupiahs) excluding land and buildings and/or having workers of 1 to 4 people. 14. Small Industry is an industry with total investment of up to IDR 200,000,000 (two hundred million rupiahs), excluding land and buildings of business premises 15. Small and Medium Industry herein after called as IKM is the Industry that hold Industry Registered Certificate (TDI) and Industrial Business License (IUI) with limit of the investment value of up to IDR 10,000,000,000 (ten billion rupiahs) excluding land and buildings of bussiness premises. 16. Memorandum of Understanding (MOU) is a mutual agreement between Director as fund provider of mentoring and the party who will conduct mentoring to group of license holders 17. Director General is a Director General that is assigned tasks and responsibilities in forestry enterprises. 18. Director is a Director that is assigned tasks and responsibilities in Processing and Marketing of Forest Product sector. 19. Treasurer is a treasurer of Agency's expenses that provide mentoring fund. 20. District/city office is a district/city office that in charge of forestry or industry. 21. Provincial office is a Province office that in charge of forestry or industry. 22. Watershed Management Agency (BPDAS) is a Technical Implementation Unit of Watershed Management 23. Monitoring Agency of Utilization of Production Forest (BP2HP) is a Technical Implementation Unit at Forestry Enterprises Sector. 24. Extension Coordination of Agriculture, Fisheries and Forestry (Bakorluh) is an education coordination body at provincial level 25. Extension Implementation of Agriculture, Fisheries and Forestry (Bapeluh) is an education implementation body at District/City level Article 2 (1) Timber Legality Certificate (S-LK) as groups can be undertaken to: a. State forests managed by community (HTR, HKm, HD); b. Private forests;
5 -5- c. IUPHHK with the capacity of up to 6,000m3/year and IUI with the investment value of up to IDR 500,000,000 (five hundred million rupiahs); d. Industry Registered Certificate; e. Registered Timber Depot (TPT); and f. Home Industry/Artisan (2) The form of certification group as referred in paragraph (1), that is: a. for the holders of IUPHHK-HTR/Hkm/KD, such as forest farmer group; b. For private forest owner, such as community forest farmer group/combined group of farmers/community forest farmer association. c. For Industry holders (IUIPHHK with the capacity of up to 6,000 m3 per year, TDI, IUI) and TPT, such as region association, group of timber processing industry. d. For home industry owner and Artisans, such as cooperation, group of Artisan. (1) the requirement of S-LK as groups for : Article 3 a. the holders of IUPHHK-HTR/HKm/HD: 1. the size of IUPHHK-/HKm/HD areas at least 250 (two hundred fifty) hectares, or can be less than 250 (two hundred fifty) hectares if it is located within 1 (one) district/city. 2. have notary deed or statement letter accros materai on group establishment. 3. have AD/ART or Agreement between members of the group. 4. have list of management structure and members of the group. b. private forest owners: 1. the size of private forest areas at least 250 (two hundred fifty) hectares, or can be less than 250 (two hundred fifty) hectares if it is located within 1 (one) district/city. 2. have notary deed or statement letter accros materai on group establishment. 3. have AD/ART or Agreement between members of the group. 4. Have list of management structure and members of the group. c. the holders of IUIPHHK with the capacity of up to 6,000 m3 per year or IUI or TDI or TPT: 1. number of group members at least 5 (five) holders of IUIPHHK with the capacity of up to 6,000m3 per year or IUI or TDI or TPT; 2. have notary deed or statement letter accros materai on group establishment. 3. have AD/ART or Agreement between members of the group. 4. have list of management structure and members of the group. 5. in case the groups of industry holder (IUIPHHK capacity of up to 6,000 m3 per year, IUI, TDI) and TPT incorporated in local association, shall have
6 -6- notary deed or statement letter across materai on the establishment of association group as well as have management structure and organisation s supervisor. d. home industry owner and artisan: 1. number of member at least 5 (five) home industry owners/artisans; 2. have notary deed or statement letter accros materai on group establishment. 3. have AD/ART or Agreement between members of the group. 4. have list of management structure and members of the group. 5. in case home industry owners and artisans incorporated in a cooperation, shall have deed of establishment made by official deed of cooperation and have management structure and cooperation s supervisor. (2) Provisions among group members as referred in paragraph (1), such as agreement to accept consequences of suspension or revocation of group certification in case one of the group members does not meet the certification requirements. Article 4 Financing of S-LK as group (1) Financing of timber legality certificate for first period and first surveillance can be charged to Government or other legitimate and unbinding source against groups of private forest owner, the holders of IUPHHK-HTR, IUPHHK-HKm, IUPHHK-HD, IUIPHHK with the capacity of up to 6,000m3 per year, IUI, TDI, TPT, Home industry/artisan and IKM. (2) Financing of S-LK surveillance against groups of private forest owners, the holders of IUPHHK-HTR, IUPHHK-HKm and IUPHHK-HD can be charged to Government or other legitimate and unbinding sources as long as it is yet to be produced. (3) The procedures of mentoring process and financial proposal are as referred in paragraph (1), included in this Regulation of the Director General. Article 5 With the stipulation of this regulation, the Regulation of Director General of Forestry Enterprises Number P.3/VI-BPPHH/2013 on Guidelines of Group Mentoring in order for readiness of timber legality certification is revoked and is no longer valid.
7 -7- Stipulated in Jakarta On the date of 29 th December 2014 DIRECTOR OF GENERAL OF FORESTRY ENTERPRISES Signed BAMBANG HENDROYONO Copies of this regulation are submitted to: 1. Minister of Environment and Forestry 2. Echelon I Officer within Ministry of Environment and Forestry 3. Echelon II Officer within Directorate General of Forestry Enterprises 4. Head of Provincial in charge of forestry 5. Head of Provincial in charge of industry 6. Head of Provincial in charge of cooperation of UMKM 7. Head of District/City in charge of forestry 8. Head of District/City in charge of industry 9. Head of District/City in charge of cooperation of UMKM 10. Head of Watershed Management Agency across Indonesia 11. Head of Monitoring Agency for Utilization of Production Forest across Indonesia 12. Extension Coordination of Agriculture, Fisheries and Forestry educations across Indonesia 13. Extension Implementation of Agriculture, Fisheries and Forestry educations across Indonesia
8 -8- Attachment of Regulation of Director General of Forestry Enterprise NUMBER P.13/VI-BPPHH/2014 Date 29 th November 2014 Concerning: GUIDELINES OF TIMBER LEGALITY CERTIFICATION AS GROUPS I. Mentoring Process Mentoring process is a series of activities undertaken by stakeholders in term of S-LK that include: A. Inventory and Identification of Group 1. Inventory and identification of groups can be carried out by Government, Local Government or accountable source. 2. In case data is obtained by Local Government, then inventory and identification is undertaken with the following procedures: a. Inventory and Identification for groups of TDI holder, IUI, Home industry/craftsman is conducted by District/City Office in charge of industry. b. Inventory and Identification for groups of private forest owner, holders of IUPHHK-HTR, IUPHHK-HKm, IUPHHK-HD, IUIPHHK with the capacity of up to 6,000 m3 per year is conducted by District/City office in charge of forestry; c. Data of inventory and identification for IUIPHHK holder with the capacity of up to 6,000 m3 per year, TDI, IUI, Home industry/artisan consist of: name of business operators/license holder, licensing evidence, type of production, production capacity and location d. Data of inventory and identification for private forest owner, holders of IUPHHK-HTR, IUPHHK-HKm, and IUPHHK-HD consist of: name of owner/license holder, ownership evidence/licensing, location, area and dominant plantation. e. Inventory and identification, and selection of groups can be undertaken in coordination with relevant agencies, such as BPDAS, BP2HP, District office in charge of cooperation and UKM, Bakorluh and/or Bapeluh. f. The outcome of Inventory and Identification of Groups will become a basis of proposing of group mentoring 3. in case the data is obtained from other accountable source, then inventory and identification is conducted with the following procedures: a. Inventory and Identification for groups of TDI holder, IUI, Home industry/craftsmen is conducted by third party/lsm
9 -9- b. Inventory and Identification for groups of private forest owner, holders of IUPHHK-HTR, IUPHHK-HKm, IUPHHK-HD, and IUIPHHK with the capacity of up to 6,000 m3 per year is conducted by third party/lsm. c. Data of Inventory and Identification in accordance with the need of third party/the financial assistance provider LSM or donor d. The outcome of Inventory and Identification of Groups will become a basis of proposing of group mentoring B. Stipulation of Groups 1. Group is proposed by Head of District/City office to Director General with copies to Regent/Major and Head of Provincial office. 2. In term of groups of private forest owners, the holders of IUPHHK-HTR, IUPHHK-HKm, IUPHHK-HD, IUIPHHK with the capacity of up to 6,000 m3 per year, the proposal to be submitted by Head of District/City in charge of forestry with copies to Regent/Major, Bapeluh and Head of Provincial Office in charge of forestry. 3. In term of groups of IUI holder, TDI, Home industry/artisan, the proposal carried out by District/City Office in charge of industry with copy to Regent/Major and Head of Provincial Office in charge of industry. 4. in case Head of district/city does not propose, then it can be proposed directly by instructor/supervisor 5. the requirement of proposing a mentor are as follows: a. incorporated in groups, local association, or cooperation. b. having and attaching list of group management structure, or cooperation s management structure c. having and attaching list of group member include information of member name, member identity number, SK license owned, type and production capacity of IUIPHHK holders with capacity of up to m3 per year, IUI, TDI include home industry/artisan, the size of area for the holder of IUIPHHK-HTR/HKm/HD or evident of land ownership for private forest owners, d. have notary deed or statement letter accros materai on group establishment. e. in case groups are incorporated to a cooperation, shall have deed of establishment made by official deed of cooperation and have cooperation s organisation chart. f. in case groups are incorporated to local association, have notary deed or statement letter across materai on the establishment of association group as well as have organisation structure. g. have AD/ART or Agreement between members of the group. C. the format of list of group members is as follows:
10 -10-1) Group of Private Forest Owner No. Member Name Address ID No. NPWP Evidence No. of Land Ownership Size of Area Type of Plantation Details 2) Group of Private Forest Owner/IUPHHK-HTR/IUPHHK-HKm/IUPHHK-HD Member ID SK IUPHHK Size of Type of No. Address NPWP Name No. No. Area Plantation Details 3) Group of IUIPHHK with capacity of up to 6,000 m3 per year, IUI and TDI Member SK IUIPHHK/ Type of Production No. Address NPWP Name IUI/TDI No. Production Capacity Details 4) Group of Home Industry/Artisan Member No. Address ID No. NPWP Name Type of Production Production Capacity Details 6. Director conducts research against mentoring proposal based on the availability of financing, size of area and number of license/right holders. 7. The outcome of research is informed through letter to Head of District/City office related to approval or rejection of intended mentoring proposal. 8. In case the mentoring activity proposal/s-lk is conducted by LSM or third party, then mentoring mechanism and/or group of S-LK is submitted to LSM/third party of finance assistance provider/donor in accordance with the provision.
11 -11- D. Creating Memorandum of Understanding (MoU) 1. Mentoring activities financed by Government or other legitimate and unbinding source that in its implementation is assisted by: a. Provincial/District/City offices in charge of Industry, for group of holders of IUI, TDI, Home industry owner/artisan or; b. Provincial/District/City offices in charge of Forestry, for group of private forest owners, holders of IUPHHK-HTR/HKm/HD, IUIPHHK with capacity of up to 6,000 m3 per year; or c. community based organization (LSM) 2. Form of cooperation in Mentoring activity is Memorandum of Understanding (MoU) 3. Types of MoU are as follows: a. MoU between Director and District/City Office in charge of forestry and/or industry. In term of location of group is across district/city then MoU is made between Director and Provincial Office. b. MoU between mentoring executor/service provider party and financial provider, if S-LK proposal is submitted by third party/lsm and financed by third party/lsm. 4. Selection of MoU Type depends on agreement between relevant parties, particularly FIRST PARTY as financial provider and SECOND PARTY as executor of mentoring. 5. Once the signing of MoU is completed, then SECOND PARTY provide name and bank account number of executor to transfer fund from Director as financial provider as well as submitting details budgeting (RAB) of mentoring from FIRST PARTY to SECOND PARTY 6. Financing Standard as mention in point 5, is stipulated by Government E. Mentoring Implementation 1. The establishment of steering team a. Provincial office in charge of forestry and/or industry established mentoring steering team by decision letter once MOU is in place. b. Steering Team consist of officer from Provincial and Local District/City office in charge of forestry and/or industry, and/or local BP2HP, and/or BPDAS, and/or Bakorluh and/or Bapeluh. c. Steering Team assigned to: 1) conduct counselling and briefing to mentor until mentoring process is completed. 2) assist mentor in implementing mentoring if needed as resource. 3) monitor supervisory process to be run as appropriate until report of mentoring result available. 4) facilitate a communication between mentor and Director as the financial provider.
12 -12- d. Steering team to be provided a briefing by Director, Provincial office in charge of forestry and/or industry, BPDAS and/or BP2HP e. Briefing material given to steering team, amongst others is LVLK (VLK for license holder, PUHH) and financial accountability f. in case of mentoring is conducted by third party /LSM and financed by third party/lsm, Steering Team Establishment can be excluded and refer to policy of both parties in accordance with the agreement attached to MoU. 2. Establishment of Mentor a. Mentor is formed by District/City office in charge of Forestry and/or industry in coordination with BPDAS/BP2HP, Bakorluh and Bapeluh once the establishment of steering team in place with the SK stipulation if the mentor comes from government officer. b. In case the mentor established come from LSM, it is to be assigned with MoU between District/City office in charge of Forestry and/or Industry and relevant LSM. c. in case the location of group is in several districts/cities or across district/city, the mentor is stipulated by provincial office d. Mentor at least consist of 1 (one) mentor for 1(one) group. e. Mentor can come from: 1) PNS Forestry Instructor, Community based forestry (PKSM) Instructor, other Instructor, individual, LSM, Private forest instructor, forestry/industry technical personnel. 2) Especially for PKSM, other instructor, individual, LSM, Private forest instructor and retirement at least should be graduated from high school (SLTA). f. Mentor shall understand SVLK and preferably a person that has attended SVLK auditor/facilitator education and training g. Mentor is responsible for: 1) accompanying, guiding, assisting, preparing and ensuring that the groups is ready to undertake S-LK process. 2) Settling financial responsibility to finance provider through steering team in accordance with provision of financial responsibility. h. the Mentor does not involved in certification activity at timber legality verification bodies for group that been mentored. i. in case the mentoring is conducted by third party/lsm and financed by third party/lsm, the establishment of mentoring team shall refer to finance provider policy. 3. Socialization of Timber Legality Certification to Groups a. Socialization is conducted by mentor and if needed, they can request assistance to steering team or other competent party as the resource. b. Socialization is conducted to a member of group that will be mentored.
13 -13- c. Socialization is conducted gradually to provide clear and thorough understanding on timber legality certification to group's member. d. Material of socialization given such as VLK and PUHH at each group. 4. Strengthening of Institution and Arrangement of Institution rule a. Mentor provides guidance and assistance in strengthening of institution and arrangement of group rule. b. institutional group can be a farmer group association, cooperation, or other groups c. Group has management structure of group. d. Group creates written commitment to meet principal and criteria of SVLK e. Group has rules to control its member, such as related to member responsibilities, requirement to be a member, rule to revocation/suspension as a member, internal monitoring systems and control against member f. Group institution (together with management list) is acknowledged by local notary, or it is made in letter with materai. g. in case groups are incorporated into cooperation, the cooperation has deed of establishment made by official deed of cooperation as well as has management structure. h. in case the groups are incorporated into local association, shall has notary deed or statement letter across materai on the establishment of association group as well as has organization structure. i. Group appoint a person responsible for certification or Management representative as a representative from group that has knowledge of the overall system exist in management unit and groups, and is provided written authority to mentor the auditor in verification proses as well as sign the verification result. 5. Socialization of Institution rules a. Socialization of institution rules are conducted by management of group accompanied by mentor to all members of the group b. Socialization is aimed to provide understanding to all member of group on the important of implementation of institution rules as one of requirement to obtain S-LK as group. II. Financing Process of S-LK as group A. Proposal of Financing of S-LK 1. it has to be incorporated in group, 2. group is proposed by: a. Group is proposed by Head of District/City office or LSM to Director General with copies to Regent/Major and Head of Provincial office.
14 -14- b. In case of groups of private forest owners, the holders of IUPHHK-HTR, IUPHHK-HKm, IUPHHK-HD, IUIPHHK with the capacity of up to 6,000 m3 per year, the proposal to be submitted by Head of District/City in charge of forestry with copies to Regent/Major, Bapeluh and Head of Provincial Office in charge of forestry. c. In case of groups of IUI holders, TDI, Home industry/artisan, the proposal carried out by District/City Office in charge of industry with copies to Regent/Major and Head of Provincial Office in charge of industry. d. In case Head of district/city office does not propose, then it can be proposed directly by Instructor/mentor with copies to Head of Province office, District/City in charge of forestry or industry. e. in case the certification is proposed by third party/lsm and financed by third party/lsm, the mechanism of proposing the certification shall refer to policy of third party/finance provider LSM 3. Group that is proposed to be financed is prioritized to a group that has conducted mentoring in order to be ready for S-LK, either mentoring activity done by District/City or mentoring activity done by LSM or other institution. 4. in case group that is proposed yet to have mentoring, it has to have result of internal audit of assessment that stated the group met standard of SVLK. B. Financing of S-LK and Surveillance 1. Financing of S-LK for first period and first surveillance can be charged to Government or other legitimate and unbinding source for groups of private forest owner, TPT, Home industry/artisan, the holders of IUPHHK-HTR, IUPHHK-HKm, IUPHHK-HD, IUIPHHK with the capacity of up to 6,000m3 per year and IKM. 2. Financing of S-LK surveillance for groups of private forest owners, the holders of IUPHHK-HTR, IUPHHK-HKm and IUPHHK-HD can be charged to Ministry or other legitimate and unbinding sources as long as it is yet to be produced. 3. in term of estimating of certification cost, group that is proposed to be financed, has to be cleared in number of member and size of area/unit 4. Director undertakes research for proposal of S-LK cost based on the availability of financing, the research outcome shall be informed through letter to proponent related to approval or rejection of intended S-LK cost proposal 5. In case S-LK is financed by third party/lsm, the mechanism of cost reviewing shall refer to policy of third party/finance provider LSM. C. Procurement of goods/ Services of S-LK Audit process 1. For S-LK audit of cost proposal that utilized government budget that met the requirements, then the bid process will be held soon. Bid stages shall follow LKPP procedures
15 in cost of cost as referred in point 1 is not available, the financial assistance can come from other source that is not binding and use the procurement mechanism in accordance with finance provider provision. 3. in case of S-LK is financed by third party/lsm, the mechanism of procurement is in accordance with provision of third party/fund provider LSM. DIRECTOR GENERAL OF FORESTRY ENTERPRISES Signature BAMBANG HENDROYONO
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