Indonesia has exported over USD $1 billion of certified wood and timber products to the European Union (EU) since the EU recognized Indonesia's Legality Verification System (in Indonesian: Sistem Verifikasi Legalitas Kayu, or, SVLK) certificate. The SVLK certificate, designed to verify the legality of timber products, is now in accordance to the EU's Forest Law enforcement, Governance and Trade (FLEGT) action plan.
The EU's FLEGT action plan, launched in 2003, was designed in an effort to combat illegal logging and enhance forest management across the globe. FLEGT license guarantees that the product was harvested, processed and exported in accordance to national laws.
Now the EU recognizes Indonesia's national SVLK certificate system, Indonesia can ship its wood and timber products (provided these are SVLK certified) to this regional bloc that is known for its strict requirements. For example, Indonesian palm oil companies have often complained about the EU's strict requirements and heavy import duties.
Since mid-November 2016 Indonesia has been able to ship more than USD $1 billion worth of wood and timber products to the EU without the need for importers to conduct further due diligence checks. Having access to the EU should also work as a good reference to access other markets that enforce timber legality (for example Australia, Japan and the United States).
Earlier this year, Indonesian President Joko Widodo (a former furniture entrepreneur) said he expects Indonesian furniture exports to have tripled from USD $1.5 billion in 2016 to USD $5 billion by 2021.
However, analysts say that although the SVLK system has indeed managed to limit illegal logging across Indonesia, illegal logging remains a major problem in Indonesia's forest sector. The SVLK certificate is in essence good but its positive impact is undermined by the nation's weak timber administration system, the lack of planning and data, an unreliable monitoring system, and poor law enforcement.