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Indonesia: Proposal to Reduce Limits on Logging

(Dec. 26, 2013) According to news reports, Indonesia is proposing to resume exports of logs from productive forests. This would reverse a ban on such sales that has been in place for 12 years. The Forestry Ministry plan would allow exports from community plantation forests or industrial forest concessions, as long as the businesses involved have certificates under a government verification system. The expectation is that this requirement will limit the scope of exports, despite the fact that no quota system would be imposed. Hadi Daryanto of the Ministry stated that because the “exports will be limited to companies fulfilling the certification requirement, thereby it will not happen on a massive scale.” (Linda Yulisman, Govt Plan to Lift Ban on Log Exports Questioned, THE <!–?JAKARTA POST (Dec. 16, 2013); Editorial: To the Bottom of the Value Chain, THE JAKARTA POST (Oct. 23, 2013); Kementerian Kehutanan Republik Indonesia [The Ministry of Forestry of the Republic of Indonesia] (last visited Dec. 23, 2013).)

The plan to resume the exports followed a request from the Association of Indonesian Forest Concessionaires (Asosiasi Pengusaha Hutan Indonesia, APHI), seeking better prices and additional markets. Prices for domestic sales of logs have decreased, now reaching about US$30 per cubic meter, compared with US$80 elsewhere in the region. (Yulisman, supra.; APHI website (last visited Dec. 24, 2013).) The Association has suggested that unless the current ban on exports is lifted, only 5% of the forest concession holders will remain in business more than three years. If that constriction in the industry happens, other wood-based industries would be affected. (Editorial: To the Bottom of the Value Chain, supra.)

Indonesia, once the largest log exporter in the world, has the third largest rain forest on earth, after the Amazon and Congo River basins. (Yulisman, supra.) Environmentalists have been concerned about illegal logging resulting in deforestation, smog due to burning vegetation, and decreases in biodiversity. In addition, illegal logging has resulted in the loss of billions of dollars in state revenue. (Id.)

Both environmental activists and some representatives of wood-based industries oppose the resumption of log exports. The chair of the Indonesian Sawmill and Wood Working Association called it “one step back.” She also asked, “[i]f we resume the exports, who will be able to guarantee an end to illegal log exports?” (Id.)