Indonesian FLEGT licensing procedures

When are FLEGT licences issued?

FLEGT licences are issued at the point at which the consignment is consolidated prior to export.

How are FLEGT licences issued?

FLEGT licensing authorities are independent organisations registered with the Ministry of Environment and Forestry, which lists them on the SILK website:  https://silk.dephut.go.id/index.php/info/lvlk

The licensing authorities issue FLEGT licences to accompany consignments of verified legal timber that registered operators with valid legality certificates wish to export to the EU. FLEGT licences are issued at the point at which the consignment is consolidated prior to export.

What follows is a summary of the procedure. For full details, consult the revised Annex V of the Indonesia-EU Voluntary Partnership Agreement (VPA): http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32015D1158

To obtain a FLEGT licence, the exporter applies in writing to the licensing authority with which it holds a contract. The exporter attaches the following documents to demonstrate that the timber raw materials in the product originate only from verified legal sources:

  • A summary of the transport documents for all timber/raw materials received by the factory since the last audit (up to maximum of 12 months)
  • Summaries of Timber/Raw Material Balance-Sheet Report, and Processed Timber Balance-Sheet Report since the last audit (up to maximum of 12 months)

The licensing authority verifies the validity of the operator's legality certificate by reconciling the data provided and, where necessary, conducting a field visit to ensure consistency with the information to be specified in the FLEGT licence.

For the licensing authority to issue a FLEGT licence, all suppliers in the exporter's supply chain that make up the consignment must have been covered by a valid legality or sustainable forest management certificate, or a Suppliers Declaration of Conformity (SDoC).

If the operator complies with legality and supply chain requirements, the licensing authority issues a FLEGT licence in the format presented in Annex IV of the VPA.

If an operator does not comply with the legality and supply chain requirements, the licensing authority will issue a non-compliance report instead of a FLEGT licence. The non-compliance report halts the movement of the related timber and/or timber products.

Indonesia follows the same procedure to issue V-Legal Documents for exports to non-EU markets for the products covered in the VPA.

The licensing authority registers each FLEGT licence in the Ministry of Environment and Forestry’s SILK system (https://silk.dephut.go.id/index.php/info/vlegal), which is linked to Indonesia’s online trade and customs systems to allow for fast approval of export and clearance of consignments. Competent authorities in EU Member States have access to SILK, as regulated in the VPA.

Who are the licensing authorities?

Licensing authorities are independent organisations registered with the Ministry of Environment and Forestry, which lists them on the SILK website: https://silk.dephut.go.id/index.php/info/vlegal

Independent private certification bodies, called conformity assessment bodies (CABs), are accredited by the National Accreditation Committee (KAN) and mandated by the Ministry of Environment and Forestry to carry out legality verification functions nationwide. By June 2016, 22 of the CABs had also been accredited and mandated as licensing authorities.

The licensing authorities issue their customers (exporting companies) with V-Legal Documents, and in future will issue FLEGT licences, to accompany shipments of verified legal timber products exported to the EU. The licensing authorities are supervised by the Ministry of Environment and Forestry, and use the SILK online information management system managed by the Licence Information Unit (LIU).

What is the Licence Information Unit?

The LIU is a service of the Ministry of Environment and Forestry in charge of overseeing the licensing function. In the case of questions about a licence or a licensing authority, the LIU is the main source of information in Indonesia. Visit the SILK website for information on the licensing authorities and V-Legal Documents (and in future FLEGT licences) that have been issued: https://silk.dephut.go.id/index.php/info/vlegal

How long does it take Indonesia to issue a FLEGT licence following an application from an exporter?

The lead time is three days for a licensing authority to issue a FLEGT licence after an application by an exporter, as set out in the SVLK Guidelines. Note that the licensing authority can only issue export licences (V-Legal Documents or FLEGT licences) to exporters that are SVLK certified.

For how long do FLEGT licences remain valid?

A FLEGT Licence is valid for four months after its issuance by Indonesian licensing authorities. EU-based operators should therefore send FLEGT licences to their Competent Authorities as soon as possible after they have FLEGT licences from the exporters.

Is the FLEGT licence issued at the same time as the Bill of Lading?

A FLEGT licence or V-Legal Document is issued just before products are loaded into containers, which are then sealed. This is not necessarily at the same time that the Bill of Lading is issued. Note that the invoice number/reference information is among the mandatory pieces of information that appear in a FLEGT licence or V-Legal Document. A customs-approved Export Declaration (‘Pemberitahuan Ekspor Barang’ or PEB) features the following mandatory information: (a) the FLEGT licence/V-Legal Document number; (b) the Invoice number/reference; and (c) the Bill of Lading number.

Do the mills I source from in Indonesia need to have a SVLK certificate in order to apply for their FLEGT licence?

Yes. Before the start of FLEGT licensing, Indonesian exporters need to have a valid ‘SVLK certificate’ to apply for their V-Legal Document, which is an export licence. For exports to the EU, the V-Legal Document will be ‘replaced’ by a FLEGT licence when Indonesia begins FLEGT licensing. Indonesian exporters will then need to have a valid ‘SVLK certificate’ to apply for their FLEGT licence.

SVLK certification does not automatically mean that a company can get a V-Legal Document of FLEGT Licence. This is because, while the SVLK certificate certifies the company, the V-Legal Document or FLEGT licence is shipment based. To issue a FLEGT licence, the licensing authority will check whether its client has the SVLK certificate and whether products and production figures are consistent. 

What is the status of timber products that are already on their way to the EU when FLEGT licensing starts and which therefore lack FLEGT licences?

Timber products exported to the EU from Indonesia on or after 15 November 2016 must have a FLEGT licence. If such products lack FLEGT licences, authorities in EU member states will not allow the products to enter the market. Timber products exported from Indonesia before 15 November 2016, and so lacking FLEGT licences, are permitted to enter the EU after that date. However, for such products, the due diligence requirements of the EU Timber Regulation still apply.

What are the VPA and SVLK requirements for species declaration?

According to the VPA, if more than one species is included in a composite product, the FLEGT licensee should use a separate line in the FLEGT licence to list each species. The species declaration may be omitted for a composite product or component that contains multiple species whose identity has been lost (e.g. particle board). Under the SVLK (DG regulation P.14/PHPL/SET/4/2016, Annex 7), if a product consists of more than one species, each species needs to be listed by separating them with semicolons (;). For composite products or for products comprising of more than three species, it is sufficient to record the main species.

What happens if a shipment includes multiple products whose details cannot fit onto a single-page FLEGT licence?

Indonesia has developed an annex to the FLEGT licence that will be used if more than one product is shipped under one FLEGT licence. The annex provides details per product on HS code, scientific name, country of harvest (specifying if imported), volume or weight, and number of units. This will allow Competent Authorities in EU Member States to fulfil their reporting requirements.

What is the export procedure for Indonesian recycled/non-timber paper products that are exempted from FLEGT licensing?

In general the procedure is as follows:

  1. The paper industry sends an application to the Ministry of Industry (MoI). The application lists intended products (10 digit HS codes) and production plan, loading port(s) and destination countries (can be several).
  2. If the industry uses waste paper, it attaches the report of field examination by MoI’s centre for pulp and paper, or proof of its ecolabel certificate that testifies the waste paper use.
  3. If the industry uses non-wood material, it attaches the report of field examination by MoI’s centre for pulp and paper, or an analysis by an independent (KAN-accredited) laboratory.
  4. The MoI’s Directorate General of Forest and Plantation Based Industry checks the validity of these documents. It can conduct field checks if necessary.
  5. If MoI approves the paper industry’s application, it will issue a recommendation letter to Customs that informs Customs that no V-Legal Document or FLEGT licence is required for the specific industry, product, loading port(s) and destination country/countries.
  6. The recommendation is valid for one year, but only for the listed product(s), port(s), and destination(s).
  7. The letter is issued in Bahasa Indonesia and English and can be used by an EU importer to inform EU Competent Authorities that a specific paper shipment is exempted from FLEGT licensing.