Indonesia: Improving Transparency in Timber Administration

UNCLAS JAKARTA 001079 SIPDIS DEPT FOR OES AND EAP USTR FOR DBROOKS USAID FOR ANE, EGAT BANGKOK FOR RDMA USFS FOR CMACKIE TREASURY FOR KBERG E.O. 12958: N/A TAGS: SENV EAID KGHG ECON PGOV ID SUBJECT: Indonesia: Improving Transparency in Timber Administration REF: JAKARTA 951 ¶1. Summary: Indonesia is taking another significant step to improve transparency in the forestry sector by requiring the labeling/bar-coding of logs. This online timber tracking system will be phased in gradually. The Government of Indonesia (GOI) is targeting nation-wide implementation by the end of 2009 but achieving this will be a technical and logistical challenge. End Summary. Log Labeling System -------------- ¶2. The Indonesian Ministry of Forestry (MOF) launched a new online forest product management and forest fee system in February 2009. The labeling or bar-coding of logs is part of this new timber administration system. According to Director of Forest Fee and Product Distribution Bambang Murdiono, the MOF has been developing the system for 2 years, with the support of PT. Sucofindo (a timber surveyor/certifier and quality assurance provider),the European Union's Forest Law Enforcement, Governance and Trade (FLEGT) Support Project and The Nature Conservancy's USAID-funded Responsible Asia Forestry and Trade (RAFT) program (see para 5). Phase-in Period -------------- ¶3. According to Bambang, the system has been implemented in some areas, including East Kalimantan and Central Kalimantan, and the MOF is targeting nationwide implementation by the end of 2009. As a first step, the system will be mandatory for forest concessions producing 60,000 cubic meters or more of logs per year (Minister of Forestry Regulation No. 8/2009). The new system increases the cost of production by 3,000 Rupiah ($0.30) per cubic meter but it will benefit the concession including increasing market trust and selling price. With this system, the MOF can more easily control and verify logs from the stump to the processing unit. Challenges to Implementation -------------- ¶4. However, the system faces some challenges. Bambang cautions that the new system's implementation might be slowed down due to inadequate or nonexistent infrastructure (e.g. cell phone network coverage) and lack of human resources (trained system operators). He notes that not all areas, especially forested ones, have good network signal strength. The system needs access to the network to upload data from the label or barcode. USG Support for New System -------------- ¶5. From June 15-19, 2009, the MOF, FLEGT and USAID's Responsible Asia Forestry and Trade (RAFT) program held a second training workshop for the online timber administration system in West Kalimantan. Around 24 government officials and 15 forest management unit participants from Kalimantan and Sumatra attended the training. The new online tracking system support RAFT's key objectives of increased regional timber trade from legal sources by providing transparency and efficiency in the administration of legal timber products. HUME