Forest Certification in Developing and Transitioning ... - UTas ePrints

forest certification in indonesia
61
involvement in solving this problem, up to the present the obligation for securing the
area remains the burden and responsibility of the concessionaire.
PT Sumalindo Lestari Jaya (SLJ), a concessionaire in the process of obtaining certification,
reported that the main problem it faced is the hilliness of its working area.
To reduce the impact of felling, they needed to redesign the area and the harvesting
system. They also needed to restructure the area, allocating part of it to protect high
conservation value forests, which reduced its overall Annual Allowable Cut (AAC).
The process of retooling and adjusting its exploitation methods and applying Reduce
Impact Logging, as well as redesigning the working area, will take almost five years,
costing a significant amount of money.
There is a lack of market incentives too because many countries have yet to put
into effect procurement policies supporting log certification. China, Korea, and
Middle East countries are examples of the countries that pay little attention on these
matters, made worse by their readiness to source illegal logs.
Benefits
DRT is advantaged by the issuance of the Ministry Decree (SK) No. 168/Kpts-IV/2001
that allows Ramin (Gonestylus bancanus), which is listed in CITES’ Appendix III, to
be felled. PT DRT is the only legal Ramin producer in Indonesia producing about 20
percent (12,000 cubic meter per year) of the crop potentially available. The government
through the Ministry Decree No. 156/Kpts-II/2003 and the Decree of Director
General of Forest Production No. 02/Kpts/VI-PHA/2003 also provides incentives to
concession holders via an exemption in reduction of its AAC. As a result, the concessionaire
has an economic benefit because its AAC is not cut back. According to concessionaires,
the overall benefit from these two economic incentives could cover the
additional cost to meet the requirements of SFM.
While the above incentives appear to be important, certified forest companies in
Indonesia claim that the price premium earned by certified timber is not significant,
even though Perum Perhutani reports it at 15 percent. There are other economic and
commercial imperatives why the Company is interested in implementing sustainable
forest management, and these include long-term benefits such as the reduction of
production cost, reduced environmental and social risks, and increased productivity.
One company interviewed believed that forest certification would enable it to market
its products and compete particularly in advanced economies. It recognized that
today it is not the certification itself that is important; rather of most concern to the
company is the sustainable development of the business. Therefore the adoption of
the certification standard was aimed at improving the way the company did business.
The company reported that standard operating procedures aimed at improving
productivity and minimizing adverse environmental and social impacts were put in
place and continuously disseminated amongst its own employees and contractors.
They had also institutionalised the ISO 14000 environmental management system
and were making continuous improvements in correcting and improving areas where
major non-conformance are observed. The company had also replaced its Annual
Environmental and Social Report with a Sustainability Report that followed the
yale school of forestry & environmental studies