On April 21, 2016 President of Indonesia Joko Widodo, European Commission President Jean-Claude Juncker and President of the European Council Donald Tusk issued a joint statement that the European Union and Indonesia have agreed to move swiftly towards implementation of the first Forest Law Enforcement, Governance and Trade (FLEGT) licensing scheme, a strategy from both parties to reduce illegal logging and promote the trade of legal timber.

Implementation of the FLEGT licensing scheme is one of the main achievements of the Voluntary Partnership Agreement (VPA) between Indonesia and the European Union on FLEGT that was signed in 2013 and ratied in 2014. The latest development in Indonesia was the issuance of Decree of Minister of Commerce No. 25 of 2016 which ensured that all timber products from Indonesia must comply with the Timber Legality Assurance System (TLAS) indicated by the issuance of the V-Legal Document for exported timber products. This Timber Legality Assurance System is known in Indonesia as the Sistem Verikasi Legalitas Kayu (SVLK) and is implemented throughout the entire supply chain from the source of timber to the point of export, as a requirement prior to issue of a FLEGT license for timber trade

between Indonesia and the European Union. The implementation of FLEGT licences is expected to not only strengthen the economic value of timber trade between Indonesia and the European Union but also to encourage ongoing improvements in governance, especially in the forestry sector and related trade.

This development must be appreciated and regarded as a show of commitment by all parties in Indonesia and the European Union in their joint effort to address illegal timber trade and forest degradation. However, it must be noted that trade incentives will not be achieved if stakeholders do not work together to build and maintain credibility. Stakeholders must prepare mitigation safeguards for the potential negative impacts that may occur during this stage of FLEGT licensing implementation, especially safeguarding indigenous and local communities whose livelihoods depend on the forests.

There are still challenges in forestry governance and law enforcement. Issues pertaining to information transparency, boundaries in forest tenure/utilisation and management, conicts, environment devastation through forest conversion, corruption and forms of maladministration still occur. In addition, the Timber Legality Assurance System itself must be adapted further to achieve sustainable forest management.

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