 We're going to have a short discussion with a panel of C4 scientists regarding this recent landmark decision and Signing of an agreement on the SPLK between the government of Indonesia and the European Union With me on this panel are senior scientist Christoph Obisinski Senior researcher Ahmed demo one scientist Harry Ponomo and senior scientist Paulo Chiruti all of whom have been involved in the Implementation of a project research project managed by C4 called pro formal funded by the European Commission in Five countries in the Congo Basin Indonesia and Ecuador which has been exploring the implications of the development of VPAs vis-a-vis the domestic timber trade in particular Before the C4 scientists will comment on this achievement. I would just like to make a few comments to acknowledge this breakthrough In terms of the signing of the VPA between the government of Indonesia and the European Union And to stress that it is a major achievement Particularly given the fact that the process of negotiation under a multi-stakeholder platform that's involved many actors representing government civil society private sector industry and many others has taken almost a decade to get to this point During that process. There have been many ups and downs and more recently even trial shipments I think Christoph will be able to confirm this. I think 11 companies actually sent trial shipments Earlier this year or at the end of last year through to the European market But in addition, I'd like to try and highlight that there are a number of caveats to this achievement Particularly in terms of some of the recognized. I think now by a number of different groups Weaknesses within the SPLK arrangement one relates to the fact that if Timber is produced on land where there are existing or earlier claims and hence associated conflicts There are no mechanisms to ensure that these conflicts are actually addressed In relation to the provisions of the licensing agreements to export timber to Europe In addition, some of C4's own publications have raised concerns Since 2011 on the proposed Mechanism for monitoring which in essence involves civil society organizations, but which we've highlighted in an earlier document Has in his sense hollowed out the role of government in terms of its monitoring role And this is I think also something that is cause for concern Thirdly the extent to which this mechanism will address the continued risks of corruption at many different layers of governance are not addressed through this mechanism Fourthly, I think one of the concerns relates to some of the Issues if timber is exported through a third-party country before it enters the European Union market And here there are major weaknesses with the SPLK But where the backup in effect is the European Union timber regulation which came into a force in March this year Which still provides an insurance mechanism to ensure that any supply of timber May still be required to undertake additional to diligence to ensure that they can Document the chain of custody from the origin of where this timber is produced to its ultimate sale in the European Union A fifth and perhaps last point relates to the risks that this European Union timber regulation may be contested under the core prohibitions of The general agreement on trade and tariffs the World Trade Organization and this is still a big question mark That has been raised in some current Documentation that C4 is developing and will shortly be published and Christoph will talk perhaps more about this Lastly, I think we should also recognize Importantly that this is one of a number of initiatives that are being addressed at different scales To tackle some of the major forest governance problems and challenges in Indonesia This is very much Eurocentric because it's an initiative that was started in 2003 by the European Union under the forest law enforcement governance and trade arrangements However, I think we should also recognize that as of earlier this year the anti-corruption Commission in Indonesia has Taken the lead in organizing an initiative which brings together eight ministries and four National agencies including the national land agency to try and improve the whole process of demarcating forested lands in this country Which lies at the core of many of the forest governance challenges? Because it relates essentially to who owns the property on which forest stand on which land can then be developed In addition, I think we should recognize the efforts by many other countries outside of the European Union Particularly the United States in terms of the Lazy Act The recent promulgation by the Australian Parliament of the regulations for the Australian equivalent and other initiatives Which are underway in South Korea Japan and New Zealand amongst other countries? So this is just a short introduction And I would like now to hand over first to Christoph To add any additional points in terms of the experience we've had and perhaps to say a little bit more about the work in progress crystal Thanks, Andrew. Yes, I would like to follow up on some points that Andrew made already and just wanted to iterate that indeed You know this signing of EPA by Indonesia constitutes an important achievement crowning as he said a ten-year long period of negotiation formulation of T-LAS or Timber League got the verification system and Getting to the point of actually signing the agreement and verifying it This is ten years or kind of trying to find a way to address illegal logging You know figuring out how how we get over this illegal logging problem and solve it at the international level once and for all So from that standpoint, that's kind of a you know important achievement for sure Is this also I would like to say an important achievement for you for the EC for the for Europe as well because They've invested heavily into this flagty process and and VPA processes with various supply countries and It's really time for them now to show results and show that volumes of Flagty certified timber are flowing to Europe. So getting Indonesia on board is critical It's really like, you know something that they that they really can be happy about So from that standpoint, you know from the second one of these macro achievements It looks good, but I would like to contribute a few things to the challenges that I see And you mentioned already about these trial shipments that took place in November and December last year And we followed some information about these trial shipments and indeed they have been 12 13 I think companies that that have shipped Timber under these new measures under SBLK to Europe and they've all been successful and you know been heralded us as a successful test and Indicated that everything is going to work fine. However, you know, what we would like what we would like to point is that All of all 12 companies that ship the steamer are essentially well-established large companies with established systems for verification and and trade and so We feel that perhaps the basing extrapolating from from that small sample of well-established companies to the whole sectors probably a little bit optimistic The other observation comes from our study here in the in Indonesia under the under the project and the pro formal project and And it relates to to this timber legality verification system SBLK One aspect that we find worrying is that The size of the small-scale sector in the country our research has shown that the size of the small-scale sector small-scale logging and processing of timber in Indonesia is is very large and is grossly underestimated by the official statistics so So the new system will try to incorporate all these players and bring him into the fold of the formal economy that there is a number of Processes that will take place to do that. There will be monitoring. There will be There will be some financing made available to these business units to bring them into the formalization fold, but there also continue to be questions of costs Some of the medium and larger companies may be able to handle these costs of additional Costs associated with formalization better than small-scale players There's also the another initiative rolled out by the government for group certification particularly for the small-scale processor processor source of timber There are some signs of success in Java, but overall it is still very very small you know, we are talking on the order of 40 to 50 business units being certified by group certification process while According to our estimates in Indonesia, we probably have something like 600,000 small-scale business units in in Indonesia Perhaps Christoph at that point it might be a good idea if we could ask Harry To give a share some of his experiences from another research project, which has been funded by the Australian government in North and Java in Jepara About the successes that you've had in your project in terms of this collective action to meet the challenge of the excessive costs of Verification to obtain an SVLK license Harry thank you assignment of the SVLK give a threat as well as opportunity threat it means if the SME for instance for richer small-scale Producer cannot comply with this criteria as SVLK then million of people will close their job their source of income and It also gives opportunities to secure wood material to secure the furniture industry for instance in Jepara So the problem is how to make the small-scale producer Which actually use the legal comply with the Requirement of SVLK. That's why we have been working in Jepara Central Java to facilitate them step by step to understand the SVLK process especially the documentation process because Usually the small-scale enterprise Do not actually document where the wood coming from Where the the forest that the wood coming from this Come so they don't actually where the wood so step by step we are fascinated the The process of compliance with the SVLK and finally we succeeded some of them by group get the SVLK certificate and Again if individuals too expensive for them to get the certificate, but together By as in remains and collective action they can comply, but it's not easy it to be step by step But this is only Around nine producers in Jepara itself. We have two left thousand of small scale twelve thousand 12,000 of small-scale production So long time to go to make the SME able to take a benefit Yeah, thank you very much and I think that that raises Christoph to come back to you one of the other big challenges which is To the best of my knowledge Indonesia currently has only 11 registered validators for the verification process and In the country of this size and with as you said more than six hundred thousand small and medium enterprises It doesn't take rocket science to realize that it's going to take a long time to get all these producers With SVLK licenses So how do you think Christoph the government with its development partners will be able to address this particular challenge? I think that they will take a two pronged approach on one hand They're doing whatever they can to increase the number of verifiers I Think at the end of the beginning of this year. It was around 12 now It's I think maybe 15 or 16 already that but still I mean it's It's not a significant difference even though the numbers are increasing. So on one hand They will there will be resources made available to train more companies and and Verifiers of timber legality That's on one hand as I understand on the other hand What the government is trying to do is to focus on just major key companies large and medium companies which account for for the Majority share in in the export in in the trade and export of timber so That that will that that it seems to me that it will leave the the small scale players kind of Later on down the road it will push them a little bit to the side And they will kind of be left over to be verified and certified later on in the process But You know, there's an additional Aspect to this as well. I mean on one hand We've got this shortage of verifiers on the other hand as well There are voices that are concerned that some of these verify that some of these verifiers actually may have a Conflict of interest as well built into their work because of their background that you know, some of these companies originally did Forestry work there are essentially forest trading companies. So so they are very intimately connected to some of these Business enterprises which are trading now So there are various dimensions to it But I think the government will try to prioritize and they will try to increase the numbers of these verifiers as much as they can Okay, thanks very much crystal Amid would you would you like to say a few words about some of the Complementary efforts that the government of Indonesia has taken to address some of these broader forest governance challenges which are obviously associated with The anti-corruption efforts and efforts to improve the demarcation of the forest estate Yeah, sure. Thanks Andrew. I would like to say that like VPA Signing between EU and Indonesia is one part of a larger effort carried out by the Indonesian government to improve their forest governance I think we heard that like we may know that there are two or three years ago this initiative to to develop a one map System for the country and it has been like going on and To the best of my knowledge that a map with a with a better scale will be published sometime around need of next year in addition to that Kapeka has been like monitoring key ministries which Have been involved in land use and one of the review is published in 2010 as well where Kapeka reviewed the Ministry of Forestry's mapping System so to speak and they have found challenges and weaknesses in the system and the Kapeka has been Asking the Ministry of Forestry to improve their land and Moreover like as Andrew mentioned earlier the Kapeka has recently engaged with eight ministries and four agencies to sign an MOU to improve their demarcation of the land and On the add-on on the other side that we we know that like in May in May this year the Constitutional court has issued a decision to exclude indigenous forest out of state forest which in one sense could clarify could help clarify the demarcation of forest lands But it also creates challenges in some areas for example in Papua where communities claim that the whole island Is claim as being an indigenous land. So they have challenges with the Ministry to To solve the issue Thanks very much. I'm in now moving on Paolo You've been involved and responsible for the pro formal project Focusing in terms of your own work more in the Congo Basin Would you like to add another dimension of the significance of this achievement vis-a-vis for example the VPAs that have already been signed in a number of countries in Africa and how you would compare the progress in the two different Context that have been made in terms of trying to improve Governance in the forest sector in the countries. You've been working in I think the major difference is that in Asia If I'm not wrong the the launch of the SVLK or at least the the planning of the SVLK was already ahead of the VPA negotiation So it was something that the government already had in its own mind And one of the weakest point that has been proven to be in Central Africa and also in Western Africa is exactly this Transability system if you want The scheme the VPA have already been signed in several countries, but none of them has been able today to put in place one Secure possibility system to check the timber from harvesting to export could be given a flight license So that's the major difference one similarity Conversely is that the small-scale logging sector is Also a big part of the forest receptor of the more general forest receptor. So Efforts It has been included in all the VPA that have been signed to date Except the Central African Republic But it's still a major challenge for the government as a question So how how do we include that into the VPA into the the traceability system the legality assurance system? Etc. Because this is completely different from the industrial sector. It's Hundreds of well dozens of thousands of people working mostly independently so from micro to mid Industries and and it's very difficult to to control their activities to check whether the timber is harvesting legally And and and also they they basically don't ask for legal logging title because it's too difficult for the moment in the legal Framework to come to the counter to the capital cities and ask for these titles I don't know how Indonesia is Trying to solve in this problem, but in at least in Africa Central and Western Africa is still a major a major The legal framework is still very weak vis-à-vis these these producers I think Paolo it's a very important point and I think there are parallels in Indonesia in terms of even the extent to which the Small and medium enterprises are recognized As Christoph has said the predominant focus is on producers who produce more than 6,000 cubic meters of timber a year Whereas most of our small and medium enterprises are producing anything between 25 and 250 cubic meters This can still be garden furniture that's being exported to Germany or France or to the European market But it's on the scale of family businesses So a small number and I think the key point that you've alluded to Paolo is that the risks with any system of traceability Which is going to reinforce the e-gallity or Illegality associated with these production systems risk possibly pushing lots of people into a zone of being considered as criminal But which in fact represents major sources of income to sustain the livelihoods as Harry was saying in Japan There's these are 12,000 enterprises behind each enterprise. You might have 10 family members So it's hundreds of for hundreds of thousands of people these represent major sources of income So this is something that I think we have to be cautious about in terms of how it's going to be enforced so I hope this has given you some idea of the achievements that have been made over the last 10 years and all credit due to the government of Indonesia and the European Union for What has now been signed? There are still many challenges ahead And we hope that C4 as it has done already Significantly in the Central African region will continue to contribute to this debate through our research in Indonesia Central Africa and we hope increasingly in Latin America. Thank you very much