, JAKARTA – The Corruption Eradication Commission said the timber legality verification system (SVLK) is still needed to guarantee the legality of forestry industry export products at the upstream to downstream levels.

Researcher at the KPK’s Research and Development Directorate Hariadi Kartodihardjo assessed the SVLK as having an important role in ensuring the validity of licensing documents in the forestry sector. He suggests that without SVLK companies are often ignorant of legal procedures such as tax deductions.

“We see many companies in the downstream sector whose legality is unclear. “In the upstream sector the SVLK is useful to ensure the company is truly legal,” he said in Jakarta, today, Thursday (10/15/2015).

Nevertheless, Hariadi said that the SVLK could not be relied on to prevent state losses in the forestry sector such as leakage of non-tax state revenues (PNBP). Because the problem of the forestry sector is not merely a matter of legality but also adequate and accurate administrative records.

“Like a diploma, on the SVLK system it is important that you have a diploma, but do not search for fake diplomas or not,” said the Professor of Forestry Policy, Bogor Agricultural Institute.

Therefore the KPK also proposed to the Ministry of Environment and Forestry to improve the SVLK system. Hariadi said that the SVLK still used the 2003 paradigm when the system was first discussed.

At that time, most of the natural forest timber supplied to the processing industry came from forest management rights (HPH) concessions. Currently, he continued, timber for the downstream industry is supplied from land clearing areas, not selective logging systems.

As a result, there are still gaps that have the potential to cause SVLK certified processing companies to use timber that has not been recorded or come from unlicensed areas. “The SVLK procedure must adapt to this change.”

He gave an example of the wood processing industry or pulp mill can be given an SVLK certificate without any field inspection to the land clearing area which is a source of raw material supply. Supposedly, the SVLK examination procedure is getting tougher as with sudden inspections to the field.

Indonesia will implement the SVLK in full on January 1, 2016. However, the Ministry of Commerce plans to delete SVLK obligations for 15 classifications of furniture products (Harmonized System / HS Code). This was stated in the revised draft of the Minister of Trade Regulation No. 66/2015.

Meanwhile, the regulation to be amended is a substitute for the Minister of Trade Regulation No. 12/2014 concerning Provisions on the Export of Forestry Industry Products published on August 27 and removing the validity period of the Export Declaration (DE).

Permendag No. 12/2014 previously allowed Small and Medium Industry Registered Exporters of Forestry Industry Products (IKM-ETPIK) to use DE as a temporary substitute for V-Legal documents — as proof of having an SVLK.

However, in the new DE beleid candidates and even the SVLK it is no longer mandatory for the 15 HS Code.