VZCZCXRO6147
RR RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2550/01 2560641
ZNR UUUUU ZZH
R 130641Z SEP 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 6222
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 0783
RUEHBJ/AMEMBASSY BEIJING 4305
RUEHBY/AMEMBASSY CANBERRA 1156
RUEHUL/AMEMBASSY SEOUL 4190
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 002550 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS AND EB/IFD/ODF 
USFS FOR CMACKIE 
USTR FOR MLINSCOTT, DBROOKS 
USAID FOR CBARBER, MMELNICK 
TREASURY FOR TFCA - BERG 
DEPARTMENT FOR OES/IET and OES/ETC 
NSC FOR CEQ CONNAUGHTON, VAN DYKE 
 
E.O. 12598: N/A 
TAGS: SENV EAID ECON PGOV ID
SUBJECT: PROPOSED REGIONAL DIALOGUE ON ILLEGAL LOGGING WELCOME 
 
 
¶1. (SBU) Summary.  Assistant U.S. Trade Representative (AUSTR) Mark 
Linscott held a series of meetings on September 6 and 7 related to 
illegal logging.  Officials at the ASEAN Secretariat welcomed the 
proposal of an informal regional dialogue on illegal logging. 
Government of Indonesia (GOI) officials and NGO representatives 
updated Linscott on the development of Indonesia's new timber 
legality standard and challenges for its implementation.  They 
enthusiastically encouraged U.S. engagement of China and Malaysia on 
illegal logging issues.  Linscott and GOI officials also agreed to 
discuss firm dates for a potential bilateral Illegal Logging MOU 
working group meeting in Jakarta during a joint USTR-Department of 
State mission to the region later this year.  End Summary. 
 
Limited ASEAN Activity on Illegal Logging Could Change 
--------------------------------------------- --------- 
 
¶2. (SBU) ASEAN officials admitted during a September 6 meeting with 
a delegation led by AUSTR Mark Linscott that ASEAN has done little 
to address illegal logging at the regional level.  However, they 
expected increased activity after a potential "Bangkok Declaration" 
by ASEAN Ministers of Agriculture and Forestry in Bangkok this 
November that will call for strengthening forest law enforcement and 
governance (septel).  The draft declaration specifically refers to 
illegal logging -- a first for such a high-level ASEAN meeting. 
Officials acknowledged that ASEAN has not engaged China 
substantively on forestry or timber trade issues.  However, they 
noted that ASEAN officials would raise these issues at the upcoming 
EU-China Forest Law Enforcement and Governance (FLEG) Conference in 
Beijing later this month. 
 
¶3. (SBU) Nor is there any formal cooperation between the EU and 
ASEAN on forestry issues, according to Somsak Pipoppinyo, head of 
ASEAN's Natural Resources Unit.  He and other officials welcomed in 
principle Linscott's proposal of a regional process or dialogue on 
illegal logging.  They also highlighted potential areas for further 
U.S.-ASEAN cooperation related to illegal logging, particularly in 
customs cooperation and technical assistance for developing an ASEAN 
legality standard.  They agreed with Linscott on the importance of 
working regionally in order to facilitate legal trade in wood 
products. 
 
¶4. (SBU) Pipoppinyo said that there have been slow-moving 
discussions on an ASEAN timber certification mechanism, due to 
ongoing disputes over defining a timber legality standard.  He and 
other officials noted that ASEAN would probably implement any future 
legality standard and timber certification process in a phased 
manner in order to account for the different capacities and levels 
of development among member countries.  In addition, they emphasized 
that this ASEAN-wide standard would probably be a minimum standard, 
and respective member countries might have much stricter national 
standards.  For example, Vietnam is developing a certification 
modeled on Forest Stewardship Council standards and certification. 
 
 
NGOs, Officials: Engaging China, Malaysia on Timber Key 
--------------------------------------------- ---------- 
 
¶5. (SBU) AUSTR Linscott held meetings on September 6 and 7 with GOI 
officials and NGO representatives, respectively.  Members of the GOI 
interagency working group under the U.S.-Indonesia MOU on Illegal 
Logging cautiously endorsed the idea of an informal regional 
dialogue on illegal logging.  They emphasized that it would be 
difficult to get Malaysia to cooperate, and suggested initiating 
this dialogue only after the "Bangkok Declaration" (see Para 2), 
during or after the November ASEAN Summit.  Both they and the NGOs 
enthusiastically welcomed U.S. engagement of China on illegal 
logging.  Ministry of Forestry (MOF) officials stated that one 
reason for signing the MOU with the U.S. was in order to bring U.S. 
influence to bear on importing or transshipment countries such as 
China and Malaysia.  The GOI seeks international support for its 
"zero laundering" concept and says it has evidence of log 
laundering; for example, Merbau wood smuggled through Papua New 
Guinea. All sides acknowledged the complexity and challenge of 
dealing with the timber trade, and Linscott emphasized the U.S. 
determination to press China on this issue and create a regional 
dialogue. 
 
JAKARTA 00002550  002 OF 002 
 
 
 
¶6. (SBU) Linscott informed the GOI working group and NGO 
representatives that he and OES Assistant Secretary Claudia McMurray 
were exploring the possibility of a joint mission to the region in 
late October.  They could initiate the regional dialogue at that 
time, he suggested, as well as hold the next bilateral illegal 
logging MOU working group meeting in Jakarta.  They agreed to 
discuss and decide on dates later, given the tight late-October 
schedule with a pre-COP 13 ministerial in Bogor and various 
ASEAN-related meetings leading up to the early-November ASEAN 
Summit. 
 
Bilateral Illegal Logging MOU: Future Directions 
--------------------------------------------- --- 
 
¶7. (SBU) AUSTR Linscott proposed that the next bilateral MOU working 
group meeting should discuss next steps under the MOU, particularly 
an increased focus on facilitating trade.  Facilitating trade could 
include an integrated approach to customs cooperation and law 
enforcement, a project to enhance trade data, as well as 
private-sector partnerships.  MOF Director General of Forestry 
Production (and GOI interagency working group chair) Hadi Pasaribu 
informed Linscott that the GOI has designated two large ports, 
Belawan near Medan in North Sumatra and Surabaya in East Java, in 
which to focus MOU efforts.  The MOF hopes that its action plan will 
improve interagency cooperation and coordination -- including 
standardizing and compiling trade data -- at these two ports. 
 
Legality Standard: Implementation and Challenges 
--------------------------------------------- --- 
 
¶8. (SBU) The MOF said the timber legality standard includes overall 
concession management, forest certification and chain of custody to 
port, documentation, and a complaint mechanism.  The MOF officials 
as well as NGO representatives stated that Forestry Minister Kaban 
has approved the legality standard, but that implementation will be 
a challenge.  Internal debate and stakeholder consultations continue 
regarding the independent verifying mechanism, but they expect to 
reach a decision by December, after which the Minister will sign a 
formal Decree. At the NGO meeting, a representative of the EU-FLEG 
program emphasized that the outstanding question is how watertight 
the standard will be, and that the EU remains concerned about who 
the independent verifier(s) will be.  Linscott affirmed that the 
U.S. strongly supports the development and implementation of the new 
legality standard. 
 
¶9. (SBU) MOF officials acknowledged that implementation of the 
legality standard and its necessary counterpart, a strong timber 
administration system, will require a great deal of 
capacity-building at the central and local levels.  For example, the 
MOF and local governments need a great deal more assistance on 
integrated mapping of forest areas and concessions, as well as land 
use planning.  The MOF has taken supportive steps, revising a 
regulation to allow farmers land tenure for community forests, and 
setting deadlines for concessions to obtain certification.  NGO 
representatives also asserted that timber companies would lack 
sufficient incentives to meet the standard if importers continued to 
accept non-certified wood.  A representative of the Indonesian 
Ecolabeling Institute (LEI) noted that, given the challenges, the 
GOI would probably phase in implementation, requiring companies that 
export to the U.S. and EU to comply first. 
 
 
HUME