PROPOSED REGIONAL DIALOGUE ON ILLEGAL LOGGING WELCOME

UNCLAS SECTION 01 OF 02 JAKARTA 002550 SIPDIS SENSITIVE SIPDIS DEPT FOR EAP/MTS AND EB/IFD/ODF USFS FOR CMACKIE USTR FOR MLINSCOTT, DBROOKS USAID FOR CBARBER, MMELNICK TREASURY FOR TFCA - BERG DEPARTMENT FOR OES/IET and OES/ETC NSC FOR CEQ CONNAUGHTON, VAN DYKE E.O. 12598: N/A TAGS: SENV EAID ECON PGOV ID SUBJECT: PROPOSED REGIONAL DIALOGUE ON ILLEGAL LOGGING WELCOME ¶1. (SBU) Summary. Assistant U.S. Trade Representative (AUSTR) Mark Linscott held a series of meetings on September 6 and 7 related to illegal logging. Officials at the ASEAN Secretariat welcomed the proposal of an informal regional dialogue on illegal logging. Government of Indonesia (GOI) officials and NGO representatives updated Linscott on the development of Indonesia's new timber legality standard and challenges for its implementation. They enthusiastically encouraged U.S. engagement of China and Malaysia on illegal logging issues. Linscott and GOI officials also agreed to discuss firm dates for a potential bilateral Illegal Logging MOU working group meeting in Jakarta during a joint USTR-Department of State mission to the region later this year. End Summary. Limited ASEAN Activity on Illegal Logging Could Change -------------- -------------- ¶2. (SBU) ASEAN officials admitted during a September 6 meeting with a delegation led by AUSTR Mark Linscott that ASEAN has done little to address illegal logging at the regional level. However, they expected increased activity after a potential "Bangkok Declaration" by ASEAN Ministers of Agriculture and Forestry in Bangkok this November that will call for strengthening forest law enforcement and governance (septel). The draft declaration specifically refers to illegal logging -- a first for such a high-level ASEAN meeting. Officials acknowledged that ASEAN has not engaged China substantively on forestry or timber trade issues. However, they noted that ASEAN officials would raise these issues at the upcoming EU-China Forest Law Enforcement and Governance (FLEG) Conference in Beijing later this month. ¶3. (SBU) Nor is there any formal cooperation between the EU and ASEAN on forestry issues, according to Somsak Pipoppinyo, head of ASEAN's Natural Resources Unit. He and other officials welcomed in principle Linscott's proposal of a regional process or dialogue on illegal logging. They also highlighted potential areas for further U.S.-ASEAN cooperation related to illegal logging, particularly in customs cooperation and technical assistance for developing an ASEAN legality standard. They agreed with Linscott on the importance of working regionally in order to facilitate legal trade in wood products. ¶4. (SBU) Pipoppinyo said that there have been slow-moving discussions on an ASEAN timber certification mechanism, due to ongoing disputes over defining a timber legality standard. He and other officials noted that ASEAN would probably implement any future legality standard and timber certification process in a phased manner in order to account for the different capacities and levels of development among member countries. In addition, they emphasized that this ASEAN-wide standard would probably be a minimum standard, and respective member countries might have much stricter national standards. For example, Vietnam is developing a certification modeled on Forest Stewardship Council standards and certification. NGOs, Officials: Engaging China, Malaysia on Timber Key -------------- -------------- ¶5. (SBU) AUSTR Linscott held meetings on September 6 and 7 with GOI officials and NGO representatives, respectively. Members of the GOI interagency working group under the U.S.-Indonesia MOU on Illegal Logging cautiously endorsed the idea of an informal regional dialogue on illegal logging. They emphasized that it would be difficult to get Malaysia to cooperate, and suggested initiating this dialogue only after the "Bangkok Declaration" (see Para 2), during or after the November ASEAN Summit. Both they and the NGOs enthusiastically welcomed U.S. engagement of China on illegal logging. Ministry of Forestry (MOF) officials stated that one reason for signing the MOU with the U.S. was in order to bring U.S. influence to bear on importing or transshipment countries such as China and Malaysia. The GOI seeks international support for its "zero laundering" concept and says it has evidence of log laundering; for example, Merbau wood smuggled through Papua New Guinea. All sides acknowledged the complexity and challenge of dealing with the timber trade, and Linscott emphasized the U.S. determination to press China on this issue and create a regional dialogue. JAKARTA 00002550 002 OF 002 ¶6. (SBU) Linscott informed the GOI working group and NGO representatives that he and OES Assistant Secretary Claudia McMurray were exploring the possibility of a joint mission to the region in late October. They could initiate the regional dialogue at that time, he suggested, as well as hold the next bilateral illegal logging MOU working group meeting in Jakarta. They agreed to discuss and decide on dates later, given the tight late-October schedule with a pre-COP 13 ministerial in Bogor and various ASEAN-related meetings leading up to the early-November ASEAN Summit. Bilateral Illegal Logging MOU: Future Directions -------------- --- ¶7. (SBU) AUSTR Linscott proposed that the next bilateral MOU working group meeting should discuss next steps under the MOU, particularly an increased focus on facilitating trade. Facilitating trade could include an integrated approach to customs cooperation and law enforcement, a project to enhance trade data, as well as private-sector partnerships. MOF Director General of Forestry Production (and GOI interagency working group chair) Hadi Pasaribu informed Linscott that the GOI has designated two large ports, Belawan near Medan in North Sumatra and Surabaya in East Java, in which to focus MOU efforts. The MOF hopes that its action plan will improve interagency cooperation and coordination -- including standardizing and compiling trade data -- at these two ports. Legality Standard: Implementation and Challenges -------------- --- ¶8. (SBU) The MOF said the timber legality standard includes overall concession management, forest certification and chain of custody to port, documentation, and a complaint mechanism. The MOF officials as well as NGO representatives stated that Forestry Minister Kaban has approved the legality standard, but that implementation will be a challenge. Internal debate and stakeholder consultations continue regarding the independent verifying mechanism, but they expect to reach a decision by December, after which the Minister will sign a formal Decree. At the NGO meeting, a representative of the EU-FLEG program emphasized that the outstanding question is how watertight the standard will be, and that the EU remains concerned about who the independent verifier(s) will be. Linscott affirmed that the U.S. strongly supports the development and implementation of the new legality standard. ¶9. (SBU) MOF officials acknowledged that implementation of the legality standard and its necessary counterpart, a strong timber administration system, will require a great deal of capacity-building at the central and local levels. For example, the MOF and local governments need a great deal more assistance on integrated mapping of forest areas and concessions, as well as land use planning. The MOF has taken supportive steps, revising a regulation to allow farmers land tenure for community forests, and setting deadlines for concessions to obtain certification. NGO representatives also asserted that timber companies would lack sufficient incentives to meet the standard if importers continued to accept non-certified wood. A representative of the Indonesian Ecolabeling Institute (LEI) noted that, given the challenges, the GOI would probably phase in implementation, requiring companies that export to the U.S. and EU to comply first. HUME