Furniture exporters deem SVLK relaxation a setback.
Business People have raised concerns that the Trade Ministry’s recent move to relax requirements for the certification of timber, despite the benefits the policy aims to provide, sets Indonesian companies back in global competition.
SasBourjot, a director of furniture manufacturer Surya AlamSemesta based in Jepara, Central Java, said Tuesday that the Timber Legality Verification System (SVLK) certificate was a “weapon to fight in the global market,” as buyers from the EU and the US always asked whether her furniture was made from legally certified wood.
“We will have added value in international trade negotiations,” she said during a discussion on Indonesian wood products in South Jakarta.
Another Jepara-based furniture business owner, FebtiEstiningsih, voiced a similar view, saying that she was able to directly export her product overseas without the assistance from agents since obtaining the SVLK certificate in 2013.
“I can ship 17 containers of wooden furniture this year compared to only five last year,” she said.
Data from the Environment and Forestry Ministry showed that furniture exports this year reached a total value of US$10.37 billion as of Tuesday, higher than the $6 billion booked in the full year 2014.
The ministry’s director general for sustainable production forest management, PuteraParthama, said the increase was seen after the implementation of the SVLK certification.
“The SVLK increases market access,” he said.
However, the Trade Ministry recently revised Regulation No. 97/2014 on industrial forestry products, which requires all timber exporters to obtain SVLK certification, and issued Regulation No. 89/2015 as a deregulation measure. The new regulation allows exports of 15 downstream products, such as furniture, without SVLK certification.
Indonesian Pulp and Paper Association (APKI) executive director Liana Bratasida said Tuesday that instead of dropping the requirement, the government should have proposed conformity and harmonization on SVLK requirements among members of the ASEAN Economic Community (AEC), so that the other countries would have to follow Indonesia’s criteria and indicators of legal timber. It also needed to push mutual recognition through the Forest Law Enforcement Governance and Trade (FLEGT) license with the EU.
“Indonesia can take the lead among Southeast Asian countries,” she said.
The FLEGT negotiations between Indonesia and the EU have reached the final stage. When sealed, the deal will allow Indonesia to export its timber without following a time-consuming legal process, if it carries an FLEGT license. FLEGT-licensed timber is considered by the EU to have been harvested legally.
Meanwhile, Sobrur of the Indonesian Rattan Furniture and Craft Association (AMKRI) praised the Trade Ministry’s policy, arguing that downstream products should not need to require further certification if the upstream products were already certified.
“SVLK certification is considered to weigh on business costs by some of our members, most of whom are small and medium businesses,” he said.
Putera said his office was ready to assist businesspeople facing difficulties in procuring certificates with funds and information, to name a few.
“It seems there’s some conflicting information between the government, local administrations and businesspeople about the process,” he said.