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Viet Nam: business learns to engage with work in legal timber production and trade

FAO-EU FLEGT PROGRAMME SUCCESS STORY










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    Article
    Being legal and formal? Opportunities and challenges of the timber legality verification system for smallscale furniture producers in Indonesia
    XV World Forestry Congress, 2-6 May 2022
    2022
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    Over the last decade, Indonesia has made significant strides in improving forest governance. The Government of Indonesia (GoI) has made curbing illegal logging a strategic goal within the Ministry of Forestry's long-term plan. One of the main milestones in improving forest governance in Indonesia is signing the Voluntary Partnership Agreement (VPA) with the European Union and being the first country that obtains the FLEGT license. The GoI has developed a timber legality assurance system called Timber Legality Verification System (Sistem Verifikasi Legalitas Kayu - SVLK). This system enables tracking a piece of timber back until the origin and ensure its legality. One major issue that remains under contention is how small actors should be included in the SVLK system. This paper attempts to assess the financial implications of SVLK certification for small operators in Indonesia. We found that while there are opportunities for smallscale producers to access the international market by having SVLK certificate, they face challenges to become formal entities. Moreover, they are hampered by the scale needed to enable them to meet the demand from global buyers. The paper aims to generate lessons for Indonesia to deal with small operators' inclusion into the FLEGT process and other countries seeking similar VPA arrangements with the EU to draw lessons from Indonesia as the first country that has obtained FLEGT license. Keywords: Value chain, Illegal trade, Policies, Policies, Research ID: 3486706
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    Project
    Contributing to Sustainable Forest Management and Poverty Reduction by Tackling Illegal Logging and Promoting Trade in Legal Timber Products - GCP/GLO/397/EC and GCP/GLO/600/MUL 2023
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    Poor forest governance, unclear legal frameworks, weak law enforcement and demand for cheap timber and timber products all contribute to illegal practices in the forest sector. These practices jeopardize efforts to improve sustainable forest management (SFM) and have a significant impact on a country's ability to achieve broader sustainable development goals such as poverty alleviation, food security and climate change mitigation. As part of an effort to tackle illegal logging and associated trade, the European Union’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan was established in 2003 to help tropical timber producing countries establish and implement measures to promote trade in legal timber products. Under this framework, tropical timber producing countries and the European Union enter into Voluntary Partnership Agreements (VPAs), bilateral trade agreements which commit to exporting only legal timber into European markets. In this context, the FAO EU FLEGT Programme provided technical support and resources for the negotiation and implementation of VPAs, while in countries not engaged in a formal VPA process, the Programme supported measures to improve law enforcement, timber legality assurance and overall forest sector governance.
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    Book (series)
    Enabling micro, small and medium-sized enterprises to participate in legal timber production and trade
    Transformational changes generated by the FAO-EU FLEGT Programme
    2022
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    Micro, small and medium-sized enterprises (MSMEs) play a critical role in meeting the growing demand for forest products worldwide, with potential to contribute to responsible supply chains that combat illegal logging while promoting economic growth. However, a growing number of countries are adopting demand-side control measures that require proof of legality of forest products. Forest sector MSMEs will require significant support – and changes to the types of support they receive – to fulfil and even take advantage of these new and emerging market requirements and related opportunities. This paper draws from 110 initiatives in 20 countries supported by the FAO-EU Forest Law Enforcement, Governance and Trade (FLEGT) Programme between 2016 and 2022 and seeks to provide examples of how to support forest sector MSMEs cost-effectively and at scale to integrate them into domestic and international legal timber value chains. The initiatives discussed in this paper offer a wealth of experience and knowledge, which can be capitalized upon to boost forest-dependent livelihoods and promote both social equity and sustainability within timber supply chains. Implementing a portfolio of these strategies in a comprehensive support package generate “transformational changes” that help realize the potential of MSMEs to move past traditional business-as-usual modes of operation towards sustainable growth and more inclusive, resilient economies.

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