Downstream Industries and Sonokeling Phenomenon

Downstream Industry and Sonokeling Phenomenon

SVLK Monitoring in East Java

As a downstream area, Surabaya or more generally East Java Province became the center of the timber trade, especially the timber recipient originating from various regions outside Java. The following we will present about two forestry business units that serve as the downstream of the wood circulation which is suspected to come from illegal logging, namely CV Surabaya Trading & Co and PT Dwi Rimba Agung; as well as two forestry business units related to logging and trade of Sonokeling timber from the Perhutani region of KPH Jember and KPH Banyuwangi Selatan.

CV Surabaya Trading & Co

CV Surabaya Trading & Co (hereinafter referred to as STC) is a company holding Timber Legality Verification System (SVLK) Number LVLK-003-Quality/LK/213 with validity period from July 11, 2020 to July 10, 2023, issued by Timber Legality Verification Agency (LVLK) of PT Mutuagung Lestari (MAL). Timber Forest Product Processing Primary Industry Business License (IUIPHHK) company and Industry Business License (IUI) is located at Jl. Veteran No. 142, Gending Village, Kebomas District, Gresik Regency, East Java Province and Jl. Major General Sungkono No. 35A, Gresik Regency, East Java. IUIPHHK STC on Jl. Veteran 124 Gresik has wood production with capacity sawn of 15,000 m3/year and the other in Jl Mayjen Sungkono 35A Gresik is 5,950 m3/year. While the Upstream Industrial License (IUI-Lanjutan) in Jl. Veteran 124 Gresik has a Molding production with the capacity of 18.000 m3/year and flooring with the capacity of 2,000 m3/year. The capacity of the IUI-Lanjutan (Upstream Industrial License) is in Jl. Major General Sungkono 35A Molding production with the capacity of 15,600 M3 per year. In addition to these two permits, STC also has a TPT KB permit with LVLK of PT TRIC.

The director or owner of STC with the initials RG who is known as one of the main actors in smuggling Merbau wood from Indonesia (Papua) to China and is difficult to prosecute. There are

several illegal timber cases revealed by suspected law enforcement officers involving STC, but it is unable to ensnare RG. From digital data search and interviews with RG’s “right hand” allegedly that STC still receives illegal timber. The mode is forging documents, one of them is forging the V-legal barcodes to deceive the law enforcement officers. RG also has a company named CV Surabaya Trading Industri as wood exporting company or Non-Producer Exporter with PT MAL certification body. Office of CV Surabaya Trading industry is located in Jl. Veteran No. 142 RT.001 RW.001 Gending Village, Kebomas District, Gresik Regency, Province East Java. The timber legality certificate of STC is ever been revoked by Sucofindo. In addition, the information obtained by The Center of Environmental Education (PPLH) of Mangkubumi, technical staff (GANIS) for recording timber receipts had its permit revoked by the Ministry of Environment and Forestry, for committing manipulation of wood mutation records. In 2019, the owner of STC was ever harshly reprimanded by the Ministry of Environment and Forestry for receiving wood from West Papua, where the timber is actually destined for Semarang but the physical wood to the STC. The alibi put forward by the STC that there is a cooperation between STC and a company in Semarang.

This monitoring activity is carried out using an open and closed method, where observers make in-person visits to the industrial locations and see the industrial activities. Closed method is conducted to interview the STC owners or workers. Monitors also digging the online data related to STC. The results of monitoring of STC are: First, some data and information mention that STC is suspected to receive illegal timber but can always escape the law, so it requires intensive investigation. Second, STC is suspected to receive illegal timber from other companies by falsifying documents, one of which uses the used V-Legal barcode. Third, STC receives log that is affixed V-legal barcode and this violates Ministry of Environment and Forestry Regulation 66/2019 regarding administration of Timber Forest Products Derived from Natural Forests. Fourth, STC conducts a routine monitoring of environmental conditions in the around of the factory every 6 months. However, the monitoring of environment condition data is not available. Fifth, the workforce at STC work by not using safety and health requirements.

Picture 24. Merbau Logs Without V-Legal Barcode (Left) and Wood Merbau Month at CV STC Warehouse

Meanwhile, the monitoring results of CV Surabaya Trading Industri are: PT Surabaya Trading Industri is a forestry industry located in Gresik, beside as a primary industry, PT Surabaya Trading Industri is also registered as exporter of processed wood and other building materials.

Name of Industry PT Surabaya Trading Industri Address Jl. Veteran No. 142 RT.001 RW.001 Gending Village, Kebomas District Gresik Regency, East Java Province Business License No. 246-17-P.I/437.74/PM/2017 TDP Number No. 13.02.1.47.03197 Product Kayu Olahan Audit Body PT Mutuagung Lestari

The monitoring team conducts monitoring in location of PT Surabaya Trading according to the address we have. The wood processing activity at the location is running normally, even we got some informations from the director of PT Surabaya Trading Industry as follows: • PT Surabaya Trading Industri having its address at Jl. Major General Sungkono No. 35A and on Jl. Veteran No. 142 which both operate normally; • The main office or the industrial center is the one on Jl. Veteran No. 142; • The owner is Ricky Gunawan; We found a new mode on PT Surabaya Trading Industri by not processing the logs they own but only as evidence or complement that he processes

wood from logs, but he brings in the processed wood from Kalimantan and Papua; • Wood logs are only available at the head office, namely Jl. Veteran No. 142, while on Jl. Mayjend Sungkono only has wood processed: (6). Both industries, on Jl. Veteran No. 142 and Jl. Major General Sungkono are producing processed wood • Wood raw materials are received from Kalimantan, Sulawesi and Papua • At the location on Jl. Veteran No. 142, some things we can say are the following: – There are piles of processed wood of various types of timber, one of them is merbau with the size of the rail bearing. – Pile of timber in the size of finger joint, flooring, molding, etc. – Processed wood is not accompanied by a tally sheet as the requirements in order to be known the traceability of the wood. – The wood will not only be sent to the area or the local market but also be shipped overseas to China and Japan.

Currently, the monitors are continuing to dig and delve that there is an allegation of illegal timber business from West Papua which was received and circulated by CV STC through non-producer exporters, CV STI. Currently, the Center Environmental Education (PPLH) Mangkubumi is finalizing the complaint report about the disobedience and violations committed by CV STC for the provisions in the Timber Legality Verification System (SVLK). The complaint Report IS addressed to Timber Legality Verification Agency (LVLK) of PT TRIC. There are obstacles for the Center of Environmental Education (PPLH) Mangkubumi to report criminal allegations committed by CV STC to law enforcement officers. This is because the crime is occurred in the past. A lesson learned. The establishment of CV STI as a non-producer exporter aims to support the export process of wood products generated by CV STC. Thus, in the context of obedience against the provisions of the SVLK, checking is only can be carried out one step back, that is only from CV STI to CV STC.

Picture 25. Loading the merbau processed wood from Papua at CV STI and STC’s log and processed log warehouse (right)

Picture 26. PT Surabaya Trading & Co. timber supply chain

PT Dwi Rimba Agung

PT Dwi Rimba Agung has an office and factory on Jl. Raya Sememi No. 7, Benowo Sub-district, Surabaya City, East Java Province. This company has a Timber Forest Products Primary Industry Business License (IUIPHHK) with production capacity > 6.00 M3 and IUI- Lanjutan with investment value is > Rp. 500 Million. The production capacity of sawn timber of this company is 5,000 m3/year, Dry Kiln 5,000 m3/year and Molding 4,000 m3 per year. PT Dwi Rimba Agung has a Timber Legality Verification System (SVLK) that issued by PT Sucofindo (Persero), namely VLK 00588 with a period of valid from April 17, 2015-16 April 2021. The Center of Environmental Education (PPLH) of Mangkubumi in November-December 2020 conducted monitoring to PT Dwi Rimba Agung. The results of the monitoring on the legal aspect, namely PT Dwi Rimba Agung has complete permits, starting from TDP, Business license Number, IUIPHHK, IUI-Lanjutan, Environmental Permit and SVLK. Other than that, it is found that there are other companies that carry out activities at the the same address as PT Dwi Rimba Agung, namely PT Gunung Giri Perkasa which is a non-producer exporter and has a Timber Legality Verification System (SVLK).

In terms of the legality of raw materials and production, there are some of the monitoring findings: • In the FWI report (2020), it is stated that on August 20, 2020 there is a shipment of illegal timber from the Aru Islands, specifically from UD Zahra Pratama with the aim of PT Dwi Rimba Agung. The wood is suspected to have come from natural forests in Aru Islands, Maluku. • UD Zahra Pratama which is located at Jl. paradise, Aru Islands, Aru Islands sub-district, Maluku, in the SILK data of The Ministry of Forestry and Environment, does not have SVLK. • UD Zahra Pratama is not registered in PNBL Online system of Ministry of Environment and Forestry, but there is a Legal Certificate document Forest Products and Transport Note Documents from the Ministry of Environment and Forestry. • In the Decision of the Surabaya District Court Number 2182/ Pid.B/LH/2019/PN SBY on September 27, 2019, decided the

defendant TS, the Director of PT Rajawali Papua Foresta is guilty of smuggling Merbau wood from Papua between 2017-2018. One of the facts revealed in trial is that there are 36 companies or individuals who become the destination of illegal merbau timber shipments from PT Rajawali Papua Forest. One of them is CV Dwi Rimba Agung Surabaya.

On the environmental aspect, PT Dwi Rimba Agung has environmental permit document. However, the activities of PT Dwi Rimba Agung on July 28, 2020 and August 13, 2020 pollutes Western Regency housing area. Due to the malfunction of the chimney, the sawdust scattered and it is polluted Western Regency housing area which is near the factory. The pollution is not reported to the authorities but resolved by means of the company by paying the actual compensation of IDR. 28,000,000,. However, the residents just receive around IDR. 18,000,000. This compensation is not only borne by PT Dwi Rimba Agung but also by PT Gunung Giri Perkasa and PT Kharisma Jaya. For the wood oven process, PT Dwi Rimba Agung uses coal. Use of coal as fuel is potentially pollute the environment. The ash from burning coal must also be treated properly before being discharged into the environment or utilized.

On January 14, 2021, the Center of Environmental Education (PPLH) of Mangkubumi has sent a letter of complaint to LVLK Sucofindo regarding the receive of processed wood by PT Dwi Rimba Agung Surabaya East Java that is sent from UD Zahra Pratama, Aru Islands, Province Maluku. For this, the Center of Environmental Education (PPLH) of Mangkubumi recommends Timber Legality Verification Agency (LVLK) of Sucofindo to conduct an audit to ensure the validity of the origin of the source of raw materials received by PT Dwi Rimba Agung for the period of August – December 2020. Moreover, the Center of Environmental Education (PPLH) of Mangkubumi also has sent a letter of complaint dated December 15, 2020 to the Mayor of Surabaya regarding air pollution caused by the production activities of PT Dwi Rimba Agung. On the report of the Center of Environmental Education (PPLH) of Mangkubumi to Timber Legality Verification Agency (LVLK), Sucofindo on January 14, 2021, Timber Legality Verification Agency (LVLK), Sucofindo on February 8, 2021 conducted a special field audit to PT Dwi Rimba Agung in Sidoarjo Surabaya, East Java.

Picture 27. Timber Delivery Documents from UD Zahra Pratama to PT Dwi Rimba Agung

Picture 28. Transiting Merbau Timber by KM Asia Ship to PT Dwi Rimba Agung

Picture 29. Pile of Timber in PT Dwi Rimba Agung Factory

Picture 30. Flow of Illegal Logging from Forests Supplied by UD Zahra to PT DRA

Perum Perhutani KPH Jember

Based on the Certificate of Sustainable Production Forest Management (S-PHPL) issued by PT Equality Indonesia with the Certificate of Sustainable Production Forest Management (S-PHPL) number 041.4/EQC.PHPL/VII/2020 which is valid until May 17, 2021 as part of the forest resource management unit (SDH) of the East Java Regional Division, the area of KPH Jember reached 71,776.49 Ha. KPH Jember itself is divided into three classes of companies, namely, Teak, Mahogany, and Pine. Outside these 3 types of wood, KPH Jember also has Sonokeling plant which is concentrated in blocks 14, 15, and 19 RPH Sabrang BKPH Ambulu. Although there has never been any official felling, Sonokeling logs from RPH Sabrang, especially block 14, are often felled under the pretext of rongkatan or disaster.

There has been a practice of illegal logging of sonokeling wood in the protected forest block 35 of RPH Sabrang BKPH Ambulu Perhutani KPH Jember by Mr. Robi, who is suspected of collaborating with wayward officials of Perhutani KPH Jember. The logs from illegal logging enter to the number of industries, including UD Albarokah, UD Sumber Rejeki. Both industries have Timber Legality Verification System (SVLK). In addition to these two industries, Sonokeling (Sonokeling) wood was also sent to UD Semi Jaya Perkasa and CV Makmur Greenindo Multifarm. Both industries do not have Timber Legality Verification System (SVLK). The four industries are located in Jember. The four companies use a profit-sharing system with Mr. Robi, that is 50% of the profits from the illegal logging activities.

The Sonokeling wood sold by Perhutani, after being investigated by observers, is not listed on Perhutani’s online timber sales website, www.tokoperhutani.com. Thus, it is suspected that the timber and the proceeds from the sale were not recorded in the assets of the Perum Perhutani company. Sonokeling wood should not be cut because it is in protected forest. Furthermore, Sonokeling is a type of wood that is included in CITES Appendix 2 where its circulation must obtain a distribution permit from the local KSDA Center.

The Center of Environmental Education (PPLH) of Mangkubumi is currently investigating this case, especially the parties involved in the illegal practice of logging Sonokeling wood in KPH Jember. If strong evidence is found, the Center Environmental Education (PPLH) of Mangkubumi will report to law enforcement and a letter of complaint to Timber Legality Verification Agency (LVLK)

Picture 31. The Flow of Sonokeling Circulation in KPH Jember

Picture 32. PK Perhutani Ambulu (BKPH Ambulu) dan Puger Kulon (BKPH Wuluhan)

Perum Perhutani KPH Banyuwangi Selatan

Perhutani KPH Banyuwangi Selatan conducted Sonokeling logging activities at Chinatown RPH, BKPH Genteng, Banyuwangi. The mode used, Mr. R cooperates with the Perhutani foreman with the initial B to cut the Sonokeling by paying the slasher/labor. The Sonokeling, after being stacked in front of the foreman’s house, is then transported to the Perhutani wooden shelter (TPK) for the first type of wood movement, but some is directly transported to the industry for the second type of wood movement. Mr. R sends wood to industries in Pasuruan and Sidoarjo. In addition, Mr. R also sends wood to PT Warisan Eurindo Banyuwangi. Then, from companies in Pasuruan and Sidoarjo and then exported to China. Likewise, PT Warisan Eurindo sells its products to companies in Jombang or exports it to China. Sonokeling product types are floors, walls, and house fences.

The logging is not registered in Perhutani’s online timber sales system (tokoperhutani.com). Timber from the sawmill is belonging to Mr. R (whose company name is not yet known) accommodates illegal logs from Perhutani forests. Sonokeling illegal logging is carried out openly by blandong (a lumberjack) because he received support from the lower level Perhutani officer, namely the foreman. The Sonokeling, which is suspected to have been the result of illegal logging, also went to a company that has a Timber Legality Certificate (S-LK), namely PT Warisan Eurindo. The pretext used is that PT Warisan Eurindo, based on the RPBBI document, it has a supply contract with Perum Perhutani for Sonokeling wood.

The majority of Sonokeling logging is outside of Perum Perhutani Annual Cutting Plan. This means that the Sonokeling that grows naturally is not recorded as Perhutani’s assets. Thus, wayward officials of Perhutani take advantage of the wood. This clearly causes state losses. What we learned is that the benchmark price for Sonokeling is 3 times less than the benchmark price for teak. The benchmark price of Sonokeling type A1 is 1,300,000. On the other

hand, in the market, the price of Sonokeling per m3 is between 8 million and 13 million. Therefore, the Center Environmental Education (PPLH) of Mangkubumi will submit a letter to the Ministry of Environment and Forestry regarding the low benchmark price of wood made in 2017 which is no longer relevant to the current market price of Sonokeling. This has an impact on state revenues in the form of the Forest Resources Provision (PSDH). It is hoped that the raised Sonokeling benchmark price will provide added value to the state revenues in the forestry sector.

Picture 33. PK Perhutani Ambulu (BKPH Ambulu) and Puger Kulon (BKPH Wuluhan)