AR MFP_YEAR 1 by Multistakeholder Forestry Programme

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Multi-Stakeholder Forestry Programme Phase 3 Annual Report August 2014 â&#x20AC;&#x201C; July 2015

www.mfp.or.id

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Published by: Multistakeholder Forestry Program Registered offices Gedung Manggala Graha Manggala Wanabhakti Blok VII, Lantai 6 Jl. Jend. Gatot Subroto Jakarta 10270 INDONESIA Telp: +62 21 573 7094 Dipo Business Center, Lantai 9, Unit B Jl. Jend. Gatot Subroto Kav 50-52 Jakarta 10260 INDONESIA Telp: +62 21 298 66400 - 1 Fax: +62 21 298 66402 Email: mfp@mfp.or.id

Photos MFP Publication date September 2015

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Table of Contents

Table of Contents 3 Programme Overview 5 Report Layout 6 Programme Summary for Year One 7 1 Program Highlights and Progress in Year One 9 2 Timber Legality 13 Strengthening Sistem Verifikasi Legalitas Kayu (SVLK) as Mandatory Timber Legality System 13 2.1. Improvement of SVLK Regulation 13 2.2. Acceleration of SVLK Certification 14 2.2.1. Establishment and Coordination of SVLK Certification Acceleration Team 2.2.2. Identification of Accredited Verification Bodies and Certification Bodies 2.3. Supporting FLEGT VPA 19 2.3.3. Improving Credibility of SVLK through Independent Monitoring 2.4. Database System for Forest Products and Timber Documentation 21 2.3.2. Promoting SVLK in International Market 2.5. Improving Capacity Skills of Institutions in Support of SVLK 24 3 Entrepreneurship Development 27 3.1. Support Community Based Forest Enterprises 27 3.2. Capacity Building 28 3.2.1. Establishment and Implementation of Training Network 3.2.2. Facilitate the Process to Develop Forestry Extension Workers and Non-Governmental Extension Workers (Penyuluh Kehutanan Swadaya - PKS) for Community Based Forestry Operational) 3.3. Access to Finance 29 3.3.1. Facilitate Small Scale, Private and Community Based Forest Enterprises to Develop Business and Investment Plans 3.3.2. Increasing Level of Investment from Government and Non-Government in Community Forest Enterprise 3.4. Establishment of Coordinating Stakeholder Groups at Provincial Level 30 4. Community Access to Forest 33 4.1. Supporting FMU Development 35 4.2. Community Forests Legal Review 35 4.3. Participatory Mapping Initiatives and Conflict Resolution Review 36

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

5. Cross Cutting Issues 39 5.1. Research 39 5.2. Stakeholder Engagement 41 5.2.1. Support Timber Legality Work Stream: Assessment of SVLK Clinic 5.2.2. Stakeholder Engagement Guidelines 5.3. Social Inclusion 42 5.3.1. Integrating Gender Equality and Social Inclusion in Impact Monitoring of VPA Implementation 5.3.2. Tracking Womenâ&#x20AC;&#x2122;s Participation in MFP3â&#x20AC;&#x2122;s Programming 5.4. Communication and Knowledge Management 43 5.4.1. Communications Library 5.5. Grants Management 45 5.6. Monitoring Evaluation and Learning (MEL) 49 5.6.1. Capacity Building of Regional MEL Consultants 5.6.2. Strengthening MEL of Grantees and Sub-contractors 6. Lessons Learned 53 Who we are 55

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Programme Overview Over the past decade the Government of Indonesia (GOI) has taken decisive action to eradicate illegal logging and has made strong commitments to conserve its forests to help alleviate global warming. However, policing forests and ensuring compliance with a complex set of often conflicting or insufficient laws has proved challenging. The GOI recognises that existing international timber trade drives illegal logging and has asked consumer countries to play their part in tackling the problem. In May 2011 Indonesia and the European Union concluded negotiations on a Voluntary Partnership Agreement (VPA), a legally binding bilateral trade agreement under the EU’s Forest Law Enforcement, Governance and Trade (FLEGT) Action Plan. This commits the Indonesian government to implement systems that ensure its timber products exported to the EU have been legally produced; that is, the products have been harvested, transported, processed and traded in accordance with a legality definition and means of verification of compliance agreed between Indonesian stakeholders. Since 2000, Department of International Development (DFID) of the United Kingdom has been supporting Indonesia in strengthening its governance, particularly in forest sector, through Multi-stakeholder Forestry Programme (MFP). Initially, this programme covered a wide range of activities from forest land tenure reform to industrial restructuring. It also encompassed a bilateral Memorandum of Understanding between the UK and Indonesia to tackle illegal logging and its associated trade. A second phase of the programme since 2007 (“MFP2”) has focused primarily on supporting Indonesia’s preparations to enter EU’s Forest Law Enforcement, Governance and Trade – Voluntary Partnership Agreement (FLEGT – VPA). It promoted Timber Legality Assurance System/TLAS or Sistem Verifikasi Legalitas Kayu/SVLK as a measure to curb illegal logging and to promote trade of legal timber products. The SVLK is developed with the base on the principles of good governance, representativeness, and transparency. MFP3 is the third phase of the programme. It aims to support concrete implementation of the VPA has been agreed through a Letter of Arrangement signed by the Secretary General of the Indonesian Ministry of Forestry and Director General of DFID on 28th of May 2012. MFP3 provides technical assistance necessary to accelerate the provision of forest land to enable the expansion of commercially viable and auditable community based forest enterprises and producing timber products that can legally enter domestic and export markets.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Programme Summary for Year One MFP3 will contribute to improving management of forests throughout Indonesia that will contribute to reducing rural poverty, enhancing biodiversity conservation and strengthening climate protection by reducing emissions from land use, land-use change and forestry (LULUCF) practices. The outcome of the programme is the establishment of a legally and technically effective community-based forest management and industry to complement corporate industrial forest production, reducing illegal (unplanned forest degradation and deforestation); providing greater tenure security; improving rural livelihoods; protecting forest ecosystems and the environment, and mitigating climate change. The programme outcomes are divided into three major work streams: Work Stream 1 – Timber Legality. The objective of this working area is the industry-wide adoption of the SVLK timber legality assurance system, which will be achieved in support of sustained exports to legality-regulated markets. Activities within this work stream include: support overall FLEGT – VPA and SVLK implementation; increase SVLK compliance in small and medium sized enterprises and improve its credibility through Independent Monitoring; improve the database system for forest products and timber documentation; improve the capacity skills for SVLK related stakeholders; identify the impacts of SVLK implementation under FLEGT VPA to local communities, indigenous peoples, and industries; and strengthen the capacity of Forest Management Units (FMU) in order to facilitate the SVLK certification process. Work Stream 2 – Forestry Entrepreneurship. This work stream provides support for local governments, community right-holders, and private sectors in timber processing in order to accelerate the effective implementation of community-centred forest management, as prioritized in the Ministry of Forestry policies and regulations, and the National Strategies for REDD+ and Food Production. Activities under this output include: identification of the capacity building needed to improve private sector’s involvement in timber legality and the VPA process; survey, including the Knowledge, Attitude, and Practices (KAP) Survey for SVLK; facilitate the expansion of SVLK in order to support Community Based Forest Enterprises (CBFE); facilitate the operation of national training networks, including ICH (Information Clearing House); facilitate the operational of Forestry and Non-Governmental Extension Workers; facilitate the development of business and investment plans for small scale, private, and CBFE; establishment of coordinating stakeholder groups at provincial level; facilitate multistakeholder groups for certification; increase the level of investment from government and non-government institutions in the community forest enterprise; and strengthen the capacity of FMU in entrepreneurship development issues.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Work Stream 3 â&#x20AC;&#x201C; Community Access to Forest. This working area focuses on facilitating the multi-stakeholder process and formulating mechanism to ensure access to forest and land resources by community groups, as well as the clarity of their tenure. This allows them to contribute to meeting industry demand and national market and export targets for timber and non-timber forest products. Activities undertaken include: facilitating the development and coordination meeting on issues related to FMU and community access to forest resources; drafting regulations on FMU and CBFM; facilitating the institutional capacity building of community groups; and facilitating participatory mapping and forest tenurial conflict resolution.

OUTPUTS 1

OUTPUTS 2

OUTPUTS 3

The three above outputs are linked together in a framework that sets Output 3 (on community access to forest resources) as the starting point for achievements of the other two Outputs. Community access to forest resources is at the cornerstone of promoting a viable community-based forest sector. Land titling is believed to make the landowner more prone to long-term investments and stronger economic growth. Clear legal status and land ownership are a key requirement for the implementation of the Voluntary Partnership Agreement (VPA).

Mechanisms for assuring access to forest resources by community groups and clarity of their tenure.

Support for local government and community rights-holders has accelerated the effective implementation of community-centred forest management

If the incentives of communities to participate in the VPA process are not perfectly understood, and if the communities are not adequately supported, legislation will be ineffective, thereby increasing the risk of widespread leakage of illegal logs (considered to be a strong likelihood given the informal nature of the sector), and leading to capture of community forests by large companies and elites. Clarity over the status of access to forest resources needs to be supported with capacity building and other measures, such as viable models for access to finance, in order to enable businesses to become robust and profitable. The certification process required SVLK to add to the capacity and financial constraints. In summary, the logical steps leading to reduced deforestation and a decrease in emissions require intervention that addresses issues of forest tenure security. Better ownership rights contribute to the creation of strong CBFMs and CBFEs; these in turn will increase capacity to obtain SVLK certification. This approach is summarised in Figure 1 below.

The establishment of a legally and technically effective community-based forest industry to complement corporate industrial forest production

Industry-wide adoption of the SVLK timber legality assurance system

Figure 1. Logical Approach

Improved management of forests throughout Indonesia has reduced rural poverty, enhanced biodiversity conservation and strengthened climate protection by significantly reducing emissions from land use, land-use change and forestry (LULUCF) practices.

IMPACT

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

01 PROGRAM HIGHLIGHTS AND PROGRESS IN YEAR ONE The election of President Jokowi Widodo in October 2015 has already brought about important changes in MFP3’s programmatic directions. Four of his 9 “Nawa Cita’ objectives for strengthening the economy are relevant to the MoEF’s programming and are relevant to this programme. For example, 'Developing Indonesia from the Margins' involves strengthening the role of villages in forest management; 'Improving peoples' productivity and competitiveness internationally' includes developing forest based business; 'State involvement in law reform' includes clarifying land ownership and putting an end to illegal logging and illegal trade in wildlife; and 'Achieving community self-sufficiency' which involves working with communities on improving the management of the natural resource based to improve, amongst others, food security. The National Medium-Term Development Plan of 2015-2019 has set the target to distribute at least 12.7 million hectare of state forest land by 2019 to adat and local communities who are located in the settlements inside and surrounding the state forest areas. This is a major breakthrough on an issue that successive governments have given little attention. From MFP3’s perspective, this new momentum for promotion of community based forest schemes is very much in line with the objective of MFP3 Output 3 that aims to secure land tenure for adat and local communities to gain control and access to state forest areas. In addition, it fits with Output 2, in which the objective is to develop and enhance community organization enterprises to supply certified timber and non-timber products. By giving communities greater access to state forests a number of land conflicts might finally be resolved. At the same time, this initiative may contribute to poverty eradication goals. Nevertheless, there are still many questions to be answered concerning the process of releasing the lands and their location. MFP3 is well placed to work with the MoEF on how this policy is to be implemented. The other major change for the programme under the new government was the decision by the MoEF to accelerate the certification programme of all furniture exporters SMEs (mostly in Yogyakarta, Central and East Java) in January 2015. • The MFP3 work plan was approved by the Steering Committee on 6th August 2014. The work plan was formulated through several focus group discussions (FGD) and consultation with Ministry of Forestry, other ministries and government institutions, non-governmental organizations (NGOs), private sectors, SVLK accredited- verification bodies (Lembaga Verifikasi Legalitas Kayu), and other relevant stakeholders. During this period, the MFP3 team conducted preparatory activities such as consultation meetings, scoping and other research activities.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

• In October 2015, President Jokowi and Vice President Jusuf Kalla were inaugurated. The Ministry of Environment and the Ministry of Forestry were merged to create the Ministry of Environment and Forestry (MoEF). In addition, a Ministry of Agraria was created with a mandate over land tenure and spatial planning, which may also have implications for MFP3 programming. • The environmental agenda did not make it into the President’s Nine Priorities popularly known as the ‘Nawa Cita.’ However, given that governance is one of the new administration’s top priorities, we can safely assume that forest governance will be a priority. • MFP3 completed most of the strategic baseline or foundational assessments during this period. These works are important to inform and guide the programming of MFP3. Some of the most important baseline work included: assessment of the Target FMUs, the Independent Monitoring and the Knowledge, Attitude and Practice Survey on SVLK. It is important to note that during this period, MFP3 initiated its grant programme with several partners both at national and local levels. • The main highlight of all the activities in this period is the acceleration of the certification programme following MoEF’s decision to accelerate the certification of all furniture exporters SMEs (mostly in Yogyakarta, Central and East Java) and primary industries holding IUIPHHK licenses of up to 6000m3 capacity. The program entails certification of 400 furniture SMEs and 1000 primary industries supported by the end of 2015 with funding from the MFP3 and state budgets.

This programme is a massive undertaking requiring support from the grassroots up to the national level. MFP3 facilitated the coordination with relevant provincial and district governments, training of field workers, media outreach, procurement of certification auditors and development of a gap assessment application to enable a consolidated and real-time data updates. To support this programme, MFP3 shifted its focus for the year and consequently reallocated the budget for Output1 to fund this programme. This shift in focus and reallocation of budget will not affect the achievement of the targeted milestone for the first year as prescribed in the log frame. The Steering Committee approved this shift and corresponding budget re-allocation on 17 February 2015.

• Another important development is the GOI’s commitment to distributing state forests to adat and local communities. The National Medium-Term Development Plan of 2015 2019 has set the target to distribute at least 12.7 million hectare of state forest by 2019 to adat and local communities who are located in the settlements inside and surrounding the state forest areas. This mean, the target areas for Social Forestry program assigned by the Ministry of Environment and Forestry (MoEF) must reach around 2.5 million hectare per year. If it is compared to the past experience of very slow process to grant social forestry scheme for the adat and local community, so far only around 1.4 million hectare the total area has been distributed by 2014, the new government policy is quite ambitious plan.

From MFP3 perspective, this new momentum for promotion of Social Forestry scheme is very much in line with the objective of Output 3 which aims to secure land tenure for adat and local communities to gain control and access to state forest areas as well as the objective of Output 2 in which the objective of that MFP3 project is to develop and enhance community organization enterprises to supply certified timber and non-timber products.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

02 TIMBER LEGALITY Strengthening Sistem Verifikasi Legalitas Kayu (SVLK) as Mandatory Timber Legality System 2.1. Improvement of SVLK Regulation Through Regulation 38/2009, the Government of Indonesia has developed The Standards and Guidelines for the Assessment of Sustainable Production Forest Management Performance and Verification of Timber Legality for License Holders or in Private Forests. This policy has been amended several times through Regulation No. 68 / Menhut II / 2011, Regulation No. 45 / MoF / 2012, and Regulation No. 42 / Menhut II / 2013 Then in 2014, after the Indonesian government ratified the FLEGT VPA on March 13, 2014, the regulations regarding SVLK replaced by Regulation 43 / Menhut II / 2014 on the Assessment of Sustainable Production Forest Management Performance and Verification of Timber Legality for License Holders or in Private Forests. Related to the Regulation 43 / Menhut-II / 2014, MFP facilitated the MoEF to conduct socialization this regulation in some areas. In addition to the MFP, other organizations such as WWF, Partnership, APHI, and LEI were conducted socialization. As Table 1 below indicates SVLK socialization took place in 6 regions over a period of six months with a total of 141 participants, 41 of which were women. One of the findings of the socialization process is that there are significant numbers of SMEs that are not certified and do not have a business license. The Indonesian government, particularly MoEF, are committed to facilitate the certification process, including facilitating the certification process and the first surveillance for SMEs during the acceleration phase. The MoEF requested the Governor to coordinate with the district/city heads to ensure access to business permits is accelerated to support SVLK implementation. Currently, Regulation 43 / Menhut II / 2014 has been amended by Regulation LHK No. 95 / Menhut II / 2014. These changes are in response to the export needs of SMEs ETPIK Furniture holders, who have a certificate, but the raw materials processed products not certified or DKP, they can use the Export Declaration until December 31, 2015. DE is only a statement that the goods are exported using a source of raw materials that meet SVLK requirements. DE is aimed to facilitate the furniture product so that the SMEs can export their product without V-Legal. However, DE does not secure the compliance of the product to the legality regulation and policy. It means that when the products arrive at the EU market, due diligence will apply for such products. MFP3 has facilitated national communication on DE for SMEs in six major cities: Surabaya, Jepara, Denpasar, Semarang, Solo, Cirebon and Jakarta. These events were attended by 1,571 people consisted of 987 women and 584 men.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

No 1 2 3 4 5 6

Location Medan, North Sumatera Surabaya, East Java Solo, Central Java Manado, North Sulawesi Bandung, West Java South Kalimantan

Date Monday, 8 Sep 2014 Tuesday, 11 Nov 2014 Tuesday, 18 Nov 2014 Monday, 8 Dec 2014 Friday, 19 Dec 2014 Monday, 22 Dec 2014

Number of Participant Female 33 10 28 13 148 40

Male 134 98 77 104 117 101

Total 167 108 105 117 135 141

was then initiated. National communication on SVLK and DE for IUIPHHK was carried out in Jakarta on 13 January 2015 attended by 180 participants, 33 women and 147 men.

The Government also invited IUIPHHKs for the full implementation of SVLK. There are about 3,000 IUIPHHK that are not ready yet to implement SVLK (or not having S-LK certification) . Acceleration of group certification for IUIPHHKs

2.2. Acceleration of SVLK Certification To support the Indonesian Government's commitment to fully implement of SVLK on January 1, 2015 (and specifically for SMEs ETPIK Furniture 1 January 2016), MFP3 had to realign its work plan and re-allocate its human resources to support this effort. This was done in a two-day workshop attended by the Executing Agency, UKCCU, and the PMU. The refocusing targeted the certification process for ETPIK in furniture sector with no S-LK (target: 725 units) and IUIPHHK suppliers (target: 1.645 units). The activities to be carried out include technical support such as training, database system development, facilitator, and supervision from the local government. To accelerate SVLK Certification for IUIPHHK and SMEs, the MoEF sent a letter, S.34/Menhut-VI/2015, 4 February 2015 to the Governors of West Java, Central Java, East Java, Banten, Yogyakarta, and Bali. The letter emphasizes the mandatory No 1 2 3 4 5 6 7

Location Surabaya, East Java Jepara, Central Java Semarang, Central Java Solo, Central Java Cirebon, West Java Jakarta, DKI Jakarta Denpasar, Bali

Date January 6th, 2015 January 6th, 2015 January 7th, 2015 January 8th, 2015 January 9th, 2015 January 12nd, 2015 January 7th, 2015

status of SVLK and outlines the history of developing the mechanism. The letter also notes the multi-stakeholder nature of its implementation and how it ensures the sustainability of forest management, improves forest governance, as well as promotes the legal timber trade and its importance to penetrating markets for forest industry products. MFP3 facilitated the socialization of the letter in collaboration with three ministries: MoEF, Ministry of Trade (MoT), and Ministry of Industry (MoI) along with members of timber-based furniture SMEs centres. As Table 2 below indicates DE socialization took place in 7-targeted areas with a total of 1,571 participants, 987 of which were women. such as Jepara, Surabaya, Semarang, Denpasar, Solo, Cirebon, and Jakarta.

Number of Participant Female 127 129 107 141 164 91 228

Male 65 137 82 90 69 45 96

Total 192 266 189 231 223 136 324

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

2.2.1. Establishment and Coordination of SVLK Certification Acceleration Team In close coordination with the MoEF, the MFP3 facilitated the following process: • Establishment of Supervision Committee, comprising the Directorate Generals (Forest Utilization of the MoEF, SMEs of the MoI, and Foreign Trade of the MoT) and MFP3. This team coordinates with Governor/Provincial Secretary to prepare the coordination meeting between Forest Utilization Directorate General with the Head of Agency. This team also performs regular monitoring and evaluation to measure the progress of the acceleration programme. • Steering Committee, comprising the Forestry Agency (Dishut) and Industry and Trade Agency (Disperindag) at the provincial

level and the Centre for Monitoring Forest Product Utilisation (BP2HP) in the target area to collect data on management unit with no S-LK and to support the gap assessment implementation, provide technical support and administration for the business unit to fulfil the requirements from the verifier.

• Facilitation Team, comprising Non-Governmental Organization (NGOs) with skills and experience to facilitate the small industries, GaniMs/Wasganis (technical personnel), and association. The tasks of this team are to classify business players based on the type of their business, to perform gap assessment of the Management Unit, and to conduct technical support and perform an internal audit before the certification process. MFP3 facilitated the activities of these three teams. Particularly for the Facilitation Team, MFP3 issued 6-month contracts for 22 persons recruited based on the target area of the SVLK implementation. Support and capacity building for this Facilitation Team was conducted in February 2015 in Jakarta. The team was equipped with information on SVLK implementation, tips to communicate with multi-stakeholders, and how to perform the gap assessment. MFP also provided technical supports in all provinces in Indonesia to forestry office at district level. Technical support aimed to provide guidance for SMEs, IUIPHHK below 6.000 m3/year, and private forest. The technical support conducted as follows:

Technical Support Supported by MFP SUMATERA NO 1 2 3 4 5 6

PROVINCE Aceh North Sumatera West Sumatera Jambi South Sumatera Lampung

LOCATION Banda Aceh Medan Padang Jambi Palembang Bandar Lampung

IMPLEMENTATION 9-Apr-15 26-Mar-15 28 May 15 9-Apr-15 7-Apr-15 28-Apr-15

JAVA, BALI AND NUSA TENGGARA NO 7 8 9 10 11

PROVINCE West Java Central Java DI Yogyakarta East Java Bali

LOCATION Bandung Semarang Yogyakarta Surabaya Denpasar

IMPLEMENTATION 6-May-15 27-Feb-15 24-Mar-15 20-Mar-15 24-Mar-15

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

KALIMANTAN NO 12 13 14

PROVINCE Central Kalimantan South Kalimantan East Kalimantan

LOCATION Palangka Raya Banjarbaru Samarinda

IMPLEMENTATION 23-Apr-15 28-Apr-15 27-Apr-15

SULAWESI NO 15 16 17 18

PROVINCE Central Sulawesi North Sulawesi South Sulawesi Gorontalo

LOCATION Palu Manado Makassar Gorontalo

IMPLEMENTATION 7-Apr-15 6 May 15 16-Apr-15 7 May 15

PAPUA & MALUKU NO 19 20

PROVINCE North Maluku West Papua

LOCATION Ternate Manokwari

IMPLEMENTATION 5 May 15 17-Apr-15

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

2.2.2. Identification of Accredited Verification Bodies and Certification Bodies Fourteen accredited Verification Bodies (VBs) for SVLK assessment/audit and 13 accredited certification bodies (CBs) were identified by MFP3. These VBs/CBs were invited to bid for

verification/certification assessment processes which will be supported by the programme, as follows:

List of Auditors Internal Auditor

External Auditor

PT. BRIK PT. Sucofindo International Certification Services PT. Mutuagung Lestari PT. Mutu Hijau Indonesia PT. TUV Rheinland Indonesia PT. Equality Indonesia PT. Sarbi International Certification PT. SGS Indonesia PT. Transtra Permada PT. Trustindo Prima Karya PT. Ayamaru Sertifikasi PT. PCU Indonesia PT. Global Resource Sertifikasi PT. Scientific Certification System Indonesia PT. Lambodja Sertifikasi PT. Intishar Sadira Eshan PT. Mandiri Mutu Sertifikasi PT. Nusa Kelola Lestari

13 60 18 4 9 7 36 6 10 17 5 -

22 5 7 7 20 4 20 15 1 2

2 5 2 3 1

6 18 2 8 10

35 65 25 11 29 11 36 26 25 18 5 2 0 8 23 4 11 11

Total

198

147

345

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Total Auditor

Verification Bodies

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

2.2.3. Certification Process Based on http://dataindustrikayu.org/ as of 20 August, there are 2,684 units (SMEs furniture, IUIPHHK below 6,000m3, timber depot/TPT, and private forests) that participated in the acceleration program. Eight hundred and fifteen units of SMEs furniture, IUIPHHK below 6,000m3, and timber depot/TPT are being assessed for SVLK group certification. In addition, a hundred and fifty two (152) units of SMEs furniture, IUIPHHK below 6,000m3, and timber depot/TPT have already been granted SVLK group certificates.

Ministry of Environment and Forestry stated that there are 3005 units of IUIPHHK below 6,000m3 and 725 SMEs furniture. Table above shows that the project has facilitated the awareness of SVLK full implementation for 68% (2529 out of 3730 units) since January 2015.

Detail

Unit

Number of SMEs, IUIPHHK below 6,000m3, and timber depot/TPT that are involved during the SVLK acceleration program

Number of SMEs, IUIPHHK below 6,000m3, and timber depot/TPT that are in the process for group certification

815

Number of SMEs, IUIPHHK below 6,000m3, and timber depot/TPT that are already certified

152

Number of SMEs, IUIPHHK below 6,000m3, and timber depot/TPT Facilitated by MFP3 (as of 24 June 2015)

2,529

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

2.3. Supporting FLEGT VPA The VPA entered into force on 1 May 2014. The VPA builds upon and complements Indonesia’s existing efforts to tackle illegal logging through enhanced law enforcement, improved forest governance and incentives for legality in the forest sector. Central to the VPA is a description of a timber legality assurance system, which comprises a legality definition, supply chain control, verification of compliance, FLEGT licensing, periodic evaluation by independent auditors and independent monitoring by civil society.

VPA implementation activities have included capacity building for stakeholders and action to implement VPA commitments to increase transparency. MFP is currently providing grants to KEMITRAAN to support various activities of the JIC. 2.3.1. Joint assessment of the timber legality assurance system

The timber legality assurance system described in the VPA is based on Indonesia’s SVLK (Sistem Verifikasi Legalitas Kayu),

Before FLEGT licensing can begin, a joint assessment must confirm that Indonesia’s timber legality assurance system functions as described in the VPA. The first stage of the joint assessment concluded in 2013. The

which was developed and has since been revised through a comprehensive multistakeholder process. Revisions in the reporting period have improved the system’s efficiency and made it more accessible to small and medium enterprises (SMEs).

second stage took place from 23 September to 31 October 2014. The assessment team found many improvements in the SVLK since the first stage of the assessment. The team reported no major systemic issues. Challenges for Indonesia to address before FLEGT licensing begins relate mainly to implementation.

Indonesia and the EU have established a Joint Implementation Committee (JIC) to oversee implementation of the VPA, as well as additional joint structures to support the JIC. The JIC held its first meeting in September 2014 and its second meeting in February 2015.

To address these challenges, in November 2014, Indonesia and the EU agreed on the Second Indonesian–EU Action Plan on Advancement of VPA Implementation, and agreed action points, which included: • A nationwide rollout of Indonesia’s timber legality assurance system (see Section 4) • New regulations relating to control of imported timber and control of FLEGT licensing • Implementing independent monitoring, periodic evaluation and VPA impact monitoring

In September-October 2014, the joint assessment of the timber legality assurance system identified issues to resolve before FLEGT licensing can begin. Indonesia and the EU have agreed a joint action plan to address these issues and have appointed a joint working group to monitor progress. A process to select a periodic evaluator of the timber legality assurance system began in April 2015. Indonesia has rolled out the SVLK across the country. By April 2015, the SVLK had certified more than 1400 timber industries. More than 80% of timber harvested in natural forest concessions was SVLK certified, as well as all timber coming from plantation forest concessions. This tremendous effort intensified in the reporting period in order to ensure that all operators in the timber sector, and especially SMEs, become formalised and verified. Stakeholders in government, the private sector and civil society support the goals of the VPA and have played active roles in VPA implementation in the reporting period, including by participating in the JIC and stakeholder platforms. In addition to refining the timber legality assurance system,

Final revisions to VPA annexes to reflect the recent changes Indonesia has made to the SVLK in response to stakeholder input and the first stage of the joint assessment. At the second Joint Implementation Committee meeting, in February 2015, the committee: • Adopted updates to VPA Annex I on product scope, Annex II on the legality definition and Annex V on the timber legality assurance system • Reviewed progress on the four monitoring mechanisms described in the VPA • Agreed to establish a joint working group to review progress under the action plan In March 2015, Indonesia and the EU agreed on measures to track the achievement of each action in the action plan and on data to monitor progress. The parties also agreed to set up a field team to visit several provinces to assess VPA implementation.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

2.3.2. Joint Implementation Committee Indonesia and the EU set up a Joint Implementation Committee (JIC) to oversee implementation of the VPA.16 Senior officials from the EU and Indonesia co-chair the JIC and each party selects member delegates. Indonesia’s delegates include representatives of the government, private sector and civil society. The committee has met three times – on 24 September 2014, 12 February 2015, and 8 July 2015. Indonesia and the EU have set up the following structures to support the JIC : • JIC secretariat: This provides administrative support to the JIC and its supporting bodies. The secretariat’s members include representatives of Indonesia’s government, civil society and private sector associations, as well as one representative of the EU delegation in Jakarta. • Technical working groups: These multistakeholder groups provide technical support to the JIC in areas such as VPA impact monitoring. • Joint expert meetings: This multistakeholder forum brings together representatives of the EU and Indonesia to explore technical issues. In the reporting period, four joint expert meetings took place to discuss progress towards FLEGT licensing. These meetings prepare and inform the JIC meetings. • Joint working group: This multistakeholder group monitors and assesses progress under the Second Indonesia–EU Action Plan on Advancement of VPA Implementation. The group includes representatives of the EU and the following. 2.3.3. Improving Credibility of SVLK through Independent Monitoring Independent Monitoring is an important part of SVLK implementation to ensure credibility of the system. The Independent Monitoring is performed either by an individual organisation or a network of organisations, such as JPIK, APIKS (in Sumatra), Coalition Anti-Forest Mafia, and Eyes of the Forest. To support these organisations, MFP3 conducted an evaluation process of independent monitoring organisations. The evaluation found that independent monitoring organisations have not been able to gather detailed information on forest/ wood-based companies’ performance, particularly information related to forest production. The organisations conducted assessments mostly based on social indicators In addition, national policies on SVLK are rapidly changing. There are some new terms such as Self Declaration of Conformity (or DKP) for private forests, timber depots, and handicraft producers. In the last six months, MoEF has revised

SVLK regulation twice. As a result, independent monitoring groups need to keep up their knowledge on their monitoring programmes. Several meetings were conducted with independent forest monitoring, such as JPIK, WALHI, YCHI, SIEJ, ICEL, Kemitraan and WALHI. JPIK is not the only IFMs. To ensure effective monitoring, MFP3 will expand representation to also cover communities and other professions, for example the media. In the relation to IFM’s security, it can only be achieved if all stakeholders in the certification process, as well as local authorities recognise IFMs and their rights. A MOU could be issued and signed by multiple parties, not just between JPIK and the MoEF because this will not ensure the security of IFM. MFP3 will meet with IFMs, including non-NGOs IFMs to discuss accreditation standards and strategies to expand the IFMs. Drawing from the experience of elections monitoring, prior to monitoring activities, IFMs signed MOUs with local authorities including local police to assure their security. MoEF can also sign this MoU with local governments and local police to ensure security of IFMs. MoUs need to be extensively socialised and publicised so that public can also support the security of IFMs. Currently MFP3 has facilitated a meeting of IFMs with the Witness and Victim Protection Agency (Lembaga Perlindungan Saksi dan Korban) to understand the role of this institution to provide security for IFMs. MFP3 facilitated workshops to develop a code of conduct agreed to and signed by IFMs, enforcement measures to monitor compliance to codes of conduct established, to establish standardised monitoring methodology and will follow with training on IFM for various stakeholders such as communities, media, NGOs, CBOs. 2.3.4. Identifying Impacts of SVLK Implementation under FLEGT VPA Agreements with Local Communities, Indigenous Peoples and Industries In September 2014, the Ministry of Forestry’s Director for Forest Product Processing and Marketing (BPPHH) along with the Directorate General (DG) of Forestry Enterprise Development (BUK) established a Thematic Working Group (TWG) to develop a Livelihood Impact Assessment. The TWG is comprised of Government of the Republic of Indonesia staff from relevant ministries, as well as representatives from civil society, the private sector, MFP3 and European Forest Institute (EFI). Initially it was thought that the IM could be carried out and completed by the end of 2014. However, as most government agencies and stakeholders are busy towards the end of 2014, it has been decided that the TWG will continue preparing for the IM until the end of 2014 with the aim of starting the IM process in January 2015 and completing it by May 2015.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

MFP3 supported the Ministry of Environment and Forestry to facilitate a Technical Working Group on Impact Monitoring of SVLK Implementation. In February 2015, a Concept Note on Impact Monitoring of SVLK Implementation was endorsed by the JEM. Then, the full version of its Terms of Reference and a plan showing details of its tender process was presented to the 2nd JIC meeting on 12 February 2015. The Panel Team selected PT Hatfield Indonesia (Consortium of PT. IDEAS), and MFP3 will proceed with contract negotiations and the preparation of a contract document for the preferred Bidder by 10 April 2015 with a view to the contract being mobilised by mid-April 2015.

2.4. Database System for Forest Products and Timber Documentation MFP3 supports the maintenance of the Timber Legality Information Verification (SILK) database. The SILK database was specifically designed in order to improve objectivity and transparency and accountability of the V-legal document as well as to provide optimum data and information related to timber legality verification. This website was launched in August 2012 and is managed by Sub Directorate of Information Timber Legality Verification, Directorate General of Forest Utilization, Ministry of Forestry. Data is now available about how many companies are exporting and their export value. As of 25 March 2015, 214,493 V-legal documents were issued for 190 destination countries for a value of nearly USD 15 billion (Table 1

below). In the logframe, the baseline indicator for this activity is USD 9 billion dollars in 2013. MFP3 has played an important role in contributing to the increase in export value. Furthermore, as can be seen from Table 1 below there are 190 destination countries, of which only 28 are EU countries. This indicates that Indonesia has successfully penetrated markets all over the world with potential for further growth. See Map 1 below for the destination countries. Based on SILK records at the request of DE as of 25th March 2015, there were 4,335 DE documents that have been issued by the system. However, only 4,210 documents were accepted by the Indonesia National Single Window (INSW) system in the Ministry of Trade. Total V-Legal Issued (25 March 2015) Destination Countries EU Countries HS Code (4 Digit) Loading Harbour Downloading Harbour Weight (Kg) Value (USD)

NORTH AMERICA

2013 USD 475M

214,493 190 28 44 84 1,959 20,741,600,352 14,908,070,619

Table 3. Total V-Legal recorded by SILK Online

EUROPEAN UNION

2014 USD 626M

NON-EU EUROPE

2014 USD 645.9M

2014 USD 13.3M

2013 USD 593.3M

2013 USD 10.8M

ASIA

2014 USD 4.9B 2013 USD 4.6B

2014 USD 645.9M

SOUTH AMERICA

Export Value per Region Year 2013 and 2014

2014 USD 14.7M

AFRICA

2013 USD 593.3M

2013 USD16.7M

Source: Presentation of Director of Directorate of Forest Product Processing and Marketing at Coordination Meeting of SVLK Acceleration, Medan, March 26, 2015

2014 USD 317M

OCEANIA

2013 USD 277M

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

2.3.2. Promoting SVLK in International Market In order to increase the international acceptance of V-legal timber from Indonesia the communication and marketing team have facilitated the attendance of MoEF officials at a number of international exhibitions in Jakarta. In addition in 2014-15, twenty officials from the GOI went to France, China, Myanmar Switzerland, South Korea, Australia, Philippines, to promote SVLK. In October 2014, for example MFP3 drafted a Country Specific Guideline (CSG) between Government of Indonesia and Australia at the request of the Ministry. The CSG aims to provide clear definition of legal timbers defined by the countries including on how to import legal timbers from and to both countries. This CSG is being prepared for the upcoming Memorandum of Understanding (MOU) between Indonesia and Australia on Promoting Trade of Legal

Event

Date, Venue

Timber Products from Sustainably Managed Forests. In Switzerland the MoEF presented the Indonesian experience on SVLK, forest governance and the process of Indonesia’s negotiations with EU on FLECTI/VPA. Finally, in Myanmar a delegation carried out a stock taking on development of timber legality assurance across ASEAN member countries. Other Southeast Asian Countries are also interested in implementing a Timber Legality Assurance System (TLAS) similar to Indonesia’s SVLK. In November 2014, government officials, civil society, and private sector from the Lao People’s Democratic Republic visited Indonesia to learn about how the system works. MFP3 facilitated international travel for Government of Indonesia Officials including the Ministry of Environment and Forestry staff to participate in the following events:

Decisions

Workshop on Developing Timber Legality Assurance System

6 May 2014, Qing Dao, China,

The delegate was selected as one of the members of the task force to develop and populate a template to summarise the commonalities across definitions of timber legality. Other members are: USA, Australia, China, Malaysia, New Zealand, Papua New Guinea, and Vietnam

APEC (Asia-Pacific Economic Cooperation) meeting on EGILAT (Expert Group and Illegal Logging and Associated Trade) Meeting

7-9 May 2014, Qing Dao, China,

The delegate conducted informal meeting with the Australian Delegation to discuss the progress on the Memorandum of Understanding on implementation of SVLK as part of the Australian Illegal Logging Prohibition Act (AILPA) in November 2014. Both sides agreed to the process for the signing of the MOU and followed up by the development of Country Specific Guidelines between the two countries.

The 13th ASEAN (Association of Southeast Asian Nations) Working Group Meeting on a PAN ASEAN Timber Certification Initiative (AWG-PATCI),

3-4 June 2014 in Nay Pyi Taw, Myanmar

Stock taking on development of timber legality assurance across ASEAN member countries was carried out, including exchanges of information on negotiation with EU on VPA (Voluntary Partnership Agreement), impact of the US Lacey Act on timber exporting countries in ASEAN and impact of revision of ITTO Principles and Guidelines for Sustainable Management of Natural Tropical Forests. Preparations were made for the establishment of the ASEAN Economic Community (AEC), which requires the achievement of trade of legal timber and sustainable forest management in ASEAN by 2015. One of the issues identified during the meeting is the limited mandate of WG-PATCI to only address timber certification issues, but not issues related to trade and customs.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Event

Date, Venue

Roundtable Discussion on sustainability of Indonesian Forest Product: Case Study in the Pulp and Paper Industry

18 June 2014, Paris, France

Decisions Concerns over the persistence of EU member countries’ preference to procure non-legal timber over legal timber. The declining timber export to European countries from countries with timber legality assurance system. The role of Greenpeace in running negative campaigns against Indonesia’s timber products in Europe. Criticisms over EU’s decision to accept Malaysia’s decision to exclude the state of Sarawak from the FLEGT-VPA between Malaysia-EU. Sarawak is known to have the highest level of illegal loggings in Malaysia.

The Committee of Trade and Environment Meeting

30 June 2014, Geneva, Switzerland

The Trade and Environment Committee is the standing forum dedicated to dialogue between governments on the impact of trade policies on the environment, and of environment policies on trade. Created in 1995, the Committee has followed a comprehensive work programme. Under the Doha Development Agenda, the regular committee is also looking at the effects of environmental measures on market access, the intellectual property agreement and biodiversity, and labelling for environmental purposes. During the meeting, the MoFor representatives presented the Indonesia experience on implementation of SVLK, forest governance and sustainable forestry and Indonesia’s negotiation with EU on FLEGT-VPA.

International Green Island Forum (IGIF)

Country Specific Guideline (CSG) with the Government of Australia

24-26 September 2014, Jeju Island, South Korea

Development of archipelago based green economic is important to be formed for collaboration

16-17 October 2014, Canberra, Australia

Indonesia and Australia agreed and endorsed the CSG and the Quick Reference Guide for Indonesia.

Working group to focus on but not limited to natural tourism, green earth campaign, and utilization of new energy source

The endorsement of the two documents meant that any timbers or wood products with V-legal from Indonesia will not have to go through due diligence to enter the Australian market. 50th International Tropical Timber Council (ITTC-50)

3-8 November 2014, Yokohama, Japan

Initiating the Conservation of Cempaka Tree Species Project from Indonesia received funding of USD 435,187.20 with Research and Development Division of Manado Forestry Office as the Executing Agency Action point from the bilateral meeting between Indonesia and Japan Government is to hold a formal meeting to response to the Record of Discussion on Timber Legality System

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Event The 7th APEC â&#x20AC;&#x201C; EGILAT (Asia-Pacific Economic Cooperation, Expert Group on Illegal Logging and Associated Trade)

Date, Venue 26-27 January 2015, The Philippines

Decisions APEC â&#x20AC;&#x201C; EGILAT Work Plan 2015 Training workshop for Economies Capacity Building on Trade of Legal Timber To continue holding the joint meeting with the Anti-Corruption and Transparency Working Group on Customs Procedures To reformulate the template of EGILAT Timber Legality Guidance and APEC Policy Guidelines on Identifying the Scope of Illegal Logging and Associated Trade

The Special ASOF Meeting (ASEAN Senior Officials on Forestry)

4-5 March 2015, Phnom Penh, Cambodia

Draft of ASEAN Cooperation on Food, Agriculture and Forestry and the Strategic Plan for Forestry Sector (SPA Forestry) 2016-2025 to be completed by mid-2015 Proposal to include some issues into the SPA Forestry, such as: promoting intra and extra-legal timber trade including harmonization of timer legality standard and strengthening private sector engagement and resource mobilisation To streamline subsidiary body under ASOF to increase efficiency and effectiveness, coherency and integrity, and non-overlapping or duplication of program and activity amongst the working group, expert group and network

2.5. Improving Capacity Skills of Institutions in Support of SVLK In November 2014, MFP3 team visited University of Mulawarman (Unmul) and University of Kutai Kartanegara (Unikarta) in East Kalimantan for a scoping mission to develop SVLK curricula and syllabus for universities that have an undergraduate forestry programme. Both universities have responded positively to the initiative and discussions are underway to develop a syllabus, train lecturers and offer SVLK as a major or minor subject. The project also facilitated requests from local governments for improving capacity building of village heads. Thirty village heads (from 13 sub districts) in South Sumatra were trained for Timber Administration Document known as SKAU from 21-24 January 2015. MFP3 together with Centre of Forestry Training and Education (PUSDIKLAT) conducted a workshop on SVLK policies (Permenhut P.43/Menhut-II/2014 and Perdirjen P.5/VI-BPPHH/2014) for Senior Trainers/Instructors and Facilitators from Regional Forestry Training Centres (BDK) in Bogor. This workshop aimed to introduce and to improve the capacity of the trainers and facilitators regarding the new Policies.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

03 ENTREPRENEURSHIP DEVELOPMENT This work streams provides support for local governments, community right-holders, and the private sector in timber processing in order to accelerate the effective implementation of community-centred forest management, as prioritized in the Ministry of Forestry policies and regulations, and the National Strategies for REDD+ and Food Production. Activities within this working area include: identification of the capacity building needed to improve private sectors involvement in timber legality and the VPA process; survey, including the Knowledge, Attitude, and Practices (KAP) Survey for SVLK; facilitate the expansion of SVLK in order to support Community Based Forest Enterprises (CBFE); facilitate the operation of national training networks, including ICH (Information Clearing House); facilitate the operational of Forestry and Non-Governmental Extension Workers; facilitate the development of business and investment plans for small scale, private, and CBFE; establishment of coordinating stakeholder groups at provincial level; facilitate multi-stakeholder groups for certification; increase the level of investment from government and non-government institutions in the community forest enterprise; and strengthen the capacity of FMU in entrepreneurship development issues.

3.1. Support Community Based Forest Enterprises In the first year the SVLK was expanded to support Community Based Forest Enterprises in Java, Bali and Lampung Districts. MFP has been working with four local partners were identified to support this activity. Yayasan Bumi Hijau is supporting the expansion or implementation of SVLK in Pati district, Central Java. From January to February 2015, T4T facilitators began preliminary works in identifying farmers group in the Pati District. During this quarter, T4T facilitators successfully helped establish twenty (20) farmers’ groups in twenty (20) villages with a total of 848 members. From the twenty groups, 6 groups are more advanced than the remaining seven for SVLK preparation and organizational strengthening. The first batch of six farmers group were given training in the following skills: group administration, database and mapping of area, tree planting, inventory of standing stocks, calculation of allowable cut, environmental management, timber administration. Java Learning Centre (JAVLEC) is a grantee based in Yogyakarta, Central Java. JAVLEC’s main activities are to strengthen Community Based Forest Management/Enterprises (CBFM/CBFE) and small scale wood industry (IKM). During the month of January, 2015, the JAVLEC team began collecting baseline data for the CBFM/CBFE, saw mill and timber yards, and small scale home industry in the targeted area of intervention. For CBFM/CBFE, twenty units were identified, consisting of: 13 HKm Cooperatives, 3 HTR Cooperatives and 4 Village Forest Development Institution (LPHD). The team also completed an inventory of potential standing stocks for the twenty (20) cooperatives above. Based on the results of the inventory, training on the ‘timber harvesting plan’

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

was conducted from the 16th to18th of March, 2015, for the cooperatives’ managers. A series of capacity building sessions were implemented covering various themes: 1. Timber administration and supplier declaration of conformity (DKP) for timber yards (TPT) and saw mill (IPHHK) conducted from the 4th to 6th of March, 2015. 2. Entrepreneurship and furniture product marketing for small home industry conducted from 23rd to 25th of March, 2015. 3. Entrepreneurship and timber products (from community forest) conducted from 30th of March to 2nd of April, 2015. 4. JAVLEC’s Project Management team conducted in-house training and coaching from the 5th to 9th of January, 2015. From March 18-20, 2015, the team participated in monitoring

8 representatives from Mojo hamlet and 5 from Dawung. As a result of this meeting, 2 farmers groups were established; ‘Wilis Jaya’ and Wilis Makmur.’ Aliansi Relawan untuk Penyelamatan Alam (ARuPA), is assisting the smallholder forest, CBFEs, timber yards and primary industry (saw mill) in the application of Suppliers Declaration of Conformity (DKP). The launching Workshop was conducted in Solo, and was attended by 58 people representing stakeholders from district government of Klaten, Sukoharjo, log yard and sawmill owners, small home industry. ARuPA has been working closely with the district government of Klaten, which has a strong commitment to support the small scale wood industry in the region.

and evaluation (Monev) training conducted by MEL Team from PMU.

Subsequent to the launching the workshop, ARuPA facilitators began a series of supplier declaration of conformity (DKP)

Lembaga Studi Ekosistem Hutan (LeSEHan), based in Madiun, East Java, is working with log yards, small holder forest and small home industry in the target regions of Trenggalek, Magetan, Nganjuk, and Kediri, all in East Java. A preliminary assessment was conducted in two districts, Nganjuk and Kediri. In Kediri, LeSEHan will be collaborating with the local Forestry Office, in preparing smallholder forests for SVLK certification. Two management units of smallholder private forests were established for group facilitation. LeSEHan also organized four multi-stakeholder consultations with the relevant industry player and forestry offices in Magetan and Trenggalek, both in East Java. The consultation in Magetan was attended by 24 participants, including representatives from the Forestry and Trade Agencies, Environment, KPP, Local Planning Board, timber industry and farmers groups. As a follow up activity, the first workshop for group establishment of forestry enterprises was conducted in Trenggalek, on 12th of March 2015. Most of the participants were timber traders, and based on the Forestry Office data, only two of them have the proper permits. A similar workshop for group establishment has just been conducted on the 30th of March, 2015, in Magetan, East Java. This was attended by 26 timber industry operators and Forestry Office. One of the results from this workshop was the establishment of timber trade group called the ‘Lawu Manunggal.’ A socialization event was also conducted in the Mojo hamlet, Kediri. LeSehan collaborated with the Forestry Office and PT.SMS, a plywood industry which is getting most of its timber from the surrounding villages. This meeting was attended by

trainings from February to March 2015. The first series of DKP trainings targeted the smallholder forest owners, covering the region of Gunung Kidul, Boyolali, Pacitan, Karanganyar and Wonosobo. There were 243 men and 27 women participants who attended the 5 workshops. The second series of DKP trainings targeted the secondary processing home industry, covering the region of Klaten, Sragen, Sukoharjo and Karanganyar. A total of 180 men and 28 women participants attended the 4 workshops.

3.2. Capacity Building 3.2.1. Establishment and Implementation of Training Network After the establishment of Centre for Forestry Education and Training (CFET) in Bogor, the MoEF also established eight (8) Regional Forestry Education and Training Centres or Balai Pendidikan dan Latihan Daerah (BDK). These include BDK in Pematangsiantar, Pekanbaru, Bogor, Kadipaten, Samarinda, Makassar, Kupang, and Manokwari. However, since Manokwari is the least active BDK operation, early in 2014, for efficiency it has been consolidated with BDK Makassar. In addition to BDK, MoEF also established a number of Forestry High Schools (SMK), in Pematangsiantar, Bogor, Kadipaten, and Samarinda. Following the established Standard Operating Procedure/SOP and maintaining high quality of forestry education and training, all forestry training modules have been developed, upgraded and approved by CFET. BDK and other training institutions will only conduct training by using the approved modules. As a follow up to the training “Communication of SVLK for

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Trainers and Training for Information Clearing House (SIMPATIK) for Web Master and Operator”, conducted in early September 2014 with CFET, the MFP3 programme conducted a two-day workshop on 20 – 21 October 2014, on a training module development related to the implementation of SVLK. The main purpose of the workshop is to update module content, to include some revisions made on the MoEF Regulation No. 45/2013, including the Perdirjen No. 8/2012. The biggest change is the inclusion of ‘Conformity Declaration’ or ‘deklarasi kesesuaian pemasok (DKP)’ for the smallholder forest farmer, log trader, small scale producer/artisan, and timber importer. The outputs generated by the two-day workshop were the development of five training modules and - specifically for Output 2 – for forest extension workers. As a result of the web master training, the BDK websites are now much more user friendly and provide up to date information. The three Regional Training Centres (BDK) in collaboration with MFP3 prepared training for facilitators for the acceleration of SVLK. The three BDK include: Samarinda, East Kalimantan, Makassar, South Sulawesi and Pematang Siantar, North Sumatera. Based on the consensus of three Ministries, the Ministry of Trade, Environment and Forestry and Industry, at the end of 2014, small scale furniture exporters are the priority for SVLK certification. For this reason, most of the resources from the programme and MenLHK are allocated for the facilitation and certification of small scale industry located mainly in Java and Bali. 3.2.2. Facilitate the Process to Develop Forestry Extension Workers and Non-Governmental Extension Workers (Penyuluh Kehutanan Swadaya - PKS) for Community Based Forestry Operational) Specific training for forestry extension workers and nongovernmental Extension workers (PKS) are on hold, as the acceleration phase is focusing on certification in Java and Bali. During the acceleration of SVLK implementation phase, training of Wood Grader Supervisor (Wasganis) and facilitators for gap assessment became the priority. In mid-February 2015, the first batch of 21 independent facilitators or ‘Focal Points’ were trained in gap assessment prior to being deployed to their respective working areas. The focal points are actually local facilitators already knowledgeable in SVLK implementation. Their main responsibility is to identify those primary and small scale industries that are part of the export supply chain. After the baseline data is collected, the focal points are responsible for preparing and encouraging the operators to form a group, and eventually prepare them for group certification.

3.3. Access to Finance 3.3.1. Facilitate Small Scale, Private and Community Based Forest Enterprises to Develop Business and Investment Plans As a follow up to socialisation of DKP (Supplier Declaration of Conformity) scheme under SVLK in Jepara on 29 October 2014, MFP3 facilitated a group formation meeting on 18 December 2014 in collaboration with local Forestry and Plantation Office of Jepara district,. The group formation is needed to obtain the SVLK certification through a group certification mechanism. This scheme is aimed at simplifying the process as well as to reduce the cost of SVLK verification/assessment. A group may consist of 5 or more small-scale industries, private enterprises, and CBFEs. Two groups, which are the log yards (TPT) and sawmill (IPHHK) operators successfully established a group of their own. The log yard (TPT) group named their joint group operation (KUB) “Cipta Maju Jaya Wood". The group has 35 members, in which 30 are men and 5 are women. The sawmillers (IPHHK) named their group “Sejahtera” and has 34 members; 27 are men and 7 are women. In collaboration with the Indonesia export Training Centre (IETC/ PPEI), PEAC BROMO organized Export Training for 24 CBFEs. Six (6) of the participants are also exhibitors for the Indonesia Furniture Expo (IFEX), held on 12 – 15 March 2015, in Jakarta International Expo (JIE). The “How to Export” curriculum used for the training, was jointly developed by MFP3 Team, PEAC BROMO and PPEI to include SVLK and export of forest products requiring V-Legal document. One of Output 2 strategy to support CBFE is by facilitating them to participate in both national and international exhibition and expo. During the first year, MFP3 has facilitated some CBFEs to participate in these following events: Trade Expo Indonesia (TEI) The Trade Expo Indonesia (TEI) as the country’s biggest annual trade event was held at the Jakarta International Expo in Kemayoran, Jakarta, on 8 – 12 October 2014. MFP3 facilitated two groups of Small Medium Enterprises (SMEs) with total of (7) SMEs. IFEX 12 – 15 March 2015 Indonesia Furniture Expo or IFEX 2015, is an international trade show held on 12 - 15 March 2015, at the Jakarta International Exposition, in Kemayoran, North Jakarta. The programme, under activity 2.4.4.5., supported 8 small scale furniture businesses

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

to participate in IFEX, to promote their SVLK certified furniture collections. Riwani Globe, the contracted party for organizing the participation, conducted a rigorous and transparent selection process of the candidates. The final 8 participants were selected in early February 2015. One of the most important criteria for the selection is the commitment and willingness of the candidates to work together to make the show a success. Most of the participants selected are ‘newcomers’ to participating in international furniture trade fairs. In the preparatory phase, the selected participants went through several trainings in how to participate in trade show, how to make and close a deal and the basics of how to export International Furniture Fair Indonesia (IFFINA) 2015, 14 – 17 March 2015 The International Furniture Fair Indonesia or IFFINA 2015, is an international trade show held on 14 – 17 March 2015, at the Senayan East Park, Central Jakarta. IFFINA 2015 overlapped the IFEX 2015 by one day, creating unnecessary confusion to visitors. In collaboration with ASMNDO, 17 small to medium scale enterprises (SME) were selected to participate. The 17 SMEs represent members of ASMINDO from Central and East Java and Bali, and all of them are already SVLK certified. 3.3.2. Increasing Level of Investment from Government and Non-Government in Community Forest Enterprise Participants for IFEX & IFFINA 2015 Trade Fairs, and 24 participants of the Export Training, are potential candidates for business plan development and access to finance facilitation. This next phase of activity is already in the plan of activities by our grantees, Riwani Globe and PEAC BROMO. The first activity will be ‘Access to Finance’ Forum, to be conducted in early May 2015. Duncan McQueen, from International Initial Seminar on “Investing in Locally Controlled Forestry” (ILCF) was conducted in the third week of January 2015. Case studies highlighted how successful investment by government in local forestry improved livelihoods for the surrounding local community.

3.4. Establishment of Coordinating Stakeholder Groups at Provincial Level During the scoping activity in Klaten, Yogyakarta and Solo from 22 – 23 September 2014, MFP3 also attended the formation

of SVLK Working Group (WG) in Klaten, Central Java that was facilitated by the Partnership for Governance (Kemitraan). A working cooperation is currently being established between MFP3 and the Partnership on the development of a SVLK Support Group, including a forum, working group and SVLK clinics. Based on the results of the scoping activities, future collaboration is also possible with the Klaten SVLK WG and PERSEPSI (a local NGO in Wonogiri District), Klaten Community Forest WG that will request financial assistance from MFP3. MFP3 conducted a Mapping of Business License issuance services (One Stop Service/PTSP) in the wooden furniture and handicraft production centres in Central Java, East Java, and Bali provinces. A complete and up to date business license is a prerequisite for business expansion, access to credit and independent certification for certain sectors. In general, there are numerous licenses to be obtained for business operations. These requirements and procedures involve many agencies in the provincial as well as in the local government level. The purpose of this assessment is to help improve the quality of public service for business licensing at the district level, to clarify the requirements, and to enable forestry entrepreneurs in getting legality of their operation. To accomplish this end, the following are some recommendations for improvement: Intensify public communication regarding business licensing, including basic requirements, fees, procedures, and length of the process. This socialisation should focus on provincial, district, and village levels. Various communication materials, such as posters and brochures should be provided by the OSS/ PTSP and related agencies. Provide information on licensing and other requirements issues to all associations/ organisation related to wood-based industry. Propose revisions on some local HS codes/nomenclatures (Perda and Perbup) which are no longer relevant or consistent with the higher Ministerial regulations. Intensify technical assistance to the local and provincial governments on improving public services for business licensing, especially in Jepara and Sukoharjo.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

04 COMMUNITY ACCESS TO FOREST This working area focuses on facilitating the multi-stakeholder process and formulating mechanism to ensure access to forest and land resources by community groups, as well as the clarity of their tenure. This allows them to contribute to meeting industry demand and national market and export targets for timber and non-timber forest products. Activities undertaken within this work stream include: facilitate the development and coordination meeting on issues related to FMU and community access to forest resources; drafting regulations on FMU and CBFM; facilitate the institutional capacity building of community groups; and facilitate participatory mapping and forest tenurial conflict resolution.

4.1. Supporting FMU Development There are approximately 33,000 villages in and around forest areas nationwide. This may create tenure uncertainty for village communities and the government. To address this issue, the government created Forest Management Units (KPH) to sustainably manage the forests. Law 41/1999 defines the management unit as a Forest Management Unit corresponding with the principle function of the forest in that area: Protected Forest Management Unit (KPHL), Production Forest Management Unit (KPHP), Conservation Forest Management Unit (KPHK), Community Forest Management Unit (KPHKM), Indigenous Forest Management Unit (KPHA), and Watershed Management Unit (KPDAS). A seven-day field work was held to assess the potential FMUs on 13 â&#x20AC;&#x201C; 20 October 2014. The field work was aimed at examining the extent to which the eight FMU nominees met the five criteria and several indicators determined by MFP3. A high-level official meeting was later held on 30 October 2014 in Jakarta, which was attended by four Directors (Echelon 2 level) from MoEF. The meeting decided to select the following FMUs as target FMUs: 1. KPHP Benakat (South Sumatera) 2. KPHL Alor Pantar (East Nusa Tenggara) 3. KPHP Banjar (South Kalimantan) 4. KPHP Poigar (North Sulawesi) A workshop, which was attended by all selected Target FMUs, was held on 17-18 December, 2014 in Jakarta. The workshop was attended by the managers of the Target FMUs, MoEF officials, civil society and the MFP3. The workshop discussed the following topics: a. Long-Term Forest Management Plan of the four Target FMUs. b. Community-Based Forest Management. c. Joint plan of action of the FMUs and MFP3

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

The WGT facilitates three main activities: strengthening stakeholder knowledge concerning FMUs, developing LongTerm Forest Management Plan, and building capacity of FMU managers. 4.1.1. In House Training as Building the Capacity of FMUs Manager and Staff in 4 FMUs Targeted In house training is a cost effect means to increase the capacity of FMU managers and technical staff. Training materials included:

1. Policy regarding tenure issues related FMU 2. Policies related to community empowerment 3. The land tenure assessment tools 4. Conflict Mediation 5. Communication Skills The selection of training materials was based on the field identification of existing conditions at each FMU. The location and training duration is presented in Table 5.1 below.

Location

FMU

Date

Banjar, South Kalimantan Alor, East Nusa Tenggara Palembang, South Sumatera Manado, North Sulawesi

KPHP Banjar KPHL Alor Pantar KPHP Benakat-Bukit Cogong KPHP Poigar

April 27 – 30, 2015 May 21 – 24, 2015 May 29 – June 1, 2015 June 3 – 6, 2015

In House training for FMU Managers and Staff

Participants Men: 14, Female: 7 Men: 25, Female: 8 Men: 12, Female: 5 Men: 23, Female: 9

Socialization FMU regulation in KPHP Benakat-Bukit Cogong

4.1.2. Socialization of FMU related Regulation Socialization of FMU policies seeks to have FMU stakeholders (local government, NGOs and community) better understand FMU regulations and implementation. It is expected that the operationalization of FMU can be accepted and supported by all stakeholders. These activities were implemented in the FMU Benakat-Bukit Cogong and will be carried out in other targeted FMU (FMU Banjar, FMU Poigar and FMU Alor-Pantar). The socialization was done at the community level in around and within FMU. The dissemination in FMU Benakat-Bukit Cogong was conducted in 4 villages: Talang Mandung, Jembatan Gantung, Talang Simpang,

and Rejosari, sub district Sungai Keruh, District Musi Banyu Asin. At Rejosari village, socialization was done through discussions with the village head, but did not involve the community. The reason was that the people are not open to discuss forest issues due to the mapping activities conducted by BPKH (Forest Zone Mapping Agency). Socialization was conducted from 2nd to7th June, 2015, simultaneously with the land tenure assessment. Socialization was the first step taken before the land tenure assessment using FGDs. This activity was attended by community leaders, village officials and villagers.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

4.1.3. Land Tenure assessment The land tenure assessment aims to identify and obtain information on existing tenure conditions. This assessment is important to for FMUs to implement the RPHJP. The tenure status of the location should be ‘clear and clean’. The assessment involved; the management of Right, License and Utility and the application of Rapid Land Tenure Assessment (RaTA) tool. This tool is officially recognized and adopted by the MoEF. These activities were conducted on from June 2nd to June 7th , 2015, in Talang Mandung and Jembatan Gantung villages, Sub district Sungai Keruh, District of Musi Banyu Asin, and was attended by representatives from the government, community and other local partners.

regulations are related to FMU. This activity is facilitated by ICEL and covers all activities related to the development of regulations concerning FMUs and CBFMs. 4.2.1. Supporting to the Framing of Reference Map of Production Forest Utility ICEL conducted the coordination meeting of the Reference Map of Production Forest Utility. This activity developed a policy document on utilization in production forests as a reference. This activity was conducted by the MoEF on April 29th, 2015, in Jakarta and was attended by 90 participants from BP2HP, FMU heads and NGOs, (72 men and 18 female). The inputs of this coordination meeting will go to creating the final draft. The next step is a public consultation of the document. MFP also conducted public consultation on Reference Map of Production Forest Utility as part of a series of coordination to obtain input from various stakeholders on the draft document. The activity was held in Jakarta on 9th May 2015 and was attended by 100 participants (78 men and 22 female). 4.2.2. Review and Development the Regulations concerning CBFM

Land Tenure Assessment

4.1.4. Supporting to 50% FMU Operationalization Concerning the operationalization of 120 model FMUs, MFP3 is supporting 60 of the model FMUs so that they can be operational. One of the indicators is that the Long Term Forest Management Plan (RPHJP) can be implemented. The FMU manager and staff should have good understanding of their respective RPHJP. MFP3 provides support to review the RPHJP documents. To date, 120 documents are under review.

4.2. Community Forests Legal Review A legal review on the regulations concerning community plantation forests is being carried out by ICEL. The review examines regulations concerning community plantation forests issued by the Ministry of Forestry and relevant Directorate Generals, such as Directorate General of Planology and Directorate General of Forest Utilisation. It further assesses the implementation of the regulations in the form of local regulations as well as analysis of the extent that these

ICEL conducted expert’s meeting in Bogor, on 15th May, 2015 to review existing CBFM policies. It was attended by nine experts (6 men and 3 female). The objective of the meeting was to obtain feedback on policies and their implementation. This activity is the first in a series of meetings. At this expert meeting several problems related to CBFM were identified: (1) the complexity of license process; (2) too many rules and scattered in different regulations; (3) community requirements are unclear. This meeting examined the 4 target FMUs to identify policy needs in each FMU and to obtain input from the FMUs in order to review and develop regulations concerning FMUs. The second expert meeting was held on 8th June and 17 June to formulate a matrix of regulations to identify gaps in FMU implementation, and attended by 9 people (3 male and 6 female).

4.3. Facilitate Institutional Formation of Community Groups to Become FMU Partners Capacity building for selected community groups (Output 3.3), and assistance to the selected community groups in conducting participatory mapping and conflict resolution (Output 3.4) are carried out by HuMA 4.3.1. Assessment of Potential Group to Become FMU Partners HuMA worked closely with the local NGOs and coordinated with other strategic partners such as WGT, SNV Indonesia and ICEL.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

The objective was to select the location and community groups which have potential to become FMU partners. This assessment

was conducted at from 16th to 22nd March, 2015. Table 5.2 below presents the names of the groups selected and their location.

FMU

Location

FMU Benakat-Bukit Cogong

Farmer Group ‘Wana Manunggal’, Sukakarya Village, STL Ulu Terawas sub district

FMU Alor-Pantar

Community Group ‘Tereng’, in Otvai Village. And Lawahing Village, Kabola sub district, Alor District

FMU Banjar

Farmer Group ‘Sinar Baru’, Pakutik Village, sub district of Sungai Pinang, Banjar District

FMU Poigar

Community Group ‘Mapalus’ and HTR Group, in Toyopon Village, Motoling Sub district, district of Minahasa Selatan

Selected Location and Community Group to become FMU Partners

4.4. Participatory Mapping Initiatives and Conflict Resolution Review Huma reviewed the existing various participatory mapping and conflict resolution initiatives. The review found that there are overlapping claims by several parties, over exploitation and control of forest area are issues that need urgent attention. Overlapping claims usually cause prolonged conflicts among the government, forest concession holders, and local people. Despite the large number of land conflicts in forest areas, only a few of them have been solved since effective settlement mechanisms are still lacking. Meanwhile, all parties involved feel the impacts of conflict. There are many cases of violence and even loss of life. As for companies, conflicts have increased the cost of operations. The Association of Indonesia Forest Concession Holders estimates timber companies spend at least 40% of production costs to deal with social issues, particularly conflict. One strategy to resolve conflicts is to clarify the overlapping claims for each party involved. Using participatory mapping it is expected that all parties involved can solve the conflict Date March 17, 2015

April 13, 2015 May 21-22, 2015

together. Participatory mapping as an approach has been adopted in projects financed by international agencies, such as post-tsunami recovery projects in Aceh and preparation projects for REDD+ program in Kalimantan. Through the development of spatial information technology, the participatory mapping also uses the latest technology in geographical information system, geographical positioning system, and remote sensing. Some methodologies have been used, ranging from simple sketch mapping to mapping using drones or high-resolution remote sensing. Capacity building for selected community groups and assistance to the selected community groups in conducting participatory mapping and conflict resolution are carried out by HuMA In related with expanding and demarcating the 12.7 million ha for public access to forest resources, MFP3 with partners conducted a series of meetings to discuss some issues related to the regulations and the possibility of This discussion looked at the existing policies and examined future strategy to achieve the target and what revisions or changes may be required. The series of meetings are described in the following table:

Topic Discussion of the target of Public access to forest resources through community forestry, opportunity and its strategic to achieve Discussion for Draft document Meeting consignment to sharpening and writing the Policy Brief

Series of Meeting of Community Forestry Policy Brief

Location Dipo office, Jakarta

Dipo Office, Jakarta Bogor

Output Minutes that related to substantial of Community forestry Minutes and draft document Final draft

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

05 CROSS CUTTING ISSUES 5.1. Research MFP3 has sponsored a considerable amount of research during the first year of MFP3. Since the research has only recently been completed it is difficult to make any assessments about its impact at this stage. Research initiatives can be broadly categorized into three areas; 1) data collection in the field to learn about latest developments; 2) how best to respond to needs from the field and; 3) policy issues. An example of the first category is the research that was conducted on the types of permits that SMEs need to have as a prerequisite for obtaining the SVLK license. The results of the survey show that further action plans and support is needed from MFP3: assistance in obtaining business permits/licensing; improving business management and strengthening entrepreneurship; business plan development and; access to finance from formal financial institutions. Another area of concern is the governmentâ&#x20AC;&#x2122;s plan to allocate 5.4 million hectares for (Hutan Tanaman Rakyat (HTR) or Community Plantation Forests. However, until mid2014, only 631,628 hectares were covered by HTR permits. MFP3 conducted a review of the permit process in order to learn about all existing regulations related to HTR and identify the gaps. One of the biggest issues is the follow up after the HTR site has been approved by the MoEF. District Heads have been very slow to issuing a permit. As a result, although the HTR applicant already has the endorsement from the MoEF, implementation cannot begin until the District Head has issued a permit to the HTR applicant. The information from this review will be useful for project planning in Output 2 and 3. The second type of research was driven by questions on what are the best actions to respond to needs from the field. For example, research on SVLK independent monitoring (IM) was carried out to learn more about the capacities of civil society groups that do the IM activities related to SVLK. Was their only problem the lack of funding as argued by some in the government? Or were their other issues that needed to be addressed in order to improve their effectiveness? To support the work on SVLK a Knowledge, Attitude, Practice (KAP) Survey was conducted in order to gain better understanding about the knowledge, attitude, and practices of key SVLK stakeholders (i.e. community forest owners and small and medium industries), as well as to obtain baseline information of selected respondents prior to the implementation of programme plans and follow-up activities (such as socialisation/national communication, dissemination, demonstration, facilitation/assistance and training). The project is investing considerable resources in strengthening the roles of FMUs since they are mandated to play an important role in forest management in the future. A number of studies have been carried out including mapping stakeholders and forest planning to support the work in Output 3. A capacity assessment was carried out of the participating FMUs that is Benakat Bukit Cogong, South Sumatra, Alor Pantar, East Nusa

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

Tenggara, Banjar, South Kalimantan and Poigar, North Sulawesi. It found that the FMUs need to improve, amongst others, their core capacities especially in the areas of tenure and conflict resolution, forest functions, method of forest inventory, timber and non-timber forest product management, and environmental services. The results will used as a benchmark in running the joint programmes to strengthen and develop the FMUs. Finally, the third type of research is related to policy change or promotion. The political context for CBFM is changing rapidly under the new government so there are opportunities to provide some policy input based on MFP3â&#x20AC;&#x2122;s experience. The National Medium-Term Development Plan of 2015-2019 has set the target to distribute at least 12.7 million hectare of state

forest land by 2019 to adat and local communities who are located in the settlements inside and surrounding the state forest areas. From MFP3â&#x20AC;&#x2122;s perspective, this new momentum for promotion of community based forest schemes is very much in line with the objective of MFP3 Output 3 that aims to secure land tenure for adat and local communities to gain control and access to state forest areas. In addition, it fits with Output 2, in which the objective is to develop and enhance community organization enterprises to supply certified timber and non-timber products. MFP3 is formulating a policy brief to influence the policy dialog amongst various stakeholders who are concerned with the strategy to accelerate the distribution of 12.7 million ha.

KAP Survey Findings Poor knowledge about SVLK, even among those who attended SVLK socialisation/national communication events. MFP3 must consider other campaign strategies besides just socialisation meetings. One of the recommendations is to conduct SVLK training for extension workers. Another recommendation is to conduct socialisation through forest farmers groups (kelompok tani); while small and medium industries prefer media communication through internet and audio visual. Socialisation about SVLK should not only focus on the downstream sector and exporters, but rather, it should target all actors involved in the timber supply and trade chains. The majority of respondents have not experienced or heard of businesses gaining a financial benefit from obtaining SVLK certificates. Some respondents, however, admitted that they see some benefit from obtaining SVLK certificates, albeit not in monetary terms. The majority of the respondents think that they do not need SVLK certificates if they only market their products domestically. Respondents will be interested to obtain SVLK certificates if there is real demand from consumers or buyers. About 57% of respondents said SVLK has no real benefit for their businesses. Small and medium enterprises expect that the government would reduce the cost of obtaining SVLK certificate. Given the high participation of women in forest industries, gender equality is important when targeting stakeholders.

The project is investing considerable resources in strengthening the roles of FMUs since they are mandated to play an important role in forest management in the future. A number of studies have been carried out including mapping stakeholders and forest planning to support the work in Output 3. A capacity assessment was carried out of the participating FMUs that is Benakat Bukit Cogong, South Sumatra, Alor Pantar, East Nusa Tenggara, Banjar, South Kalimantan and Poigar, North Sulawesi. It found that the FMUs need to improve, amongst others, their core capacities especially in the areas of tenure and conflict

resolution, forest functions, method of forest inventory, timber and non-timber forest product management, and environmental services. The results will used as a benchmark in running the joint programmes to strengthen and develop the FMUs. Finally, the third type of research is related to policy change or promotion. The political context for CBFM is changing rapidly under the new government so there are opportunities to provide some policy input based on MFP3â&#x20AC;&#x2122;s experience. The National Medium-Term Development Plan of 2015-2019 has set the target to distribute at least 12.7 million hectare of state

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

5.2. Stakeholder Engagement Stakeholder engagement is an umbrella term that covers the full range of an organizationâ&#x20AC;&#x2122;s efforts to understand and involve stakeholders in its activities and decisions. The engagement can help organizations to meet tactical and strategic needs ranging from gathering information and spotting trends that may impact their activities, to improving transparency and building the trust of the individuals or groups whose support is critical to an organizationâ&#x20AC;&#x2122;s longterm success, to sparking the innovation and organizational change needed to meet new challenges and opportunities. As part of the cross-cutting work streams, the Stakeholders Engagement Manager closely collaborates with the Research and Communication Teams to implement the foundational activities in supporting the implementation of all activities. 5.2.1. Stakeholder Engagement Guidelines The Stakeholder Engagement Manager is currently preparing the stakeholder engagement guideline. The guideline supports the programme implementation of MFP3 and its partners in identifying the influence, potential cooperation and threats, expectations, impacts, as well as to analyse the relations between stakeholders and how to develop strategy for enhancing their supports. 5.2.2. Mapping the Target Programme Area The mapping has been commenced in East Kalimantan, North Kalimantan, East Java, Central Java, Yogyakarta, and Bali, and will still be continued in Riau, West Nusa Tenggara, South East Sulawesi, and the eight nominated areas of KPH. The mapping results have been used by the PMU to the select target area for the programme, including determining programme priorities as well as important stakeholders which will be involved in the implementation of the activities.

5.2.3. Mapping Relevant Donors and Programmes in Forest Governance Considering numbers of donor institutions that have focused on forest governance projects in Indonesia, MFP3 realizes the importance to map and assess key international donor institutions and their related partners that have similar or overlapping programme with MFP3. This activity has been conducted in September as part of the implementation of foundational activities. 5.2.4. Mapping Donor, NGOs, and other Institutions Initiatives on FMU Development This is a study that attempt to map all institutions (international and national donors and civil society groups, including government institutions) implementing projects on FMU support. Similar to previous donor mapping study conducted by MFP3, this study provides information about the name of institutions, the objective, and the existing activities and/or future planning were collected. Whenever possible, their source of funding and the amount of funding were also collected. This study found out that no organisations that work with FMU has focuses on SVLK issues. None of them seem has a project to develop communities-based forest management/enterprises. The information from this study serves the need for the planning activity under output 3. 5.2.5. A Review on Independent Forest Monitoring Independent Forest Monitoring (IFM) is a crucial part of SVLK implementation. Their role in monitoring the SVLK implementation is important in strengthening the credibility of the scheme. MFP3 conducted a review of the IFM with the following objectives: (1) to obtain a description of current performance of IFM organisations and their methods of monitoring; (2) to assess whether IFM organisations have met the FLEGT VPA and TLAS requirements; (3) to review the effectiveness of IFM organisations. This study recommend MFP3 team to reach out to all monitoring groups. This study emphasis the important for these civil society organisations to improve their strategy of working together since each of these groups have its strength and weakness in term of their capacity to monitor SVLK implementation. The findings from this study has been used to the project planning output 1.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

5.2.6. Support Timber Legality Work Stream: Assessment of SVLK Clinic As part of the target area mapping, the Stakeholder Engagement Manager conducted an assessment of SVLK clinics that are supporting efforts in timber certification. Primary industry (sawmills) or advanced industrial processing of forest products must comply with government policy in the area. These clinics were held in Yogyakarta, Jepara, Surakarta, Pasuruan, Jombang, Lampung and Bali during the second phase of MFP and facilitated by the Java Learning Centre (Javlec) and Wisnu Foundation. SVLK clinics serve as a place where stakeholders such as local governments, small and medium enterprises (SMEs), SME associations, and field facilitators can exchange ideas. The clinics seek to improve timber governance, licensing, employment, environmental management, and synchronization of activities of the SME associations, as well to serve as a place for SMEs to obtain information about SVLK. From the stakeholder engagement perspective, the clinics are a meeting point between government, CSOs, and forestry sector stakeholders, including Village Forest/Community Forest owners, and SMEs. Therefore, it is imperative for MFP3 to follow up on this initiative.

5.3. Social Inclusion Social inclusion is defined as ‘the removal of institutional barriers and the enhancement of incentives to increase the access of diverse individuals and groups to development opportunities’. This approach captures the promotion of equal access of different groups (ethnic, social, economic, gender, age, etc.) and the removal of other types of discrimination. By integrating social inclusion into its policies and practices, MFP3 is contributing to a reduction in the social exclusion experienced by some societal groups. Exclusion can be attributed to socio-economic status, race, religion, disability, culture, language, background, location or gender. Effective mainstreaming of social inclusion and gender equality is essential for a sound legal and effective community-based forest industry. Over the past year MFP3’s Social Inclusion activities have involved; 1) integrating social inclusion measures such as reporting of beneficiaries according to their origin (urban and rural), sex (females and males), age group (young and old), ability, and cultural background. into the programme’s policies, processes and its outcomes, particularly in relation to the development of the programme’s instruments and templates such as the Terms of Reference (TOR) development, Minutes of Meeting (MoM), Back to Office Report (BTOR), Partner Capacity Assessment, and the Proposal Appraisals; 2) Integrating Gender

Equality and Social Inclusion in Impact Monitoring of VPA Implementation; 3) training activity on Social Inclusion and Gender Equality for MFP3 staff and; 4) Regional Monitoring, Evaluation and Learning (MEL) training workshop in Jepara that emphasized how to integrate social inclusion. 5.3.1. Integrating Gender Equality and Social Inclusion in Impact Monitoring of VPA Implementation MFP3 is supporting the Ministry of Forestry, to coordinate a country-led process of impact monitoring of VPA Implementation through the development of a thematic working group. The Impact Monitoring is examining at institutional effectiveness (and governance), reduction of illegal logging; forest conditions; economic development; and holistic definition and concept of livelihood as indicated by the sustainable livelihood framework. The impact monitoring is part of MFP3’s efforts to strengthen the social safeguards framework for the SVLK system which will in turn contribute to good governance. By minimizing and mitigating adverse VPA impacts on small and medium enterprises the rights of the most vulnerable people - the local and indigenous, females and males will be protected. The impact monitoring will be carried out through multistakeholders consultations, in which its methodology and processes will also integrate social inclusion and gender equality. The integration of social inclusion and gender equality in the methodology and processes will allow the activity to monitor potential adverse impacts of the VPA implementation to different categories of households according to differences in wealth, livelihood security, and social status, between dominant and subordinate ethnic groups, between female-headed households (FHHs) relative to male-headed households (MHHs). The monitoring will also include potential impacts of VPA implementation to different patterns of asset ownership and political voice among the impacted poorest groups. 5.3.2. Tracking Women’s Participation in MFP3’s Programming Women’s participation in MFP3 is still low but there are signs that more women are getting involved. In Output 1 activities, for example, 38% of the participants are female. Overall, however, female participation is still less than the targeted 40%. There are a number of factors that must be taken into account when accounting for the low participation of women in programme activities. A lack of common understanding and awareness among government officials and the MFP3 team members about the strong correlation between women’s participation in programme activities and equal civil, social and

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

political rights in forest management in Indonesia is one factor contributing to low participation numbers. In addition, exposure to workable, and yet practical, tools to help increase women participation in programme activities (event, training, research, and outreach) is still limited. Studies in various development programmes in Indonesia and in other parts of the world, including in member countries of EU, have shown that affirmative gender quotas with compliance rule are an efficient tool to increase women’ participation in various development programmes and decision making agencies. Those studies also indicated that voluntary measures or soft quotas without any compliance were not recommended, in these regards. To be effective, gender quotas in recruitment, selection and targeting processes for events, training, and research shall also be complemented with other measures to challenge informal rules that disadvantage women to contribute to the structural changes that are necessary to overcome the multiple forms of discrimination that contribute to women’s exclusion from decision-making processes. Such complementary measures include outreach, training, and capacity development for programme staffs and partners that can be regulated through programme’s Standard Operating Procedures. It is recommended that MFP3: • Continue to raise awareness among PMU and MFP3’s partners about women’s under-representation in Programme activities and decision-making process, and therefore, to encourage the adoption of strategies, including gender quotas mechanisms and other gender measures • Promote the adoption of a 40% women quota of participants in all programme activities (events, training, and research) and encourage further positive action with regard to female participation in Output 1, which has reached over 38% female representation in its activities. • Continue to monitor and promote the implementation of social inclusion and gender equality measures in planning and targeting through the use of proforma in planning and MEL. • Promote a requirement for carrying out gender analysis in every TOR development as part of other gender equality measures. • Prepare practical capacity development sessions to introduce and adopt the new gender quota in MFP3 activities as well as in the introduction of other gender equality measures. • Encourage MoEF to develop strategies, instruments and programmes to complement gender quotas that will being introduced by MFP3 to promote women’s participation in decision-making, such as outreach, training, and capacity building. • Monitor gender dimensions in all meeting agenda and reporting as well as gender balance in coverage.

5.4. Communication and Knowledge Management MFP3 applies robust communication and knowledge management strategy to ensure that objectives and information developed by its work streams are well disseminated to strategic stakeholders and public in general. This approach entails public relation activities, development of innovative communication products and activities, and coordinates knowledge and learning systems to ensure that the lessons learnt are fed back to improve the programme implementation. These include targeted outreach strategy to facilitate information sharing across stakeholders through numbers of communication tools and popular channels. The following table is a compilation of the media coverage done by the programme from April 2014 to March 2015. Online News

Local Newspaper

National Newspaper

Launching PermenLHK P.95/2014 and Permendag P.97/2014 (29 December 2014)

30 articles

2 articles

16 articles

Declaration Export Socialization in Surabaya, Bali, Cirebon, Jepara, Semarang, and Solo (6-8 January 2015)

22 articles

8 articles

IFFINA (14-17 March 2015)

23 articles

18 articles

IFEX (12-15 March 2015)

5 articles

Coordination Meeting for SVLK acceleration in Semarang, Surabaya, Yogyakarta, Bali and Medan (February – March 2015)

67 articles

4 articles

8 articles

Events

Media Coverage

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

The programme has also completed the Branding Guideline for partners to provide direction related with the communication products and identities produced by partners. The guideline is will ensure programme consistency and this has been disseminated during partners meeting in the early 2015 In 29 December 2014, MFP3 supported the launching of these regulations, including facilitating the press conference. The press conference was attended by the Rachmat Gobel – Minister of Trade, Bambang Hendroyono – Director General of Forest Utilization on behalf of the Minister of Environment and Forestry, and Ansari Bukhari – the Secretary General on behalf of the Minister of Industry. The launch of these regulations in a form of joint press conference has shown strong commitment from these Ministries to collaborate in ensuring the smooth implementation of SVLK in 2015. The event was covered by media, resulting in 30 online articles, 2 articles in the local newspaper, and 16 articles in national newspaper. In order to disseminate this information to the provinces, MFP3 in collaboration with the MoEF and MoT continued to facilitate the socialization of the revised regulations to six provinces: Central Java, West Java, East Java, Bali, Jakarta, and Banten. Materials covered during the events included an explanation of the revised PermenLHK and Permendag, simulation to issue

Theme SVLK

the Export Declaration, and provision of information regarding financing of the certification. The events also covered by number of local media - 22 online articles and 8 articles in local newspapers. Communication team supported IFFINA (International Furniture and Craft Fair Indonesia) and IFEX (Indonesia International Furniture Expo) on 12-15 March 2015. These exhibitions seek to showcase the creativity and innovation of the furniture and crafts sector, particularly those using forest-based products. It is expected that by being involved in these exhibitions, the SMEs can leverage the quality of their products and become market leaders in the global market. The communication team provided support to ensure the disclosure of information relevant to Indonesia-EU FLEGT VPA implementation as agreed by both parties. The team was closely involved in a number of important meetings to update the communication materials as well as to liaise and discuss with both the Indonesia and EU Delegation in developing the materials. During the last Joint Expert Meeting (JEM) in 26 March 2015, both parties agreed to a communication protocol.

Materials Produced • Pocket book on recent update of SVLK for internal dissemination, particularly for the Minister of Environment and Forestry • Updated brief on SVLK (Bahasa Indonesia and English) • Roll banner SVLK (Bahasa Indonesia and English) • Roll banner Sistem Informasi Legalitas Kayu (SILK) • Roll banner Klinik SVLK • SVLK-certified product catalogues • V-legal stickers • Polo shirt ‘We Support SVLK’ • Short video on testimonies of SMEs on certification process • Photo Stock

Events of Use • Indonesia International Furniture Expo 2015 • International Furniture & Crafts Fair Indonesia 2015 • Internal Meeting

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

5.5. Grants Management During the first year of its programme, MFP works with these following partners through grants mechanism:

Agency

ARUPA

Title SVLK Implementation on private forest and timber small medium enterprise.

Program Description Assisting private forest on the SVLK implementation to expand certified total private forest area. The total number of potential forest wood farmers who have been certified on the community forest list is still well-below the needs of the timber industry. To educate the owners of the timber business product on the SVLK policy related To encourage certified community timber trade To facilitate partnership between the owners of private forests and timber businesses.

Bumi Hijau Lestari

Strengthening Community Forest Farmers Group in Pati, Central Java

Strengthening community forest farmers group program by mentoring activity to the community forest farmers group to manage forest in their private land according to sustainable and SVLK standard in Pati district, central Java with around 1,000 (20 groups with total area covered of 280 Ha) farmers will be involved in this activity Expected to have sustainable farmer group to manage forest that produce continuously and with minimum impact on environment.

HUMA

Facilitating community groups as KPH partners and to facilitate agreement of the parties in the preparation and application of Standard Mechanisms for participatory mapping and conflict resolution.

Institutional strengthening of community groups; Preparation of standard procedures for conflict resolution and participatory mapping tenurial forestry; Capacity building in participatory mapping and conflict resolution; Mainstreaming participatory mapping and conflict resolution; Seminar to share knowledge among stakeholders related to the mapping and conflict resolution.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

No 4

Agency JAVLEC

Title Strengthening Timber Community Based Forest Enterprises and Small Medium Enterprises

Program Description To initiate enterpreneurship in the farmer forest group to increase their incomes; To facilitate the timber CBFE and SME to find best products, market segments and branding communication;. To facilitate CBFE to have business plan to manage the businesses and to provide guidelines for the development of enterprises so that the timber CBFE and SME have clear references to run the business. Timber management and documentation that will change entire timber circulation chain includes CBFE, Registered Timber yard (TPT), primary industry and SME as main capital to obtain timber legality certification. Sustainable timber documentation will facilitate the assessment of the feasibility of the business from the needs of the raw materials.

LESEHAN

To encourage establishment of registered timber yard (TPT) and to facilitate licensing of wood industries

To facilitate the formation of registered timber yard (TPT) as a follow-up to the MFP2 program that has facilitated the Forest Management Unit (UMHR) in Trenggalek, Magetan, Nganjuk and Kediri areas To facilitate the strengthening of entrepreneurial activities for potential small and medium enterprise (SME) in Kediri regency. To improve capacity and increase understanding of potential SMEs related to Timber Administration (TUK) on the timber management and Conformity Declaration (DKP).

Sahabat Timur Indonesia (SATIN)

Forming a self-reliance and entrepreneurship in the forest management unit, the forest village, community forest, community plantation forest and small medium industry with SVLK standard.

Identify perceptions and goals among all parties involved in the project. In collaboration with local governments in this regards, Department of Plantations and Forestry especially forestry extension unit to do an inventory of community forest, HD, HKM, HTR and SME in the district of Buleleng. Organize a training on Surat Keterangan Asal Usul (SKAU) for Buleleng, Bali area.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

No 7

Agency Working Group Tenure

Title Support the Development of FMUs

Program Description To increase knowledge and understanding of the parties regarding the associated regulation related to forest management unit (FMU). To share experience between parties on the concreate works on how to manage KPH To facilitate the development of RPHJP at 4 KPH targets. To increase human resources capacity and organisational management skills of FMU officers.

Indonesian Center for Environmental Law (ICEL)

Updating legal policy to encourage the implementation of KPH, CBFM in Indonesia through strengthening of SVLK partners.

Facilitation of the establishment of group coordination between parties to accelerate the implementation of SVLK at regional level Facilitation of the formulation of a national policy related to the acceleration of SVLK implementation, CBFM and KPH

Program Studi Kehutanan Universitas Sumatera Utara

The integration of timber legality verification system (SVLK) based on KKNI into the universityâ&#x20AC;&#x2122;s/collegeâ&#x20AC;&#x2122;s curriculum.

Workshop on SVLK with primary target audience is educational institutions such as universities or research institutions. Workshop on the curriculum of the forestry faculty based on KKNI (Indonesia national qualifications framework) related to SVLK Training on GBPP and SAP development as implication of the curriculum based KKNI related SVLK Training on the material development for the curriculum based KKNI related to SVLK.

Lembaga Penelitian dan Pengabdian Masyarakat (LP2M) Universitas Nusa Bangsa

SVLK Curriculum development for the university

SVLK material or course development for university Advance training on SVLK for professor and assistant Implementation of the teaching of the SVLK material/courses to the UNB student.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

No 11

Agency Yayasan Lembaga Pemberdayaan dan Pengembangan Sumberdaya (YLP2S)

Title Increase capacity of the CBFE wooden houses (Woloan) and timber traders/timber yard (TPT) in the implementation of SVLK

Program Description Entrepreneurial training on the wooden houses industry (Woloan). Entrepreneurial mentoring on the wooden houses industry (Woloan). Training for Supplier Declaration of Conformity for timber products traders/timber yard (TPT) Mentoring for Supplier Declaration of Conformity for timber products traders/timber yard (TPT)

Perkumpulan Masyarakat Jurnalist Lingkungan Indonesia - The Society of Indonesian Environental Journalist (SIEJ)

Implementation of SVLK Workshop for journalist in East and Central Java, and Yogyakarta.

Kemitraan bagi Pembaruan Tata Pemerintahan [Kemitraan]

Strengthening of small timber industry and related government agencies in the implementation of SVLK and FLEGT-VPA in Indonesia

Implementation of SVLK seminar and training for journalist in Central, East Java and Yogyakarta Training on SVLK media coverage for journalist

Strengthening policy, coordination and human resources capacity related government agencies for SVLK implementation at district/city and provincial level Facilitating the acceleration of certification IUIPHHK holder of up to 6000 m3 outside of Java Strengthening capacity, coordination within organization, network of independent monitoring forestry to monitor the SVLK implementation as well as ensuring its credibility in the global market Managing Joint Implementation Committee (JIC) secretariat

Yayasan Penabulu

Asosiasi Pengrajin Kayu Jepara (APKJ)

Socialization of Permenhut No. 43/2014 dan Pedirjen 5/2014

Implementation of SVLK socialization activity for DKI Jakarta; West Java; Central Java; East Java; North Sulawesi; Gorontalo; West Sulawesi; South Sulawesi province.

Participation of APKJ Jepara to Trade Expo Indonesia 2014

To take part in the Furniture Trade Expo event to promote furniture and handicraft products with SVLK standards

DPD AMKRI Jepara

Participation of DPD AMKRI Jepara to Trade Expo Indonesia 2014

To take part in the Furniture Trade Expo event to promote furniture and handicraft products with SVLK standards

Lembaga Ekolabel Indonesia (LEI)

Seminar of â&#x20AC;&#x153;Synergizing Government Regulation with the Voluntary Scheme Initiative in Supporting the Sustainable Natural Resources Management in Indonesiaâ&#x20AC;?

To conduct 1 day seminar to share experiences and formulate important issues related to government policy in the management of Natural Resources in the forestry sector and strengthening the identification of opportunities between systems that can be synergistic.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

5.6. Monitoring Evaluation and Learning (MEL) A MEL Framework was developed to ensure that MEL is incorporated by all programme staff in all MFP3 activities. Some of MEL instruments have been developed and reviewed by MFP3 team members who have prior experience in evaluation as well as extensive experience in managing programmes. The MEL team that consists of Senior MEL Advisor and MEL Manager started the intensive work in developing MFP3 MEL system, guideline and instruments in mid July 2014.

The MEL findings and reports are shared with MFP3 managers, Ministry of Forestry officials as well as grantees and implementing partners, to ensure that these findings are incorporated into delivery of activities to improve the quality of delivery by sharpening outputs, closely adhering to logframe requirements, time table and social inclusion requirements. The MEL component has a number of capacity building activities such as the following:

The MEL team developed a MEL tool for general activities such as TOR development, training and socialization activities. These tools consist of several forms including Pre-Post Test form for training and socialization, Activity Evaluation form, improvement of Terms of Reference (TOR) and Back to Office Report (BTOR) forms. Self-Assessment form has also been developed to be used by programme staff to self-evaluate their achievements.

5.6.1. Capacity Building of Regional MEL Consultants

In order to monitor programme implementation, programme management software, Clarizen, is used. Clarizen will be used by all programme staff for but not limited to monitor the progress, programme achievements, time frame, as well as tasks delegation to the external parties such as grantees or consultants. In the review of â&#x20AC;&#x153;Intermediate Indicators for Outputâ&#x20AC;?, the MEL team found that there are far too many activities. Furthermore, a draft of MFP3 MEL Guideline has also been developed and currently in the process of being circulated for MFP3 teamâ&#x20AC;&#x2122;s input before it could be finalized.

A workshop to build the capacity of regional partners in Monitoring, Evaluation and Learning was conducted in Jepara, Central Java, from 17-20 March 2015. The workshop aimed to build and strengthen the capacity of MFP3 Regional MEL Consultants who will become the focal points of MEL activities (both implemented by MFP3 or by partners such as grantees, sub-contractors, or consultants) at their respective regions and to also support and ensure the achievement of MFP3 indicators targets as stated in the logical framework. The materials covered in the workshop include Programme Design Approaches, Monitoring Evaluation and Learning, Report Writing, Gender and Social Inclusion, Work Plan and Field Visit Plan Development, and some practices such as MFP3 Milestone review, TOR and BTOR review, and field trip practices where the regional consultants had the opportunity to put the knowledge gained during the workshop into practice dir ectly.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

5.6.2. Strengthening MEL of Grantees and Sub-contractors The MEL team has contributed to strengthen MEL of Output 2â&#x20AC;&#x2122;s partners during the Grantees and Sub-contractors Coordination Meeting in Semarang. Four grantees and two sub-contractors were asked to draw their programmeâ&#x20AC;&#x2122;s tangible outputs and presented to others so they could learn from each other and understand what others are working on, to see any possible collaboration in the implementation, and to avoid overlap in activities. The MEL team also explained the MEL tools that will be used by grantees and sub-contractors and how to use them in various activities implemented by the partners. The MEL tools include: Minutes of Meetings, Terms of Reference, Back to Office Reports, MEL Framework, Monthly Progress Reports, and Quarterly Reports. Partners were also asked to provide feedback to improve the current MEL tools if necessary.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

06 LESSONS LEARNED 1

For SMEs the main challenge is to be able to obtain business licences that they need to comply with SVLK regulation. Unfortunately, this issue is beyond the role of the Ministry of Environment and Forestry (MoEF) since it is the domain of local governments. Unless MoEF can find ways to gain support from other ministries such as the Ministry of Home Affairs as well as the head of districts (Bupati) and other elements within the local government, SMEs access to affordable business permits will continue to be an obstacle to implement the “adequate” certification system for SMEs.

Before we conducted a field visit to Forest Management Unit (FMU) in Alor, none of us has thought that community forest scheme on private land existed outside the FMU area. MFP3 project has never seriously considered the fact that such a scheme might exist outside Java. This lesson learned also taught us the importance of acquiring agriculture census data by the Agency for Statistical Data (Badan Pusat Statistik/BPS) to provide a good picture about the existence of community forestry on private land outside of Java. As a result of this finding, we requested SNV to also analyze the existence of local timber production and trade that comes from sources outside the state forest area.

Facilitate the involvement of stakeholders from the outset in the FMU program -- especially involving decision makers at the grassroots level such as the Head of Forestry Agency, Regional Development Planning Agency, Monitoring of Production Forest Utilization (BP2HP), Agency for Forestry Area Consolidation (BPKH) and the Forestry Development Supervision (Pusdalbanghut) at the regional level. Introductory workshops, for example, are important for the partners since it helps them to develop relations and build channels of communications that are essential for program implementation. Local governments also find these workshops beneficial since they build transparency, trust and speed up programme implementation. The range of stakeholders must be broadened beyond the forestry sector.

The SLVK acceleration have significantly increased the number of companies, especially the smallholders, to do the V legal scheme.

Efforts for gender – now integrated in program, better data – more focused – assisting in achieving objectives.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

WHO WE ARE Since 2000, the UK department for International Development (DFID) has been supporting Indonesia in strengthening its governance within the forestry sector through a programme known as the Multistakeholder Forestry Programme (MFP), which focuses on poverty alleviation for people who make a living through the use of the forestland and its resources. The programme implemented its second phase in 2007, which focused on the development of the Timber Legality Assurance System (Sistem Verifikasi Legalitas Kayu/SVLK), the purpose of which was to support the Sustainable Production Forest Management (Pengelolaan Hutan Produksi Lestari/PHPL). In April 2014, a third phase, “MFP3”, was agreed upon through the signing of a Letter of Arrangement by the Secretary General of the Indonesian Ministry of Forestry, and the Director General of DFID. This phase sought to support the Indonesian government’s effort in improving forest governance, as well asto support the successes of the previous phases of the programme. MFP3 supports the improvement of a legal and technically effective, community-based forest industry to complement corporate industrial forest production, through a commitment to reducing illegal forest degradation and deforestation, providing greater tenure security, improving rural livelihoods, protecting forest ecosystems and the environment, and mitigating climate change. The vision of the programme is the improved management of forests throughout Indonesia has reducedrural poverty, enhanced biodiversity conservation and strengthened climate change mitigation.

Working Area1 –Timber Legality The objective of the Timber Legality working area is the industry-wide adoption of the timber legality assurance system (SVLK), which has been achieved in support of sustained exports to legality-regulated markets. Working Area 2 –Forestry Entrepreneurship Development This working area provides support for local governments, community right-holders, and private sectors in timber processing, in order to accelerate the effective implementation of community-centred forest management. Working Area 3 – Community Access to Forest This working area focuses on formal recognition of the mechanisms in place for insuring access to forest and land resources by community groups, as well as the clarity of their tenure. This allows them to contribute to meeting industry demand, and national market and export targets for timber and non-timber forest products.

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015

www.mfp.or.id

Multi-Stakeholder Forestry Programme Phase 3 | Annual Report 2015