Administration vs. Substance The role of governance in embodied forest legality and sustainability

Administration vs. Substance The role of governance in embodied forest legality and sustainability

Utilization of timber forest products, especially in state forests, has been of concern to the world since the early 90s and at that time was born the idea of ​​ecolabel certification. The main assumption of the initiative is that with certain conditions that must be met by producers for each cubic of internationally traded timber, it will be followed by the efforts of the producers to fulfill these requirements. For this reason, it is expected that there will be two reactions. First, company management will adjust to market standards. Second, the Government is committed to improving regulations and policies, so that the company’s response to the market standard can run.

When the certification process went on until the beginning of 2000 — as the deadline for ITTO’s target to realize tropical timber producers running sustainable forest management, the assumptions began to appear to not work, then policy development continued. Strong thinking at that time, that the effort needed to be phased (phase approach). That way, the company is not directly faced with difficult efforts – because it also depends on the commitment of the Government, but will consistently carry out the stages. From this point of view, for example, that the stage of achieving legality (Timber Legality Verification / VLK) is the first stage. However, in order to also be an incentive for companies, since they can reach the first stage, they have to get incentives from the export of their products. Of course, with other conditions such as the traceability of products from the chain of custody. In line with this development, there have also been initiatives to develop the capacity of management units in order to achieve legality standards towards the well manage forest.

At present, after 22 years, Government-mandated VLK and sustainable forest certification in a sustainable manner have an important role, despite weaknesses. The relevance of this role must be placed in the fact that the forestry and industrial business environment, both large and small, is still covered by bad governance. A condition where, on the one hand, production costs are high due to the large number of bribes / squeeze, but on the other hand there is an opportunity to do things that can be called illegal. In such conditions, certification and VLK can be said as a form of intervention by third parties voluntarily and by the government with a more open system. However, the burden borne by the system seems very heavy, because with bad governance (BG) conditions, it is very difficult for good corporate governance (GCG) to be realized. BG and GCG are very closely related, even tend to have a conflict of interest relationship, namely using state authorities for personal or group interests.

Delegitimation of Certification / Verification

In 1991 the number of natural forest enterprises (IUPHHK-HA) was 580 companies with an area of ​​61.48 million hectares and plantations (IUPHHK-HT) of 2 companies with an area of ​​83,083 hectares. Along with the development of the certification / verification, developments until the end of 2017, the number of remaining natural forest companies was 262 companies (45%) with an area of ​​19.13 million hectares (31%). That is, for 26 years 318 companies have been “dead” or not operating and production natural forests of 42.35 million hectares (69%) have been turned into secondary forests. The secondary forest was then cultivated by 281 plantation companies (IUPHHK-HT) with an area of ​​10.33 million hectares. Calculation on paper, the utilization of production natural forests which are now abandoned is 35.02 million hectares. Called “on paper” because most of them have been turned into mining, plantation, or settlement businesses.

In early 2017, from natural forest businesses managed by 220 companies covering an area of ​​16.5 million hectares with an effective area of ​​12.2 million hectares (74%) received PHPL certification and / or VLK. Of all the companies, only 16 companies have set boundaries. Of all the companies, 85 companies applied for VLK (5.1 million ha) and an effective area of ​​3.8 million hectares (75%). At that time there were 57 companies that got VLK standards but only 3 companies had set boundaries. Among the 57 companies, only 13 companies (15%) held PHPL certificates with good titles.

For plantation companies, from 281 companies (10.3 million hectares), 104 of them (5.8 million hectares) which are still active have received PHPL certification of 66 companies and VLK as many as 53 companies. From the company that received the VLK, the company whose boundaries have not been established and the evaluation results of the Ministry of Environment and Forestry have been declared unfeasible are continued by 12 companies.

This fact shows that the realization of forest sustainability by companies depends on the running of public policies by the Government / Regional Government. Even the public policy determines whether the private response to meet market standards can be done or not. The worse the public policy, the more expensive the cost of creating sustainable forests according to market standards, and the more limited companies can follow them. In such a case, it appears that sustainable forest certification is carried out voluntarily, only has a qualification segment of a particular company and faces many obstacles to being able to appoint a company that has poor performance to be good. LEI data (2018) shows the number of certified natural forest and plants covering 9.43 million ha (15% of national production forest area), namely FSC 5.9 million ha, PEFC 3.76 million ha and LEI 2.34 million ha. The broad development figures for certification depend largely on how much improved governance performance, especially licensing, can be realized. As for mandatory VLK, because it is put in place to fulfill administrative requirements, then in the verification of state forest concessions, generally the legality and legitimacy of the wider community has not been obtained. This is due to, among other things, the current system is not enough to force the Government to correct the implementation of policies as the cause.

The above facts can be interpreted as follows. First, almost all the conditions of the management unit are around 25% of the working area that is not effectively done. In general, there are claims or rights of indigenous or local communities, overlapping with mines and gardens, especially oil palm. Such structural problems tend not to be resolved alone by the company on the recommendation of the certification process (PHPL) or verification (VLK). Secondly, certification and VLK by using legality benchmarks administratively — or stated in accordance with laws and regulations, in fact does not answer the issue of sustainability. That is due to the substance and / or implementation of laws and regulations that do not answer the fundamental problems of forest sustainability. For example, in the certification / verification process, there are companies that do not have the legality to determine the boundaries of their working area and / or their performance is not good, also pass certification or verification. Third, certification and verification instruments cannot be directly linked directly to forest sustainability and business, because many other factors are beyond its scope that determine forest sustainability and business. In that context, for VLK whose implementation is required, it can lose its credibility when BG still surrounds it. On the basis of all conditions, the future of certification and VLK is highly dependent on whether GG and GCG can be realized.

Administration vs. Substance

In the current era, where information is easier for anyone to obtain, the performance of a forest product business cannot only be measured by administrative requirements, which often conflict with substantial conditions in the field. Meanwhile, what is of public concern is the reality on the ground. The difference in administration – the substance will come to the fact that those who get VLK (fulfillment of administrative requirements) can still have conflicts or even illegal logging. This fact is an argument why VLK has a lower credibility position than voluntary certification. Beyond that, this fact is in fact in line with the original thinking as mentioned at the beginning of this paper, that the VLK was the initial stage of the process towards voluntary certification / towards sustainable and sustainable management.

There is also a fact that the current anti-corruption initiative by the private sector, which was initiated by the KPK, is in the fields of oil and gas, infrastructure, forestry, food and health, and the slowest development is the forestry sector. Indications expressed, that international standards help determine the company’s positive response, also as a result of the implementation of GCG. So, why some parties think FSC and PEFC are more acceptable in the world market, is a verified fact. There is a substantial question in this matter, if the certificate or verification is not necessarily an indication of the sustainability and profitability of the company — with the data described earlier, the question is: Can certification realize its goals without preconditions of GCG, and can GCG be realized without GG?

Regarding the question, notes from the discussion of certification activists in Bogor on October 12, 2018 ago, first, there were still problems with certification / verification capacity such as the matter of qualifications, credibility and number of auditors. This is one of the causes for certificates / verification to be manipulated. Second, regulations that determine forest sustainability are still problematic, so that only by stating “in accordance with the regulations”, legality or sustainability may not be realized. Third, the results of certification / verification and learning have not been used as important information in the improvement of laws and regulations. Fourth, there are a number of problems to realize legality or forest sustainability beyond the capabilities of certification initiatives, for example political issues, backing the implementation of illegal logging, use of concession areas for mines and gardens, extortion in licensing, and so forth.


One of the main pillars of the certification / verification system is its credibility. That is why at the beginning of its formation, there was the term certification by a third party, which could free itself from government and private interests. Related to the issues stated above, although to create credibility is a challenge that is not easy, but even then it is not enough.

The certification system needs to be used to input improvements in public policy from the information it has. Even so, at this time it is not time to assume that bad policies can last long due to the absence of information or recommendations for policy improvement. In general, the policy is bad due to conflicts of interest. With bad policies, all people benefit or can take advantage of the conditions for the benefit of the group. Or, a policy that is good or bad, is not related to the position of a position, meaning that it is not related to its interests; then it’s just ignored. This is another matter that is outside the certification initiative.

From all this discussion, it can be shown that the implementation of certification cannot be free from the good and bad governance. The worse the governance (BG), the more impossible it is to rely on certification for the implementation of mere regulations. The role and transparency of certification / verification information for the public must be improved.