P.02/VI-BPPHH/2010

Directorat General of Production Forest DevelopmentThe Ministry of Forestry Republic of Indonesia

DIRECTOR GENERAL OF PRODUCTION FOREST DEVELOPMENT GUIDANCE Number: P.02/VI-BPPHH/2010

On

GUIDANCE OF PERFORMANCE EVALUATION OF SUSTAINABLE PRODUCTION FOREST MANAGEMENT AND

TIMBER LEGALITY VERIFICATION

Support by :

KEHATITHE MINISTRY OF FORESTRY

DIRECTOR GENERAL OF PRODUCTION FOREST DEVELOPMENT GUIDANCE

Number: P.02/VI-BPPHH/2010

On GUIDANCE OF PERFORMANCE EVALUATION OF SUSTAINABLE PRODUCTION FOREST MANAGEMENT AND TIMBER LEGALITY

VERIFICATION

Considering : a. Based on the Article 5 of Ministry of Forestry regulation

No P.38/Menhut-II/2009 on Standard and Evaluation Guidance of Sustainable Production Forest Management and Timber Legality Verification on License holder or Forest Right holder, The Director of Production Forest Development Director has issued Regulation No P.6/VI-Set/2009 on Standard and Performance Evaluation guidance of Production Forest Management and Timber Legality Verification;

b. In order to set a common understanding in implementing Performance Evaluation of Sustainable Production Forest Management and Timber Legality Verification among stakeholders, it is important to issue an implementation guidance of Evaluation and Verification which is supplement from Director General of Forest Management and Production No P.6/VISet/2009 as referred

c. In relation to the above mentioned purposes, it is urgent to put an action on Directorate General of Forest Management and Production side by setting a Guidance of Implementing Performance of Sustainable Production Forest Management and Timber Legality Verification.

Recalling : 1. Ministerial decree No 41 in 1999 on Forestry jo. No. 19

in 2004 2. Government Regulation No. 102 in 2000 on National

Standardization; 3. Government Regulation No. 6 in 2007 jo. Government

Regulation No 3 in 2008 on Forest Management and Arrangement of Forest Management Workplan, and Forest Utilization

4. President of Republic of Indonesia Decision Number 78

in 2001 regarding National Accreditation Committee;

5. President of Republic of Indonesia Decision Number 84/M in 2009 on Establishment of The 2nd Cabinet of Unity Indonesia

6. Regulation of The President of Republic of Indonesia number 9 in 2005 on Position, Duties, Function, Organizational structure and Working arrangement of State Ministerial of the Republic of Indonesia as referred have been changed several times which was in final released by a Presidential Act of the Republic Indonesia Number 20 year 2008;

7. Regulation of President of the Republic of Indonesia Number 10 in 2005 on Organization Unit and Echelon I duties of State Ministry of Republic of Indonesia, that have been changed several times with the last revision concluded by Regulation of President of the Republic Indonesia Number 50 in 2008;

8. Regulation of Ministry of Forestry Number P/13/Menhut-II/2005 on Organization and Ministry of Forestry’s Working Arrangement, that has been changed several times, which the last one was ended up with Ministry of Forestry Regulation Number P.64/Menhut-II/2008;

9. Regulation of Ministry of Forestry Number P.38/Menhut-II/2009 on The Standard and Guidance of Performance Evaluation of Sustainable Production Forest Management and Timber Legality Verification on the Concession Holder or on the Forest Right Holder.

10. Regulation of Production Forest Development Director General Number P.6/Menhut-VI/2009 on the Standard and Guidance of Performance Evaluation on Sustainable Production Forest Management and Timber Legality Verification.

DECIDING STATED : REGULATION OF DIRECTORATE GENERAL OF PRODUCTION

FOREST DEVELOPMENT ON IMPLEMENTATION GUIDANCE OF SUSTAINABLE PRODUCTION FOREST MANAGEMENT PERFORMANCE EVALUATION AND TIMBER LEGALITY VERIFICATION

FIRST : 1. Guidance of Implementation of Sustainable Production Forest Management Performance Evaluation (PHPL) as stipulated on the Attachment 1 of this regulation.

2. Guidance on Verification Implementation and Certification of Timber Legality: a. On IUPHHK-HA/HPH holder, IUPHHK-HT/HTI,

IUPHHK-RE; IUPHHK-HTR Holder, IUPHHK-HKm; License Holder from Right Forest; IPK Holder, as stated on attachment 2;

b. On IUIPHHK and IUI extension, as stated on the Attachment 3;

3. Independent Monitoring in Implementing Sustainable Production Forest Management Performance Evaluation (PHPL) and Timber Legality Verification System, as stated on the Attachment 4;

4. Proposal and Dispute Resolution in the Implementation of Evaluation of Sustainable Production Forest Management Performance (PHPL) and Timber Legality Verification as stated on the Attachment 5;

5. Criteria and Requirements of Personnel and Auditors in The Implementation Sustainable Production Forest Management Performance Evaluation (PHPL) and Timber Legality Verification, as stated on the Attachment 6;

SECOND : Guidance of The Evaluation Implementation as stated on the

sub article proposal FIRST number 1 is used by Evaluation Institution in implementing the evaluation of performance of IUPHHK-HA/HT holder.

THIRD : Guidance of Verification Implementation as stated on the sub article FIRST number 2 is used for the Evaluation Institution and Independent Verification in implementing Verification and Certification of Timber Legality for those holders of

IUPHHK-HA/HPH, IUPHHK-HT/HTI,IUPHHK-RE; IUPHHK-HTR, IUPHHK-HKM; License Holder of Forest Right; and IPK Holder as well as IUIPHHK and IUI extension.

FOURTH : Guidance of the Independent Monitoring as stated on the sub article FIRST number 3 that is used by the Independent Monitoring Institution in participation of monitoring of activities related to the implementation of Sustainable Production Forest Management Performance Evaluation (PHPL) and the System of Timber Legality Verification.

FIFTH : Guidance of Proposal and Dispute Resolution as stated on the sub article FIRST number 4 is used for relevant parties in case there are disputes/objection on the on going processes and outputs which are part of consequence in the Implementation of Sustainable Production Forest Management Performance Evaluation (PHPL) and Verification and Timber Legality Certification.

SIXTH : The Guidance of Criteria and Requirements of Auditor Personnel as meant on the sub Article FIRST number 5 that is used for stating the criteria and general requirements in determining of Lead Auditor, Auditor and the Potential Auditor and Decision Makers.

SEVENTH : This regulation should be applied since its date of release.

Stated in Jakarta Dated: 10 February 2010 DIRECTOR GENERAL, Ttd. DR. IR. ING. HADI DARYANTO, DEA NIP 19571020 198203 1 002

Copies:

1. Minister of Forestry; 2. Echelon I within Ministry of Forestry; 3. Echelon II within Directorate General of Forestry

Production and Development

Attachment 1 : Regulation of Production Forest

Development Directorate General Number : P.02/VI-BPPHH/2010 Date : 10 February 2010 Reference Guidance of The Implementation of Sustainable

Production Forest Management Performance Evaluation and Timber Legality Verification

GUIDANCE OF THE IMPLEMENTATION OF SUSTAINABLE PRODUCTION FOREST MANAGEMENT PERFORMANCE EVALUATION

(PHPL) I. INTRODUCTION

A. BACKGROUND This guideline is arranged as a reference of the implementation of

evaluation in meeting the principles of credibility and tracing system for the process of the Evaluation of Sustainable Production Forest Management Performance Evaluation (PHPL) as mandated by Minister of Forestry Regulation Number P.38/Menhut-II/2009 on the Standard and Guidance of Evaluation of Sustainable Production Forest Management Performance Evaluation (PHPL) and Timber Legality Verification on the License Holder or the Forest Right. This guidance consists of requirements, process and procedures that should be followed in the implementation of Evaluation of Sustainable Production Forest Management Performance Evaluation (PHPL) by Evaluation Institution and other parties that they are directly having relation and interest in this regard.

B. GOAL This guidance is having goal to guide the implementation of The

Implementation of Sustainable Production Forest Management Performance Evaluation to guarantee the quality of implementation result.

C. SCOPE 1. This guidance has scope of requirement, process and procedures

of Sustainable Production Forest Management Performance Evaluation (PHPL) in issuing the license of Timber-based Products Utilization from Natural Forest or Plantation Forest (IUPHHK-HA/HT).

2. The standard being used in the Sustainable Production Forest Management Performance Evaluation (PHPL) is a standard that is stated on the Attachment I of The Regulation of Director General of Production Forest Development Number P.6/VI-Set/2009 on the Standard and Guidance on Evaluation of Sustainable Production Forest Management Performance Evaluation (PHPL) and Timber Legality Verification.

D. REFERENCE

1. Regulation of Minister of Forestry Number P.38/Menhut-II/2009 on the Standard and Guidance of Sustainable Production Forest Management Performance Evaluation and Timber Legality Verification on the License Holder or Right Forest holder.

2. Regulation of Director General of Production Forest Development Number P.6/VI-Set/2009 on the Standard and Guidance of Sustainable Production Forest Management Performance Evaluation and Timber Legality Verification.

3. ISO/IEC 19011:2002 ISO/IEC 19011:2002 Guidelines for Quality and/or Environmental Management Systems Auditing.

4. ISO/IEC 17021:2006 Conformity Assessment – Requirement for Bodies Providing Audit and Certification of Management Systems.

5. SNI 19-19011-2005 Audit Guideline for Quality Management System and/or Environment (Panduan Audit Sistem Manajemen Mutu dan/atau Lingkungan.

6. KAN document DPLS 13 Rev.0 : Additional Requirements and Roles about Evaluation on Accrediting Sustainable Production Forest Management valuating Institution Syarat dan Aturan Tambahan Akreditasi Lembaga Penilai Pengelolaan Hutan Produksi Lestari (LP-PHPL).

7. Other regulations related to sustainable production forest management (PHPL)

E. UNDERSTANDING 1. Independent Evaluation and Verification Institution (LP&VI) is a

legal company owned by state or private which is accredited to conduct Sustainable Production Forest Management Performance Evaluation (PHPL) and/or verification of timber legality.

2. The Institution of Sustainable Production Forest Management Performance Evaluation (LP-PHPL) is a legal company owned by state or private sector which is accredited to conduct Sustainable Production Forest Management Performance Evaluation (PHPL).

3. The Independent Monitoring Institution is an institution that will be functioning to run on monitoring/supervising related to the public service in forestry sector such as issuance of PHPL certificate or LK certificate, as for example forestry NGOs could have that function.

4. The decision making is personnel in LP-PHPL (The institution of Sustainable Production Forest Management Performance Evaluation) that meet the requirements and officially permitted to proceed the decision making into a final for the performance of Sustainable Production Forest Management Performance

5. The license holder is a License Holder that is allowed in Timber-based Forest Product Utilization in Natural Forest which is then to be simply called IUPHHK-HA (d.h. HPH), and/or the License Holder of Timber-based Forest Products Utilization in Forest Plantation which is simply to be called IUPHHK-HT (d.h. HPHTI).

6. Auditee is the License Holder to be audited 7. Lead Auditor is a personal who meets requirements and whose

ability to act as a lead auditor, and is employed by LP-PHPL to lead a performance evaluation of Sustainable Production Forest Management.

8. Auditor is a personal who meets requirements and whose ability as an auditor, and is employed by LP-PHPL to conduct a Performance Evaluation of Sustainable Production Forest Management.

9. Indicator is an indication as mentioned on the Attachment I of The Regulation of Director General of Production Forest Development Number P.6/VI-Set/2009.

10. Verifier is a set of tools which has function to indicate physically the indicator status in a Performance Standard of PHPL (Sustainable Production Forest Management)

11. Verification method is a mechanism of operating the verifier

12. Verification Instrument is a tool and materials which are needed in verifier operation.

13. Public consultation is a process of delivering Plan of Evaluation of Sustainable Production Forest Management Performance to the public for getting information related to the auditee.

14. The Entry Meeting is a meeting between auditor team and agency/institution and relevant partners in province’s capital city to deliver the field working plan, working methodology and schedule of Performance Evaluation of Sustainable Production Forest Management.

15. Exit Meeting is a meeting between Auditor Team and the agency/institution and relevant partners in the Province’s capital city to report the Field visit of evaluation is ended up and expected to get further data and information from the exit meeting.

II. ACTIVITIES

A. EVALUATION PROPOSAL 1. License holder send an application of Performance Evaluation of

Sustainable Production Forest Management to the Institution/Agency LP-PHPL which at least the scope of certification, profile of License Holder and other information which are needed in the process of Performance Evaluation of PHPL.

2. LP-PHPL finalizes the contractual agreement with the License Holder

3. LP-PHPL does a study on the application’s pre condition that should be met for further Performance Evaluation field study of Sustainable Production Forest Management (PHPL)

4. LP-PHPL delivers a decision over the study of applicant for the Performance Evaluation of PHPL to the License Holder. Regarding the result of study, in case a License Holder not meeting the minimum condition as required to further be proceeded, then the License Holder would be requested to fulfill the minimum conditions that are required in the field evaluation.

5. Regarding the result of Desk Study of License Holder once the meet the minimum pre conditions as required, then the process of Performance Evaluation of Sustainable Production Forest Management should be further conducted.

6. Regarding implementation of Government-funded Performance Evaluation of PHPL, the evaluation procedure itself should not be through out submission of License Holder’s application to the LP-PHPL, but the decision of LP-PHPL appointment is direct by the government. The government issues an Announcement Letter to the to-be-evaluated License Holder.

B. EVALUATION PLAN

1. Preparation

a. Recruitment and team mobilization for the Performance Evaluation of Sustainable Production Forest Management (PHPL) 1) LP-PHPL recruits Auditor, Lead Auditor and the Decision

Maker according to the requirements and competencies. 2) LP-PHPL finalizes contractual agreement with the

Auditor, Lead Auditor and the Decision Maker, ascertaining the capability, preparing the work protocol for internal team, and dealing with insurance.

3) LP-PHPL guarantees that the Auditor, Lead Auditor and the Decision Maker are available to commit to do evaluation when it takes place and time.

b. Logistic

1) LP-PHPL prepares financial arrangement in a sum as

sufficiently as possible to meet the needs of Auditor’s work, Lead Auditor and the Decision Maker. The financial stuff should be available when they are needed on time.

2) LP-PHPL provides working utilities for Auditor, Lead Auditor and the Decision Maker.

3) LP-PHPL provides administrative requirements to expedite the work progress.

2. Audit Plan

LP PHLP should be determining the audit plan that possibly the audit implementation should meet requirements of ISO 17021:2006, Regulation of Minister of Forestry No. P.38/Menhut-II/2009 and Regulation of Directorate General of Forestry Production Development No P.6/VI-Set/2009.

C. AUDIT IMPLEMENTATION

1. 1st Step of Audit The audit team conducts the 1st step of audit according to the

audit plan which has been arranged before. 2. 2nd Step of Audit

a. Public Consultation 1) Before field exercise of evaluation, the auditor should

conduct a public consultation with community, related agencies and other partners by sharing information of planning to evaluate the performance of License’s holder Sustainable Production Forest Management. Public consultation of LP-PHPL will result of information sharing relevant to the license’s holder activities.

2) Format of public consultation should be an announcement of Performance Evaluation’s plan of PHPL by using the information of name and address of LPPHPL, auditee’s name and address, location, and the date of evaluation at least 7 calendar days and uploaded in Ministry of Forestry website and mass media, which at least conduct one meeting with community.

b. Entry Meeting The audit team should report the plan of evaluation activities to the Forestry agency/institution in provincial level prior conducting field evaluation exercise.

c. Exit Meeting After finalizing the field evaluation exercise, the audit team should report to the agency/forestry institution in provincial level that the evaluation field exercise has been done and concluded. Whenever needed, data clarification should be carried out in this phase.

d. Audit mechanism Audit mechanism in the field should refer to the ISO/IEC standard 19011:2002 or SNI 19-19011-2005.

D. REPORTING

1. Audit team arranges an field exercise audit report by referring to

the ISO/IEC standard 19011:2002 or SNI 19-19011-2005 that covers systematic as attached on Attachment 1.2 and is submitted

to the LP-PHPL, completed by the written statement of reporting submission.

2. LP-PHPL should report the audit result to the auditee as stipulated on the Article 9 sub article (1) Regulation of Minister of Forestry No P.38/Menhut-II/2009. In regard and based on the audit result, if there are a numbers things are needed to improve, to whom the auditee it is an opportunity to provide justification or disagreement at least within 10 days working day since it receives the audit result report.

3. In order that dispute resolution is well paid attention, LP-PHPL creates an Ad Hoc team and result of the decision whether it is acceptable or unacceptable should be informed to the auditee at latest 10 calendar days since the objections are raised.

4. Result of dispute resolution by Ad Hoc team should include the evaluation report which has been revised to be submitted to the Decision Maker as a basic principles of evaluating decision to be taken.

5. LP-PHPL should deliver the audit result report and the evaluating decision to the Government c.q Ministry of Forestry.

6. In terms of financial which is derived from the government’s financial allocation, and by the time of evaluating decision announcement in case there are still having some objections from the auditee, hence the process and dispute resolution financing supposes to be shouldered by auditee’s responsibility.

7. Time of finalizing the evaluating process should be at latest within 6 (six) months period since the signatory agreement. In case the evaluation could not be concluded within six months period, hence the process of evaluation is assumed to be failure. To whom the auditee should re apply the evaluation process from the beginning by shouldering the overall cost may bear in the reevaluation.

III. DECISION MAKING

A. The decision making should be carried out by decision making

personnel that meet following requirements: 1. Permanent personnel from the related LP-PHPL. 2. Understand on the system of Performance Evaluation of PHPL. 3. If needed, the Decision Making should be forming a supporting

team that they should consist of competent personnel and/or auditor who are not doing auditing service for the related auditee.

B. Decision Making of evaluation should be based on the result of audit exercise result. The decision of PHPL performance evaluation should be done by scoring the end result with the predicate as “GOOD” or “BAD”. Guidance of scoring for end result are as follow: 1. For those auditee with license period less than 5 (five) year, the

performance should be determined by performance of 13 (thirteen) good key indicators. Key indicators are as follow: a. Precondition criteria: Indicator 1.2; 1.3; 1.4 and 1.5; b. Production Criteria: Indicator 2.1; 2.3 and 2.6; c. Ecological Criteria: Indicator 4.2; 4.3 and 4.4

2. For those auditee with minimum operation the license of 5

(five) year plan or more, the good performance should be determined by 14 (fourteen) performance of key indicators that should be “good” with minimum requirements should meet 15 (fifteen) indicators from 24 (twenty four) good indicators as scored “good” are following: a. Precondition criteria: Indicator 1.2; 1.3; 1.4 and 1.5; b. Production Criteria: Indicator 2.1; 2.3; 2.4 and 2.6; c. Ecological Criteria: Indicator 3.1; 3.2 and 3.4; d. Social Criteria: Indicator 4.2; 4.3 and 4.4.

3. For those auditee with license agreement are about 2 year to the closing time of operation, good performance should be determined by 14 (fourteen) key indicators that should be within the scoring level of being “good” with minimum requirements meet 16 (sixteen) indicators from the good scored 24 (twenty four) indicators being determined. Key indicators should be scored “good” are as follow: a. Precondition criteria: Indicator 1.2; 1.3; 1.4 and 1.5; b. Production criteria: Indicator 2.1; 2.3; 2.4 and 2.6; c. Ecological criteria: Indicator 3.1; 3.2 and 3.4; d. Social criteria: Indicator 4.2; 4.3 and 4.4.

C. Regarding the auditee’s right to get granted the PHPL certificate

(titled as GOOD) whether there are a number of indicators scored as “BAD”, hence the auditee would be given opportunities to improve the bad indicators that should be in line with the

D. In case the auditee’s status that was decided not to get granted the PHPL certificate (as GOOD predicate), however they still hold some BAD indicators, hence the auditee would be given opportunity to improve their BAD indicators according to the provision that they

should follow minimum indicators they have to achieve by improving within 6 months period. If within the timeline as advised the auditee has not been achieving minimum required improvements, then the process of evaluation would be discontinued. If the auditee still wishes to receive PHPK certificate, hence the process of evaluation should began from the beginning.

IV. CERTIFICATE ISSUANCE

1. Certicate would only be granted to those auditees whose performance scoring on the level of “GOOD” predicate. LP-PHPL should submit copies of each single evaluation reporting (whether they get certified or not) and/or the certificates which are issued for the government c.q Ministry of Forestry.

2. In case the released PHPL certificate is a revision from the existing certificate one, there should be differentiated in between the revised certificate and the “old” non valid one.

3. LP-PHPL should publicize any publishing, changes and cancellation of desertification by providing a complete audit result resume that is released in mass media and Ministry of Forestry’s website (www.dephut.go.id) after the decision is taken.

V. SURVEILLANCE

A. LP-PHPL should have surveillance guidance and procedures by referring to the standard of ISO/IEC 17021:2006 and the Regulation of Minister of Forestry No P.38/Menhut-II/2009 with provisions at least are as follow: 1. Surveillance should be carried out based on the existing and

valid Performance Evaluation standard of PHPL. 2. Surveillance should be known by the auditee 3. Surveillance work plan should be elaborated clearly (typical of

indicator, methodology of evaluation and the timeline of activities)

4. Surveillance should be carried out throughout the process of field evaluation exercise.

5. Result of surveillance is designated in a written report and submitted to the auditee.

http://www.dephut.go.id/�

B. In a certain case should there be inputs/recommendation from an Independent Monitoring Institution, LP-PHPL could do speed up the process by having additional surveillance.

VI. RE-CERTIFICATION

LP-PHPL should have a Re-certification procedure by referring to the ISO/IEC standard 17021:2006 and regulation of Minister of Forestry No P.38/Menhut-II/2009.

VII. EXTRA ORDINARY AUDIT LP-PHPL should have an extra ordinary audit mechanism where it is a special one by referring to the ISO/IEC 17021:2006 standard and Regulation of Minister of Forestry No P.38/Menhut-II/2009

Attachment 1.1. : Regulation of Director General of Forest Production Development Number : P.02/VI-BPPHH/2010 Re : Guidance of Sustainable Production Forest Management Performance

Evaluation and Verification of timber legality

Guidance of Sustainable Production Forest Management Performance Evaluation (PHPL)

No EVALUATION STANDARD EVALUATION REFERENCE Criteria Indicator Meaning Evaluation tool Assessment

method Evaluation guidance

Score Elaboration 1 2 3 4 5 6 7 8

1 Pre condition 1.1. Certainty of Licence Holder’s area of operation

Certainty of area status of IUPHHKHA/ HT/HTI management unit over land use, spatial zone arrangement and forest land use that ascertain the area status is being utilized. Activities of forest delineation is part of activities in the frame toward getting recognition

1. legal documents and borderline arrangement administration should be available and provided

2. Conformity of the IUPHHKHA/ HT/HTI area with the function/land allocation.

3. Realization of land delineation

4. Legitimacy of

1. Size and percentage of production forest, and integrated plan and compre-hendsive on land use are elaborated in detail according to the forest function, are as follow: production forest, protected forest, natural protected areas and sanctuary, other land use/if there are existing.

2. size and

GOOD a complete legal documentation should be available and administration (as for example land delineation report submission, map, and/or decision letter to ascertain the land use status), land delineation in the field has been completed, there are no conflicting situation, forest function follows




about the existence of IUPHHKHA area/HT/HTI by community, other parties that utilize the land use as well as the relevant agency. Physical symbol such as border stick should be seen as a sign of responsibility has been taken care by the licensed management unit.

IUPHHK borderline

5. Recognition among parties over the existing IUPHHK area.

6. Clarity, effectivity and impact of the area use outside the forestry sector/if it is existing.

percentttage of area are reflec-ted per type of forest. In the IUPHHK an elaboration is based on forest type classi-fication such as up land tropical forest, lowland tropical forest, mangrove, peatland forest, swamp, and fresh water forest etc.

3. Check the impact of use outside of forestry sector (include the impact) if it is available.

the allocation land use procedure for production forest.

BAD There are some part (not overall) of legal documents are completed, administration of decision letter on rights, land delineation report submission, decision letter to ascertain the land use status, BAP land delineation report submission, Map), Some




conflicting situations are still existing with other parties, forest land misused by other sector’s interest (as for example for mining purpose) in conclusion the forest production function is defined as a non forest purpose.

1.2 Commit-ment of IUPHHKHA license/ HT/HTI

Statement of vision, mission and goals of the license holder company and its implementation by the IUPHHKHA/HT/HTI holder for its activity of sustainable forest utilization

1. vision, mission documents are available and the com-pany’s goal should be according to the Sustaina-ble Forest Management principle.

1. Reviewing the credibility and originality of document contents.

2. Field checking if needed.

GOOD There are a written statement to do Sustainable Production Forest Management (PHPL) included in the vision and mission of company. In




during its license period is valid.

2. Socialization of vision and mission plus the company’s goal.

3. Conformity of vision and mission to be in line with the Sustainable Forest Management implement-tation.

reality the company does activities of land use delineation, planning, forest management and development, forest protection, environmental management and human resources development.

BAD There are a written statement to conduct Sustainable Production Forest Management (PHPL) and included in the vision and mission of company.




In fact there are no realistic activities demonstrating the company’s commitment in compliance with the sustainability principles such as land use delineation, planning, forest management and development, forest protection, environmental management and human resources development.

1.3 Compa-ny’s healthi-ness/ holding company

Company’s investment in a form of financial asset that are from the stock exchange

1. Capitalization of company should be increased.

1. Reviewing the validity of document’s contents

2. Field checking exercise.

GOOD There are capitalization and reinvest-tment. Forest stocks are growing up.




(owner), and loans for investment. And, the additional asset for long term financing and Sustainable Forest Production Management financing are indeed needing sufficient investment.

2. The capital that is invested return to the forest.

3. Realization of physical activities of forest management and develop-ment

BAD There are capitalization but it is not reinventing for the growing of forest existence.

1.4 Compliance with the legal framework, policy and regulation that are existing in sustain-nable forest mana-gement.

IUPHHK-HA/HT/HTI work on utilization of forest based on the legal framework, policy and regulation that are existing to support utilization of sustainable production forest

1. Completeness of regulations and acts that are being referred.

1. document checking

2. field exercise checking, forest inventory which is in accordance with the existing provisions that are valid in primary forest and logged over forest.

GOOD Regulations and other adminis-trative require-ments are completed. Both of them are referred by the license’s holder and the techni-cal implement-tation of forest management in the field should




(rule of silvicultural system, heavy tools use, manpower, forest products administration etc). IUPHHK-HA/HT/HTI should refer to the existing forest inventory result that are existing and valid to guarantee sustainable forest management.

2. Conformity of technical implement-tation of forest management with the referred regulations and acts.

3. Sufficient standing stocks potentiality, working area with the valid and existing provisions.

be in compliance with the existing acts and regulations. The working area has standing potentialities which are larger or similar with the minimum standard according to the existing regulation.

BAD Regulations and other administrative requirements are completed as referred by the Licence Holder. However the technical implementation of forest management in the field does




not meet the regulations and administration as promised. Working area has potentiality of standing stocks less than the required minimum standard according to the existing regulation.

1.5 Number of professional welltrained manpower are sufficient. In additional technical workers to serve all level of work, implement-

In order to guarantee sustainability of business and forest resources in IUPHHK-HA/HT/HTI they would need manpower of production plan personnel,forest management and

1. The Existence professional manpower and technical personnel in the field on each single activity of forest management.

1. Document review;

2. interview with staffs

GOOD There are sufficient professional manpower includes technical basis personnel that they could cover the work area in planning, management, development, forest protection,




tation, research, education and training

development, and or procurement and cultivating plantation, forest protection and sufficient professional business management.

2. Efforts to upscaling the capability level of human resouces

3. manpower documentation are set and available

production, environmental management, human resources development and research where the needed number of personnel are sufficient to serve.

BAD Insuffient number of proffesionals to handle the issues of technicalities, planning, management and development, forest protection, production, environmental management, human




resources and research activities are not well-managed. There is no efforts to scale up human resources capability to be as competent as possible.

1.6 Capacity and mechanism to do planning, implement-tation activities, periodical monitoring, evaluation and feed back service on the achieving

Managerial policy of IUPHHK-HA/HT/HTI toward sustainable production should be identifiable from all level of Management Iinformation System that has and is supported by sufficient human

1. effectivity of planning unit

2. The existing of manage-ment informa-tion system and operators to run on the system

3. SPI existence and effectivity

4. The existing corrective action management based on

1. documentation checking/review

2. interview

GOOD A set of information monitoring, organization and action (SOP), as well as it is controlable by SPI, however the SIM could be utilized that to be applied certain position level




progress of IUPHHK-HA/HT/HTI

resources. Available to provide monitoring system and proportional management covering the area of IUPHHKHA/HT/HTI and clear mechanism of decision making to synchronize the decision on each single department (planning, production and management development and supporting teamwork)

monitoring and evaluation result.

BAD A set of information monitoring, organization and action (SOP), but the SPI is not fully functioned, and the SIM could not be utilized optimally to be applied in all level of position.




2 PRODUCTION 2.1 Long term working area arrange-ment in sustainable forest manage-ment

Effective area arrangement for production to be divided into blocks and cutting/planta-tion compart-ment according to the existing and being used silviculture system, also by considering sustainability in ecological aspect and social.

1. The existing RKU document which has been agreed by the authority should cover following document-tations:

a. RKUPHH documents& attachments which are arranged based on IHMB and is carried out by Ganis PHPL Can hut.

b. Map of working area arrangement be created by Ganis PHPL – Canhut

Purposive due dilligence over RKT block delineation is based on the delineation map/area plan which have been agreed upon with targets are as follow: a. Logged RKT

block b. Unlogged RKT

block

c. Cutting compartment (block)

GOOD There are comformity in between planning and implementation of plan activities over forest part, compartmenization and yield regulation.

BAD There are non conformity between planning and implementation of plan activities over forest part, compartmenization and yield regulation.




2. Implemen-ation of working area arrangement in field should be in line with RKUPHHK

3. block delineations are cultivated as well as compartment.

2.2 Level of sustainable harvesting for each types of timber-based forest main species and non timber on each type of ecosystem

In cultivating the forest sustainability, harvesting regulation should be following the increemental rate of standing stocks, or should have an adaptation with the plantation cycle.

1. Standard operation procedure for Permanent Sample Plot and increemental measurement

2. PUP existence on each single type of ecosystem

RKT document review and PUP that covers: a. timber forest

products potentiality based on the volume and species being elaborated on each single diameter class

GOOD Growth measurement and increement have been implemented, but have not yet been applied in harvesting plan.




3. yearly based PUP measurement implement-tation

4. Increemental data documentation of standing stock in each ecosystem

5. AAC on the RKT document is arranged and based on growth and yield of standing stock in logged over area of natural forest or plantation

b. timber forest products potentiality based on volume and species

c. endemic/protected and non protected flora and fauna potentiality

BAD Measurement on growth and increement is not yet carried out as a principle for harvesting plan.




2.3 Implementation of applying the silvicultural system steps for guaran-teeing forest regene-ration

Steps of silvicultural implementation complies with the right proce-dures that can be guarateeing the forest regeneration and minimising destruction (as consequence of harvesting activities)

1. SOP should be available in all steps of silvicultural system active-tes, including the environ-menttally friendly cutting techni-ques (RIL) – reduced impact logging

2. SOP imple-mentation for overall stages of silvicultural system activities

3. Official documents for utilizing species included in CITES appendix

1. review SOP contents whether they are appropriately applied and implemented in field exercise.

2. Evaluation of SOP implementation effectivity/each single management activity on field level

3. Comparing the intensity of implementation of preserving standing stock remnants and regeneration with the appointed regular standard

4. field exercise checking on standing remnants and the coverage area of

GOOD There are SOPs to be applied to all stages of activities and be implemented in field.

BAD The SOP does exist but is never applied completely in the context of SOP implementation in the field.




4. The level of degraded standing remnants

5. level of sufficiency for standing remnants

destructed standings

5. observation and taking pictures of standing structures in several blocks/compartment that have been cultivated and they have different the cutting age

2.4 Applied and appro-priate techno-logy should be available to run on the PHPL

The RIL imple-menttation (which is availa-ble) in forest management will increase the effectivity, efficiency and environmentally friendly attitude that refer to the formally-recognized-by-Dephut RIL guidance.

1. Application of appropriate and applied technology

2. RIL procedures are available

3. RIL application in the PWH (Opening Forest Space) and harvesting

1. Evaluating the exploitation factor of waste use and species use

2. Identification of activities and impact that might appear on environmental surround

3. Analysis on Environmental Monitoring Impact result

GOOD Procedure of RIL SOP is available and applied appropriate technology for opening forest space (PWH), harvesting, and achieving the optimum exploitation factor are conducted in consistent way.




4. Species utilization

5. Exploitation factor

(AMDAL) and efforts to control the impacts

4. Observing RIL infrastructure and sub infrastructure setting in the field

BAD Procedure of RIL SOP is available and applied appropriate technology for opening forest space (PWH), harvesting, and achieving the optimum exploitation factor are not conducted in consistent way.

2.5 Financial sounds for licence’s holder

Performance of management unit that supports for the PHPL should be demonstrated by capability in financial management in fulfilling short term obligations (liquidity), long term (solvability),

1. Conformity in between financial report and PSAK 32

2. Liquidity 3. Solvability 4. Rentability

Field checking to see how the conformity in between the fact findings and Public Accountant reporting

GOOD Liquidity ≥ 100-150%, solvable and rentability > interest rate.

BAD Liquidity < 100-150%, solvable and rentability < interest rate.




and also a typical of activities that gives advantage economically (rentability rate).

2.6 Cutting realization follows the cutting workplan/harvesting/utilization on other working areas.

Production sustainability will be achieved if the annual cutting volume arrangement matches with the yield regulation plan which is planned based on the provided sources of valid data and basic map

1. The existing RKT document which is being arranged and based on the RKU to be legalized by related authority. Or self approval is applicable in this case.

2. The existing working map should conform RKT/BKU that covers:

1. Analytical process to conform AAC with the realization of forest yield production and the harvesting area size.

2. Comparison of implementation and implementing guidance

3. interview with field worker

GOOD Yearly forest yield products matches to the designated yield regulation annual plan by considering the factor of environment and market condition.

BAD Yearly forest products yields do not match with the yield regulation plan, where on the planning arrangement, there are no




a. working map that illustrates the area be able to be cut, harvested, utilized, planted/culti-vated with the area being legalized as a protected area (for conservation/buffer zone, germ plasm conservation/religious/ cultural/infra-structure and sub infrastructure and research development.

environmental factor being-considered in local situation and market condition.




b. Working map implement-tation with the sign of marking of block/ compactment border/to be harvested/to be utilized/to be planted/to be cultivated with the area being designa-ted as a protected area (for conservation purpose/ buffer zone/germ plasm conservation/ religion/ cultural/infra-structure and sub infrastruc-ture/ research development.




2.7 Capable rate of investment and re-investment and meeting the demand of forest manage-ment, adminis-tration, research and develop-ment, and human resources develop-ment capacity building.

In embodying sustainable forest resources utilization, sufficient financial supports are needed for planning, protection, forest management, infrastructure and sub-infrastructure procurement, working equipments, research and development and human resources development plus capacity building

1. Sufficient allocation realization of funds

2. Proportional allocation realization of funds

3. Smooth funding realization and implement-tation

1. Evaluating yearly financial report of licence’s holder

2. Evaluating workplan and budget of licence’s holder

3. Public accounting

4. field investigation

GOOD Funds are available to be allocated, sufficient and easily to be accessed for mangement purpose.

BAD Allocated funds are not sufficient




3 ECOLOGY 3.1. The existing, stability and condition of protected area on each single type of forest

Forest function as a buffer zone of life for species and biodiversity sources could be reached if there are a num-ber of allocated areas to be protected sufficiently. Protected area allocation should be considering the type of forest ecosystem, biophysical condition, and other specific conditions that may apply.

1. Size of protected area

2. Designation of protected area (percentttages are being marked, borderlines are recognized)

3. Protected area condition

4. Recognition of parties to the protected areas.

5. Protected area management report from area spatial plan result/landscaping/macro and micro delineation

1. Document review 2. Satelite image

analysis/ aerial imagery to capture condition that is being designated for protection area.

3. Analyze of sloping map/shaping line and soil map

4. Observing protected area location to look at whether forest planning and area protection are being developed and existing.

GOOD The designated areas for protection are marked and having clear boundary marks where they are set up in the field that are recognized easily by some of related parties in good condition.

BAD Protected areas are well planned and arranged where the mark-ers are well set up on the field where all partiers recognize the areas less than 60% of the por-tion f total areas that are needed to be protected.




Protected area should be arranged and functioned properly to get recognition from various parties.

Designated protected areas have no clear border lines and markers. It is difficult to see the borders line on the field, and it is hard to identify the markers even involving some other people/parties.

3.2. Protection and Forest guard

Forest resources should be secured from disturbances. The disturban-ces themselves are from: forest fire, illegal logging, wild grazing, forest encroachment,

1. A set of procedural system for protection is available which is in accordance with typical of the existing disturbance;

1. SOP document review

2. Reviewing report activities

3. Interview with staffs to understand about training activities and forest disturbance.

GOOD There are procedures and institution, controlling implementation is run on pretty well, so that there are no any disturbances.




wildlife hunting, pest and disea-se. Forest protecttion is an effort of preven-tion and hand-ling for control-ling forest distur-bance, through pre emptive, preventive and represive activities. In supporting forest protection activities, should there be a unit of work action that has qualified procedural sys-tem, infrastruc-ture and sub infrastructure, human resour-ces and suffi-cient financial support

2. infrastructure and sub infrastructure of forest disturbance protection;

3. Human resources for protecting the forest;

4. Implementation of forest disturbance protection (preventive/curative/ represive)

5. Report of implementation, security and forest protection.

4. Interview with local community to understand whether there are grazing, timber theft (looting) and forest encroachment are existing or not.

5. Field observation

BAD There are procedures and institution, but there are no any implementations held.




3.3. Manage-ment and impact monitoring on soil and water as influenced by forest utilization

Forest product utilization (Forest area opening- pembukaan wilayah hutan, harvesting) should be consi-dering the nega-tive impact of handling soil and water according to the type of ecosystem. The negative impact could set by lowering the physical quality and soil chemical, the increase of erosion, subsi-dence, sedimen-tation, river current debit, the decrease of water quality. The negative impact handling should be necessarily

1. Management procedures are available and impact monitoring for soil and water.

2. Soil and water management infrastructure and impact monitoring.

3. Human Resources management in managing and monitoring the impact on soil and water;

4. Soil and water plan and management (civil techniques and vegetative)

5. Soil and water plan and impact monitoring

1. Reviewing SOP documents

2. Reviewing activity reports

3. Interview with staffs to under-stand that there are any training activities, erosion controlling active- ties in the field

4. Field observation

GOOD 1. The procedures are demon-strated

2. The implementation works well but there are in some areas soil solidifying and soil erosion still happen.

3. The growth of vegetation is fine

BAD 1. there are no any procedures applied

2. The imple-menttation has not been run so well hence




supported by implementing working unit, that they are consis-ting of qualified procedures, infrastructure and sub infrastructure human resources and sufficient financial support. Standard operational procedures are available to measure water quality change and to understand the importance of permanent negative impact that could send an early information on conflict potentiality that may happen.

6. Impact on soil and water

7. Report on implementation of erosion prevention, surface waterflow through soil conservation techniques or planting on open area/easy to erosion and activities of erosion measurement and surface waterflow throughout SPAS and erosion pool.

in some locations there are soil solidifying and soil erosion that affect disturbance of vegetation on the logged over forest areas road access, log pond, other areas where heavy machines are working.




3.4. Flora and fauna species identifica-tion which are protected and/or on the status of endangeredrare, threa-tened and endemic

Protected flora and fauna identification is very important for IUPHHK HA/HTI/HT for decision making of forest management that support biodiversity sustainability. Identification efforts as above mentioned should be supported by procedures and the results should be documented properly.

1. Flora and fauna identification procedures are available. The conserved endangered, rare and threatened and endemic flora and fauna should refer to the existing and designated legal aspects.

2. Implemen-tation of identification activities

Document review to understand that there are efforts to identify endangered, rare, threatened and endemic flora and fauna

GOOD The procedures are available for identification of endangered, rare, threatened and endemic flora and fauna where the implementation for covering all typical of forests is in periodical basis. Flora and fauna data with identified distribution spots are available




3. Data and information are available from endangered, rare, protected, and threatened flora and fauna identification that cover all typical of forests that is developed in periodical basis.

BAD The procedures are available for available for identification of endangered, rare, threatened and endemic flora and fauna but non of implementations are being applied. Flora and fauna data with identified distribution spots are NOT available




3.5. Flora manage-ment is defined for:

1. undisturbe

d certain coverage area of production forests and untouched/undegraded elements

2. Protection on conser-ved or/and endanger-red, rare, threatened and endemic flora species

IUPHHK HA/HT/HTI contribution in biodiversity conservation could be developed through principles of allocation, by keeping several parts of overal typical of forests, in production forest integrated and solid/ undisturbed and the principle of technology implementation is oriented on protecting the flora species that they include in the category being conserved and protecting their specific

1. procedures are available for conser-ved flora management that refers to the designated legal provisions

2. Implementation of flora management matches to the plan

3. Data and information conserved flora mana-gement are available that cover certain area of undisturbed production forest.

1. document reviews to look at guidance of flora management

2. interview with staffs to under-stand that there are protection efforts against flora fauna stealing attempt.

3. interview with local community to understand whether any case of flora stealing

4. Field observation to understand that there are efforts of protection and conservation of endangered, rare, threatened and endemic flora

GOOD There are endangered, rare, threatened and endemic flora manage-ment procedures where the implementation goes well in protected areas that the IUPHHK personnel understand the ecological background and specific flora endemic distribution within their working area.




biological appearance which is important applied in effective production area. The above availability and implementation procedures, are inputs and important process in IUPHHK decision making to reduce the impact of production management over the existing protected/conserved flora species.

4. Species condition for conserved flora and/or endangered, rare, threatened and endemic

BAD There are endangered, rare, threatened and endemic flora management procedures where the implementation does not happen




3.6. Fauna manage-ment in selected areas is defined for:

• certain area

of work of undis-turbed production forest and unde-graded part

• Protection for protected fauna species and/or enda-ngered, rare, threatened and endemic fauna status

IUPHHK HA/HT/HTI contribution in biodiversity conservation could be developed through principles of allocation, by keeping several parts of overal typical of forests, in production forest integrated and solid/ undisturbed and the principle of technology implementation is oriented on protecting the fauna species that they include in the category being conserved and protecting their specific

1. procedures are available for conserved fauna management that refers to the designated legal provisions

2. Implementation of fauna management matches to the plan

3. Data and information of conserved fauna management are available that cover certain area of undisturbed production forest.

1. Document reviews to look at guidance of fauna management

2. interview with staffs to understand that there are protection efforts against flora fauna stealing attempt.

3. interview with local community to understand whether any case of fauna stealing

4. Field observation to understand that there are efforts of protection and conservation of endangered, rare, threatened and endemic flora

GOOD There are endangered, rare, threatened and endemic fauna management procedures where the implementation goes well in protected areas that the IUPHHK personnel understand the ecological background and specific fauna endemic distribution within their working area.




biological appearance which is important in effective production area. The above availability and implementation procedures, are inputs and important process in IUPHHK decision making to reduce the impact of production management over the existing protected/conserved fauna species.

4. Species condition for conserved fauna and/or endangered, rare, threatened and endemic

5. Report and SOP of corridor development for fauna’s home range which is directed for protected fauna species.

BAD There are endangered, rare, threatened and endemic flora management procedures where the implementation does NOT happen.




4 SOCIAL 4.1. Clear size and borderline in between the licence’s holder area with traditional adat community and/or local community’s area where among parties have agreed

Adat rights and legal derived from adat-law community and or local community to have, authority and utilize the land rights (their own area) and forest resources which have to be recognized that they play roles in managing the forest resources. However forest resources utilization should accommodate community’s basic rights and or local community (rights to life, rights to have foods, secondary

1. clear delineation of size and border between community’s land and Licence’s holder (IUPHHK).

2. Data and information of traditional-law community and or information of community being involved, dependent, affected forest resources management activities

3. Mechanism and border line imple-mentation are

1. Survey/observation of community border

2. Document review wherever available

3. Map reconstruction overlay/concession area;

4. Interview with relevant parties

GOOD IUPHHK border line with adat local community domain and local community is clearly markable. The implementation of participatory border mapping that there are dispute resolution served to proceed complaints etc.

BAD 1. borderlines between IUPHHK and legally recognized adat customary border have not been identified.




needs, tertiary needs and cultural needs)

established in participatory way, and apply area borderline conflict resolution.

4. Agreement among parties on size and IUPHHK working area borderline

2. There are conflicts in between IUPHHK and adat customary community

3. There is no conflict resolution/dispute resolution mechanism

4.2. Typical and number of agreements that involve adat/custo-mary com-munity and or local community in embo-dying an equal principle of

Concession granting to IUPHHK by the government where it is located in the forest should give consequence to the IUPHHK to include adat/customary law community

1. Available documents should cover rights and obligations of IUPHHK licence holder in dealing with community in managing forest resources.

1. Survey 2. Interview/

Focused Group Discussion

3. Checking agreements in local institutions

4. Data is accessible from management unit

GOOD The licence holder has mechanism or procedures. Those are implemented for dispute resolution and complain of equality adat customary rights community issues, that




responsible joint mana-gement

and or local community as justice and equal way as possible by respecting to rights and obligations of each single parties what they need to do proportionally and fully responsible.

2. Socialization and sharing for community to be better understanding on their rights and obligetions where IUPHHK has been facilita-ting them in forest resources management

3. Mechanism and imple-menttation to fulfill oblige-tions and responsibilities for community are available

4. Realization of meeting obligation and response-bilities to community

might be raised by community while working jointly in forest management.

BAD The licence holder has mechanism or procedures. Those are NOT implemented for dispute resolution and complain of equality adat customary rights community issues, that might be raised by community while working jointly in forest management.




4.3. Mechanism and benefit distribution implementation are available, justice among involved parties.

Incentive distribution mechanism and shared costs where the just benefit and equal are well ditributed evenly, proportional for all parties, and are implemented as consistently as possible.

1. IUPHHK legal document-tation is existing that might guaran-tee the imple-menttation of incentive dis-tribution, cost sharing and benefit for parties

2. Benefit identi-fication, incen tive distribu-tion, cost sharing and benefit for parties are available

3. Benefit distri-bution mecha-nism for those parties are involved that matches with the designa-ted goals.

1. Secondary data verification

2. Interview with community leaders and relevant authority

GOOD 1. there are a written mechanism statement on benefit distribution issue for all parties

2. There are documented and upon agreed benefit distribution for those parties involved.

BAD 1. There is a mechanism of benefit distri-bution for all parties but no implement-tation

2. There is conflicting situation that still appears in benefit distribution




4. Claims related to the incentive distribution, cost share and benefit are settled

4.4. Plan and implement-tation of forest manage-ment have considered adat customary law and rights and local community.

Customary rights and legal from adat customary community and or local community to have, authorize and utilize area and forest resources should be recognized and respected. Forest resources management should accommodate rights of local community/adat

1. the existing forest resour-ces utilization plan has acco-modated cus-tomary traditi-onal commu-nity’s basic rig-hts and or local community related to forest resources management.

2. Basic rights of local adat customary community and local commu-nity are clearly identified in the

1. Reviewing planning book and realization

2. Field survey 3. interview with

community leaders

GOOD 1. There is planning document that involves customary people and and local community.

2. There is a written plan and realization for compensating the use of traditional customary people’s right and or local community.




customary people, (life rights, foods rights, tertiary rights, quartery rights and cultural rights)

plan of forest resources utilization

3. Mechanisms and implemen-tation of plan are provided in forest resour-ces utilize-tion by manage-ment unit that accommodates adat local customary people basic rights and local community

4. Realization to accommodate Local traditi-onnal custo-mary commu-nity’s and local commu-nity’s basic right in forest resources management

BAD The planning document is arranged from Licence’s holder’s side. 1. Some that

are written on the document planning realized by licence’s holder.

There is NO written plan and realization for compen-sating the use of traditional customary people’s right and or local community.




4.5. Participation and economic activities of local traditional customary people and local community are increasing (their activities are forest based economic activities)

Economic activities of traditional customary people and local community increases in terms of community involvement in forest management activities and economic development which is in accordance with the existing IUPHHK. Giving the opportunity to the community to supply IUPHHK’s needs and the community would be able developing the

1. IUPHHK plan document is available that supports community’s role streng-thening and forest based economic activities

2. Clear roles and traditi-onal custo-mary people and local community’s economic activities to be develop-ped.

3. Mechanism of process and imple-mentation of increasing participation and adat

1. document review scrutinized on planing and implementation

2. field survey 3. interview with

community’s leader

GOOD There is evidence demonstrated in data and information from the licence’s holder that are reflected from planning until implementation activities related to efforts of escalating the participation and roles and local community’s dependent forest economic activities.




economy based on timber forest and non timber.

customary community’s economic activities and local community to be escalated by Unit Management

4. The increa-sing of roles and partici-pation and economic activities (quality and quantity) of adat customary community and local community

BAD There is NO evidence demonstrated in data and information from the licence’s holder that are reflected from planning until implementation activities related to efforts of escalating the participation and roles and local community’s dependent forest economic activities.

Attachment 1.2 : Regulation of Director General of Forest Production and Development

Number : P.02/VI-BPPHH/2010 Date : 10 February 2010 Re : Guidance of Performance Evaluation of Sustainable

Forest Production Management and Timber Legality Verification

REPORT STRUCTURE

(Certification) Introduction Contents List of Tables List Pictures 1. INTRODUCTION

1.1. BACKGROUND

1.2. MISSIONS, GOAL AND TARGET 2. AUDITEE IDENTITY AND PHPL EVALUATING INSTITUTION

2.1. AUDITEE IDENTITY

2.2. PHPL EVALUATING INSTITUTION IDENTITY 3. GENERAL SITUATION

3.1. AREA SITUATION

3.1.1. Area Location

3.1.2. Area Border

3.1.3. Situation of Land Use and Authority

3.1.4. Situation of Spatial Plan

3.1.5. Tenurial Issue

3.2. ACCESSIBILITY AND SITUATION OF OPENING AREA

3.3. BIOPHYSICAL CONDITION

3.3.1. Climate

3.3.2. Topography

3.3.3. Geology and Soil

3.3.4. Hydrography

3.3.5. Coverage Area and Forest Function

3.3.6. Various Type of Forest and Standing Potentiality

3.3.7. Biodiversity of Plants and Wildlife

3.3.8. Mining Sources Potentiality

3.4. SOCIO ECONOMIC CONDITION AND GOVERNANCE

3.4.1. Population Demography Situation

3.4.2. Agro-economic Situation

3.4.3. Socio-cultural Situation

3.4.4. Plan of Area Development

3.4.5. Situation of Local Government

3.4.6. Situation of Law Enforcement

3.5. FOREST MANAGEMENT SITUATION

3.5.1. Production Statistic

3.5.2. Statistic of Forest Management Activities

3.5.3. Situation of Company’s financial

3.5.4. Situation of Human Resources Management

3.5.5. Situation of Timber Market and Other Forest Products

4. EVALUATION METHODOLOGY

4.1. Verifier Designation

4.2. Verification Technique

4.3. Designation of Verification Instrument

4.4. Matrix of Verification Methods for each single Indicator

5. RESULT OF FIELD EVALUATION

5.1. Result of Indicator Evaluation on Precondition criteria

5.2. Result of Indication Evaluation on Production Criteria

5.3. Result of Indicator Evaluation on Ecological Criteria

5.4. Result of Indicator Evaluation on Social Economy criteria

5.5. Joined Score Results 6. CONCLUSION

6.1. CONCLUSION

6.2. CORRECTIVE ACTION REQUESTS (CARs)

SCHEME OF ATTACHMENTS CERTIFICATION REPORT/PHPL PERFORMANCE EVALUATION

(Certification)

I. ADMINISTRATION LP-PHPL TASK FORCE DEVELOPMENT

II. DOCUMENTS OF AUDITTEE LEGALITY III. DOCUMENTS SOURCES FOR EVALUATION INFORMATION

a. Document from Auditee b. Document from Forestry Agency c. Document from other Government’s Agency d. Documents from Research/Study e. Documents from Internet

IV. EVALUATION INSTRUMENT SHEETS a. Tally sheet and recapitulation list b. Checklist document c. Interview and note taking of Focused Group Discussion d. Interview and Individual Note Taking e. Questionaire Result f. Checklist demonstration of field activities g. Quantitative analytical result/statistic h. Digital analytical result i. Laboratory analytical result

V. PHOTOs AND EVALUATION PROCESS RECORDS

VI. MAPS

Recapitulation of PHPL Performance Indicator Score Table

Indicator Score

by Auditor

Elaboration/ argument

Validation by Decision Making

Corrective Result PK

NOTES

1 2 3 4 5 6

1.1

1.2

1.3

1.4

1.5

1.6

Pre Condition Score

2.1

2.2

2.3

2.4

2.5

2.6

2.7

Production Value

3.1

3.2

3.3

3.4

3.5

3.6

Ecological Value

4.1

4.2

4.3

4.4

4.5

Social Score

Final Performance Score

REPORT CONTENTS SCHEME (Re-Certification)

Introduction Contents List of Table List of Pictures 1. INTRODUCTION

1.1. BACKGROUND

1.2. AIMS, GOAL AND TARGETS OF EVALUATION 2. AUDITEE IDENTIFICATION AND PHPL EVALUATION

INSTITUTION

2.1. AUDITEE IDENTITY

2.2. IDENTITY OF PHPL EVALUATION INSTITUTION 3. GENERAL SITUATION CHANGE

3.1. THE CHANGE OF AREA SITUATION

3.1.1. The Change of Position, Size and Area’s borderline

3.1.2. The Change of Landuse and Land right situation

3.1.3. The Change of Spatial Planning Situation

3.1.4. The Change of Opening Area Situation

3.2. BIOPHYSICAL CONDITION CHANGE

3.2.1. The change of Land coverage and Forest Function

3.2.2. The change of Forest Typical Diversity and Standing Potentiality

3.3. THE CHANGE OF SOCIAL ECONOMIC CONDITION AND GOVERNANCE

3.3.1. The Change of Population Demography Situation

3.3.2. The Change of Agro-Economic Situation

3.3.3. The Change of Social Cultural Situation

3.3.4. The Change of Spatial Planning Arrangement

3.3.5. the Change of Local Government’s situation

3.3.6. The Change of Law Enforcement

3.4. THE CHANGE OF FOREST MANAGEMENT SITUATION

3.4.1. The Change of Production Statistic

3.4.2. The Change of Forest Development Activities Statistic

3.4.3. The Change of Company’s Financial Situation

3.4.4. The Change of Human Resources Management

3.4.5. The Change of Timber Market Situation and other Forest Products

3.5. CERTIFICATION STATUS/PHPL PERFORMANCE AS RESULT OF EVALUATION ACTIVITIES

4. THE CHANGE OF EVALUATION METHODOLOGY

4.1. Review of Verification Method on Previous Evaluation

4.2. The Change of Verification Methods

4.2.1. Modernized Designation of Verifier

4.2.2. Modernized Verification Techniques

4.2.3. Modernized Verification Instrument Designation

4.2.4. Matrix of Verification Methodology for Each Single Indicator

4.3. METHODS OF THE SURVEILLANCE ACTIVITIES RESULT USE

4.4. METHODS OF FINAL SCORING DESIGNATION PERFORMANCE

5. FIELD EVALUATION RESULT

5.1. RESULT OF EVALUATION OF LEVELLING EACH SINGLE INDICATOR

5.1.1. Result of Each Single Indicator on Each Precondition Criteria

5.1.2. Result of Indicator Evaluation on Production Criteria

5.1.3. Result of Indicator Evaluation on Ecological Criteria

5.1.4. Result of Indicator Evaluation on Social Criteria

5.1.5. Similar Level of Evaluation Result in facing Previous Evaluation Result

5.2. RESULT OF FINAL SCORING

6. CONCLUSION

6.1. CONCLUSION

6.2. Corrective Action Requests (CARs) 7. ADDITIONAL INFORMATION

ATTACHMENT SCHEME CERTIFICATION REPORT/PHPL EVALUATION

(Re-Certification)

I. ADMINISTRATION DOCUMENTS LP-PHPL TASK FORCE

II. LEGALITY DOCUMENTS OF AUDITEE

III. DOCUMENT OF INFORMATION SOURCES FOR EVALUATION

a. Documents sourced from Auditee

b. Documents sourced from Ministry of Forestry

c. Documents sourced from other Governments’ institution

d. Documents sourced from Research/study

e. Documents sourced from internet

IV. EVALUATION INSTRUMENT DOCUMENTS

a. Tally sheet and recapitulation list

b. Document checklist

c. Interview points and note taking FGD

d. Interview and individual note taking

e. Questionaire results

f. Result of checklist filling form of field activities demonstration

g. Quantitative/Statistic analysis result

h. Digital analysis result

i. Laboratory analysis result

V. PHOTO AND DOCUMENTATION OF EVALUATION PROCESS

VI. MAPS

Attachment 2 : Regulation of Directorate General Production Forest Development

Number : P.02/VI-BPPHH/2010 Dated : 10 February 2010 Re : Guidance of Performance Evaluation of

Sustainable Production Forest Management and Timber Legality Verification

GUIDANCE OF VERIFICATION AND CERTIFICATION OF TIMBER LEGALITY FOR IUPHHK-HA/HPH, IUPHHK-HT/HTI, IUPHHK-RE

HOLDERS; IUPHHK-HTR, IUPHHK-HKM HOLDERS; FOREST RIGHTS LICENCE HOLDER AND IPK HOLDERS

I. INTRODUCTION

A. BACKGROUND

In order to create Forest Governance, law enforcement and promotion of legal timber trade, hence it is developed a Timber Legality Assurance System/TLAS that is familiar in domestic with A System of Timber Legality Verification (SVLK). SVLK has been developed that involves multistakeholder system in SVLK arrangement and institutionalization upholding the principle of Governance, Credibility and Representativeness.

Based on the process of multistakeholder engangement, Ministry of Forestry released a Ministry of Forestry’s regulation No. P.38/Menhut-II/2009 on the Standard and Guidance of Performance Evaluation for Sustainable Production Forest Management and Timber Legality Verification that is dedicated for the License Holder. The guidance itself also be applicable on the Rights Forest and the Regulation of Director General of Production Forest and Development No P.6/Set-VI/2009 where it needs a guidance of field exercise (implementation).

Before appointing SVLK, Ministry of Forestry developed a system of Forest Products Administration where the Timber Tracking System was the principle of this operation to guarantee the timber legality. The regulation was reflected on Regulation of Ministry of Forestry No P.55/Menhut-II/2006 following with the rules of changes, on Forest Products Administration which is derived from State Forest. Administration of Forest Products as regulated in Ministry of Forestry legal system is actually about regulating forest products administration

from the planning of production, production process, carrying forest products and checking forest products upstream to downstream on each single activity HUB.

In Ministry of Forestry Regulation No P.55/Menhut-II/2006, the Forest Products administration is divided into two administration system where the upstream zone (within the licence’s area) and downstream zone (out of the licence’s area) by considering that forest upstream is still owned by state and the mechanism of issuance/document legalization is carried out by official assessment however for the forest products which are through out a serie of verification processes and meet the state’s regulation to contribute reforestation fee (PSDH/DR) is owned in private way hence the administration system mostly is developed by self assessment.

The principal of Timber Legality Verification is about examining tracing system of timber products that are set back to the sources of timber origin. This also applies a test of obligation fulfilling and the level of compliance with regulation being appointed where it should be run in consistent way. In principal, the mechanism of forest products administration is a monitoring system that is applicable for a timber tracking tool. Administration policy which is a timber tracking system and expected to contribute legal certainty for consumers/community.

Instead of it, Ministry of Forestry has also designated by releasing a Ministerial of forestry decree No P.51/Menhut-II/2006 and the changed regulation that regulates the use of Letter of Origin (Surat Keterangan Asal Usul) for those timber are from community forest/community’s land as a legality document.

In order that the timber legality verification is on the same level of understanding among stakeholders, it should be developed to arrange guidance for action.

B. GOAL

Timber Legality Verification Guidance is aimed at leading service for related parties in implementing Timber Legality Verification on the field exercise. The guidance will be used form evaluation of IUPHHK-HA/HPH, IUPHHK-HT/HTI, IUPHHK-RE holder; IUPHHK-HTR holder, IUPHHK-HKm holder; Right Forest licence holder; IPK holder that cover:

1. Verification application.

2. Verification Plan.

3. Verification Implementation.

4. Reporting.

5. Decision Making.

6. Certification Issuance and Recertification.

7. Surveillance activities.

8. Extra ordinary audit.

C. SCOPE

1. Verification object of Timber Legality is IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR holder or IUPHHK-HKm or Licence Holder of Forest Rights or IPK holder.

2. Verification is applied on the IUPHHK-HA/HPH IUPHHK-HT/HTI and IUPHHK-RE document holder according to attachment 2; IUPHHK-HTR, IUPHHK-HKm document holder refers to document attachment 3; Right Forest Licence Holder refers to Attachment 5; and IPK holder refers to attachment 6 of Directorate General Regulation of Production Forest Development No P.6/VI-Set/2009 in last one year period.

3. Timber Legality verification covers administration and physical instrument that includes document reviews, document consistency testing and physical evidence conformity to be attested on each single HUB from Upstream to Downstream. In addition the Timber Legality Verification should also meet state’s rights that is demonstrated through out traceability level. Instead of management context, there is an examination on level of compliance on related regulation (legal compliance) as regulated on Attachment 2, Attachment 3, Attachment 5 and Attachment 6 dedicated to the Regulation of Director General of Forest Production Development No P.6/Set-VI/2009.

D. REFERENCE

1. Act No 32 in 2009 on Protection and Environmental Management.

2. Regulation of Minister of Forestry No P.67/Menhut-II/2005 on Criteria dn Standard of Forest Inventory

3. Regulation of Minister of Forestry No P.51/Menhut-II/2006 on the use of Letter of Origin for Timber Forest Products delivery (SKAU) from the Right Forest. The regulation changed several times which at latest then the Ministry of Forestry released decree No P.33/Menhut-II/2007.

4. Regulation of Minister of Forestry Nomor P.55/Menhut-II/2006 on Forest Products Administration which is from the State Forest. The regulation itself made evolution with several times changes which at last a release of Minister of Forestry regulation No P.45/Menhut-II/2009.

5. Regulation of Minister of Forestry No P.18/Menhut-II/2007 on Technical Guidance on arrangement of retribution, collection and Forest Resources Provision (PSDH) and Reforestation fund.

6. Regulation of Minister of Forestry No P.23/Menhut-II/2007 on arrangement of Licence Proposal of Utilizing Timber-based Forest Products in Community Forest and Plantation.

7. Minister of Forestry regulation No P.37/Menhut-II/2007 on Social Forestry.

8. Regulation of Minister of Forestry No P.38/Menhut-II/2009 on standard and Guidance of Evaluation of Sustainable Production Forest Management and Verification of Timber Legality Performance on licence holder or Forest Right.

9. Regulation of Director General of Production Forest Development Peraturan No P.6/VI-Set/2009 on Standard and Guidance of Evaluation of Sustainable Production Forest Management and Verification of Timber Legality Performance

10. ISO/IEC Guide 65:1996 General Requirements for Bodies Operating Product Certification Systems.

11. ISO/IEC Guide 23:1982 Methods of Indicating Confirmity with Standards for Third-Party Certification Systems.

12. KAN 12-2004 guidance on KAN logo guidelines.

E. MEANS

1. Licence Holder is a IUPHHK-HA/HPH holder or IUPHHK-HT/HTI holder or IUPHHK-RE or IUPHHK-HTR holder or IUPHHK-HKm holder or the Licence Holder from Right Forest or IPK holder.

2. Verification Standard is all elements in the Principles, Criteria, Indicator and Verifier as stated on attachment 2, 3, 5 and 6 in Regulation of Production Forest Development Director General No P.6/VI-Set/2009.

3. Evaluation and Independent Verification institution (LP&VI) is a legal-based company owned by state or private sector which is accredited to conduct Evaluation of Sustainable Production Forest Management Performance and/or Timber Legality Vertification.

4. Timber Legality Verification (LV-LK) is a LP&VI that does verification of timber legality on IUPHHK-HA/HPH holder or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR or IUPHHK-HKm holder or Licence Holder of Right Forest or IPK holder.

5. Independent Monitoring Institution is an institution working on monitoring function/supervising that is related to public service in forestry sector such as PHPL certification issuance or LK issuance, as exemplified the role of forestry NGOs could be that way.

6. Surveillance is a conformity evaluation which is carried out systematically and reiterated based on the spirit of maintaining the conformity statement validity.

7. Extra ordinary audit or it is often called an-immediate-attact audit is an activity to investigate objections or disputes which is related to the significant changes in performance evaluation result or a follow up from the License Holder when their licence is frozen

8. Representative Management is a management representative holder of IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR holder or IUPHHK-HKm or Licence holder of Forest Right or IPK holder that is verified by LV LK. The representative has knowledge on overall system within the area being managed (in IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR or IUPHHK-HKm or Right Forest or IPK) and authorized to asist the auditor in working on verification process and signing the news report related to implementation of timber legality verification.

9. Auditor is a person who meets requirements, whose capability in auditing work service. The auditor is deployed by LV-LK to implement the timber legality verification.

10. National Accreditation Committee [Komite Akreditasi Nasional (KAN)] is an agency that accredits the evaluating institution and does verification independently (LP&VI).

11. Minister is Minister of Forestry of Republic of Indonesia

12. Director General is a Director General who gets the tasks and responsibility within the Forest Production Development directorate.

II. ACTIVITY

A. VERIFICATION APPLICATION

1. Lincence holder submit a verification application to the LV-LK which at least cover the scope of verification, Licence Holder’s profile and other information that are required for the process of LK verification.

2. Before conducting a field verification, LV-LK should have a study on verification application and maintain the record to guarantee for:

a. Conditions for verification are defined clearly, well understood and documented;

b. Avoiding the understanding difference in between LV-LK and Licence holder;

c. LV-LK should be having capability in working on verification services of LK being requested, and covers the location of Licence Holder’s area of operation.

3. LV-LK concludes all contractual arrangement with the Licence Holder.

4. In regard the verification being financed by the Government, hence the verification should not have through out application of License Holder to the LV-LK, but should also be carried out the appointment by the Government and the Government issues an announcement letter to the to-be-verified Licence Holder.

5. LV-LK announces the plan of LK verification implementation to the Licence Holder in Mass Media and Website of Ministry of Forestry (www.dephut.go.id) at minimum 7 (seven) calendar days prior to verification activities, in order that the Independen Monitoring Institution could give inputs or information related to verification activities for the appointed License Holder.

B. VERIFICATION PLAN

1. Planning LV-LK should prepare the plan of verification activities are as follow:

a. Auditor personnel appointment that they consist of Lead Auditor and Auditor,

b. Schedule of verification activities,

c. Auditor’s working document.

2. Verification Plan LV-LK informs to Licence Holder on required documents and asks the Licence Holder to demonstrate Repression Management that is responsible in realizing timber legality verification. The timber legality verification is reflected in an Authorized Letter and/or Task Force Letter. This information is issued and submitted at latest 7 (seven) calendar days before verification is taken.


C. VERIFICATION ACTIVITIES

Field exercise verification consists of three stages of Opening Meeting, Document Verification and Field Observation, and Exit Meeting.

1. Introductory Meeting

a. It is a meeting between the Auditor Team and Licence Holder Management that aims at explaining the goal of verification, scope, schedule, methodology and activities procedures. After the meeting it should also request an authorized letter and/or Appointment Letter for Representative Management as meant on the item B.2. above.

b. The meeting result is expected to avail data and completion. The transparent data is needed by the Auditor Team that the licence holder should meet those above mentioned requirements.

c. Meeting result should be reflected on the Meeting News Report to be attached on the list of participants’ meeting.

2. Document verification and Field Observation

a. LV-LK should conduct LK verification on documents holders of IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE according to attachment 2; IUPHHK-HTR holder or IUPHHK-HKm according to attachment 3; Licence Holder of Rights Forest according to Attachment 5; and IPK holder according to Attachment 6 of Director General of Production Forest Development No. P.6/VI-Set/2009.

b. LV-LK is obliged to trace back the timber origin from each single HUB in which beforehand it is began from the log pond and/or inter log pond within Concession Holder zone until the tracing place where logging activities are taken. This is useful to determine traceability of timber origin and ascertaining the timber sources are from legal compliance areas that meet the legality aspect.

c. Document verification is an activity to collect, collate, study and analyzing the data and document that should be able demonstrating its responsibility and appointing the truth and

evidence. The document verification is developed by using criteria and indicators as indicated and designated for IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE holder according to Attachment 2; IUPHHK-HTR or IUPHHK-HKm holder according to Attachment 3; and the licence holder of Right Forest according to attachment 5 however the IPK holder should accord to the attachment 6 of Director General of Production Forest Development No P.6/VI-Set/2009 plus the additional information (remarks) as written on the Attachment 2.1 of this guidance.

3. Exit Meeting

a. A meeting that is designated in between Auditor Team and Licence Holder to elaborate the verification result and about confirming evidences found during the field exercise.

b. If there are documents that have not yet been demonstrated by the License Holder should there be opportunities to submit for completing the documentation as required at latest 10 (ten) calendar days since the exit exit meeting, and if by the time limit there has no submission of the documentation, the decision is “not sufficient to meet the requirements”

c. Result of exit meeting is reflected on a documentation process of Exit Meeting that to be attached with the list of participants.

d. In the context as if the Management Representative does not have a will to sign on the Exit Meeting News Reporting should there be a closed News Reporting

D. Reporting

Report of Verification result:

1. Complete information is served clearly in an array of well-listed documentation for helping out the decision making process and issuance of Timber Legality certification.

2. It is arranged by referring to the reporting format as suggested on the attachment 2.2 of this guidance.

3. It is served in a book format and soft copy for the Licence Holder within 14 calendar working days after the exit meeting.


A. Decision making whether to be granted certificate or not by Consulting Agency is taken by the Decision Making of LV-LK based on the auditor reports. In case the permanent staff is assumed as incompetent decision making personal, hence the Decision Making process should be assisted by a competent one who are non auditor (verification audit actor)

B. Decision of LK certificate granting if the case in a position where all the norms of evaluation for each single verifier noted on the Timber Legality Verification Standard for Licence Holder is defined “meeting the condition”

C. Regarding verification result if the case “not meeting the requirements”, LV-LK will report the verification result to the License Holder. LV-LK will give opportunity to the License Holder to improve incomplete verifiers of being “not meeting the requirements” with limit time period of improvement around 10 (ten) calendar days since the License Holder receiving the verification report.

D. LV-LK should not delegate the authority of decision making to any of personnal or other institutions to give, maintain, extending, halting or withdrawing the LK certificate.

E. LV-LK should give Certificate Document of LK signed by the Decision Maker to each Single License Holder that have met all SVLK evaluation norms.

IV. CERTIFICATE ISSUANCE AND RECERTIFICATION

A. CERTIFICATE ISSUANCE

1. LK certificate’s contents has at least name of company or License Holder and location, licence number, name of LV LK with the logo, KAN logo, date of issue, duration of active and certification identification number, and LK standard reference.

2. Period of active LK certificate is 3 (three) years.

3. The use of KAN logo in LK certificate refers to the KAN 12-2004 guidance.

4. Timber from LK verification result, will be identified as follow:

a. Over the timber resourced from certified PHPL forest the logo should be colored “green”.

b. Over the timber sourced from the certified LK forest the logo should be colored “yellow”.

5. LV-LK is obliged to submit recapitulation of LK certificate issuance to the Director General in each 3 (three) monthly reporting, then to be published through the website of Ministry of Forestry (www.dephut.go.id).

6. LV-LK should publisize each single issuance, changes and postponement of certificate withdrawal that to be completed with audit results on the mass media and website of Ministry of Forestry (www.dephut.go.id) soon after the appointment of decision itself released.

B. RE-CERTIFICATION

1. Implementation of recertification is held before the end period of License Holder certificate validity;

2. The License Holder should apply a written request to LV-LK in relevance of the re-certification implementation at latest 6 (six) month prior to the end date of Timber Legality certificate.

3. Recertification Audit is held at latest 2 (two) month prior the end date of Timber Legality certificate.

4. Cost of recertification activities is shouldered by the License Holder.

V. SURVEILANCE

A. LV-LK should have documented procedures for holding verification surveillance activities of timber legality.

B. Surveillance activities are held in each 1 (one) single year during active period of Timber Legality certification. It should be carried out at least 12 (twelve) months since the Exit Meeting.



C. LV-LK should oblige the licence holder reporting necessary changes in cases:

1. Things that are influencing the timber legality system, or

2. Ownership changes or

3. Structure or licence holder management.

D. In terms of changes as mentioned on point C and if needed, the LV-LK could do further verification.

E. LV-LK is obliged to do verification further if the case there are several changes on the LK verification standard which have to be fulfilled by the Licence Holder being verified.

F. LV-LK should have documentation of surveillance activities formed in a Report of Surveillance Result.

G. If the result of surveillance recommends to withdraw the LK certificate, then discussion of LK certificate withdrawal should be carried out through a Decision Making mechanism.

H. Cost of surveillance should be shouldered by Licence Holder.

VI. EXTRA ORDINARY AUDIT

A. Extra ordinary audit or often be called as “Immediate-attack audit” is conducted to investigate objections or disputes related to:

1. Other information that demonstrates whether any problems of meeting the LK requirements according to attachment 2 or attachment 3 or attachment 5 or attachment 6 on the regulation of Director General of Production Forest Development No. P.6/VI-Set/2009.

2. Significant changes that are from the License Holder.

B. Before taking an extra ordinary audit, LV-LK should confirm first the schedule of auditing service to the Licence holder at least 7 (seven) calendar days before extra ordinary audit is taken.

All cost related to an extra ordinary audit will be shouldered to the Licence holder.

Attachment 2.1. : Regulation of Director General of Forestry Product Development Nomber : P.02/VI-BPPHH/2010 Date : 10 February 2010 Concerning : Procedures of Performance Assessment in Sustainable Production Forest Management and

Timber Legality Verification A. LEGALITY VERIFICATION PROCEDURES FOR TIMBER FROM NATIONAL FORESTS (IUPHHK-HA/HPH,

IUPHHK-HTI/HPHTI,IUPHHK RE)

Verification Standards Verification Manual Remarks

No Principle Criteria Indicator Verifier Verification Method

Assessment Norms

1 2 3 4 5 6 7 8

1. P1. Confirm the affected areas and their right to use

K1.1 Forest management unit area located in production forest.

1.1.1 The license

holder to prove the validity of Forest Timber Product Utilization Permit (IUPHHK).

a. Forest Concession Rights Documents (SK IUPHHK-HA/HPH, IUPHHK- HTI/HPHTI, IUPHHK RE)

1. Verify the validity and completeness of SK IUPHHK-HA/HPH, IUPHHK- HTI/HPHTI, IUPHHK RE documents

2. Verify the annexed maps

Compliance: Completeness and validity of SK IUPHHK-HA/HPH, IUPHHK- HTI/HPHTI, IUPHHK RE documents fully complied with.

-



Assessment Norms

1 2 3 4 5 6 7 8

3. Verify the maps for their consistency to the related forest areas and water or the Agreed Forest Use Plan /TGHK.

b. Payment evidence for Forest Timber Exploitation Fees (IIUPHHK).

1. Verify the Payment Order (SPP) of IIUPHHK.

2. Verify payment slip to bank receiving IIUPHHK fees as indicated in SPP

Compliance: IIUPHHK paid according to SPP.

-



Assessment Norms

1 2 3 4 5 6 7 8

2.

P2. Follow the legal logging system and procedure

K2.1 The holders of license have logging plan for forest areas approved by the competent officials

2.1.1 Annual Work Plant (RKT/ Blue Print) approved by the comptent officials.

a.

RKT/ Blue Print approved by the competent officials

Verify the validity of RKT/ Blue Print document

Compliance: Completeness and validity of RKT/ Blue Print fully complied with.

-

b.

Maps showing areas where logging is not allowed and evidence of its compli-ance in the field

Verify the accuracy of locations (using GPS or other devices as appropriate) where logging is not allowed inclusive of: - Buffer zone with

protected forests, conserved forests or areas where the boundaries have yet to be

Compliance: Maps indicating the locations where logging is not allowed are made with correct procedures available and such locations truly exist in the field.

• GPS used in field verification should be compared with the maps made by License Holders and the device should be same as the one used by License Holder in mapping.



Assessment Norms

1 2 3 4 5 6 7 8

established. - Steep area

(slope >40% for natural forest and >25% for plantation).

- Wildlife habitat and or endangered plants (wildlife enclave & germ plasm areas).

- Areas with religious and cultural values (cross-check to local community).

- River banks, areas adjacent to springs, cliffs, etc.

• To avoid misinter-pretation concerning the accuracy of RKT/Work Blue Print, it is necessary to apply maximum tolerance of 200m.



Assessment Norms

1 2 3 4 5 6 7 8

c.

Clear markings of logging/RKT blocks in the maps and the associated evidence in the field

1. Verify the validity of logging blocks approved in Maps annexed to RKT.

2. Verify the accuracy of logging block borders in the field using GPS or other devices as appropriate.

3. Verify the visibility of logging block markings in the field according to the applicable manual.

Compliance: Logging block maps legalized (stamped), accurate position of logging blocks and truly existing in the field.


• To avoid misinter-pretation concerning the accuracy of RKT/Work Blue Print, it is necessary to apply maximum tolerance of 200m



Assessment Norms

1 2 3 4 5 6 7 8

K2.2 Valid Work Plan

2.2.1 The holders of forest concession right have valid work plan according to the applicable laws and regulations

a.

Forest Timber Exploitation Work Plan (RKUPHHK) (perhaps still in progress) and the annexes

1. Verify the completeness and validity of RKUPHHK documents (sometimes, the preparation of these documents is still in progress).

2. Verify the preparation and legalization process of RKUPHHK, for which License Holder shall hold the responsibility.

Compliance: Completeness and validity of RKUPHHK documents fully complied with.

-



Assessment Norms

1 2 3 4 5 6 7 8

b.

The consistency of location and volume of timber logging in natural forests over the permitted areas dedicated to the preparation of industrial forests (HTI).

1. Verify the location and volume of timber logging in natural forests over the permitted areas as indicated in RKT HPHTI/ IUPHHK docu-ments for industrial forest (HTI) preparation.

2. Verify the accuracy of location and volume of timber logging in natural forests over the permitted areas for HTI preparation.

Compliance: Volume of timber logging in natural forest for HTI preparation is consistent.

• The logging volume may not exceed RKT target over areas dedicated to HTI prepar-ation.

• The consis-tency of location and volume of timber logging in natural forests over the permit-ted areas for HTI preparation.



Assessment Norms

1 2 3 4 5 6 7 8

2.2.2 Equipment used in haversting is certified and physically exists in the field.

Equipment permit and transfer

Verify the consistency of equipment permit and its physical existence in the field.

Compliance: Equipment is consistent with the awarded permit.

To include equipment depreciation report

K2.3 License holders assure that all timber transpor-ted from Timber Depot (TPK) to Temporary Depot (TPK Antara) and from TPK Antara to primary fore-stry product industries (IPHH)/ market is certified with valid physi-cal identity and documents

2.3.1. Log timber cut/harvested/used certified with LHP document

LHP documents endorsed by the competent officials

(1) Cross-check LHP and LHC documents

(2) Random sampling between the endorsed PHP and physical timber.

Compliance: a. LHP and

LHC consistent

b. Physical and LHP consistent

• Verification of criteria indicator and verifier K2.3 refers to Permenhut P.55/Menhut-II/2006.

• Verification of Forest Inventory refers to Permenhut Nomor P.67/Menhut-II/2005.



Assessment Norms

1 2 3 4 5 6 7 8

• Verification of LHP document and LHC document covers the types and number of trees.

2.3.2. Timber transported outside the permitted areas certified with valid documents.

Forest Product Certification Notice (SKSHH) and the annexes from Timber Depot (TPK) to TPK Antara and from TPK Antara to primary forest product industries and or log traders.

(1) Cross-check list of log transported from Timber Depot (TPK) to TPK Antara and from TPK Antara to primary forest product industry (IPHH) and or log traders.

Compliance: list of log transported from Timber Depot (TPK) to TPK Antara and from TPK Antara to primary forest product industry and or log traders.

• Document/record of transport mode used and invoice (for sales);

• Verification of TPn, TPK locations to their decrees. • Note: for

any difference due to trimming, it must be



Assessment Norms

1 2 3 4 5 6 7 8

(2) Crosscheck with other transport documents

justified/recorded – grader report and clear accounta-bility. Volume rationality (control) and transport mode evidence.

2.3.3 Log (KB) from the holders of IUPHHK-HA/HPH, IUPHHK- HTI/HPHTI, IUPHHK RE licenses

a.

PUHH marking/ barcode for the log owned by the holders of IUPHHK-HA/HPH, IUPHHK- HTI/ HPHTI,

Check the legality of timber barcode

Compliance: Legality of log barcode consistent with the documents

In case that license holders not yet required to make SIPUHH online, the verification of timber legality will refer to P.55/Menhut-II/2006



Assessment Norms

1 2 3 4 5 6 7 8

IUPHHK RE licenses can be traced.

b.

Timber identity consistently applied by license holders.

Check log barcode applied by license holders that can be tracked back to logging plots or groups of plots for swamp areas (at least for the current year).

Compliance: Tracking system and timber identity consistently applied.

- Timber identity tracking refers to P.55/Menhut-II/2006

2.3.4 License holders able to demonstrate records indicating the transport of timber outside TPK

SKSHH file and Forest Product List (DHH) attached (for natural forest); transport invoice (for plantation forest)

1. Verify the completeness and validity of skshh for timber transport from license holders.

Compliance: Completeness and validity of skshh documents (made by the competent officials).

• LMKB with clear report (balancing sheet, to see the balance of volume received and delivered for certain period).



Assessment Norms

1 2 3 4 5 6 7 8

2. Verify the authority of official prepa-ring timber administration document.

3. Verify Timber Inspection Report (BAP) by Official Issueing Log Validity Certificate (P2SKSKB).

• Qualification verification and P2SKSKB Appointment Decree still valid.

K2.4 License holders comply with their liabilities relating to fees collected from timber

2.4.1 License holder to demonstrate payment receipt of Reforestation Fund (DR) and Forestry Resources Fees (PSDH).

a.

SPP (Payment Order) issued and paid.

Verify and compare the realization of PSDH DR and SPP documents (classification, volume and tariff)

Compliance: The realization of PSDH DR consistent with SPP document

• PP No.51/1998 concerning PSDH

• Peraturan Menteri Kehutanan No.P.18/Menhut-II/2007.



Assessment Norms

1 2 3 4 5 6 7 8

• Permendag No. 8/Mendag/Per/II/2007

b.

Payment receipt of PSDH and DR fees (for license holders of natural forests) or PSDH (for license holders of plantation forests).

1. Check the validity and consistency of PSDH – DR receipts with SPP-PSDH and DR

2. Compare SPP-PSDH and DR against payment receipts and/or agreement for the payment of deliquent timber fees

Compliance: PSDH and DR paid according to SPP



Assessment Norms

1 2 3 4 5 6 7 8

c.

Consistency of PSDH and DR tariffs for natural forest timber (including for the preparation of plantation forest development) and PSDH tariffs for plantation forest timber.

1. Verify the dimension of small log (KBK) to natural forest timber with diameter ≥30cm, and the length must be ≤130cm.

2. Verify the consistency of DR tariff payment to KBK payment receipts.

Compliance: Natural forest timber classified as KBK consistent with the specified dimension and paid according to the corresponding tariff.



Assessment Norms

1 2 3 4 5 6 7 8

3. P3. The complian-ce of environ-mental and social aspects relating to logging activities

K3.1 License holders have prepared Environ-mental Impact Assess-ment (EIA) and performed thier obligations as provided for in EIA document.

3.1.1 License holders have prepared IEA documents consisting of ANDAL, RKL (Environ-mental Management Plan) and RPL (Environ-mental Monitoring Plan) approved according to the applicable laws and regulations covering the licensed areas.

EIA documents (ANDAL, RKL and RPL).

1. Verify the completeness and validity of EIA documents (Andal, RPL/RKL_ and significant finding report.

2. Verify EIA

preparation process

3. Verify the quality of EIA documents.

Compliance: EIA documents complete and approved.

In case of changing areas, the last EIA documents will be verified.



Assessment Norms

1 2 3 4 5 6 7 8

3.1.2 License Holders prepare RKL/RPL implementation report to show actions that have been taken to deal with environ-mental impacts and to provide social benefits.

a.

RKL and RPL documents

Verify the validity of RKL and RPL documents and their consistency with other planning documents cove-ring physicalche-mical, biological and social aspects.

Compliance: RKL/RPL documents refer to the approved EIA documents.

Consistency between RKL and RPL information and EIA documents.

b.

Report of significant impact manage-ment and monitoring

Verify the imple-mentation of signi-ficant impact management in terms of physic-chemical, biology and social inclusive of: - Hidroorologi

and the associated monitoring facilities and infrastructure.

Compliance: Environmen-tal manage-ment and monitoring implemented according to the plan and significant impacts found in the field.

Field verifica-tion and obser-vation to ensure consistency of License Hol-ders’ report and actual imple-mentation in the field in terms of physicschemi-cal, biology and social.



Assessment Norms

1 2 3 4 5 6 7 8

- Pollution. - Endangered

species (cross-check with Wildlife Inventory and Endangered Plants)

- Improved positive social impacts.

- Forest fire prevention and management system and facilities.

B. LEGALITY VERIFICATION MANUAL FOR TIMBER FROM NATIONAL FORESTS MANAGED BY LOCAL COMMUNITIES (IUPHHK-HTR, IUPHHK-HKM)



Assessment Norms

1 2 3 4 5 6 7 8 1 P1. Confirm the

affected areas and their right to use

K1.1 Forest management unit area located in production forest.

1.1.1 The license holder to prove the validity of Forest Timber Product Utilization License (IUPHHK)

a. SK IUPHHK-HTR, IUPHHK- HKm documents

1. Verify the validity and completeness of SK IUPHHK-HTR, IUPHHK- HKm documents

2. Verify the annexed maps

3. Verify the maps for their consistency to the related forest areas and water or the Agreed Forest Use Plan /TGHK.

Compliance: Completeness and validity of SK IUPHHK-HTR, IUPHHK- HKm documents fully complied with.

-



Assessment Norms

1 2 3 4 5 6 7 8

b. Payment evidence for Forest Timber Exploitation Levies (IIUPHHK).

3. Verify the Payment Order (SPP) of IIUPHHK.

4. Verify payment slip to bank receiving IIUPHHK levies as indicated in SPP

5.

Compliance: IIUPHHK paid according to SPP.

-

P2. Follow the legal logging system and procedure

K2.1 The holders of license have logging plan for forest areas approved by the competent officials

2.1.1 Annual Work Plant (RKT/ Blue Print) approved by the comptent officials.

a. RKT/ Blue Print approved by the competent officials

Verify the validity of RKT/ Blue Print document

Compliance: Completeness and validity of RKT/ Blue Print fully complied with.

-



Assessment Norms

1 2 3 4 5 6 7 8 b. Maps showing

areas where logging is not allowed and evidence of its compliance in the field

Verify the suitability of locations (using GPS or other devices as appropriate) where logging is not allowed: - Buffer zone

with protected forests, conserved forests or areas where the boundaries have yet to established.

- Steep area (slope >40% for natural forest and >25% for plantation).

- Wildlife habitat and or endan-

Compliance: Maps indicating the locations where logging is not allowed made with correct procedures available and such locations truly exist in the field.




Assessment Norms

1 2 3 4 5 6 7 8 gered plants (wildlife enclave & germ plasm areas).

- Areas with religious and cultural values (cross-check to local community).

- River banks, areas adjacent to springs, cliffs, etc.

• To avoid misinter-pretation concerning the accu-racy of RKT/Work Blue Print, it is necessary to apply maximum tolerance of 200m.

c. Clear mark-

ings of log-ging/RKT blocks in the maps and the associated evidence in the field

1. Verify the validity of logging blocks approved in Maps annexed to RKT.

Compliance: Logging block maps legalized (stamped), accurate position of logging blocks

• GPS used in field verification should be compared with the maps made by License



Assessment Norms

1 2 3 4 5 6 7 8 2. Verify the

accuracy of logging block borders in the field using GPS or other devices as appropriate.

3. Verify the visibility of logging block markings in the field according to the applicable manual .

and truly existing in the field.

Holders and the device should be same as the one used by License Holder in mapping.

• To avoid misinter-pretation concerning the accuracy of RKT/Work Blue Print, it is necessary to apply maximum tolerance of 200m



Assessment Norms

1 2 3 4 5 6 7 8

K2.2 Valid Work Plan

2.2.1 The holders of forest concession right have valid work plan according to the applicable laws and regulations

a. Forest Timber Exploitation Work Plan (RKUPHHK) (perhaps still in progress) and the annexes

2. Verify the completeness and validity of RKUPHHK documents (sometimes, the prepara-tion of these documents is still in progress).

2. Verify the preparation and legalization process of RKUPHHK, for which License Holder shall hold the responsibility.

Compliance: Completeness and validity of RKUPHHK documents fully complied with.

RKT IUPHHK-HTR, IUPHHK- HKm



Assessment Norms

1 2 3 4 5 6 7 8

b. The consistency of location and volume of timber logging in natural forests over the permitted areas dedicated to the preparation of industrial forests (HTI)

1. Verify the location and volume of timber logging in natural forests over the permitted areas as indicated in RKT IUPHHK-HTR, IUPHHK- HKm documents dedicated to industrial forest (HTI) preparation.

2. Verify the accuracy of location and volume of timber logging in natural forests over the permitted areas for HTI preparation.

Compliance: Volume of timber logging in natural forest for HTI preparation is consistent.

• The logging volume may not exceed RKT target over areas dedicated to land prepa-ration.

• The consis-tency of location and volume of timber logging in natural forests over the permitted areas for HTR - HKm prepa-ration.



Assessment Norms

1 2 3 4 5 6 7 8

2.2.2 Equipment used in harversting is certified and physically exists in the field.

Equipment permit and transfer

Verify the consistency of equipment permit and its physical existence in the field.

Compliance: Equipment is consistent with the awarded permit.


K2.3 License holders assure that all timber transported from Timber Depot (TPK) to Temporary Depot (TPK Antara) and from TPK Antara to primary forestry product industries (IPHH)/market is certified with valid physical identity and documents

2.3.1. Log timber cut/harvested/used certified with LHP document

LHP documents endorsed by the competent officials

(1) Cross-check LHP and LHC documents

(3) Random sampling between the endorsed PHP and physical timber.

Compliance: a. LHP and

LHC consistent

b. Physical and LHP consistent

• Verification of criteria indicator and verifier K2.3 refers to Permenhut P.55/Men-hut-II/2006.

• Verification of Forest Inventory refers to Permenhut Nomor P.67/Men-hut-II/2005.



Assessment Norms

1 2 3 4 5 6 7 8 • Verification

of LHP document and LHC document covers the types and number of trees.

2.3.2. Timber transported outside the permitted areas certified with valid documents.

Forest Product Certification Notice (SKSHH) and the annexes from Timber Depot (TPK) to TPK Antara and from TPK Antara to primary forest product industries and or log traders.

(1) Cross-check list of log transported from Timber Depot (TPK) to TPK Antara and from TPK Antara to primary forest product industry and or log traders.

Compliance: list of log transported from Timber Depot (TPK) to TPK Antara and from TPK Antara to primary forest product industry and or log traders.



Assessment Norms

1 2 3 4 5 6 7 8 (2) Cross-check

with other transport documents

2.3.3 Log (KB) from the holders of SK IUPHHK-HTR, IUPHHK- HKm licenses

a. PUHH mark-ing/ barcode for log owned by the holders of SK IUPHHK-HTR, IUPHHK- HKm licenses can be tracked.

Check the legality of timber barcode

Compliance: Legality of log barcode consistent with the documents

Timber identity tracking refers to P.55/Men-hut-II/2006

b. Timber identity consistently applied by license holders.

Check log barcode applied by license holders that can be tracked back to logging plots or groups of plots for swamp areas (at

Compliance: System that can be tracked back and timber identity consistently applied.

Timber identity tracking refers to P.55/Menhut-II/2006



Assessment Norms

1 2 3 4 5 6 7 8 least for the current year).

2.3.4 License holders able to demonstrate records indicating the transport of timber outside TPK

FAKB (Log Transport Invoice) file

1. Verify the com-pleteness and validity of FAKB docu-ment for timber transport from license holders.

2. Verify the authority of official prepa-ring timber administration document.

3. Verify Timber Inspection Report (BAP) by Official Issueing Log Transport Invoice (FAKB).

Compliance: Completeness and validity of FABK documents (made by the competent officials).

• LMKB with clear report (balancing sheet, to see the balance of volume received and delivered for certain period).

• Qualifi-cation verification and FAKB Appointment Decree still valid.



Assessment Norms

1 2 3 4 5 6 7 8

K2.4 License holders comply with their liabilities relating to fees collected from timber

2.4.1 License holder to demonstrate payment receipt of Reforestation Fund (DR) and Forestry Resources (PSDH) fees

a SPP (Payment Order) issued and paid.

Verify and compare the realization of PSDH DR and SPP documents (classification, volume and tariff)

Compliance: The realization of PSDH DR consistent with SPP document

All criteria in K2.4 refer to: • PP

No.51/1998 concerning PSDH

• Permenhut No.P.18/Menhut-II/2007.

• Permen-dag No.8/Men-dag/Per/II/2007

b. PSDH payment slip

1. Check the validity and consistency of PSDH – DR receipts with SPP-PSDH and DR

2. Compare SPP-PSDH and DR against payment receipts and/or agreement on the payment of dilinquent fees

Compliance: PSDH and DR paid according to SPP



Assessment Norms

1 2 3 4 5 6 7 8

c. Consistent PSDH tariff

1. Verify the dimension of small log (KBK) to natural forest timber with diameter ≥30cm, and the length must be ≤130cm.

2. Verify the consistency of DR tariff payment to KBK payment receipts.

Compliance: Natural forest timber classified as KBK consistent with the specified dimension and paid according to the corresponding tariff.



Assessment Norms

1 2 3 4 5 6 7 8 P3. The com-

pliance of environmental and social aspects relating to logging activities

K3.1 License holders have prepared Environmental Impact Assessment (EIA) and performed thier obligations as provided for in EIA document.

3.1.1 License holders have prepared IEA documents consisting of ANDAL, RKL (Environmental Management Plan) and RPL (Environmental Monitoring Plan) approved according to the applicable laws and regulations covering the licensed areas.

EIA documents (ANDAL, RKL and RPL).

1. Verify the completeness and validity of EIA documents (Andal, RPL/RKL_ and significant finding report.

2. Verify EIA preparation process

3. Verify the quality of EIA documents.

Compliance: EIA documents complete and approved.

In case of changing areas, the last EIA documents will be verified.



Assessment Norms

1 2 3 4 5 6 7 8 3.1.2 License

Holders prepare RKL/RPL implementation report to show actions that have been taken to deal with environmental impacts and to provide social benefits.

a. RKL and RPL documents

Verify the validity of RKL and RPL documents and their consistency with other planning documents covering physical-chemical, biological and social aspects.

Compliance: RKL/RPL documents refer to the approved EIA documents.

Consistency between RKL and RPL information and EIA documents.

b. Report of significant impact management and monitoring

Verify the implementation of significant impact management in terms of physic-chemical, biology and social inclusive of: - Hidroorologi

and the associated monitoring facilities and

Compliance: Environmental management and monitoring implemented according to the plan and significant impacts found in the field.

Field verification and observation to ensure consistency of License Holders’ report and actual implementation in the field in terms of physics-



Assessment Norms

1 2 3 4 5 6 7 8 infrastructure.

- Pollution. - Endangered

species (cross-check with Wildlife Inventory and Endangered Plants)

- Improved positive social impacts.

- Forest fire prevention and management system and facilities.

chemical, biology and social.

C. LEGALITY VERIFICATION MANUAL FOR TIMBER FROM CONCESSIONAL FORESTS



Assessment Norms

1 2 3 4 5 6 7 8 1. P1. The

validity of timber ownership title secured

K1.1 The validity of ownership title in connection with its areas, timber and commerce

1.1.1 The license holders of concession forests to prove the validity of their concessionaire rights.

(a) Valid land title document (or other recognized title/document)

Verify Land Title Certfificate, i.e. Hak Milik, Leter C, Leter B, Girik; and Certificate of Right to Use (HGU); or other valid land titling documents.

Compliance: The documents complete and valid (thery may consist of Land Titling Certifica-tes, Leter C, Leter B, Girik, HGU Certificate or other valid land titling document



Assessment Norms

1 2 3 4 5 6 7 8 (b) Maps

showing the affected forest areas and borders in the field

Verify the existence of location maps. Verify the visibility of forest area borders

Compliance: Location maps exist

In the absence of visible markings (either poles, dikes or border plants) the verification shall be made by checking the consis-tency of area borders mentioned in the maps to land title legality documents.

Compliance: Visible border markings (con-sisting of poles, or dikes or border plants).



Assessment Norms

1 2 3 4 5 6 7 8 1.1.2 Community-

based manage-ment unit able to demons-trate valid timber transport documents.

(a) SKAU or SKSKB document stamped with KR (Public Timber)

Verify the validity of SKSKB held by the farmers/ traders and local agency. Verify the validity of Letter of Origin (SKAU) held by the farmers/traders and local agency for particular timber. Verify the consistency of recapitulated logging license with skshh.

Compliance: SKSKB stamped with KR (Public Timber) and issued by the competent official

(a) SKAU issued by Village Head/Lurah or other equal officials where the timber is about to be transported

Compliance:

(b) Type of timber mentioned in SKAU document consistent

• All verifi-cation of criteria, indicators and verifier K2.3 refer to P.51/Men-hut-II/2006 and the subsequent amend-ment(s)

• In the absence of P2SKSKB official the verification shall be made to the qualifications as official issuing SKAU and the appoin-tment decree.



Assessment Norms

1 2 3 4 5 6 7 8

with the type indicated in decree of Forestry Minister now in effect.

• Verification is carried out under random sampling with regard to the consistency of type of timber with its SKAU document for tracing back to the logging site..



Assessment Norms

1 2 3 4 5 6 7 8 (b) Sales

invoices Verify the validity and consistency of invoices attached to timber transport.

Compliance: Recapitulated logging license consistent with SKSKB Cap KR or SKAU

(a) Invoices issued by the owner of timber.

Compliance:

(b) Invoices

consistent with the physical condition of timber.

(c) Invoices mention the destination of timber transport.

The above documents must be valid for the last one year period before the date of verification

D. LEGALITY VERIFICATION MANUAL FOR TIMBER OF IPK HOLDERS



Assessment Norms

1 2 3 4 5 6 7 8 1. P1. Other valid

timber exploitation licenses

K1.1 Timber exploitation licenses over [forest] areas used for non-forestry enteprises without changing the status of forests.

1.1.1 Business actors possess Other Valid Licenses (ILS)/IPK over the lease-use areas within productive forests.

(a) ILS/IPK license for the lease-use areas

Verify the validity and completeness of ILS

Compliance: ILS refers to areas that have been approved and legalized as lease-use areas.

(b) Maps annexed to ILS/IPK for the leased-used areas attached with the related lease-use permit.

Verify the validity and completeness of maps annexed to ILS.

Compliance: The sites of ILS secured areas consistent with the locations dedicated to lease-use areas.

K1.2 Timber exploita-tion licenses over [forest] areas used for non-forestry enteprises without changing the

2.2.1. Business actors possess IPK license for conversed areas located within HPK areas

(a) Business permit and the maps (the IPK license holder is same as the holder of business permit)

Varify the validity and completeness of: 1. Non-forestry

enterprise permit

Verification and observation made based on the latest [forest] area release decree.

Compliance: Forest area release permit consistent with the license issued and attached with the endorsed maps.



Assessment Norms

1 2 3 4 5 6 7 8 status of forests.

2. [Forest] area release permit for non-forestry farming areas

The annexed maps show that the applied areas are truly located in non-forestry farming areas.

(b) IPK for conversed areas

Verify the validity and completeness of IPK

Compliance: IPK secured areas situated in the areas approved and legalized as non-forestry farming areas.



Assessment Norms

1 2 3 4 5 6 7 8

(c) Maps

annexed to IPK

Verify the validity and completeness of maps annexed to IPK

Compliance: The sites of IPS secured areas consistent with the locations indicated in the corresponding license

(d) The valid documents contain changing status of the affected areas (the IPK license holder is same as the holder of business permit)

Verify the validity and completeness of changing status of the affected areas and their release stages. Documents to be verified is that of [forest] area release decree

Compliance: [Forest] area release decree is issued in adherence to the applicable stages and signed by the competent official.



Assessment Norms

1 2 3 4 5 6 7 8 2. P2. Consistency

with logging and timber transport system and procedures

K2.1 Consistency of IPK/ILS plan and implementation with the designed land-use.

2.1.1 IPK/ILS holders have the approved work plans

(a) IPK/ILS holders’ work plan documents (potential survey)

Verify the validity and completeness of IPK/ILS holders’ work plans (forest clearing work plan)

Compliance: IPK/ILS holders’ work planc consistent with the awarded license.

(b). Equipment permit still valid

Verify registration documents and their consistency with the equipment operated in the field


Compliance: Registration documents consistent with physical equipment used in the field.

2.1.2 Business actors able to demonstrate that the log is from IPK/ILS areas and its validity can be traced back

(a). Document indicating stands potential to grow in conversed areas

Verify the completeness, validity and existence of sampling potential survey documents.

Compliance: The output of potential stand calculation available



Assessment Norms

1 2 3 4 5 6 7 8 (b). Timber

production document (LHP)

Verify the completeness, validity and existence of timber production document

Verification of qualifications and appointment decree P2LHP official

Compliance: Timber Production Report (LHP) verified by the competent official.

K2.2 Comply with liabilities for timber exploitation related charges set by the government and the validity of timber transport

2.2.1 Business actors to demons-trate forestry charges evidences

(a) DR and PSDH payment slips

Verify the completeness, validity and existence of DR and PSDH payment slips

All criteria in K2.2 refer to:

Compliance: UM demontrates DR and PSDH payment slips consistent with SPP

• PP No.51/1998 concerning PSDH

• Forestry Minister Decree No.P.18/Menhut-II/2007.

• Trade Minister Decree No.8/Men-dag/Per/II/ 2007



Assessment Norms

1 2 3 4 5 6 7 8 2.2.2 IPK/ILS

holders to demonstrate valid timber transport documents.

(a) FAKB and the annexes for KBK

Verify the completeness, validity and existence of transport invoice and skshh documents

Compliance: All KBK transport attached with timber transport invoices

(b) SKSKB and the annexes for KB

Verify the validity and completeness of skshh

Compliance: All skshh attached with DHH.

Attachment 2.2. : Director General of Forestry Production Development’s Regulation

Number : P.02/VI-BPPHH/2010 Date : 10 February 2010 Concerning : Guidelines for the Implementation of Performance

Assessment of Performance Management of Sustainable Production Forest and Timber Legality Verification

GUIDELINES FOR REPORTING TIMBER LEGALITY VERIFICATION (LK) RESULTS TO IUPHHK-HA/HPH OR IUPHHK-HT/HTI OR IUPHHK-RE OR IUPHHK-HTR HOLDERS OR IUPHHK-HKM OR FOREST UNDER RIGHTS

CONCESSIONAIRE OR IPK HOLDER Minimum information presented in the Timber Legality Verification Result Report covers: 1.1. Document Identity

1.1.1. Document Naming

Document that presents information on field assessment result is called TIMBER LEGALITY VERIFICATION RESULT REPORT. The report document consists of two inseparable parts, i.e.:

a. Book I Timber Legality Verification Result Report on

IUPHHK-HA/HPH or verified IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR Holder or IUPHHK-HKm or Concessionaire of Forest under Rights or IPK Holder, which contains methods and procedure of assessment, unverifiable indicators and its reasons, assessment result of the fulfillment of each indicator, as well as relevant additional information;

b. Book II Attachment of Timber Legality Verification Result Report on verified IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR Holder or IUPHHK-HKm or Forest under Rights Concessionaire or IPK Holder, which contains t h e attachment o f t h i n g s c o m p l e m en t i n g the assessment result.

1.1.2. Page Numbering

Every page of the document is given a number page stating a part of the whole document. Page numbering is also given on every piece written on the bottom center of the page, including chapter’s title, while and total number of pages.

1.2. Identity of Verification Institution (LV-LK) and Field Assessor Team The explanation of the name of LV-LK, address, institution’s head and

structure of Field Assessor Team showing the personnel conducting and responsible for field assessment undertaken. Report document is signed by LV-LK head and Field Assessor Team Leader.

1.3. The identity o f t h e v e r i f i e d IUPHHK-HA/HPH or IUPHHK-

HT/HTI or IUPHHK-RE or IUPHHK-HTR Holder or IUPHHK-HKm or Forest under Rights Concessionaire or IPK Holder

Short explanation which contains the name of the IUPHHK-HA/HPH

or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR Holder or IUPHHK-HKm or Forest under Rights Concessionaire or IPK Holder, h e a d o f f i c e and branch a d d r e s s e s , verified location, name and position o f t h e head a t cen t r a l of assessment location, as well other general information.

1.4. Verification Methods Verification process is carried out by referring to this Implementation of

Timber Legality Verification Guidelines. 1.5. Verification Results Verification results are presented in direct, clear and

systematic manner and consist of:

1.5.1. Explanation on the Principles, Criteria, Indicators and Verifiers of non-verifiable.

Provide clear illustration of the rationale and accountable evidence for unverified Principles, Criteria, Indicators and Verifiers.

1.5.2. Analysis Results

Provide accurate and clear illustration of analysis results of field data for each verification standard. Field data, maps, and r e g u l a t i o n r e f e r e n c e s i n a d d i t i o n t o o t h e r r e l e v a n t w r i t t e n e v i d e n c e used in analyzing data or explaining verification result for each verification standards, are included in the attachment. The assignment of attachment number to completing the illustration of field data analysis result has to be mentioned on each verification result illustration.

1.5.3. Drawing Conclusion for Each Verification

Norm Fulfillement

Illustration on the fulfillment of each indicator as well as its explanation and argument has to be clearly presented and quoting regulation basis for the assessment reference compared to the conditions on the field.

1.6. Attachment

Attachment contains field data, maps, or other written evidence used in data analysis or explaining the verification results for each respective indicator. The attachment list has to be presented in the beginning part of the document’s attachment.

Attachment 3. : Director General of Forestry Production Development’s Regulation Number : P.02/VI-BPPHH/2010 Date : 10 February 2010 Concerning : Guidelines for the Implementation of Performance

Assessment of Performance Management of Sustainable Production Forest and Timber Legality Verification

GUIDELINES FOR THE IMPLEMENTATION OF WOOD LEGALITY (LK)

VERIFICATION AND CERTIFICATION OF IUIPHHK AND ADVANCED IUI

I. INTRODUCTION

A. BACKGROUND

To implement forestry governance, law enforcement and to promote legal wood t r ade , a Timber Legality Assurance System, titled Timber Legality Verification Standard (SVLK) is developed by involving multi-stakeholders during the formulation of the Wood Legality (LK) verification standard or its institutional development in compliance with governance, credibility, and representativeness prinsiples. Based on the multi-party process the Minister of Forestry Number P.38/Menhut-II/2009 concerning Standards and Guidelines for Performance Assessment in Sustainable Production Forest Management and Wood Legality Verification for Concessionaires or for Forest under Rights, and Director General of Forestry Production Management Regulation Number P.6/VI-Set/2009 concerning Standards and Guidelines for Performance Assessment in Sustainable Production Forest Management and Wood Legality Verification that requires guidelines for implementation. The implementation of the LK verification particularly for Permit Holder of Primary Industry of Forest Timber Product Exploitation (IUIPHHK) and Advanced Industrial Business Permit (IUI) is carried out by Wood Legality Verification (LV-LK) Institutions that have been accredited by National Accreditation Committee (KAN) in compliance with ISO/IEC Guide 65:1996, and appointed by Director General on behalf of the Minister.

LV-LK that conducting LK verification to IUIPHHK and Advanced IUI will publish an LK Certificate for industries that have met all verification standards as stipulated in Director General of Forestry Production Development’s Regulation Number P.6/VI-Set/2009 and Guidelines for the Implementation of Wood Legality Verification and Certification of IUIPHHK and Advanced IUI. In order to prevent different interpretations in implementing LK verification among the stakeholders, it is necessary to draft the Guidelines for its Implementation.

B. OBJECTIVE

This Guidelines are drafted to provide guidelines for parties concerned with the implementation of LK verification to IUIPHHK and Advanced IUI, which covering:

1. Verification equest.

2. Verification planning.

3. Verification Implementation.

4. Reporting.

5. Decision Making.

6. Publishing Certificate and Re-Certification.

7. Surveillance Implementation.

8. Extra ordinary Audit.

C. SCOPE

1. The scope of LK verification of IUIPHHK and Advanced IUI is only limited to the IUIPHHK and Advanced IUI. Legality assurance for woods coming from sources that have not received Sustainable Production Forest Management Certificate (PHPL) or LK Certificate is using the rules in existing forest product administration regulation i.e. Minister of Forestry Regulation Number P.55/Menhut-II/2006 and its ammendment and/or Minister of Forestry Number P.51/Menhut-II/2006 and its ammendment.

2. LK Verification made by LVs that are in compliance with

verification standards stipulated in Attachment 4 Director General Regulation Number P.6/VI- Set/2009. In situations when auditor deems tha t ce r ta in criteria/indicators/verifiers require no verification, he/she has to provide his/her decision with sufficient explanation.

3. Verification is taken to documents at IUIPHHK and Advanced IUI

for the past one year. For this LK verification at IUIPHHK and Advanced IUI, it is unnecessary to track the raw material at IUIPHHK and Advanced IUI to the origin/source.

D. REFERENCES

1. Law Number 6 Year 1983 concerning General Provisions and Tax

Procedure. 2. Law of Republic of Indonesia Number 17 Year 2006 concerning

Ammendment to Law Number 10 Year 1995 concerning Customs. 3. Law Number 32 Year 2009 concerning Environment Protection and

Management. 4. President of Republic of Indonesia D e c r e e Number 43 Year

1978 concerning the Ratification of Convention on International Trade in Endangered Spesies (CITES) of Wild Fauna.

5. Minister of Industry and Trade of Republic of Indonesia Number 68/MPP/Kep/2/2003 concerning Inter-island Wood Trade.

6. Minister of Finance Regulation Number 92/PMK.02/2005

concerning the Stipulation of Types of Specific Export Goods and Amount of Export Fee Tariff as amended several times, lastly with Number 72/PMK.011/2008.

7. Minister of Forestry Regulation Number P.51/Menhut-II/2006

concerning the the Use of Certificate of Origin (SKAU) for Timber Forest Product Transportation that comes from Forest under Rights as amended several times, lastly with Minister of Forestry Regulation Number P.33/Menhut- II/2007.


concerning Forest Product Administration with sources from State Forest as amended several times, lastly with Minister of Forestry Regulation Number P.45/Menhut-II/2009.

9. Minister of Law and Human Rights of Republic of Indonesia

Regulation Number M.01-HT.01.10 Year 2006 concerning Procedure for Submitting Request and Validation of Deed of Establishment, Approval, Report Submission, and Notification of Deed of Modification of Limited Liability.


amended by Number P.43/Menhut-II/2009 concerning the Amendment to Minister of Forestry Regulation Number P.16/Menhut-II/2007 concerning Industrial Raw Material Requirement Plan (RPBBI) of Primary Timber Forest Product.

11. Minister of Trade of Republic of Indonesia Regulation Number

36/M- Dag/Per/9/2007 concerning the Issuance of Trade License. 12. Minister of Finance Regulation Number 129/PMK.011/2007

concerning Penetapan Import Duty Associated to Common Effective Preferential Tariff (CEPT) Scheme.


amended by Number P.9/Menhut-II/2009 concerning Industrial Business Permit Primary Forest Products.

14. Minister of Industry Regulation Number 41/M-Ind/Per/6/2008

concerning Terms and Conditions for Issuing Industrial Business Permit, Expansion Permit and Industry List Mark.

15. Minister of Finance Regulation Number 223/PMK.011/2008

concerning the Stipulation of Export Duties and Differential Export Tax.

16. Minister of Trade Regulation Number 20/M-DAG/PER/5/2008

concerning Terms and Conditions for Forestry Industrial Products Export.


concerning Standard and Guidelines on Assessment of Performance of Sustainable Production Forest Management and Verification of Timber Legality for License Holders or in Private Forests.

18. Director General of Forestry Production Management Regulation

Number P.6/VI- Set/2009 concerning Standard and Guidelines on Assessment of Performance of Sustainable Production Forest Management and Timber Legality Verification.


Number P.13/VI- BPPHH/2009 concerning Yield of Processed Timber o f Forest Wood Product Primary Industry.

20. ISO/IEC Guide 65:1996 General Requirements for Bodies

Operating Product Certification Systems. 21. ISO/IEC Guide 23:1982 Methods of Indicating Confirmity with

Standards for Third-party Certification Systems.

22. Director General of Customs Regulation Number P-06/BC/2009

concerning the Amendment of Director General of Customs Regulation Number P-40/BC/2008 concerning Export Customs Management.

23. KAN’s Guidelines 12-2004 concerning Guidelines on the use of

KAN’s Logo.

E. DEFINITION

1. Forest Primary Product Timber Industry Exploitation Permit (IUIPHHK) is an industry that processes log and/or small diameter log into half-processed or processed wood.

2. Advanced Industrial Business Permit (Advanced IUI) is wood

processing industry of downstream forest wood product. 3. Concessionaire is IUIPHHK and Advanced IUI Holders. 4. National Accreditation Committee (KAN) is the institution that

gives accreditation to assessor and independent verification (LP&VI) insitutions.

5. Assessor and Verification Independent Institution (LP&VI)is a

state or private owned enterprises with legal entity which are accredited for performing Assessment of Performance in Sustainable Production Forest Management (PHPL) and/or Timber Legality Verification.

6. Timber Legality Verification (LV-LK) Institution is LP&VI that

performs Timber Legality Verification to IUIPHHK or Advanced IUI.

7. Independent Monitoring Institution is institution that performs

supervising/monitoring functions related to public service in

forestry s e c t o r s u c h a s t h e i s s u a n c e o f PHPL Certificate or LK Certificate, among others, forestry non-governmental organizations (NGOs).

8. Verification Standards are all elements in Principles, Criteria,

Indicators and Verifiers as stipulated in Attachment 4 Director General of Forestry Production Development’s Regulation Number P.6/VI-Set/2009.

9. Surveillance is conformity assessment activities performed

systematically and repeatedly as the base to maintaining the validity of conformity declaration.

10. Extra ordinary Audit or also called immediate-attack audit is

audit a c t i v i t y c o n d u cted to investigate complaints (objections), or in relations to significant changes or as follow up actions for clients with freezed certificate.

11. Auditor is personnel who has met the requirements and the

capacity to perform audit, and who is assigned by the LV-LK to perform Timber Legality Verification.

12. Management Representative is the representation of the

management of IUIPHHK Holder and Advanced IUI that have been verified by LV-LK with knowledge of all existing system at IUIPHHK and Advanced IUI and given the authority to facilitate auditor in the verification process as well as signing the Official Report related to the implementation of Timber Legality Verification.

13. List of Certification Supporting Institution (DPLS) 14 are

requirements and rules/procedure that KAN has stipulated and has to be met by accreditation aspiring LV-LK.

14. Minister is Minister of Forestry of Republic of Indonesia.

15. Director General is the Director General who has been assigned with tasks and responsibility in Forestry Production Development.

II. ACTIVITIES

A. VERIFICATION REQUEST 1. Concessionaire submits a verification r e q u e s t t o LV-LK

containing at least verification scope, Permit Holder profile, and other information required in the verification process.

2. Prior to performing field verification activities, LV-LK has to study

the verification request and keep the records to guarantee that: a. requirements for verification a r e c e a r l y l

d e f i n e d , understood, and documented; b. remove different interpretations between LV-LK and

Concessionaires; c. LV-LK is able to perform the requested LK verification

service, and reach Concessionaire’s operational location.

3. LV-LK finishes the working contract with the Concessionaire. 4. In the matter of verification implementation is funded from

government budget, Concessionaire’s request for an LV-LK is not required, however the government will make a stipulation issue a Notification Letter to the to-be-verified Permit Holder.

5. LV-LK announces the plan to perform LK verification to a

Concessionaire in mass media and Ministry of Forestry’s website (www.dephut.go.id) at least 7 (seven) calendar days prior to the implementation of the verification to allow Independent Monitoring Institution provides input or information related to the verification of the Concessionaire.


B. VERIFICATION PLANNING

1. Preparation LV-LK has to prepare verification activity plan such as:

a. An auditor personnel appointed consists of Lead Auditor and Auditor.

b. Implementation of verification activities schedule. c. Auditor’s work document.

2. Planning LV-LK informs the Concessionaire about required documents

and requests the Permit Holder to appoint a Management Representative responsible for the implementation of LK verification, incorporated into Letter of Authorization and/or Letter of Assignment. Such information has to be conveyed within at the latest 7 (seven) calendar days prior to implement the verification.

C. VERIFICATION IMPLEMENTATION

The implementation of LK verification consists of 3 (three) stages i.e. Opening meeting, Document Verification and Field Observation, and Closing Meeting.

1. Opening Meeting

a. A meeting between Auditor Team and Concessionaire t h a t

aims at providing explanation to goals of the verification activities, the scope, schedule, methodology and procedure activities as well as requesting letter of authorization and/or letter of assignment of the Management Representative.

b. From the meeting, it hoped that data availability, completion

and transparenscy reuquired by the Auditor Team can be met by the Concessionaire.

c. The result of the meeting will be drafted in Opening Meeting official report attached with Attendance List of the Opening Meeting.

2. Document Verification and Field Observation

a. Document verification is an activity of gathering, studying and

analyzing the accountability and the accuracy of data and document. The document verification results will then be analyzed against criteria and indicators stipulated in Attachment 4 of Director General Forest Product Management Regulation Number P.6/VI-Set/2009 including the explanation such as this Attachment 3.1 of the Guidelines.

b. Field Observation is an activity of observing, making notes,

try-out and investigation to verify data accuracy. Field observation results will be analyzed against criteria and indicators set to examine the compatibility.

3. Closing Meeting

a. A meeting between Auditor Team and Concessionaire to

present the results of verification activity and to confirm field findings.

b. In the matter of Concessionaire inability to procure a certain required document, it will be given a chance to provide such document no later than 10 (ten) calendar days since the Closing Meeting ends, and in the matter the deadline has passed and no document is procured, the Concessionaire wil l be considered fai l .

c. The result of the meeting will be recorded in the form of Minutes of Meeting attached with the attendance list of the Closing Meeting.

d. In the matter of Management Representative’s refusal to signing the Minutes of Meeting of the Closing Meeting, a Closing Official Report will be made.

D. REPORTING

Verification Results Report:

1. Contains comprehensive information and presented clearly and in order as material for making the decision over the issuance of LK certificate.

2. Drafted in reference to reporting procedure as explained in

Attachment 3.2. 3. Presented in the forms of book and soft copy in a CD and

submitted to the Concessionaire no later than 14 (fourteen) calendar days after the Closing Meeting.


A. The decision to award an LK certificate or not is made by LV-LK

Decision Maker based on auditor’s report. In the matter of the incompetence of a permanent Decision Maker, he/she has to accompanied by a capable non-auditor personnel in making the verification.\

B. The decision to award an LK Certificate is given after all

assessment n o r m s for each verifier in Timber Legality Verification Standard at the IUIPHHK and Advanced IUI is considered “Satisfactory”.

C. In the matter when the verification results is “Unsatisfactory”, the

LV-LK provides a verification result report to the Concessionaire and the LV-LK gives the Concessionaire another chance to repair the “Unsatisfactory” verifier with a deadline of 10 (ten) calendar days since the Concessionaire receives the verification result report.

D. LV-LK is not allowed to delegate the decision making authority to other people or institution in relations to giving, keeping, expanding, delaying or revoking LK Certificate.

E. LV-LK has to provide LK Certificate document signed by Decision

Maker to every Concessionaire that has already met SVLK assessment norms.

IV. ISSUANCE OF CERTIFICATE AND RE-CERTIFICATION

A. ISSUANCE OF CERTIFICATE 1. LK Certificate should at least consist of the name of the

company or concessionaire and its location, permit number, LV-LK name complete with its logo, KAN’s logo, issuance date, expiry date and certification identification number, as well as LK standard reference.

2. The use of KAN’s logo on the LK Certificate refers to KAN 12-

2004 Guidelines. 3. Wood product manufactured from raw material source with

PHPL certificate, LK, or Minister of Forestry Regulation Number P.55/Menhut-II/2006 and/or Number P.51/Menhut-II/2006 or its combination, will be identified as follows:

a. Wood products with 100% raw material source coming from PHPL certified forest are given a “green” logo.

b. Wood products with raw material source coming from mix of PHPL and LK certified forests are given a “blue” logo.

c. Wood products with 100% raw material source coming from LK certified forest are given a “yellow” logo.

d. Wood products with raw material source coming from mix of PHPL and LK certified as well as Non LK certified forests, but still in compliance with Minister of Forestry Regulation Number P.55/Menhut-II/2006 and/or Number P.51/Menhut- II/2006, or coming from from LK and Non LK Certified forests but still in compliance with Minister of Forestry Regulation Number P.55/Menhut-II/2006 and/or Number P.51/Menhut-II/2006, are given a “brown” logo.

e. Wood products with 100% raw material source coming from forests that only in compliance with Minister of Forestry Regulation Number P.55/Menhut-II/2006 and/or Number P.51/Menhut-II/2006, are given a “red” logo.

4. LVs are obliged to submit the recap of LK Certificate issuance to Director General regularly in every 3 (three) months, then followed by its publishing at Ministry of Forestry’s website (www.dephut.go.id

).

5. LVs have to publish every issuance, change, and delay of certificate cancellation including with verification result resume at mass media and Ministry of Forestry’s website (www.dephut.go.id

) immediately after the decision is made.

B. RE-CERTIFICATION 1. Re-certification is carried out before the expiration date of LK

Concessionaire Certificate is exhausted; 2. Concessionaire has to submit a written request to LV-LK in

regards to the re-certification no later than 6 (six) months before the expiration date of the LK Certificate is exhausted.

3. Re-certification verification is carried out no later than 2 (two)

months before the expiration date of the LK Certificate is exhausted.

4. The costs for the implementation of re-certification born by

the Concessionaire. V. SURVEILLANCE

A. LV-LK has to own a documented procedure of the implementation of LK verification surveillance activity.

B. The surveillance ac t i v i t y i s car r ied out every 1 (one) year

during the vailidy period of the LK Certificate and no later than 12 (twelve) months since the Closing Meeting.


C. LV-LK has to oblige Concessionaire report any significant change that may occur:

1. Any matter that influence wood legality system, or 2. Chang of ownership, or 3. IUIPHHK or Advanced IUI structure or management.

D. In the event of change as mentioned in point C occurs and it deems

necessary, LV-LK can make further examination. E. LV-LK is obliged to conduct further examination in the event that there

are changes to LK standard verification that has to be met by the verified Concessionaire.

F. LV-LK has to document the surveillance activity in the form of

Surveillance Result Report. G. When surveillance results recommend the revoking of the LK

Certificate, then the deliberation over the revocation of the LK Certificate is implemented by way of Decision Making mechanism.

H. Cost of surveillance implementation born by the Concessionaire.

VI. EXTRA ORDINARY AUDIT

A. The implementation o f extra ordinary audit or also called immediate-attack audit is carried out to investigate complaints (objections) in relations to:

1. Other information that shows that it no longer meets the

requirements of LK as stipulated in Attachment 4 Director General of Forestry Production Development’s Regulation Number P.6/VI-Set/2009.

2. Significant changes or as a follow up action to Concessionaire with freezed certificate.

B. Before the implementation of extra ordinary audit, LV-LK has to confirm time of audit implementation to the Concessionaire no later than 7 (seven) calendar days before undertaking the extra ordinary audit.

C. Cost for extra ordinary audit implementation born by the

Concessionaire.

Attachment 3.1. : Regulation of Director General of Forestry Product Development Number : P.02/VI-BPPHH/2010 Date : 10 February 2010 Concerning : Procedures of Performance Assessment in Sustainable Production Forest Management and

Timber Legality Verification LEGALITY VERIFICATION PROCEDURES FOR TIMBER FROM IUIPHHK and IUI Lanjutan

Verification Standards Verification Manual Remarks Principle Criteria Indicator Verifier Verification

Method Assessment

Norms 1 2 3 4 5 6 7

P1. Timber Manufactur-ing Industries to support legal timber trading.

K1.1 Business Units: a) Manu-facturing

industries, and b) Exporters of

processed products to hold valid licenses

1.1.1 Manufacturing industries hold valid licenses

(a) Company Establish-ment Deed

(1) Verify the validity and comple-teness

(2) In case of owner change, verify the validity and comple-teness

Compliance: Verify the validity, check the consistency of scope of business to those indicated in the deed.

Completeness and validity complied with.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) Business License (SIUP).

Verify Business License and the validity of business

Compliance: Verify the validity of business license and consistency with the business run.

Business License still valid and consistent with the performed business activities

(c) Company Registration Number (TDP)

Verify the validity

Compliance As defined by “valid” here is the validity and consistency between information contained in TDP and actual conditions in the field.

Valid TDP exists.


Method Assessment

Norms 1 2 3 4 5 6 7

(d) Tax Payer Identification Number (NPWP)

Verify the validity

Compliance: Verify Regis-tration Certifi-cate (SKT) / Taxable Firms (PKP) to confirm the consistency of information on business type with business activities actually run.

NPWP number exists

(e) EIA/Environmental Manage-ment and Monitoring Measures (UKL/UPL) / Environmental Manage-ment Statement (SPPL)

Verify the validity and completeness of EIA/UKL-UPL/SPPK document and significant finding records including the subsequent revised documents

• Verification is made consis-tent with the requirements set for the industry concerned.

Compliance: EIA/UKL-UPL/SPPK documents approved by the competent officials including the subsequent revised documents available

• Conduct field verification to check report and field implemen-tation


Method Assessment

Norms 1 2 3 4 5 6 7

(f) Industrial Business License (IUI) or Industrial Registration Number (TDI)

Verify the validity and completeness (agency issuing the license, year of issuance, renewal permit, type of industrial business).

Compliance: IUI orTDI consistent with business activities and capacity specified by the agencies issuing such license)

(g) Industrial Raw Material Supply Plan ( (RPBBI) for Primary Forest Product Industries (IPHH)

Verify the completeness and consistency of documents furnished to the competent agencies.

Compliance:Verification is only mage for primary forest product industries using RPBBI online or manual as set out in P.16/Menhut-II/2007 jo P.43/Menhut-II/2009

RPBBI furnished to the competent agencies


Method Assessment

Norms 1 2 3 4 5 6 7

1.1.2 The exporters of processed timber based products are producer exporters holding valid licenses

(a) Company Establishment Deed

(1) Verify the validity and complete-ness

(2) In case of owner change, verify the validity and comple-teness

Compliance: Verification is made if the industry is also exporter. Focused on verification to the consistency of scope of business so indicated in the Deed as exporter.

Completeness and validity complied with.

(b) Company Establishment Deed (SIUP)


Compliance: Verification is made if the industry is also exporter. Verification to indicator 1.1.1. (b)

Business License still valid and consistent with the run business activities


Method Assessment

Norms 1 2 3 4 5 6 7


Verify the validity

Compliance Verification is made if the industry is also exporter. Verification to indicator 1.1.1. (c)

Valid TDP exists.

(d) Tax Payer Identification Number (NPWP)

Verify the validity

Compliance: Verification is made if the industry is also exporter. Verification to Registration Certificate (SKT) to identify the consistency of industrial Business Field Classification (KLU) in the capacity of exporter.

NPWP number exists


Method Assessment

Norms 1 2 3 4 5 6 7

(e) EIA/Environ-mental Management and Monitoring Measures (UKL/UPL) / Environ-mental Management Statement (SPPL).

Verify the validity and completeness of EIA/UKL-UPL/SPPK document and significant finding records including the subsequent revised documents

Verification is made if the industry is also exporter. Verification to indicator 1.1.1. (e)

Compliance: EIA/UKL-UPL/SPPK documents approved by the competent officials including the subsequent revised documents available

(f) Industrial Business License (IUI) or Industrial Registration Number (TDI)

Verify the validity and completeness (agency issuing the license, year of issuance, renewal permit, type of industrial business).

Verification is made if the industry is also exporter. Verification to indicator 1.1.1. (f)

Compliance: IUI orTDI consistent with business activities and capacity specified by the agencies issuing such license)


Method Assessment

Norms 1 2 3 4 5 6 7

(g) Industrial Raw Material Supply Plan ( (RPBBI) for Primary Forest Product Industries (IPHH)

Verify the completeness and consistency of documents furnished to the competent agencies.

Compliance: Verification is made if the industry is also exporter. Verification to indicator 1.1.1. (g)

RPBBI furnished to the competent agencies

(h) Have status of Registered Exporters for Forestry Industrial Products (ETPIK).

Verify the validity, completeness and consistency of products indicated in ETPIK with other licenses. Verify the consistency of industrial classification/ETPIC product with physical condition in the field.

Compliance: Verification is made if the industry is also exporter. Verification to the accuracy of ETPIK data compared with other documents mentioned in ETPIK acknowledgment statement.

Business license must be consistent with the location and type of business given.


Method Assessment

Norms 1 2 3 4 5 6 7

P2. Business Units prepare and introduce timber tracing system to assure timber tracing from the origin

K2.1 Raw material and processed product system put in place and impleme-nted

2.1.1 IPHH and other timber manufac-turing industries able to prove that the timber they receive from legal sources

(a) Transaction document and or raw material supply contract

Verify the validity and completeness

Compliance: Verification of physical condition of timber with skshh document refers to P.55/Menhut-II/2006 and its amendement and/or No. P.51/Menhut-II/2005 and its amendment made on per transaction document basis for the last one year period.

Transaction document must be consistent with physical condition of timber sold/purchased or skshh document.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) Timber hand over report


Compliance: Verification of completeness of Timber Hand Over Report for the last one year period.

All timber attached with skshh document and conferred by the competent official.

(c) Import timber attached with Import Goods Notice (PIB) indicating the origin of timber

Verify the validity, completeness and consistency of documents including: (1) Import

Goods Notice (PIB) from DG Customs and Excise

(2) Packing List (P/L).

(3) Bill of Lading (B/L).

Compliance: Verification to the documents shall be made for the last one year period, if the import of timber is made by land, it is not necessary to verify B/L document, instead Company Notes and other documents.

Import documents must include list of import timber and certificate of origin.


Method Assessment

Norms 1 2 3 4 5 6 7

(4) Other documents, such as CoO (Certificate of Origin).

(d) SKSKB and or FAKB and or SKAU or FAKO/Notes or Auction Transport Certificate (SAL)

Verify the accuracy of PUHH document according to the applicable regulations (for SAL document, it shall be established in separate regulation).

(e)

SKSKB and or FAKB and or SKAU and or FAKO/Notes documents or Auction Transport Certificate (SAL) valid

Compliance:

Refer to P.55/Menhut-II/2006 and its amendment and/or No. P.51/Menhut-II/2005 and its amendment for the last one year period.


Method Assessment

Norms 1 2 3 4 5 6 7

(e). LMKB/LMKBK documents

Verify the validity and consistency of LMKB/LMKBK documents with other supporting documents.

Verification to LMK/LMKB documents and its supporting documents for the last one year period.

Compliance : The documents consistent with supporting documents.

(f) RPBBI supporting documents (SK RKT)

Verify RPBBI document reporting.

RPBBI supporting documents (SK RKT) consistent with those furnished to the competent agency

Compliance: RPBBI has been furnished to the competent agency


Method Assessment

Norms 1 2 3 4 5 6 7

2.1.2 IPHH and other timber manufac-turing industries apply timber tracing system

(a) Tally sheet of raw material consumed and products manufactured

Verify the existence and completeness.

Compliance: Tally sheet of raw material consumed in early production process can be traced back in skshh documents and tally sheet in production process available.

Can be traced to the previous stage.

(b) Processed Product Report.

Verify the existence and completeness.

Compliance: Verified for the last one year period, and the yield is calculated for comparison with yield established in Perdirjen BPK No. P.13/VI-BPPHH/2009.

Production realization supported with legal raw material supply. Thus there is logic relation between input-output, and yield.


Method Assessment

Norms 1 2 3 4 5 6 7

(c) Industrial production may not exceed the permitted production capacity.

Verify and compare the realized production and permitted production capacity set by the competent agency.

Compliance: The realized production may not exceed the permitted production capacity.

P3. The legality of processed timber transaction and transfer

K3.1 Interisland transport and trade.

3.1.1 Business actors engaged in interisland forest product transport certified as Registered Interisland Timber Traders (PKAPT)

(a) Business License (SIUP)


Compliance: Verification is made in case of PKAPT engaged in industries Verification to indicator 1.1.1 (b)

Business permit consistent with business activities performed.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) Company Establishment Deed


Compliance: Verification is made in case of PKAPT engaged in industries Verification to indicator 1.1.1 (a)

Validity and completeness fully complied with.


Verify the validity

Compliance: Verification is made in case of PKAPT enga-ged in industries Verification to indicator 1.1.1 (c)

Valid TDP exists

(d) Tax Payer Identity Number (NPWP)

Verify the validity

Compliance: Verification is made in case of PKAPT engaged in industries Verification to indicator 1.1.1 (d)

NPWP of business actors exists


Method Assessment

Norms 1 2 3 4 5 6 7

(e) PKAPT Document


Compliance: Verification is made in case of PKAPT engaged in industries

Business license consistent with business activities performed

3.1.2 Timber or timber-based products must be carried by Indonesian flag ships with legal license.

(a) Document showing ship identity

Verify the validity and completeness of documents certifying Indonesian flag ships.

Verification is made in case of PKAPT engaged in industries. The identities of Indonesian flag ships used by industries consistent with the list of Indonesian flag vessel fleet issued by the Ministry of Transportation

Compliance: Ships transporting timber are Indonesian flag vessels.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) Ship identity consistent with SKSKB and or FAKB and or SKAU or FAKO/Note or Auction Transport Certificate (SAL)

Verify the consistency of ship identity to skshh document (for SAL document, separate provision shall be applied)

Verification is made in case of PKAPT engaged in industries and the transport-ting vessel conduction stevedoring activities.

Compliance: Ship identities consistent with those mentioned in skshh.

3.1.3 PKAPT able to prove that the transferred timber comes from legal sources

(a) SKSKB and or FAKB and or SKAU or FAKO/Note or Auction Transport Certificate (SAL)

Verify the validity and completeness (for SAL document, separate provision shall be applied)

Verification is made in case of PKAPT engaged in industries Random sampling is only made in case of PKAPT engaged in industries and refers to P.55/Menhut-II/2006

Compliance: Type, quantity, volume, origin and destination consistent with skshh and DHH.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) Permanent identity (in case of log)


Verification is made in case of PKAPT engaged in industries Random sampling is only made in case of PKAPT engaged in industries and refers to P.55/Menhut-II/2006

Compliance: The transported log has physical characteristics as indicated in transport document..

K3.2 The shipping or processed products for export

3.2.1 The ship-ping of processed products for export must consistent with PEB documents

(a) Acknowledgment as Registered Forestry Industrial Exporters (ETPIK).


Verification is made in case of PKAPT engaged in industries Verification to indicator 1.1.2. (h)

Compliance: Exporters licensed as ETPIK.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) PEB Verify the validity and completeness

Verification is made if the industry is also as exporter for the last one year period

Compliance: The consis-tency of PEB documents and other export document.

(c) Packing list Verify the validity and completeness


Compliance: The consis-tency of P/L documents with other export documents

(d) Invoice Verify the validity and completeness


Compliance: The consis-tency of invoice docu-ments and other export documents.


Method Assessment

Norms 1 2 3 4 5 6 7

(e) B/L Verify the validity and completeness

Verification is made if the industry is also as exporter and uses sea transport. Verification is made for the documents valid for the last one year period

Compliance: Freight companies possess Bill of Lading

(f) FAKO/Note or SAL

Verify the validity and completeness (for SAL document, separate provision shall be applied)

Verification is made if the industry is also as exporter Verification is made for the documents valid for the last one year period

Compliance: Consistency of invoice document with other export documents


Method Assessment

Norms 1 2 3 4 5 6 7

(g) Export duty payment slip (PE) if charged


Verification is made if the industry is also as exporter according to Permenkeu No. 95/PMK.2 /2005 and its amendment

Compliance: PE duty paid for the export of certain timber products/PE chargeable products.

3.2.2 Type of timber and timber based products exported comply with the applicable regulations

(a) Document mentioning the type of timber and timber-based product (endorsement and technical verification)

Verify the export realization to provisions regulating the type of timber or products outlawed for export

Verification is made if the industry is also as exporter and exports products as established in Permendag Nomor 20/M-DAG/Per/5/2008 Verification is made for the documents valid for the last one year period.

Compliance: Not to perform export of the outlawed timber and products.


Method Assessment

Norms 1 2 3 4 5 6 7

(b) Other documents as relevant (e.g. CITES) for timber which its transaction is limited

Verify the validity and completeness.

Verification is made if the industry is also as exporter and exports timber, which its transaction is limited. Verification is made for the documents valid for the last one year period.

Compliance: Complete CITES document or other provisions concerning type of timber and timber-based product, which their transactions are limited.

Attachment 3.2. : Director General of Forestry Production Development’s Regulation

Number : P.02/VI-BPPHH/2010 Date : 10 February 2010 Concerning : Guidelines for the Implementation of Assessment of

Sustainable Production Forest Management Performance and Timber Legality Verification

GUIDELINES TIMBER LEGALITY VERIFICATION RESULT REPORTING

(LK) Minimum information provided by Timber Legality Verification Result Report contains: 1.1. Document Identity

1.1.1. Document Naming

Document that provides information about result field assessment is called TIMBER LEGALITY VERIFICATION RESULT REPORT. The report document consists of two inseparable parts i.e.:

a. Book I Timber Legality Verification Result Report on

IUIPHHK or Advanced IUI, which contains methods and procedure of assessment, unverifiable indicators and its reasons, assessment result of the fulfillment of each indicator, as well as relevant additional information;

b. Book II Attachment of Timber Legality Verification Result Report on verified IUIPHHK or Advanced IUI, which contains t h e attachment o f t h i n g s c o m p l e m en t i n g the assessment result.

1.1.2. Page Numbering

Every page of the document is given a number page stating a part of the whole document. Page numbering is also given on every piece written on the bottom center of the page, including chapter’s title, while and total number of pages.

1.2. Identity Verification Institution (LV-LK) and Auditor Team

The explanation of the name of LV-LK, address, institution’s head and structure of Field Assessor Team showing the personnel conducting and responsible for field assessment undertaken. Report document is signed by LV-LK head and Field Assessor Team Leader.

1.3. Identity of IUIPHHK or Advanced IUI

Short explanation which contains the name of the IUIPHHK or Advanced IUI, h e a d o f f i c e and branch a d d r e s s e s , verified IUIPHHK or Advanced IUI locations, name and position o f th e IUIPHHK or Advanced IUI heads a t cen t ra l of assessment location, as well other general information concerning IUIPHHK or Advanced IUI.

1.4. Verification Methods

Verification process is carried out by referring to this Implementation of Timber Legality Verification Guidelines.

1.5. Verification Results

Verification results are presented in direct, clear and systematic manner and consist of: 1.5.1. Explanation on the Principles, Criteria, Indicators and

Verifiers of non-verifiable. Provide clear illustration of the rationale and accountable evidence for unverified Principles, Criteria, Indicators and Verifiers.

1.5.2. Analysis Results

Provide accurate and clear illustration of analysis results of field data for each verification standard. Field data, maps, r e g u l a t i o n r e f e r e n c e s i n a d d i t i o n t o o t h e r r e l e v a n t w r i t t e n e v i d e n c e used in analyzing data or explaining verification result for each verification standards, are included in the attachment. The assignment

of attachment number to completing the illustration of field data analysis result has to be mentioned on each verification result illustration.

1.5.3. Drawing Conclusion for Each Verification Norm Fulfillement

Illustration on the fulfillment of each indicator as well as its explanation and argument has to be clearly presented and quoting regulation basis for the assessment reference compared to the conditions on the field.

1.6. Attachment

Attachment contains field data, maps, or other written evidence used in data analysis or explaining the verification results for each respective indicator. The attachment list has to be presented in the beginning part of the document’s attachment.

Attachment 4. : Director General of Forestry Production Development’s Regulation



GUIDELINES FOR INDEPENDENT MONITORING OF THE

IMPLEMENTATION OF ASSESSMENT OF SUSTAINABLE PRODUCTION

FOREST MANAGEMENT (PHPL) PERFORMANCE AND

TIMBER LEGALITY (LK) VERIFICATION I. INTRODUCTION

A. BACKGROUND

The assessment of Sustainable Production Forest Management (PHPL) Performance and Timber Legality (LK) Verification stipulated in Minister of Forestry Regulation Number P.38/Menhut-II/2009 and Director General of Forestry Production Management Regulation Number P.6/VI-Set/2009 in addition to DPLS KAN 13 and 14, ISO/IEC GUIDE 65, ISO 17011, and 17021, requires guidelines in its implementation. One of the required guidelines is the monitoring guidelines f or independent monitoring of the implementation of assessment of PHPL Performance and LK verification.

B. OBJECTIVE

This Guidelines aims as reference for Independent Monitor in monitoring the process and assessment results of the Assessment of PHPL Performance and LK verification made by LP&VI.

C. SCOPE

This guidelines becomesa reference for Independent Monitoring in monitoring t h e process and assessment result o f PHPL Performance and LK verification based on Minister of Forestry Regulation Number P.38/Menhut-II/2009, Director General Bina Production Forestry Regulation Number P.6/VI-Set/2009, DPLS 13, DPLS 14, ISO/IEC Guide 65, ISO/IEC Guide 17011, and ISO/IEC Guide 17021.

D. REFERENCES

1. Minister of Forestry Regulation Number P.51/Menhut-II/2006 concerning the the Use of Certificate of Origin (SKAU) for Timber Forest Product Transportation that comes from Forest under Rights as amended several times, lastly with Minister of Forestry Regulation Number P.33/Menhut- II/2007.









6. Director General of Forestry Production Management Regulation Number P.6/VI- Set/2009 concerning Standard and Guidelines on Assessment of Performance of Sustainable Production Forest Management and Timber Legality Verification.

7. ISO/IEC Guide 23:1982 Methods of Indicating Confirmity with



9. ISO/IEC 17011:2004 Conformity Assessment - General

Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies.

10. ISO/IEC 10002:2004 Quality management. Customer Satisfaction.

Guidelines for Complaints Handling in Organizations. Guidelines for Complaints Handling in Organizations.

11. ISO/IEC 17021:2006 Conformity Assessment – Requirement

for Boodles Providing Audit and Certification of Management Systems.

12. Supporting List of Certification Institution (DPLS) 13 Rev. 0 is

Additional Terms and Conditions for Accreditation Institution of Sustainable Production Forest Management Assessor.


Additional Terms and Conditions for Accreditation Institution of Timber Legality Verification.

E. DEFINITION

1. Independent Monitor:

a. Forestry non-governmental organization (LSM) or civil

society can become Independent Monitor. b. Independent Monitors from NGOs or civil society are legal

entity forestry observer NGOs in Indonesia, communities that live within or surrounding the area where

Concessionaire or Forest under Rights located/operating, and any Indonesian citizen that have concerns in forestry sector.

c. Institution (including institution’s personnel) or individual

independent monitor has no direct or indirect relations to LP&VI and concessionaire.

d. Independent Monitor (PI) assumes the

supervising/monitoring functions related to public service in forestry sector for the issuance of PHPL Certificate or LK Certificate.

2. Independent Assessor and Verification Institution (LP&VI)is a

state-owned legal entity/company or private accredited to undertake the Assessment of Sustainable Production Forest Management (PHPL) Performance and/or Timber Legality Verification.

3. National Accreditation Committee (KAN) is the institution that

gives accreditation to independent assessor and verification (LP&VI) institutions.

4. Wood Legality Certificate (LK) is a letter of explanation given to

Concessionaire or Forest under Rights Owner stat ing that the concessionaire or the Forest under Rights owner has followed Wood Legality standard (legal compliance) in obtaining timber forest product.

5. PHPL Certificate is a letter of explanation that explaining the

success rate of the implementation of sustainable forest management.

6. Concessionaire is permit holder of Forest Timber Product

Exploitation and industrial business permit holder.

7. Forest Timber Product Exploitation Concessionaire covers permit holders of Forest Timber Product Exploitation in Natural forest or abbreviated as IUPHHK-HA (formerly known as HPH), Permit Holder of Forest Timber Product Exploitation or IUPHHK-HT (formerly known as HP-HTI), Permit Holder of Forest Timber

Product Exploitation in Community Plantation Forest or IUPHHK-HTR, permit holder of Forest Timber Product Exploitation of Ecosystem Restoration or IUPHHK-RE, Permit Holder of Forest Timber Product Exploitation in Community Forest or IUPHHK-HKm as intended in Government Regulation Number 6 Year 2007 amended by Government Regulation Number 3 Year 2008

8. Primary Industrial Business Permit Holder of Forest Timber

Product (IUIPHHK) as intended in Government Regulation Number 6 Year 2007 amended by Government Regulation Number 3 Year 2008.

9. Advanced Industrial Business Permit (Advanced IUI) Holder is

downstream forest timber product processing company manufacturing products such as furniture.

II. ACTIVITY

A. IMPLEMENTATION

1. Monitoring activity administered in this guidelines is monitoring activity related to LK verification activity and PHPL Performance Assessment i.e. the certification and the Assessment of PHPL Performance in the past 3 (three) years as well as the certification and the LK verification in the past 1 (one) year conducted by LP&VI.

2. Independent Monitor observes the process and LP&VI’s

assessment results, decision making process and LP&VI’s decision in issuing PHPL/LK Certificate.

3. Independent Monitor can use and develop its own monitoring

method that can generate accountable monitoring results.

4. In implementing the activity, Independent Monitor can access the required public information/document and isable to submit request for other required information/document in writing to information holder.

5. Independent Monitor can also monitor the progress of

complaint report being handled by LP&VI and KAN.

6. For the security and safety of information source, Independent

Monitor can keep the identity of the respondent and/or informant confidential.

B. REPORTING

1. Monitoring report from Independent Monito is report that

contains coplaints to the process and/or LP&VI’s assessment result to the concessionaire, and equipped with the identity o f t h e reporting party in addition to accountable supporting evidence.

2. Materi keberatan merupakan hasil monitoring activity 1 (satu)

tahun ke belakang for LK verification or 3 (tiga) tahun ke belakang for Assessment PHPL Performance or sesuai with cakupan assessment or verification yang dilakukan oleh LP&VI.

3. Monitoring report needs to be submitted to LP&VI no later than

20 (twenty) calendar days since the announcement of the assessment result.

4. If LP&VI is aunable to resolve the complaint, then the

monitoring report can be sumitte to KAN 5. After 20 (twenty) calendar days p e r i o d s i n c e t h e

a n n o u n c em en t o f the result (certificate), new findings can be reported as new monitoring result from Independent Monitor to Ministry of Forestry and LP&VI.




GUIDELINES FOR SUBMITTING AND RESOLVING OBJECTION OF THE IMPLEMENTATION OF ASSESSMENT OF SUSTAINABLE PRODUCTION

FOREST MANAGEMENT (PHPL) PERFORMANCE AND TIMBER LEGALITY VERIFICATION (LK)

I. INTRODUCTION

A. Background

Objection is a written expression of dissatisfaction made by objection submitting party who submits their objection completed with accountable evidence. In Minister of Forestry Regulation Number P.38/Menhut- II/2009, concessionaire and independent monitor (non-governmental organizations or civil society in forestry sector) can submit objection to assessment result made by Assessor and Verification Independent Institution (LP&VI).

B. Objective

This guidelines are aiming at: 1. Developing objection submission and resolution

mechanism. 2. Realizing transparent and accountable management of

assessment process and result o f PHPL Performance and Timber Legality Verification (LK) made by LP&VI.

3. A control measure for the suitability of PHPL and LK Certificate issued by LP&VI for the concessionaire or Forest under Rights owner.

C. Scope PHPL Performance and LK Certificate Assessment has to comply with field conditions known and experienced by concerned parties. The Guidelines consist of procedure for submitting and resolving PHPL Certificate and LK status to be the guidance for submitting and resolving objection.

The scope of objection resolution process includes:

1. Objection submitted by concessionaire about assessment result

report.

2. Objection submitted by Independent Monitoring Institution about process and assessment result.

D. References

1. Minister of Forestry Regulation Number P.51/Menhut-II/2006 concerning the Use of Certificate of Origin (SKAU) for Timber Forest Product Transportation that comes from Forest under Rights as amended several times, lastly with Minister of Forestry Regulation Number P.33/Menhut- II/2007.







5. Minister of Forestry Regulation Number P.38/Menhut-II/2009 concerning Standard and Guidelines on Assessment of Performance of Sustainable Production Forest Management and Verification of Timber Legality for License Holders or in Private Forests.


Number P.6/VI- Set/2009 concerning Standard and Guidelines on Assessment of Performance of Sustainable Production Forest Management and Timber Legality Verification.

7. ISO/IEC Guide 23:1982 Methods of Indicating Confirmity with



9. ISO/IEC 17011:2004 Conformity Assessment - General

Requirements for Accreditation Bodies Accrediting Conformity Assessment Bodies.

10. ISO/IEC 10002:2004 Quality management. Customer Satisfaction.

Guidelines for Complaints Handling in Organizations. Guidelines for Complaints Handling in Organizations.

11. ISO/IEC 17021:2006 Conformity Assessment – Requirement

for Boodles Providing Audit and Certification of Management Systems.


Additional Terms and Conditions for Accreditation Institution of Sustainable Production Forest Management Assessor.



E. Definition

1. Assessor and Verification Independent Institution (LP&VI) is a state-owned or private legal entity company accredited to implementing the Assessment of Sustainable Production Forest Management (PHPL) Performance and/or Timber Legality Verification.

2. Objection Resolution Ad Hoc Team is a team authorized to

making document examination, consultation with related parties and field verification about objection material submitted by the objection submitting party.

3. Independent Monitoring:

a. Forestry non-governmental organization (NGO) or civil society can become Independent Monitor.

b. Independent Monitoring NGO or civil society is a legal entity, forestry observer NGO in Indonesia, community living inside or surrounding the area where Concessionaire or Forest under Rights i s located/operational, and any Indonesian citizen whose concerns in forestry sector.

c. Institution (including its personnel) or individual independent monitor must not have direct or indirect relations to LP&VI and concessionaire/management unit.

d. Independent Monitor (PI) assumes supervising/monitoring functions related to public service in forestry sector over the issuance of PHPL Certificate or LK Certificate.

4. National Accreditation Committee (KAN) is an institution that

gives accreditation to independent assessor and verification institution (LP&VI).

5. Wood Legality Certificate (LK) is a letter of explanation given to Concessionaire or Forest under Rights Owner stat ing that the concessionaire or the Forest under Rights owner has followed Wood Legality standard (legal compliance) in obtaining timber forest product.

6. PHPL Certificate is a letter of explanation informing the success

rate of the implementation of sustainable forest management.

7. Concessionaire is permit holder of Forest Timber Product Exploitation and industrial business permit holder.

8. Forest Timber Product Exploitation Concessionaire include

permit holders of Forest Timber Product Exploitation in Natural forest or abbreviated as IUPHHK-HA (formerly known as HPH), Permit Holder of Forest Timber Product Exploitation or IUPHHK-HT (formerly known as HP-HTI), Permit Holder of Forest Timber Product Exploitation in Community Plantation Forest or IUPHHK-HTR, permit holder of Forest Timber Product Exploitation of Ecosystem Restoration or IUPHHK-RE, Permit Holder of Forest Timber Product Exploitation in Community Forest or IUPHHK-HKm as intended in Government Regulation Number 6 Year 2007 amended by Government Regulation Number 3 Year 2008.

9. Primary Industrial Business Permit Holder of Forest Timber

Product (IUIPHHK) as intended in Government Regulation Number 6 Year 2007 amended by Government Regulation Number 3 Year 2008.

10. Advanced Industrial Business Permit (IUI Lanjutan) Holder is

downstream forest timber product processing company that manufacturing products such as furniture.

II. ACTIVITY

A. Submitting Objection

1. Objection Material

a. Objection followed by dissatisfaction of certain parties accompanied with accountable evidence in relations to the process and/ or LP&VI’s certification d e c i s i o n making.

b. Submitted objection material has to refer to assessment

stages, i.e. how LP&VI conducts stages of PHPL assessment and LK verification based on Standard and Guidelines o f PHPL Assessment and LK verification as well as the conclusions from assessment results.

c. Objection can be proved and supported with comparative

data/information or document that hasn’t been used during assessment process.

2. Objection Submitting Party

Parties that can submit objection regarding the process and/or certification decision are as follows:

a. Concessionaire about assessment result report. b. Independent Monitor about process and assessment result

(certificate)

3. Objection Submitting Period

a. Objection from concessionaire should be submitted no later than 10 calendar days after receiving LP&VI’s assessment result.

b. Objection from independent monitor should be submitted no later than 20 calendar days after the announcement of certificate issuance.

c. In the event that independent monitor obtains new

findings after 20 calendar days since the announcement of the certificate, the objection should be submitted to Ministry of Forestry and LP&VI.

4. Objection Submission Procedure

a. Objection is submitted in writing to LP&VI completed with supporting data.

b. Submitted objection must (1) refer to assessment stages

and/or to results of standard completion (criteria and indicators) and (2) be supported with new accountable data/information tha t has never been used during the assessment process.

c. In the event that LP&VI is unable to resolve the objection

coming from Independent Monitoring Institution, the Independent Monitoring Institution can submit the objection to KAN.

B. Objection Resolution

1. Objection Resolution

a. LP&VI establishes an Ad Hoc Team for the resolution of

the objection submitted by Concessionaire and other mechanism to revolve the objection submitted by Independent Monitoring Institution.

b. Objection Resolution Ad Hoc Team

Objection Resolution Ad Hoc Team is a team authorized to making document examination, consultation with related parties and field verification of objection material submitted by objection submitting party.

• Objection Resolution Ad Hoc Team is established by LP&VI, which temporarily (ad hoc) assisting concerned LP&VI resolve the objection.

• Auditor and Decision Maker (LP&VI), objection submitting party, and Concessionaire can’t sit on the Objection Resolution Ad Hoc Team.

• Objection Resolution Ad Hoc Team consists of odd number members, with at least 3 (three) persons, who at least one member understand and comprehend about the emerging problems and about local interest where the subject of objection is located.

• Objection Resolution Ad Hoc Team consists of 1 (one) chairperson and member, and several other members.

• Objection Resolution Ad Hoc Team is obliged to give explanation/reponse about the objection resolution report it has made.

• Objection Resolution Ad Hoc Team members have to meet the following criteria:

- Independent, representing stakeholders and

experts in related field, in line with objection material, with at least 5 (five) years experience.

- Have the capacity to make an assessment from information found in objection material;

- Understand the Assessment System of PHPL Performance and LK Verification;

- Have the capacity to mediate conflict resolution; - Have interdisciplinary perspective and ability to

work with other team members; - Have high integrity and objectivity during the

process of objection resolution;

2. Objection Resolution Period

a. Objection from Concessionaire shall be resolved by LP&VI in no later than 10 calendar days starting from the LP&VI first receives the objection report.

b. Objection from Independent Monitoring Institution shall

be resolved by LP&VI in no later than 10 calendar days starting from the LP&VI first receive the objection report;

c. In the event that LP&VI is unable to resolve the objection

from Independent Monitoring Institution, the Independent Monitoring Institution can submit the objection to KAN to be resolved in compliance with existing objection resolution procedure at KAN.

3. Objection Resolution Procedure

a. Objection resolution by LP&VI follows these phases:

• verification of objection legality and • verification of objection material.

b. In verifying objection legality, an examination is made

about material’s relevance and objection submitting party. c. Objection is considered relevant when:

• submitted data and information is relevant and • submitted by way of relevant party.

d. Objection is rejected when considered irrelevant or fail to

present a new evience (novum).

e. During objection material verification stage, consultation with related parties and field verification about the subject of objection, as well as mediation between related parties regarding submitted objection material, can be performed.

f. Objection resolution by LP&VI is carried out by making and

stipulating the decision of objection resolution in writing based on the results at stage (a) objection legality verification and/or (b) objection material verification. Report containing the decision of objection resolution made by LP&VI is submitted to objection submitting party in writing.

g. In the event that LP&VI is unable to resolve the objection

from Independent Monitoring Institution, the Independent Monitoring Institution can submit the objection KAN to be resolved in compliance with Objection Resolution Procedure at KAN.


Number : P.02/VI-BPPHH/2010

Date : 10 February 2010

Concerning : Guidelines for the Implementation of Assessment of

Sustainable Production Forest Management Performance

and Timber Legality Verification

GUIDELINES CRITERIA AND REQUIREMENTS OF PERSONNEL AND

AUDITOR FOR THE IMPLEMENTATION OF ASSESSMENT OF

SUSTAINABLE PRODUCTION FOREST MANAGEMENT (PHPL)

PERFORMANCE AND TIMBER LEGALITY (LK) VERIFICATION I. INTRODUCTION

A. BACKGROUND

In line with Minister of Forestry Regulation Number P.38/Menhut-II/2009 concerning Standard and Guidelines Assessment of Sustainable Production Forest Management Performance and Timber Legality Verification of Concessionaire or Forest under Rights, it is stated that the implementation o f accreditation o f Sustainable Production Forest Management Assessor Institution (LP-PHPL) and Timber Legality Verification Institution (LV-LK) is made by National Accreditation Committee (KAN). In the process o f a w a r d i n g accreditation to LP-PHPL and LV-LK, KAN enforces regulations/procedure that LP-PHPL and LV-LK have to comply with. The implementation of Assessment of Sustainable Production Forest Management (PHPL) Performance and Timber Legality Verification (LK) is carried out by the Auditor Team that consists of Lead Auditor and Auditor. Auditor Team’s understanding of the criteria, indicators and verifiers is critical to determine the results of assessment and verification.

In order to allow the field assessment process is effective, general requirements for Auditor as the implementer of the process is deemed necessary.

B. OBJECTIVE The objective of the guidelines is to determine criteria and general requirements in selecting Lead Auditor, Auditor, and Candidate Auditor.

C. SCOPE

The general requirements are references for a personnel to play the role as an Auditor. The selection of an Auditor is made by Assessor and Verification Independent Institution (LP&VI) based on previously determined requirements in order to allow the appointee to function. This Guidelines are managing general requirements for: 1. Auditor f o r PHPL Performance and Auditor LK verification

Assessment at IUPHHK-HA/HPH, IUPHHK-HT/HTI, IUPHHK-RE; IUPHHK-HTR, IUPHHK-HKm Permit Holder; Forest under Rights Concessionaire; and IPK Holder; as well as,

2. Auditor for LK verification at IUIPHHK and IUI Lanjutan.

D. REFERENCES

1. Minister of Forestry Regulation Number 6420/Kpts-II/2002 concerning Persyaratan and Procedure Assessment Institution Assessor Independent (LPI) Mampu.



3. Director General of Forestry Production Management Regulation Number P.6/VI- Set/2009 concerning Standard and Guidelines on Assessment of Performance of Sustainable Production Forest Management and Timber Legality Verification.

4. ISO/IEC Guide 65:1996 General Requirements for Bodies

Operating Product Certification Systems.

5. ISO/IEC 17021:2006 Conformity Assessment – Requirement for Boodles Providing Audit and Certification of Management Systems.

6. SNI 19-19011-2005 Panduan Audit System Management

Mutu and/or lingkungan.

7. Supporting List of Certification Institution (DPLS) 13 Rev. 0 is Additional Terms and Conditions for Accreditation Institution of Sustainable Production Forest Management Assessor.



E. DEFINITION

1. Auditor is a personnel with the capacity to audit. 2. National Accreditation Committee (KAN) is an institution that

gives accreditation to independent assessor and verification institution (LP&VI).

3. Independent Assessor and Verification Institution (LP&VI) is a

state-owned or private legal entity/company accredited to undertake the Assessment of Sustainable Production Forest Management (PHPL) Performance and/or Timber Legality Verification.

4. PHPL Performance Assessment Institution is LP&VI that performs

HPL certification process at State Forest (IUPHHK-HA/HT).

5. Wood Legality Verification Institution (LV-LK) is LP&VI that performs Timber Legality Verification of IUPHHK-HA/HPH or IUPHHK-HT/HTI or IUPHHK-RE or IUPHHK-HTR Holder or IUPHHK-HKM or Forest under Rights Concessionaire or IPK Holder or LP&VI that performs Timber Legality Verification of IUIPHHK or IUI Lanjutan.

6. Able Independent Assessor Institution (LPI) is a legal entity in

the form of Limited Liability with the competency to provide performance assessment service of companies of Forest Timber Product Exploitation concessionaire at natural forest, previously called Forest Exploi tat ion R ight at business management unit, and received its recognition from Minister of Forestry during previous PHPL scheme.

7. Chain of Custody (CoC) is a timber tracking system that

guarantees wood trackability from the forest to the industry, which during the process has gone through transportation, shipping, product manufacture until ready to use product.

8. Verification of Legal Origin (VLO) is a system that assesses and

verifies wood producer and non-wood forest products have an official permit to fell in compliance with Indonesian existing laws and regulations and that the whole points in supply chain of forest products maintain a documenting system and controlling its chain of custody procedure.

II. CRITERIA AND REQUIREMENTS

A. General Requirements for LP&VI Auditor

1. LP&VI Personnel has to possess the capacity that matches the functions to work properly, including making necessary technical considerations, drafting a policy and its implementation.

2. Auditor must have auditing skills, according to ISO 19011:2002.

3. Have documented instructions that clearly illustrate the

obligations and t h e responsibility, which are available to every personnel. The instructions have to be maintained and updated.

4. Have no financial and/or ownership and/or other relations with

t h e a s se s s ed concessionaire or s e l e c t e d bu s i n e s s unit that may generate conflict of interest.

B. Minimum Requirements for a Personnel of PHPL Assessor Institution

1. Decision Maker, the requirements are as follows:

a. A personnel who understands PHPL Performance

Assessment system.

b. Permanent personnel from PHPL Assessor Institution.

c. In the event that a personnel is incompetent in making a

decision, he/she may be accompanied with a more

competent personnel who doesn’t perform field

verification.

2. Audit Team,

Consists of at least 4 (four) members, 1 person acts as the Lead Auditor and 3 o t h e r Auditors, consist of Auditor for production and prerequisite assessment, Auditor for ecological assessment and Auditor for social assessment.

C. Minimum requirements for LV-LK Personnel

1. Decision Maker, the requirements are as follows:

a. A personnel who understands PHPL Performance Assessment

system.

b. Permanent personnel from PHPL Assessor Institution.

c. In the event that a personnel is incompetent in making a

decision, he/she may be accompanied with a more

competent personnel who doesn’t perform field verification.

2. Audit Team, Consists of at least 3 (three) members, 1 person acts as the Lead Auditor and 2 qualified Auditors with the following expertise: a. IUPHHK-HA/HT, HTR-HKm, Forest under Rights, and IPK

require Production, Ecology and Social expertise. b. IUIPHHK and IUI Lanjutan require Forestry/Industrial

engineering/Mechanical Engineering skills. III. AUDITOR REQUIREMENTS

A. PHPL Performance Assessment

1. Candidate Auditor has to meet the following requirements: a. Education:

At least a three year diploma (D-3) with 5 years working experience in his/her field or a bachelor degree (S-1) with 3 years working experience in his/her field, with the following detailed requirements: 1) Candidate Auditor for Prerequisite and Production

Assessment • D-3 Forestry graduate. • S-1 Forestry graduate.

2) Candidate Auditor for Ecological Assessment • D-3 Forestry graduate. • S-1 Forestry, Agriculture, Biology, Environmental

Engineering graduate.

3) Candidate Auditor for Social Assessment • D-3 Forestry graduate. • S-1 Forestry, Anthropoogy, Sociology, Social

Economic Agriculture graduate.

b. Graduated from PHPL Auditor training held by Pusdiklat

Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.

2. Auditor has to meet the following requirements:

a. Master a discipline of knowlege and technology related to

PHPL Performance Assessment; b. Technically capable in making PHPL Performance

Assessment audit;

c. Have the capacity to analyze field data/information and make conclusions for the fulfillment of every indicator and present them well in a field assessment result report;

d. Have good communication skills, oral and writing;

e. Candidate Auditor that has attended on the job training of

audit process of PHPL Performance Assessment 2 (two) times;

f. During transition period

, the fulfillment of point e is replaced with experienced in at least 2 (two) times PHPL scheme audit and graduated from the training held by Pusdiklat Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.

3. Lead Auditor has to meet the following requirements:

a. Have the skills, education level, and experience as Auditor; b. Have the capacity and experience in leadership in order to

function effectively in managing an audit team;

c. Able to make audit team’s performance evaluation;

d. Develop natural but firm communication with auditee leadership in the event of emerging problems that require attention;

e. Have performed audit or PHPL Performance Assessment 4

(four) times as Auditor;

f. Have been supervised as Lead Auditor 2 (two) times;

g. During transition period

, the fulfillment of point e a n d f is replaced with experienced in at least 3 (two) times PHPL scheme audit and graduated from the training held by Pusdiklat Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.

B. IUPHHK, HTR-HKm, Forest under Rights, and IPK Verification and Certification

1. Candidate Auditor has to meet the following requirements:

a. At least graduated from D3 (Forestry, Agriculture, Biology, Social Science) with 5 years working experience in his/her field or graduated from S1 (Forestry, Agriculture, Biology, Social) with 3 years working experience. Skill expertise is adjusted to 3 aspects (Production, Ecological and Social Science).

b. Graduated from LK verification Auditor training held by

Pusdiklat Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.

c. During transition period

, a S k i l l e d LPI Auditor that never performs an audit and has followed training from Pusdiklat Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.

2. Auditor has to meet the following requirements: a. Candidate Auditor has attended on the job training of PHPL

Performance Assessment process 2 (two) times, particularly for LK verification expertise.

b. Technically capable to perform IUPHHK-HA/HT, HTR-HKm,

Forest under Rights, and IPK verification.

c. During transition period

, have previously made 2 times PHPL s c h em e audit (Skilled LPI) and attended/graduated from a training from Pusdiklat Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.


a. Auditor that has performed PHPL certification (SVLK) audit 4 (four) times; particularly with LK verification expertise.

b. During transition period

, 3 (three) times as Auditor of PHPL scheme (Skilled LPI) and attended/graduated from the training from Pusdiklat Kehutanan or other institutions working in forestry/environment sector that has similar curriculum with Pusdiklat Kehutanan.

c. Have been supervised as Lead Auditor 2 (two) times. C. IUIPHKK and IUI Lanjutan Verification and Certification

1. Candidate Auditor has to meet the following requirements:

a. Graduated from D3 major in Forestry/Industrial Engineering/Mechanical Engineering with at least 5 years experience in his/her field, or S1 m a j o r i n Forestry/Industrial Engineering/Mechanical Engineering with at least 3 years experience.

b. Have CoC/VLO training certificate.

c. Especially during transition period

, a personnel that has “CoC/VLO”-equa l t ra in ing certificate and attend refreshment session or; have a CoC certificate and attend refreshment session or; have a VLO certificate and attend refreshment session.

2. Auditor has to meet the following requirements:

a. Candidate Auditor has followed on the job training of CoC/VLO audit process 3 (three) times.

b. Technically capable to perform IUIPHKK and IUI Lanjutan

verification.


, Auditor that has performed VLO/CoC audit at least 2 times or Candidate Auditor that receives a reference from Lead Auditor or Candidate Auditor that has passed competency test from profession certification institution in forestry/environment sector.


a. Auditor that has performed SVLK audit at least

6 (six) times.

b. Have been supervised as Lead Auditor 2 (two)

times.


, have performed CoC/VLO audit at least 3 (three) times, have been supervised as Lead Auditor at least 2 times.

KEHATITHE MINISTRY OF FORESTRY

Support by

P.02/VI-BPPHH/2010

Documents

republic indonesia number

republic of indonesia

regulation of ministry

forest utilization

regulation of president

indonesia decision number

president of republic

government regulation