The Ministry of Trade of the Republic of Indonesia recently issued Minister of Trade Regulation (Permendag) No. 15/2020, regarding provisions for forest product exports. This new regulation stipulates that V-Legal checks, which verify the legality of all timber products, are no longer required for exports. It was intended to streamline the export process for forest products and thereby boost trade.
Sebijak Institute conducted a rapid (4-day) online survey between 21 and 23 April 2020, to various forest industries from both upstream and downstream levels (including exporters), to obtain first-hand information on how the regulation may affect their operations. The survey focused on how the legality policy have impacted them and their general positions and views changes in the exports provisions.
The study obtained 151 responses, both exporters and non-exporters, and members and non-members of associations. Only 10 participants decided not to complete the survey (Figure 1). Most of the survey participants (88%) declared to be engaged in exports of forest products. Approximately 90% of the participants indicated that they have been committed in the forest business more than 5 years (41% even more than 20 years). A third of the survey participants claimed as members of HIMKI. Most of them only run a single type of core business; only 12 indicating to have more than one. 50% of the participated categorised themselves as SMEs producing furniture.
Considering the survey size, it is by no means that the survey portrays the views of Indonesia’s forest industries. Nonetheless, the results remain valuable to illustrate what may potentially happen on the ground. The rapid survey indicates the supporting position to SVLK implementation. Approximately two-thirds of the survey participants were confident that legality verification positively impacts their business and sales to key markets (Figure 2a, 2b). Regarding the proposed regulatory change of the removal of legality from export requirements (Permendag 15/ 2020), they also anticipated negative impacts (Figure 2c, 2d).