Sustainability certification and legality verification in Indonesian natural forest-based wood products value chains

Abstract

Indonesian natural forest concessions and value chains are governed by a mandatory Timber Legality Verification System (SVLK), which includes assessment of Sustainable Production Forest Management (PHPL). Concessionaires and processors may also pursue voluntary forest certification. This study explores actors' compliance with these instruments along wood product value chains originating primarily from natural forests. Empirical results demonstrate that SVLK fostered legality compliance in domestic as well as export value chains, but still allows some possible loopholes. It is easier for actors to comply with SVLK than with Forest Stewardship Council (FSC) certification, because SVLK has less stringent requirements, and uses an assessment system that allows poor field performance and does not foster continuous improvement of practices. These results identify weaknesses in the architecture and implementation of the regulatory instruments, and suggest measures to strengthen Indonesia's sustainable forest management and timber legality systems.