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  • CIRAD research featured in new book on corporate governance

CIRAD research featured in new book on corporate governance

At a sustainably certified sawmill in Jepara, men carefully cut logs of wood that are then measured and marked. Photo by D. Ramsay/CIFOR
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A sustainably certified sawmill in Jepara, Indonesia. Photo by D. Ramsay/CIFOR

How does the complex pattern of shareholdings and subsidiaries – entangled, hierarchical and pyramidal – influence actions, decisions, policies and strategies? It could be said that the behavior of conglomerates and mega corporations is influenced by their ownership structure.

A new book, Minister of Finance Incorporated: Ownership and control of corporate Malaysia, looks at quantitative methods to decipher corporate governance, from biomass, forest and plantations to Malaysia’s corporate finance.

How the structure of commodity corporates could impact the sustainability of agricultural landscapes is of direct interest to the French Agricultural Research Centre for International Development (CIRAD), one of the CGIAR Research Program on Forests, Trees and Agroforestry’s (FTA) partner institutions.

Jean-Marc Roda speaks about the new book. Photo by IDEAS

Read more: Sustainable value chains and investments to support forest conservation and equitable development

This is because many activities linked to deforestation; forest management; the sustainability of palm oil, rubber and timber plantations; biomass and biofuel strategies are driven by the choices of international finance and mega corporations.

CIRAD’s activities concern the life sciences, social sciences and engineering sciences, applied to agriculture, the environment and territorial management. Its work centers on food security, climate change, natural resource management, the reduction of inequalities and poverty alleviation.

In particular, in Southeast Asian countries such as Malaysia and Indonesia, research by CIRAD and its public- and private-sector partners focuses on natural resource management, food security, biodiversity studies and the sustainability of tree crop-based systems, paying particular attention to island agro-ecosystems, which are particularly sensitive to climate change.

ET Gomez presents during the book launch. Photo by IDEAS

In 2010, CIRAD’s Jean-Marc Roda and his Malaysian team at Universiti Putra Malaysia started to develop methodologies aimed at deciphering corporate governance and their environmental commitments among Southeast Asian transnationals. Deciphering corporate governance and environmental commitments among Southeast Asian transnationals: Uptake of sustainability certification was subsequently published in 2015.

The paper’s coauthor Norfaryanti Kamaruddin, who also contributed to the recently launched book, previously completed a PhD that was partially supported by FTA.

An important debate on global trade and sustainability relates to the role that corporate governance has on the uptake of sustainability standards. The paper suggests that financial factors, such as ownership structure and flexibility in decision-making, may have a fundamental role in understanding the adoption of sustainable standard systems in the corporate sector. This is based on the analysis of four major Asian agribusiness transnationals comprising about 931 companies.

In addition, this paper explores as a way forward the convergence of environmental sustainability with long-term family business sustainability.

Read more: Soils, governance, big data and 99 tropical countries: Best reads in forests, trees and agroforestry

The new book looks at corporate ownership and control in Malaysia.

Research tools developed throughout the project proved extremely accurate for deciphering any kind of corporate financial structure. Such quantitative methods of ownership structure analysis, initially designed for the analysis of the forest and agriculture financial sectors, were successfully employed to independently confirm and illustrate previously published results from ET Gomez.

Roda and his team were able to demonstrate how a core of 26 corporations controlled the Malaysian corporate sector and to provide details on how that control spread throughout the financial network, leading to the chapter “Understanding the network typology of the seven government-linked investment companies (GLICs)”.

The book was launched by the Institute for Democracy and Economic Affairs (IDEAS) in August 2017. It covers all Malaysian financial sectors, with Chapter 4 focusing on the plantation sector and on quantitative methods used for comparison and validation.

Adapted from the article by Jean-Marc Roda, originally published by CIRAD.


This work is linked to the CGIAR Research Program on Forests, Trees and Agroforestry (FTA), which is supported by CGIAR Fund Donors.

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  • New kid on the block in Indonesia’s timber export industry

New kid on the block in Indonesia’s timber export industry

Women assemble a sofa in Jepara, Central Java, Indonesia. Photo by M. Usman/CIFOR
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Women assemble a sofa in Jepara, Central Java, Indonesia. Photo by M. Usman/CIFOR

Forest Law Enforcement, Governance and Trade (FLEGT) licensing is like an anak sholeh — a good and pious child — according to several speakers at a recent national policy dialogue held in Jakarta, Indonesia.

From forests to workshops, marketplaces and homes, Indonesia’s timber products form a long and complex supply chain, which FLEGT is helping to regulate and strengthen.

The country’s timber exports are valued at US$11 billion annually. Thanks to its timber legality verification system known as SVLK and the subsequent issuance of FLEGT, with which businesses can export timber and wood products to the European Union with greater ease, the government expects furniture exports to increase significantly.

Indonesia is the only country in the world to have implemented the licensing so far, giving its furniture a competitive advantage in an increasingly discerning market as consumers pay more attention to the issues of a green environment, illegal logging, deforestation and sustainable production.

Watch: Policy dialogue: CIFOR cohosts FLEGT talks in Jakarta

Speakers pose with tokens of appreciation made from SVLK-certified wood following one of the sessions at the National Policy Dialogue in Jakarta. Photo by M. Edliadi/CIFOR

However, issues remain in the widespread implementation of FLEGT in Indonesia, especially among small and medium enterprises (SMEs).

The recent policy dialogue, cohosted by the Center for International Forestry Research (CIFOR) and supported by the CGIAR Research Program on Forests, Trees and Agroforestry (FTA) on July 13, tackled the topic of FLEGT licensing and supporting SMEs to access global markets.

The dialogue brought together scientists, government representatives, local furniture producers and community leaders to discuss challenges for SMEs to meet FLEGT requirements; a strategy to maximize the impacts of the license on SMEs; and the role of province and district governments to ensure the legality of SME production.

Read more: Indonesia’s timber going green – and global

Ida Bagus Putera Parthama, Director General of Sustainable Forest Management at Indonesia’s Forestry and Environment Ministry, said the initiative stemmed from an effort to eliminate illegal logging, and a desire to “stop the stigma attached to Indonesia about illegal wood.”

He described the license as “a good boy that the whole country has been waiting for” and said “everyone should support it.”

“The final outcome we expect from the system is to increase our market share, competitiveness of products, revenue for communities and in the end improve the livelihoods of those involved,” Parthama explained.

Charles-Michel Geurts, deputy head of the EU Delegation to Indonesia and Brunei, speaks at the National Policy Dialogue in Jakarta. Photo by M. Edliadi/CIFOR

Charles-Michel Geurts, deputy head of the EU Delegation to Indonesia and Brunei, concurred. “The world is looking to Indonesia,” he said. “Anak sholeh is a role model; everybody likes him [and] wants to adopt him.”

However, some business people voiced concerns. Jepara Small-Scale Furniture Producers Association (APKJ) representative Sulthon Muhamad Amin said that while medium and large companies may not be lumbered with the requirements, the costs associated with the licensing were too onerous for small-scale workshops. Thus, some still preferred to partner with exporters in the local market rather than become exporters themselves.

Sulthon later said small businesses must change this mindset. However, he questioned how this could happen, stating that many small-scale businesses had never heard of FLEGT.

Despite dissemination efforts, local administrations must be more proactive in providing assistance to small businesses, Sulthon said. “If an SME is like a small boy being led by a mother, it doesn’t mean he can be given the information and then left alone.”

Read more: Brexit rattles Indonesia’s timber trade prospects with Europe

FTA scientist Herry Purnomo of CIFOR speaks at the National Policy Dialogue. Photo by M. Edliadi/CIFOR

FTA scientist Herry Purnomo of CIFOR, whose work looks at furniture value chains, said SLVK promoted a balance between economic progress and environmental conservation. The system was not only driven by the EU’s system, he explained, as advancing people’s economies through participation and in an environmentally friendly manner was also mandated by the country’s Constitution.

In line with this, sustainable value chains and investments to support forest conservation and equitable development are a key part of FTA’s work.

Purnomo also echoed Sulthon’s thoughts, saying small-scale businesses faced different issues to big companies. Thus, local administrations should be more active in maximizing the benefits of FLEGT licenses for SMEs.

“We should also think about the domestic market, not only about the EU market,” Purnomo added. “Maybe we need to use SVLK more in domestic procurement processes.”

Taking note of Indonesia’s status as the first country to have FLEGT licenses, the scientist said environmental awareness would continue to grow, including in other emerging markets across the region such as Korea and Singapore. “Later it will be very difficult for us to catch up.”

For business people, exporters and consumers, FLEGT is a new kid on the block worth getting to know.

By Hannah Maddison-Harris, FTA Communications and Editorial Coordinator. 

Related publications


This work forms part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA). We would like to thank all donors who supported this work through their contributions to the CGIAR Fund.

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  • Linking sustainable supply, inclusive business models and innovative finance

Linking sustainable supply, inclusive business models and innovative finance

Pressures on forests and lands forests and lands are increasing as the world population and economies keep growing. Oil palm workers in Indonesia returning home. Photo: Icaro Cooke Vieira/CIFOR
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Pressures on forests and lands forests and lands are increasing as the world population and economies keep growing. Oil palm workers in Indonesia returning home. Photo: Icaro Cooke Vieira/CIFOR

By Pablo Pacheco, Team Leader – Value Chains, Finance, & Investments, Center for International Forestry Research (CIFOR), Coordinator of Flagship 3

Pressures on forests and lands are increasing as the world population and economies keep growing. This pressure also leads to better solutions from public and private actors to enhance sustainable supply mechanisms and integrate smallholders in supply chains. In this context, Flagship 3 Sustainable global value chains and investments for supporting forest conservation and equitable development embraces the challenge of researching and providing options of how value chains and investments can be made more sustainable and inclusive, and leverage the potential of finance for scaling up.

In 2017, Flagship 3 will identify knowledge gaps, distill best practices, produce methods and tools, convene stakeholder meetings, engage in business and multi-stakeholder platforms, support learning initiatives, and co-generate options of policies and practices to:

  • Improve the sustainability of forests, agricultural and tree-crops production in forest landscapes by identifying complementarities between public regulations on the one hand, and private standards and commitments on the other hand;
  • Inform businesses and service providers about business models that are more inclusive, gender-responsive, economically viable and environmentally sustainable;
  • Increase investment flows in forest and tree-crop sectors by helping develop innovative finance mechanisms to support smallholders and small- and medium-scale enterprises (SMEs).

The three groups of activities we embrace have interconnected goals and approaches. The first goal examines the policy and institutional environment shaping the governance of supply chains, with special emphasis on supply chain and territorial interventions.

Assessing the impacts of certification standards in cacao and coffee is part of the work on value chains.Photo: Icaro Cooke Vieira/CIFOR

The second goal focuses on business models in timber and tree-crop value chains that link corporations with smallholder farmers and small and medium enterprises (SMEs).

The third goal assesses how the financial sector influences the social and environmental performance of value chains and businesses, and how innovative finance provides opportunities for smallholders and SMEs.

Enhancing public and private arrangements for sustainable supply

Research under this theme will equip farmers, businesses and the public sector with knowledge of institutional arrangements and management systems to produce agricultural crops and manage forests in more integrated and sustainable ways—and in compliance with social and environmental standards.

We will focus our efforts on producing synthesis to engage in two international processes (e.g. FLEGT, zero deforestation) and to inform two regional/national policy dialogues on the public-private governance mechanisms that are needed to enhance sustainable supply in order to ease the pressures on forests. Our primary focus will be on timber in Central Africa and oil palm in Southeast Asia.

Timber is another key commodity in this research area. Photo: Tomas Munita/CIFOR

We will complete analysis on the governance of timber value chains (Cameroon, Zambia, Uganda) and of palm oil in Indonesia, and link analysis on the connections between global sustainability processes (e.g. FLEGT VPA, RSPO, ESPO) with national regulations and initiatives to enhance sustainable supply in the timber and oil palm sectors.

More complex policy regimes are emerging linking public regulations and private standards, yet there is need to connect them and build complementarities between them.

We are also supporting the development of monitoring tools and approaches to assess progress in performance of corporate commitments to sustainability with focus on oil palm, cacao and timber. We are also assessing the impacts of certification standards in cacao and coffee.

Supporting initiatives to foster the development of inclusive business models

Better knowledge is needed on how to build business options and fair partnerships that create opportunities for smallholder farmers who are increasingly involved in global value chains. This research also aims at safeguarding the rights of marginalized groups such as women and indigenous people.

We will advance work on inclusive business models by operationalizing a strategic partnership with the Dutch development organization SNV. This partnership is aimed at building and testing approaches and interventions that improve the effectiveness of inclusive business models across several SNV projects. In addition, we will support ongoing multi-stakeholder processes for strengthening capacities and policy environments for smallholders and SMEs in the timber and oil palm sectors in some select countries and landscapes.

Our main efforts will be on assessing the technical and economic performance of independent oil palm smallholders in West and Central Kalimantan, Indonesia and of outgrower schemes implemented in the oil palm and sugarcane sectors across some select countries (e.g. Brazil, Tanzania and Mozambique). This will yield some recommendations on building more inclusive models.

We are also working on developingapproaches to design project interventions that consider the specific needs of women and youth in more inclusive business models.

Engaging with responsible finance institutions and impact investors

We want to build bridges to connect responsible financial institutions and innovative financing mechanisms with smallholders and land users in forest landscapes. The goal here is to embrace more sustainable practices and inclusive business models under reduced financial and territorial risks, and to achieve greater social benefits for smallholders and SMEs accessing those financial resources.

Our work on finance and investments, with support from our partners (e.g. The Finance Alliance for Sustainable Trade, FAST), will engage key financial institutions and impact investment funds and managers to identify the demand for responsible finance and their challenges to undertake investments at scale especially in forest landscapes.

We will focus on identifying existing schemes and demand for responsible finance and impact investment, and their challenges. Besides that, we will advance studies on palm oil in Indonesia and cacao in Ghana related to innovative finance schemes to overcome barriers facing smallholders who want to take up more efficient and sustainable practices. This work has the potential to trigger transformational change.

 

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  • The forests of Central Africa: A source of wealth to be rediscovered

The forests of Central Africa: A source of wealth to be rediscovered

Photo by M.Edliadi/ CIFOR
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Photo by M.Edliadi/ CIFOR
Photo by M.Edliadi/ CIFOR

By Guillaume Lescuyer, originally published at CIFOR’s Forests News

Although Cameroon has benefitted from sustainable forest management in the past 20 years and has a relatively well-preserved forest cover today, its forests are under increased pressure due to expanding agro-industrial exploitation, shifting cultivation, infrastructure construction and logging.

A recently published study aims to provide an updated estimate of the economic benefits of forest resources in Cameroon to inform policymakers on the financial advantages of forest management and the opportunity costs of deforestation.

The International Forestry Review published this Special Issue, which was launched at the 16th meeting of the Congo Basin Forest Partnership on 22 November 2016 in Kigali. It is also being officially introduced to the Cameroonian partners in the capital of Yaoundé on January 25.

The valuation of forest products is essential to improve the design and implementation of public policies for sustainable development and poverty alleviation, in the perspective of an inclusive green economy.

The current lack of information on the value of subsistence and informal cash revenues from forests has led to an overemphasis on forest governance of products, such as timber, that are visible highly and contains a high market value.


However, the focus on industrial exploitation of timber has obscured other forms of income derived from forest resources and has downgraded the perceived economic value of forests. Such a perception of forest uses and benefits creates an information asymmetry that poses bias to policymakers’ knowledge for rational policy hierarchy-setting in relation to the allocation of land uses.

What does the valuation of the current use of forest resources in Cameroon reveal?

Click to play video
Click to play video

First, and not surprisingly, the industrial timber sector holds the highest value. The fuelwood sector also has a significant value, although it remains largely informal. Non-timber forest products (NTFP), chainsaw milling (picture 2) and hunting each contributed around 0.2 percent to Cameroonian GDP (without the inclusion of oil) in 2013. In contrast, sport hunting and tourism have a negligible contribution to the country’s GDP.

However, it is noteworthy that the contribution to GDP is not a significant indicator of employment. There are many more people involved in the hunting, fuelwood, chainsaw milling and NTFP sectors than in the formal sectors, although these jobs are seldom comparable in terms of time spent, working conditions, and social protection.

KEY RECOMMENDATIONS

The results presented in this Special Issue suggest the need for three approaches to research and action to improve the sustainable management of forest resources in the Congo Basin countries.

First, there is a need to recognize the importance of domestic consumption of forest products in the development of forest policy. It is being largely ignored in the current forestry policy even though an overwhelming majority of rural people are producing forest goods consumed by the majority of Cameroonians. In this context, international conventions covering carbon sequestration, biodiversity protection and timber legality have had a negligible impact on cash incomes from forest revenues. Instead, the achievement of sustainable forest management depends largely on domestic markets for forest products and on commodities – especially agricultural and mineral – produced in and often to the detriment of forest areas.

Second, the procedures to integrate informal uses of forest resources in national accounts can be improved. The comparison of macroeconomic estimates of forest-related activities in national accounts with our assessments of sub-sector analyses indicates a significant under-valuation of the economic benefits derived from forest resources in official statistics. Two main reasons can explain this difference. First, the classifications used in public accounting are poorly suited to assess and analyze the diversity of forest resources. Moreover, this failure is due both to the low frequency of surveys and the nature of surveys used, which are often inappropriate to capture the value and extent of highly sensitive, illegal forest activities.

Finally, the information on the uses of forest resources in Cameroon – and across Central Africa – should be more easily accessible. Mechanisms to systematically collect, verify and publicize this information have long been proposed and urgently need to be developed.

A better dissemination of such data would contribute to show that forests have a far greater economic value beyond timber logging, and could be used to prevent the increasing pressures of forest conversion to other land uses. Valuing forest resources can also help to clarify and optimize the interactions between complementary and competing uses of forest resources, and to make a transition from informal exploitation of forest resources to sustainable and legal harvest and trade.

Cameroon possesses tremendous forest resources, but its forest policy needs to be revised urgently in order for its potential to be realized. If this can be achieved, the development of an inclusive green economy will be closer than ever.

For more information on this topic, please contact Guillaume Lescuyer at [email protected].
This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry.
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  • Illegal logging: A Russian nesting doll

Illegal logging: A Russian nesting doll

Photo by Aulia Erlangga/CIFOR.
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Photo by Aulia Erlangga/CIFOR.
Photo by Aulia Erlangga/CIFOR.

By Pablo Pacheco, Paolo Cerutti and Robert Nasi, originally posted at CIFOR’s Forests News

Illegal logging might appear to be a simple story: A bad guy chopping down trees to make a big profit without obtaining any permission from local authorities or local communities, thus causing great harm to both people and the environment.

For most urban dwellers, particularly Westerners, cliché images come to mind of far-away scorched forests and scores of proud indigenous men, women and children, together with magnificent animals, left homeless by this brutal act.

And someone, somewhere, living la dolce vita on a hefty bank account hidden away in some fiscal paradise, along with content, corrupt public officials benefitting from bribes that have allowed the transport and trade of this illegal timber.

Illegal logging, however, is far more complex than this simple narrative! The tale above might be a popular one, but it is misinformed. Before measures can be taken to curb illegal logging, a lot of preliminary work is needed to further assess the activity’s causes, complex dynamics, impacts and trade-offs.

That was the mission behind a new report conducted by a team of more than 40 scientists led by Professor Daniela Kleinschmit. The report was launched at the UN Biodiversity Conference (COP13) in Cancun, Mexico, in December 2016. It was published as a Rapid Response Assessment under the auspices of the International Union of Forest Research Organisations (IUFRO) and the Collaborative Partnership on Forests (CPF).

The report sheds light on several layers of complexity surrounding illegal logging, helping us clarify where and when interventions are needed to combat it, as well as to identify cases where preventive cures can be applied.

Illegal logging is not a simple straightforward issue; rather it is like a Russian doll containing layers within layers. If we concentrate only on the exterior, we are unlikely to understand what is happening and to make a real difference.

Below, we share our insights as we peel back some of those layers (in no order of importance):

Photo by Sofi Mardiah/CIFOR.
Photo by Sofi Mardiah/CIFOR.

BIG FISH, SMALL FISH

Definitions are important. So, let’s peel off the first layer. Research has shown that under the banner of illegal logging exist two very different groups of people: those living in and near forests who harvest trees to maintain or improve their livelihoods, and those entering forests without proper permits and authorization to cut and sell valuable timber at a profit.

Many interactions exist between these two groups. Often, the latter group buys timber harvested by the former group. ‘Small fish’ vs. ‘big fish’, or need vs. greed, with the latter almost systematically exploiting the former.

We can equate the ‘small fish’ to the local populations (traditional farmers, local immigrants, indigenous people). They often have access to small-sized plots, and in some cases, they control collective lands and make use of artisanal tools to harvest trees and to process timber (i.e. axes, hand or chainsaws).

Some among these ‘small fish’ may evolve into specialized loggers, but they will be considered ‘informal’ players because their activities are generally invisible to national economies. No matter what we call them, in the vast majority of cases, it is almost impossible for these local forest users to harvest timber legally.

This is because the current laws only pertain to a particular model of forest harvesting: industrial, large-scale and resource-intensive logging destined for international timber markets. So, calling these forest users ‘illegal’ loggers would infer that they are willing to break laws when in fact, these laws rarely exist.

For this reason, let’s be clear about who should be the target of efforts to curb illegal logging. We must recognize that there are both ‘big fish’ and ‘small fish’ involved. The report urges more research to be done on the networks of illegal logging and the various diverse players involved.

If you are someone with decision-making power and you are in a rush, or under pressure to act on illegal logging, at least apply this precautionary principle: make sure you avoid harming the livelihoods of smallholders, artisanal loggers and their families. They aren’t the criminals. They either lack the means to comply with the current, convoluted regulations, or the laws do not apply to their particular form of timber harvesting.

GOOD NUMBERS, BAD NUMBERS

We require accurate numbers about the ratios and volumes of illegal logging. Estimates are needed per sector, product, species, region and country, as well as for the whole international timber market. And we need them to be as precise and as detailed as possible, in order to avoid mixing up the ‘big fish’ and ‘small fish’.

Many countries now collect primary data about timber harvesting, processing and exports, but this data is often incomplete, recorded in multiple units (a problem that gets more significant as the types of products increase), and by different ministries. Even when this data exists, it is often hard to access since a thick layer of secrecy generally surrounds it.

Because smallholders and artisanal loggers often do not officially exist in the national statistics or, worse, they are considered criminals in the eyes of the law, in most timber-producing countries their activities are simply not recorded. In this way, they remain invisible.

But considering local forest users as criminals is an excuse for thousands of public officials, including the police and armed forces, to continue (illegally, of course) to collect millions in bribes from smallholders and artisanal loggers.

So now let’s peel off a second layer. There is an uncontested need for better data on the timber that is being produced and exported. Luckily, a few efforts are already underway like the Independent Market Monitoring run by the International Tropical Timber Organization (ITTO).

There is also an urgent need for data on timber that is produced and consumed domestically. Limiting information to export markets would greatly hamper our capacity to understand and find solutions for the thousands of smallholders and artisanal loggers supplying timber to domestic markets, which research has shown tend to be even more dynamic than export-destined markets.

Many important problems like deforestation and forest degradation, distributional issues linked to timber markets, and associated social effects such as elite capture and corruption, are related to timber harvesting that supplies these two different markets. Both markets are strongly connected, and comprise a mix of both legally and illegally-sourced timber.

Although the illegal logging sector is hidden by its very nature, more comprehensive, transparent and interconnected knowledge about the legal logging sector would help shed light on the dark spots that will result from its assessment from production zones to end-markets.

After all, logs need to be transported by large trucks, boats and containers (accompanied by hefty financial transactions) before they can become complex consumer products like furniture. Often, the best way to hide illegal logs is in plain sight, among incomplete or altered data on legal timber transactions.

BAD GUYS, GOOD GUYS

This will likely constitute our most contentious reflection, and it is the most difficult one to write about. When we conduct research about artisanal loggers, it reveals different ways in which these people conduct their work- something that can be used against them, leading to further criminalisation and loss of jobs and livelihoods. Yet, if the previous layers have diligently been peeled off (including the clarity of objectives and better data), we can unravel one additional layer of the complex illegal logging Russian nesting doll.

In most countries, notably timber-producing ones, forest crimes are not crimes at all. This means that illegal forest acts (of which illegal logging is just one) are not actually sanctioned under criminal law. This severely hampers national and international efforts to fight this behavior because it greatly limits the tools that law enforcers can use.

Why is it so difficult to incorporate illegal logging into criminal law? Based on the findings of the report, two key points come to mind.

First, it is high time to break the silos that are usually applied to forest or environmental management in national politics. For unfathomable reasons, there seems to be an unspoken agreement that forests as a policy issue belongs to the ministry in charge of forest and/or environment. No one else has a say in it.

And so these ministries feel entitled to take final, and often obscure, decisions on everything including: who has the right to access the land and resources, what constitutes the best land-cover and land-use, technical specifications applied to activities on those lands, payments that can or cannot occur, the monitoring of activities (or, in most cases, lack thereof) and, ultimately, even the sanctioning of activities and the negotiation of sanctions.

Only rarely are the ministries best placed to take these decisions consulted or integrated into the decision-making process. Ministries of agriculture, territorial administration, mines, finance and, of course, justice, are rarely part of the “forest game”. This is unfortunate, as they have an important role to play that stretch beyond the current capacities and mandate of forest-related ministries.

Secondly, timber is not an edible product. This dramatically alters the behavioural consequences of consumers. Despite the shocking images that NGOs use in their campaigns against illegal logging, buyers along the timber value chain (processing companies, retailers, wholesalers, and final consumers) pay less attention to an illegal piece of wood than they would to food or medicine produced illegally that could have harmful effects on their health.

However, if we care about the long-term health of humanity on this planet, we should start asking more questions about origin and production processes when we purchase timber products. Request immediate, clear and transparent responses, or else move onto another shop that can provide them. This will help make life better for both smallholders and those fighting the war against illegal logging

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  • Amazonia's best and worst areas for carbon recovery revealed

Amazonia’s best and worst areas for carbon recovery revealed

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10050176886_1a7ca4748d_zThe first mapping of carbon recovery in Amazonian forests following emissions released by commercial logging activities has been published in the journal eLife.

The findings suggest that, in some of the forests disturbed by logging, surviving trees may be more reliable for storing carbon emissions than newly ‘recruited’ trees (juveniles that naturally regenerate in the logged forests).

Amazonia, the largest tropical forest globally, holds 30% of the carbon stored in the earth’s forests. Logging releases a significant amount of this carbon — a key component of climate change – into the atmosphere, which is then recovered by surviving trees and new recruits.

The Tropical managed Forest Observatory is a product of partnerships within FTA. Click on image to see more.
The Tropical managed Forest Observatory is a product of partnerships within FTA. Click on image to see more.

No investigations of post-logging carbon dynamics have previously been carried out Amazon-wide. Now, researchers from the Tropical managed Forest Observatory, which forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, have created a unique modelling approach to estimate accurately how the different forest environments impact carbon changes in surviving and newly recruited trees during post-logging carbon recovery.

“We studied long-term data from 133 permanent forest plots from 13 experimentally disturbed sites across Amazonia to model the changes in the aboveground carbon stocks in the first decades after logging,” says first author and PhD student Camille Piponiot from UMR Écologie des Forêts de Guyane in Kourou, French Guiana.

“We looked at regional differences in climate, soils, and initial aboveground biomass within the forests and linked these with the changes in carbon stocks caused by both newly recruited and surviving trees to predict the carbon recovery potential Amazon-wide.”

Their model reveals that carbon recovery is highest in the Guiana Shield in northeastern South America, and also in the western regions of the Amazonian forests, due mainly to the high carbon gain of trees that survived logging activity. In contrast, recovery is lower in the south.

8898637546_123d4e95e6_z
Unamat forest, Puerto Maldonado, Madre de Dios, Peru. Photo: Marco Simola/CIFOR

Piponiot explains: “Forests of the Guiana Shield are generally dense and grow on nutrient-poor soils, where wood productivity is constrained by competition for key nutrients. Short pulses of nutrients released from readily decomposed stems, twigs, and leaves of trees damaged and killed by logging explain the substantial but limited-duration increase in the growth of surviving trees.

“In the southern Amazon, on the other hand, high seasonal water stress is the main constraint on carbon recovery. Stress-tolerant trees are generally poor competitors and this may explain the slower carbon accumulation in survivors in this region.”

Principal Investigator and senior author of the study, Bruno Hérault, from Cirad, adds: “As climate change continues, we can also expect to see increases in droughts and fires that will further disturb the Amazonian forests. Betting on newly recruited trees to store carbon in some of the forests disturbed by logging might be a risky gamble, as most of them are pioneer trees highly vulnerable to water stress. Trees that survive logging activities may therefore be more reliable in accumulating carbon in these disturbed forests.”

Hérault concludes: “While our study focuses mainly on carbon recovery after logging, our findings may also give useful clues to predict the forests’ responses to carbon loss from fires and other events brought on by climate change, which is ironically caused in part by mass disturbance and deforestation.”


The paper ‘Carbon recovery dynamics following disturbance by selective logging in Amazonian forests‘ can be freely accessed online. Contents, including text, figures, and data, are free to reuse under a CC BY 4.0 license.

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  • Brexit rattles Indonesia's timber trade prospects with Europe

Brexit rattles Indonesia’s timber trade prospects with Europe

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Photo by Murdani Usman/CIFOR
Unloading teak logs in Jepara, Central Java, Indonesia. Photo by Murdani Usman for CIFOR.

By Herry Purnomo, originally published at CIFOR’s Forests News

Shortly after the British people voted on June 24 to leave the European Union, the country witnessed a change of prime minister and economic uncertainties radiated around the globe.

For timber traders and advocates of environmental sustainability in Indonesia, this development was a major concern. The country was about to clear the final hurdle toward getting the Forest Law Enforcement, Governance and Trade (FLEGT) license for its timber trade. The license would allow Indonesia’s timber to enter the EU easily, bypassing strict EU timber regulation requirements.

This was made possible in April, when President Joko “Jokowi” Widodo met European Commission president Jean-Claude Juncker in Brussels and agreed to smoothen the FLEGT licensing path for Indonesian timber.

The repercussions of Brexit may affect the terms of this licensing, but what is its likely impact on timber legality and the sustainability of forests in Indonesia? Sustainability and legality are main issues in managing forest and timber products; timber legality was thus discussed at the recent Asia-Pacific Rainforest Summit held in Brunei from Aug. 3 to 5.

These issues are especially a concern in Indonesia, which has 69 million hectares of production forest, of which 36 million hectares are under forest concession permits. The 1945 Constitution mandates that Indonesia manage its forest and natural resources sustainably.

However, after 20 years of certification processes, Indonesia has only 5 million hectares of certified production forest under the Forest Stewardship Council (FSC), the Eco-labeling Institute (LEI) and the Program for Endorsement Forest Certification (PEFC) as stated by the Indonesian Forest Certification Forum, but these voluntary schemes have not worked optimally to create sustainable forests.

In 2003 the government initiated a mandatory Timber Legality Assurance System (SVLK) to reduce illegal logging — the result of an agreement between Indonesia and the EU. Currently, 4.6 million hectares of concessions, 500,000 hectares of community forest and 1,908 timber industries have been SVLK-certified.

With Brexit, there will be at least two types of impact on Indonesian forests: economic and political.

Economists predict Brexit will slow down the UK economy as well as those across the EU and China. Indonesia’s timber exports to the EU reached US$609 million in 2015, but with Brexit they could shrink by 2 percent, $12 million, this year.

It could see additional reduction if Chinese demand for Indonesian timber drops, as China is the main timber exporter to the EU. This is not the whole story. The domino effect of a Brexit fallout can lead to conservative spending and cutbacks that could see reduced investment in Indonesia’s timber industry.

If this happens, the government’s optimism in being able to raise exports of its timber products such as furniture, pulp and paper and plywood, valued at $11 billion through FLEGT licensing could now be a dream. Jokowi, a former furniture businessman, had an ambitious plan to boost furniture exports from $1.8 billion to $5 billion in 2020.

If realized, it would improve the livelihoods of millions of small-scale furniture producers and craftspeople in a country where 98 percent of furniture making is done by small and medium enterprises.

The UK, as a main sponsor of the SVLK initiative through its multi-stakeholder forestry program, is a strong supporter of this program in Indonesia. As a result, Indonesia benefitted from the significant backing of EU countries, led by the UK, in the FLEGT process.

After Brexit, there are doubts about the UK’s political influence to push through this FLEGT licensing process among SVLK stakeholders in EU member states by the end of this year.

WHAT CAN INDONESIA DO?

First, Indonesia should continue to improve forest governance regardless of international assistance and pressure; this can be understood as working toward stipulations in the 1945 Constitution to implement sustainable development.

Second, Indonesia can provide more support for forest certifications such as the FSC, LEI and PEFC that are independent of a state or bloc.

The government needs to endorse voluntary forest certification by providing more economic incentives to those certified, which could then attract others to join the process. More funds need to be allocated to help small-scale forestry comply with FSC, LEI and PEFC standards.

Five million hectares of certified forest after 20 years of certification in Indonesia is not good at all. Indonesia needs to double or triple this figure in the next five years.

Encouraging more investments into sustainable practices will boost exports of forest products to meet Jokowi’s goals and support the millions working in small and medium scale enterprises.

Third, talk with the UK on its timber market to manage the impact of Brexit and deepen engagement with Germany and France to access the timber legality market in the EU. Since timber legality is required by many countries, there could only be more incentive for Indonesia to obtain global recognition for this.

Timber legality is just one step toward ensuring the sustainability of Indonesia’s forests and reducing carbon emissions, conserving biodiversity and improving the livelihoods of forest-dependent people.’

*This article was originally published in the Jakarta Post

For more information on this topic, please contact Herry Purnomo at [email protected].
This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry.
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  • Indonesia’s timber going green – and global

Indonesia’s timber going green – and global

Workers moving teak (Teactona grandis) logs to transport to sawmills. Jepara, Central Java, Indonesia. Photo: Dita Alangkara/CIFOR
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Workers moving teak (Teactona grandis) logs to transport to sawmills. Jepara, Central Java, Indonesia. Photo: Dita Alangkara/CIFOR
Workers moving teak (Teactona grandis) logs to transport to sawmills. Jepara, Central Java, Indonesia. Photo: Dita Alangkara/CIFOR

By Deanna Ramsay, originally published at CIFOR’s Forests News

Forests provide both environmental benefits and economic opportunities. Striking a balance between the two – especially in developing countries where forests are being depleted and livelihoods can be precarious – is critical.

For pulp and paper, plywood and furniture producers in Indonesia, billions of dollars in investment is flowing into the country, together with increasing pressures for sustainability assurances in exports.

Ahead of the Asia-Pacific Rainforest Summit in Brunei 3-5 August, Herry Purnomo, Center for International Forestry Research (CIFOR) scientist and Bogor Agricultural University professor, said the entire region was struggling with how to turn forest extractive industries green. Research on timber and other commodities is a key theme of the CGIAR Program on Forests, Trees and Agroforestry.

“It is no easy task. Deforestation is happening and institutions and governance need to be strong to address sustainable forestry,” Purnomo said.

Indonesia established its Timber Legality Verification System (SLVK) in 2013, a scheme that certifies wood was harvested legally and required for exports to Europe, the United States and Australia.

If Indonesia obtains a license under the Forest Law Enforcement, Governance and Trade (FLEGT), the careful, creative work of this wood carver in Jepara could enter markets he had no access to before. Photo: Dita Alangkara/CIFOR
If Indonesia obtains a license under the Forest Law Enforcement, Governance and Trade (FLEGT), this wood carver in Jepara could enter markets he had no access to before. Photo: Dita Alangkara/CIFOR

Abdullah Rufi’ie, director of forest products processing and marketing with the Indonesian Ministry of Environment and Forestry, said, “Since this legality, the value of our timber exports has increased, and we have been exporting more certified timber.”

At the source

The increasing demand around the world for sustainably sourced wood and wood products has implications on the ground. Indonesia’s legal timber certification means the country now has expanded access to markets, and the supply must follow.

For Purnomo, where this wood will come from is the question.

“Every year the amount of timber cut from natural forests has decreased, along with forest concessions. And some forest concession areas have been converted to oil palm and other uses.

“How can we continue providing timber products at the same level?”

Rufi’ie said the new sustainability requirements entailed wise use of source materials.

“The trend now is to obtain raw material from private forests and community forests, especially in Java. People are planting fast-growing teak species that can be used for furniture – and there is increasing demand because the wood is widely available and of good quality,” he said.

Teak forest in Jepara, Central Java. Photo: Murdani Usman/CIFOR
Teak forest in Jepara, Central Java. Photo: Murdani Usman/CIFOR

Many markets

Following SLVK, Indonesia is in the process of obtaining the Forest Law Enforcement, Governance and Trade (FLEGT) license for its timber trade. This will allow Indonesia’s timber to easily enter EU markets, bypassing strict timber regulation requirements.

In a recent op-ed in The Jakarta Post, Purnomo wrote, “If realized, [FLEGT] would improve the livelihoods of millions of small-scale furniture producers and craftspeople in a country where 98 percent of furniture making is done by small and medium enterprises.”

Purnomo’s Furniture Value Chain Project with CIFOR has worked with such craftspeople since 2008 to improve the furniture value chain in Jepara, on the north coast of East Java.

With FLEGT licensing, the careful, creative work of people in Jepara and other towns in Indonesia could enter markets they had no access to before, increasing incomes for millions of people. But there are other markets aside from the EU.

Rufi’ie discussed plans for agreements with other countries that have specific timber certification guidelines.

“We are trying to get mutual recognition agreements with many countries. But our system doesn’t only consist of exports but imports as well, and we want to ensure that any timber that enters our supply chain is legal, demonstrated with certificates of origin and legality,” he said.

For Purnomo, the domestic market is important. “There is a lot in the domestic market to work on,” he said.

More investment into sustainable practices is needed to boost exports and encourage the domestic market, as well as supporting small and medium businesses’ moves to sustainability.

At the Asia-Pacific Rainforest Summit (APRS) in Brunei from 3 to 5 August, ways to support domestic, regional and global markets for sustainable products were be discussed by representatives from government, business, civil society and the research community.

In the session titled “Inclusive forest industries for a green economy”, panelists will delve into managing the shift from unsustainable forest industries and how to improve forest certification.

“Five million hectares of certified forest after 20 years of certification in Indonesia is not good at all. Indonesia needs to double or triple this figure in the next five years,” Purnomo said.

Indonesia’s timber, especially with FLEGT to be finalized later this year, is tied to international markets, and finding ways to manage this process sustainably to support small-scale and informal contributors is key to many conservation goals.

Purnomo said, “Timber legality is just one step toward ensuring the sustainability of Indonesia’s forests and reducing carbon emissions, conserving biodiversity and improving the livelihoods of forest-dependent people.”

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  • Impacts of industrial timber plantations in Indonesia: An analysis of rural populations’ perceptions in Sumatra, Kalimantan and Java

Impacts of industrial timber plantations in Indonesia: An analysis of rural populations’ perceptions in Sumatra, Kalimantan and Java

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Authors: Pirard, R.; Petit, H.; Baral, H.; Achdiawan, R.

Industrial timber plantations are controversial in many parts of the world. Indonesia provides an interesting case study, with its history of conflicts over land use and current ambitions for plantation expansion.

This study investigated perceived impacts of plantations on nearby rural populations. A survey was conducted of 606 respondents across three islands (Java, Borneo and Sumatra), three tree species (acacia, teak and pine) and three end uses (pulpwood, timber production and resin production). In addition, a Q-method analysis was conducted at a site with an established pulpwood plantation in order to identify significantly diverse perceptions of the plantation among villagers. The methods were combined to arrive at a representative view of these perceptions and expectations.

Results illustrate a diversity of viewpoints among villagers, with perceptions varying from general dissatisfaction to enthusiasm. Perceptions of pine and teak plantations tend to differ from acacia pulpwood plantations. For pine and teak, respondents reported a higher number and greater variety of benefits and services, higher number of perceived positive impacts in general, a better environmental record, and more opportunities to use plantation land and products for rural livelihoods. These results contrast with the heavy focus around acacia plantations on economic development and infrastructure. Hence, acacia plantations enjoy some level of recognition for opening up remote areas and providing infrastructure and services that are traditionally the responsibility of the state. Data were disaggregated by gender to enable further analysis, and offer a general indication that plantation development has not affected women more negatively than men.

Our analysis leads to several clear directions for the improvement of plantation management. The role of the state must be clarified and potentially reinforced, except if the burden of development, including that of infrastructure, is to remain the responsibility of companies. Lessons can be drawn from the teak and pine cases in Java as to the performance of institutions that act as intermediaries between companies and people. Contributions by communities should be facilitated early in the planning stages, and this should apply in particular to land claims, to the organization of the labor force (including the privileged form of work contract), to the spatial distribution of the plantation in order to leave aside areas of local value, and to options for land sharing, as this is a major vehicle for fruitful coexistence.

Published at Center for International Forestry Research (CIFOR) 2016

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  • Beyond Timber: forest management models for transforming conflict into cooperation

Beyond Timber: forest management models for transforming conflict into cooperation

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Author: Ceci P.; Taedoumg H.; Gotor E.; Spedding V.

The competing needs of different groups who depend upon the Congo Basin rainforest can be met if innovative, new research-based models for multiple-use forest management are employed. The models, together with accompanying policy guidance, have been endorsed by the region’s forest administration body COMIFAC and offer the potential to alleviate both the conflict between groups and the pressures on the landscape, allowing livelihoods and forest to flourish. Underpinned by groundbreaking, multi-disciplinary, international research, the models embody combined insights into local people’s needs, the ecological and genetic basis of forest sustainability and regeneration, and the interests of commercial logging outfits.

Published by Bioversity International 2016

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