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Local wood businesses find better global opportunities with sustainability certification

Women carve wood side by side. Photo by Deanna Ramsay/CIFOR
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Sitting in Mbak Njum’s tiny office in the coastal Central Java town of Jepara, Indonesia, talk was of exports, trends in furniture styles, cargo containers and logistics.

“Business used to be much better, and Western Europe used to be my biggest market,” said Mbak Njum, who has had her business since 1997. She added that Indonesian customers now make up 10 percent of her sales. A whiteboard in her office noted where else her items were headed: Saudi Arabia, Canada, Australia.

Jepara’s economy – almost completely dedicated to wood products – has experienced booms and busts over the decades. The 1998 Asian financial crisis actually opened up its export market, but 2008’s global economic collapse meant declines and a pivot to local buyers.

Scientist Herry Purnomo from the Center for International Forestry Research (CIFOR) has been working in the area for years, supporting the use of certified and legal wood and improved supply chains to benefit the town’s many small- and medium-scale enterprises, with research that forms part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

“Almost 30 percent of Jepara’s economy relies on furniture. If furniture disappears from Jepara, then the woodcarving culture will disappear too. Woodcraft carving and furniture-making are essential to Jepara and they need raw materials, and those raw materials are trees – specifically teak and mahogany,” he said.

Watch: Carving a niche in the global market: The woodworkers of Jepara


Just last year, Indonesia’s timber legality assurance system (SVLK) was the first in the world to be approved for the European Union’s Forest Law Enforcement, Governance and Trade (FLEGT) license, which allows legal timber and timber products to smoothly enter Europe’s markets. With this license, people are hoping for a boon for Jepara’s small businesses.

To say that Jepara’s economic life is centered around wood and woodcrafts would be an understatement. The town’s streets are littered with scenes of logs being loaded onto and off of trucks, women carving intricate designs at roadside stalls, men cutting and measuring slabs of teak, and a motley assortment of furniture available for sale at shops both large and small.

Pak Tafrikhan owns one of those stores, complete with a workshop in the back where his furniture is made and sold to Jakartans, and people in Dubai and Taiwan. Like any true entrepreneur, he is passionate about his craft and a keen observer of trends.

“My father’s principle was, don’t be afraid to make things; they’ll always sell. I still remember that message, so I never hesitate to produce. They’ll definitely sell because furniture has an extraordinarily wide-ranging market share. It depends on which segment we direct it towards,” he said, gesturing to an intricately grained teak coffee table of his own design.

Jepara has definitely cornered the market in Indonesia, so now the question is certification and licenses to expand. Many in the town aren’t yet knowledgeable about how to get their products certified, or are avoiding the levels of bureaucracy involved.

“Is the SVLK beneficial in financial terms? Perhaps it hasn’t been yet. But if this can be done, at least it will change the furniture industry’s culture in Jepara,” small business owner Pak Trisno said as the sun set at his warehouse.

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

Women carve wood side by side. Photo by Deanna Ramsay/CIFOR


As a carved relief of the Beatles serenaded men wrapping coffee table tops and women prepping stools and chairs to be sent to Australia, a carving of Jesus laid hobbled on its side, waiting for the final touches of arms and a crucifix – and hopefully a church to purchase the finished piece.

Nur Hamidah, who had been carving a decorative wood piece together with a lively group of women along a small lane, said, “This is work we all have been familiar with since we were kids – this job is like our own family, it’s in our blood.”

Here, markets, certifications and international agreements are only the finishing touches to an industry based on tradition, passion and creativity.

“People have been using teakwood for centuries, and for hundreds of years it has sustained the lives of Jepara’s people. It’s given birth to many artisans; many great works. Carvings, reliefs and many things from these trees – from this teak – have been exported to many countries, and have made Jepara famous throughout the world,” Purnomo said.

Helping craftspeople out by giving them access to sustainable wood and markets is the next step, he added, and SVLK or FLEGT licensing can help with both.

“If we see these teak trees standing tall there is huge potential to preserve the furniture industry in Jepara. And on Java small-scale forestry is actually developing rapidly. Many people are planting trees because the industry is good on Java. We want this to continue so we can preserve Java’s forests with economic incentives,” Purnomo said.

Read more: Linking sustainable supply, inclusive business models and innovative finance

A woodworking student practices his craft at a workshop that doubles as a classroom. Photo by Deanna Ramsay/CIFOR


In an interview at a CIFOR workshop on the topic, Inah Nuroniah, head of the Department of Industry and Commerce in Jepara, said, “Jepara now has approximately 1.2 million people, and the furniture industry is the central source of income. We’re now working together to look for ways in which the furniture industry can better support small enterprises now and into the future.”

As Pak Tafrikhan put it, “Jepara must return to its earlier creativity,” as well as utilizing the wisdom of people centuries before who planted vast forests of teak with specific knowledge of the best land to allow the trees to flourish.

“We really hope this business community can always be creative and innovative together. So we’re not left behind by other regions or other competitors, because we’re now in the era of globalization; there’s Vietnam, there’s China; maybe there are other countries too who are our competitors,” Nuroniah said.

“It’s these challenges that we must turn into opportunities; how we can improve performance into the future, improve quality, be more innovative, be more creative – together with the regional government we can do all of that,” she added.

Pak Trisno circled back to the forests themselves, the trees that are sustaining this unique corner of the world. “My long-term hope is for there to be wood so the timber, the raw materials can be renewed. So we should plant them as well – not just cut down and use trees.”

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

For more information on this topic, please contact Herry Purnomo at h.purnomo@cgiar.org.

This research forms part of the CGIAR Research Program on Forests, Trees and Agroforestry, which is supported by CGIAR Fund Donors.

This research was supported by UK aid from the UK government.

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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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  • Policy dialogue: CIFOR cohosts FLEGT talks in Jakarta

Policy dialogue: CIFOR cohosts FLEGT talks in Jakarta

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A national policy dialogue cohosted by the Center for International Forestry Research (CIFOR) on July 13 brought together more than 200 policy makers, scientists, business owners, craftsmen and more to discuss the potential benefits of Forest, Law Enforcement, Governance and Trade (FLEGT) licenses for small and medium enterprises in Jakarta, Indonesia. The event was also supported by the CGIAR Research Program on Forests, Trees and Agroforestry (FTA).

Originally published at CIFOR.org.

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