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Executive Summary “PHPL: From Legality to Sustainability”

Executive Summary “PHPL: From Legality to Sustainability”

In 2003, Indonesia started to develop an operator-based timber control system for all its timber exports, building on a mandatory third-party certification approach for legality and sustainability. The system, called Sistem Verificasi Legalitas Kayu (SVLK), became the basis for the Timber Legality Assurance System (TLAS) under Indonesia’s Voluntary Partnership Agreement (VPA) with the EU.

Indonesia went a step beyond verifying legality under its SVLK and FLEGT VPA timber legality assurance system. Launched in 2009, Indonesia’s Sustainable Forest Management standard – the Pengelolaan Hutan Produksi Lestari (PHPL) – has been instrumental in achieving this. The PHPL includes all aspects covered under timber legality by SVLK, but requires more efforts concerning social and environmental aspects. It was made mandatory for industrial timber plantations, commercial logging concessions, state-owned community forests, and private community forest in 2003. PHPL is an integral element of the SVLK and the FLEGT VPA, and all commercial entities operating in the production forest on state-owned land must at some stage be audited under it.

This report, conducted by the Jaringan Pemantau Independen Kehutanan (JPIK) or Independent Forest Monitoring Network, explores the environmental credentials, performance, and additionality of the PHPL. In particular, it assessed the extent to which PHPL could contribute to sustainability of timber resources in Indonesia. The analysis drew from two sample provinces (Central and East Kalimantan) between 2015 and 2017, comparing forest condition in PHPL-certified concessions with legality certified concessions, and non-certified concessions.

Key findings

  • JPIK found that PHPL-certified concessions overall demonstrated better environmental performance compared to legality certified and non-certified concessions. PHPL-certified concessions have the lowest rate of deforestation, followed by legality certified, and non-certified concessions. However, PHPL and other selective logging concessions face significant constraints in realizing their sustainability potential. This is mainly due to overlapping land use permits that threaten concession integrity and prevent the implementation of long-term forest management planning.  
  • PHPL and the legality definition under SVLK have sets of standards for different forest or permit types and are subject to annual audit by an accredited independent certification body, the Conformity Assessment Bodies (CABs). This report finds that the evaluation method used under SVLK did not fully reflect the reality on the ground. That is, they disregard factors deem to be beyond the concessionaries’ control, such as overlapping land use permits.
  • The report therefore recommends that the criteria and indicators for the evaluation of concessions under the PHPL standard be revised to ensure that all factors affecting production forests on state-owned land are taken into account when implementing assessments or monitoring. In particular, forest fires and overlapping land use permits for coal mining and palm oil plantation establishment need to be addressed comprehensively for PHPL to fully achieve its sustainability potential.

Detailed report findings are as follows:

  • Deforestation

All three types of forest concession are affected by deforestation. PHPL-certified concessions have the lowest rate of deforestation, followed by legality certified and non-certified concessions. In Central and East Kalimantan, deforestation within the boundaries of logging concession is largely due to activities by other commercial permits holders, especially borrow-and-use permits for mining (IPPKH) and Timber Utilisation Permits (IPKs) for land-clearing and oil palm. Approximately 30% of the logging concessions’ territory is affected by overlaps with permits for mining and oil palm establishment. Deforestation due to these operations is not part of long-term forest management practices.

  • Degradation

Degradation of forest occurs in all three types of concessions and is highest in PHPL certified concessions. Forest degradation in this study denotes a transition from primary to secondary forest formation, which is a natural change associated with selective logging. This is not a negative feature per se, if control of the concession area and management practices allow for recovery.

  • Forest fires

Forest fires have been found in all three types of logging concessions. During the time span analysed in this study, most fires occurred in 2015, with significantly fewer fire events in 2016-2017. Approximately half of all forest fires occurred in areas that had been affected by deforestation due to external mining and oil palm activities. Still there was a significant number of fires that occurred due to lax monitoring and poor prevention and management by concessionaires themselves.

  • Sustainability potential

All three types of concessions would potentially have had much improved environmental performance if other land use permits (mining and oil palm conversion) were not allowed to expand over significant amounts of the concession area, effectively taking large parts of a forest concession out of long-term forest management practices. All selective logging concessions examined, but especially PHPL and legality certified areas, hold significant sustainability potential that remains unrealised due to counter-productive government land-use policies stemming from other sectors.

  • CAB audits

Despite the observed issues with land overlaps, associated deforestation and forest fires, all PHPL concessions audited by CABs in the period of 2015-2017 showed consistently good scores on environment. Government policies that impact concessions territorial integrity and environmental coherence are considered outside of concessionaries’ control and therefore are not considered in the CAB audits. Similarly, CABs consider any land-use policy or forest management plans that have been officially approved by the government are taken as a given and are not questioned in assessments. The study therefore recommends that such an approach to audits needs to be reviewed as government policies, in particular those applicable for forestland permits, shape environmental conditions in logging concessions. The study further suggests that critical verifiers applicable for legal certainty of concession; free, prior, and informed consent; and forest protection and security should be reviewed.

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