Sustainability Certification and Legality Verification in Indonesian Natural Forest-Based Wood Products Value Chains

HIGHLIGHTS The case study natural forest-based value chains were largely compliant with the Indonesian timber legality verification system (SVLK). SVLK includes sustainability requirements (PHPL), but these are less stringent than voluntary forest certification, primarily because of a lesser emphasis on field performance. SVLK fostered legality compliance in both domestic and export value chains, but some loopholes remain. Weaknesses in SVLK architecture and implementation impact on both sustainability and legality of Indonesian natural forest-based value chains. This study suggests five areas for improvement of SVLK. SUMMARY Indonesian natural forest concessions and value chains are governed by a mandatory Timber Legality Verification System (SVLK), which includes assessment of Sustainable Production Forest Management (PHPL). Concessionaires and processors may also pursue voluntary forest certification. This study explores actors' compliance with these instruments along wood product value chains originating primarily from natural forests. Empirical results demonstrate that SVLK fostered legality compliance in domestic as well as export value chains, but still allows some possible loopholes. It is easier for actors to comply with SVLK than with Forest Stewardship Council (FSC) certification, because SVLK has less stringent requirements, and uses an assessment system that allows poor field performance and does not foster continuous improvement of practices. These results identify weaknesses in the architecture and implementation of the regulatory instruments, and suggest measures to strengthen Indonesia's sustainable forest management and timber legality systems.