Multistakeholder Forestry Programme Phase 3 Technical Reports Review: Comparison on Forestry Certification Scheme in Indonesia (SVLK, FSC & PEFC)
Review: Comparison on Forestry Certification Scheme in Indonesia (SVLK, FSC & PEFC) MFP3 Jakarta, January 2016
Table of Contents List of Tables and Figures List of Abbreviations iii iv Executive Summary 1 1 General Overview 2 2 Comparison of SVLK to Voluntary Scheme 3 2.1 Accreditation System and International Acknowledgement 3 2.2 Scope of Certification 3 2.3 Evaluation Standard and Criteria 4 2.4 Implementation in Indonesia and the World 7 3 Recommendation 10 ii
List of Tables and Figures Figure 2-1 Comparison of Certified Forest in Indonesia (Hectares, based on types). 8 Figure 2-2 Data of world s certified forest size (Hectares)... 8 Figure 2-3 Data of certified industry in Indonesia (including traders)... 9 Figure 2-4 Data of certified industry in the world (including traders)... 9 iii
List of Abbreviations CoC ETPIK FSC IFCC IPK ISO IUI IUIPHHK KemenLHK LSM PEFC PHPL SFM SILK SVLK TDI TPT UM VLK Chain of Custody Eksportir Terdaftar Produk Industri Kehutanan Forest Stewardship Council Indonesian Forestry Certification Cooperation Izin Pemanfaatan Kayu International Organization of Standardization Izin Usaha Industri Izin Usaha Industri Pengolahan Hasil Hutan Kayu Kementerian Lingkungan Hidup dan Kehutanan Lembaga Swadaya Masyarakat Programme for Endorsement of Forest Certification Pengelolaan Hutan Produksi Lestari Sustainable Forest Management Sistem Informasi Legalitas Kayu Sistem Verifikasi Legalitas Kayu Tanda Daftar Industri Tempat Penampungan Terdaftar Unit Management Verifikasi Legalitas Kayu iv
Executive Summary This review is designed to point out differences between types of certification. As a statement of compliance on certain standards on product, process, management system, and individual from third party, each of the certification required different principles and methodology. There are three schemes of certification which are considered to be the first runners for forestry sectors, which are: Timber Legality Verification System (SVLK), Forest Stewardship Council (FSC) and Programme for Endorsement of Forest Certification (PEFC). Timber Legality Verification System is a mandatory scheme for all forestry industrial players either in upstream sector (Forest management Unit) and downstream sector (forestry industry and trader). FSC and PEFC are voluntary scheme. Oftentimes, a number of business players have these three certificates for their business. Principally, these certifications have similar purpose: promoting sustainable forest management and providing legal assurance and sustainability on the products. 1
1 General Overview Certification in forestry sector and forestry products are in demand as awareness to consume forestry products that complied with sustainability aspect is spreading. The vast size of forest and various forestry manufacturing industries in Indonesia have always been considered as one of the focuses on sustainable forest management and timber trade legality issues. Consumers refer to certification in forestry sector and products, particularly timber, as an instrument to verify that the products are sustainably managed and/or harvested in legal ways. The following are the major certification schemes in Indonesian forestry sector: 1. Timber Legality Verification System (SVLK). SVLK is a mandatory certification, which is developed by Ministry of Forestry and Environment (formerly Ministry of Forestry) and regulated by the laws. 2. Forest Stewardship Council (FSC) A group of NGOs initiated the forest-based environment protection measures through standards of Evaluation of Sustainable Forest Management and Chain of Custody, which generically prevails all over the world. FSC has been implemented in a number of companies in Indonesia. 3. Programme for the Endorsement of Forest Certification (PEFC). PEFC also developed standards of Evaluation of Sustainable Forest Management and Illegal Logging Investigation. But unlike FSC, PEFC allows member countries to develop their own evaluation standards based on the local situation. In Indonesia, the standard is developed by Indonesian Forestry Certification Corporation (IFCC). 2
2 Comparison of SVLK to Voluntary Scheme 2.1 Accreditation System and International Acknowledgement Certification, in general, implements system developed by ISO. Owners such as Ministry of Forestry and Environment, FSC and PEFC/IFCC do not perform the certification process by themselves. They will appoint an accredited certification body to do the process. Each owner applies different policies regarding the criteria for selected accredited certification agency: 1. Ministry of Forestry and Environment, as owner of SVLK scheme, appoints National Accreditation Committee to do the certification process for Forest Resources Certification and Timber Legality Verification 2. FSC appoints Accreditation Services International (ASI) as the accreditation agency to assign certification agency for Forest Resources Certification PHL (SFM) and CoC 3. PEFC/IFCC has more flexible rules on appointing accreditation agencies. It gives freedom to applicants in choosing one of members of International Accreditation Forum (IAF). 2.2 Scope of Certification 1. SVLK Scheme SVLK scheme only includes timber product, with two types of Certification: a. Forest Resources Certification This type of certification is for the license holders of state forest management (forest concession, industrial timber plantation, and Perum Perhutani) b. Timber Legality Verification Three groups of users could apply for this type of certification, as follow: Forest area: state forest concession holders who is not in the position to apply for Forest Resources Certification and also private forest owners. Timber Processing Industry: this certification is mandatory for certain industries included in the related ministries regulation and voluntary for the rest. Trader/exporter: intended for those only selling products, not producing them 2. FSC and PEFC/IFCC Scheme FSC and PEFC/IFCC scheme includes timber and non-timber products. standard of certification are: The type and a. Forest Resources Certification, intended for all types of forest management unit (state forest, private forest, natural forest, and plantation forest). b. Chain of Custody for forestry manufacturing industry (timber and non-timber) and traders 3
2.3 Evaluation Standard and Criteria Each certification scheme has its own evaluation standard/criteria. There are basic differences between mandatory scheme (SVLK) and voluntary schemes (FSC and PEFC/IFCC) such as: 1. Forest Certification Certification for Forest Management Unit is included in the two schemes with the following differences: a. Type of certification SVLK develops various evaluation standards for Forest Management Unit. There are two types of standard to use: Forest Resources certification and Forest Timber Legality Verification Voluntary schemes (FSC and PEFC/IFCC) only have one standard, i.e. Forest Resources certification. This does not recognize timber legality certification for forestry object b. Standard of certification SVLK scheme has several evaluation standard, based on the type and capacity of the management unit/company. This is an advantage for SVLK compared to voluntary schemes. The various standards are as follow: Standard for sustainable forest management: a) For natural forest b) For industrial plantation forest c) For ecosystem restoration forest d) For holder of concession (Perum Perhutani) Standard for timber legality verification a) For natural forest/ industrial plantation forest/ ecosystem restoration forest/ holder of concession (Perum Perhutani) b) For community forestry c) For Timber Utilization License d) For private forest Standard for timber legality verification in SVLK scheme is also similar to Chain of Custody standard in voluntary schemes. Principles included for each standard category are: 1. For standards of sustainable forest management: a. Prerequisite b. Production c. Ecology d. Social e. Timber legality 2. For timber legality verification: a. Areal confirmation 4
b. Legal system and procedure of tree cutting c. Legality of trade/transfer of log d. Fulfilment of environmental and social aspects related to cutting e. Compliance to labour rules FSC scheme for certification of Forest Management Unit has two standards: FSC-STD-01-001 for Forest Resources certification and FSC-SDT-30-010 for Controlled Wood certification, similar to timber legality verification in SVLK scheme. PEFC/IFCC scheme for certification of Forest Management Unit only has one standard, i.e. IFCC-ST-1001 for Forest Resources certification. 2. Certification for Industry and Trader Certification for Timber Processing Industry and Timber Trader is part of the certification developed by all schemes a. SVLK Ministry of Forestry and Environment has developed standard for certification for Timber Processing Industry and Timber Trader. This scheme has plenty of various standards which are specific for certain types and industrial capacity, such as: Timber legality verification for industry: a) For permit with capacity of more than 6,000 m3/year and or industrial permit worth more than IDR500 million b) For permit with capacity of 6,000 m3/year and or industrial permit worth IDR500 million, c) For Industrial Registration or small scale industrial permit d) For household industry/artisan Timber legality verification for trader: a) For registered workshop b) For ETPIK Non Producer (registered exporter of forestry product) Principles for each category of standard: 1. Timber legality verification for industry: a. Business legality confirmation b. Implementation of timber tracking system c. Legal trade or transfer of product d. Compliance to labour rules 2. Timber legality verification for trader: a. Business legality confirmation b. Implementation of timber tracking system c. Legal trade or transfer of product d. Compliance to labour rules 5
b. Voluntary schemes (FSC and PEFC/IFCC) For industry and trade category, FSC has three standards: 1. FSC-STD-40-004V2-1 FSC Standard for Chain of Custody Certification 2. FSC_DIR-40-004 FSC Directive on Chain of Custody Certification 3. FSC-STD-50-001 V1-2 FSC Requirements for Trademark Use These are generic standards applicable for various sizes of industry. The standard is applicable to all Chain of Custody operations trading, processing or manufacturing wood based and non-timber forest products from virgin and/or reclaimed materials including the primary industry sector (harvesting, pre-processing) or, in the case of recycled materials, reclamation sites, the secondary sector (primary and secondary manufacturing), and the tertiary sector (trading, wholesale, retail, print services). The standard defines and addresses the basic elements of a Chain of Custody management system: Quality management: responsibilities, procedures and records Product scope: definition of product groups and outsourcing arrangements Material sourcing: material specifications Material receipt and storage: identification and segregation Production control: control of quantities and determination of FSC claims Sales & delivery: invoicing and transport documentation Labelling: application of FSC labels on-product and labelling thresholds As for PEFC/IFCC scheme, there are two standards: 1. PEFC ST 2002:2013 Chain of Custody of Forest Based Products Requirements 2. PEFC ST 2001:2008 Logo Usage Rules Requirements PEFC/IFCC CoC standard covers the requirements to implement a chain of custody for forest based products. The standard describes a process of how to get information on the origin of raw material and if it is comply with the information of the origin as attached in the product labels. This standard specifies two optional approaches for chain of custody, namely the physical separation method and the percentage based method. It also specifies the minimum requirements of implementation system management and the chain of custody process. The quality of the organization (stated with applied ISO 9001:2008) or environmental management system (ISO 14001:2004) may be used as the minimum requirements for this standard. In addition, minimum requirements on health, safety and labour related qualities are also included in the CoC 6
2.4 Implementation in Indonesia and the World 1. SVLK SVLK scheme only applicable in Indonesia. The management units already certified based on the latest data from SILK are: a. Forest Resources Certification 114 management units of natural forest with forest size reaching 10,448,093 hectares 61 management units of plantation forest with forest size reaching 4,944,814 hectares b. Timber Legality Verification System 2. FSC 45 management units of natural forest with forest size reaching 2,967,896 hectares 79 management units of plantation forest with forest size reaching 1,301,329 hectares 93 management units of private forest with forest size reaching 42,672 hectares 1,419 timber processing industries Based on the size of implementation, certified management units are: a. In Indonesia: 32 forest resources certification with size reaching 2,186,422 hectares CoC certification for 214 companies b. In the world : 1,365 forest resources certification with size reaching 186,410,374 Hectares in 80 countries CoC certification for 29,801 companies in 117 countries The data is obtained from FSC s website at www.ic.fsc.org. 3. PEFC/IFCC Based on the size of implementation, certified management units are: a. In Indonesia: 14 forest resources certification with size reaching 751,588.78 hectares CoC certification for 19 companies b. In the world: 10,866 units of forest resources certification with size reaching 267,051,086 hectares CoC certification for 20,216 companies The data is obtained from PEFC s website at www.pefc.org and IFCC s website at www.ifccksk.org. 7
The following graphics show the comparison of the three schemes based on different aspects. Figure 2-1 Comparison of Certified Forest in Indonesia (Hectares, based on types) Based on the size, SVLK ranks as the highest, followed by FSC and PEFC/IFCC respectively. It is obvious since SVLK is a mandatory certification, while the others are voluntary. The PEFC/IFCC has only been implemented in Indonesia for a year, with more than 750,000 hectares of forest certified. Based on the type of forest, SVLK scheme certifies the similar number of natural forest and plantation forest. Based on the composition, FSC scheme certifies natural forest. In Indonesia, it is hampered by FSC policy which only allows for plantation forest converted before 1994 to apply for certificate. On the contrary, PEFC/IFCC scheme allows all plantation forests to apply for certification. Figure 2-2 Data of world s certified forest size (Hectares) 8
Based on Figure 2, it is known that PEFC ranks the first in the World s Forest Resources Certification, followed by FSC and SVLK. SVLK comes last because it is only applicable in Indonesia. Figure 2-3 Data of certified industry in Indonesia (including traders) Based on Figure 3, SVLK ranks the first, followed by FSC and PEFC/IFCC. SVLK is mandatory for all timber processing industry as regulated by Minister of Trade. Therefore even though buyers do not require the industry to supply the certificate, they are still mandated to apply. FSC and PEFC/IFCC are applied more in responding to the buyers demands. Industries implement the scheme based on consumers request, not regulation. Figure 2-4 Data of certified industry in the world (including traders) Based on Figure 4, PEFC ranks first in number of certified industries, followed by FSC and SVLK, the latter only applicable in Indonesia. 9
3 Recommendation Comprehensive review on all schemes of forestry certification in Indonesia, both mandatory (SVLK) and voluntary (FSC/PEFC), is strongly recommended. Each scheme has different methodologies and approaches to verify that the forestry products are sustainably managed. The parameters being used in this review will need to be expanded and elaborated for such comprehensive review. 10
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