VZCZCXRO8471
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1079 1760712
ZNR UUUUU ZZH
R 250712Z JUN 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 2691
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHBJ/AMEMBASSY BEIJING 5957
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS JAKARTA 001079 
 
SIPDIS 
 
DEPT FOR OES AND EAP 
USTR FOR DBROOKS 
USAID FOR ANE, EGAT 
BANGKOK FOR RDMA 
USFS FOR CMACKIE 
TREASURY FOR KBERG 
 
E.O. 12958: N/A 
TAGS: SENV EAID KGHG ECON PGOV ID
SUBJECT: Indonesia: Improving Transparency in Timber Administration 
 
REF: JAKARTA 951 
 
¶1.  Summary: Indonesia is taking another significant step to improve 
transparency in the forestry sector by requiring the 
labeling/bar-coding of logs.  This online timber tracking system 
will be phased in gradually.  The Government of Indonesia (GOI) is 
targeting nation-wide implementation by the end of 2009 but 
achieving this will be a technical and logistical challenge. End 
Summary. 
 
Log Labeling System 
------------------- 
¶2.  The Indonesian Ministry of Forestry (MOF) launched a new online 
forest product management and forest fee system in February 2009. 
The labeling or bar-coding of logs is part of this new timber 
administration system.  According to Director of Forest Fee and 
Product Distribution Bambang Murdiono, the MOF has been developing 
the system for 2 years, with the support of PT. Sucofindo (a timber 
surveyor/certifier and quality assurance provider), the European 
Union's Forest Law Enforcement, Governance and Trade (FLEGT) Support 
Project and The Nature Conservancy's USAID-funded Responsible Asia 
Forestry and Trade (RAFT) program (see para 5). 
 
Phase-in Period 
--------------- 
¶3.  According to Bambang, the system has been implemented in some 
areas, including East Kalimantan and Central Kalimantan, and the MOF 
is targeting nationwide implementation by the end of 2009.  As a 
first step, the system will be mandatory for forest concessions 
producing 60,000 cubic meters or more of logs per year (Minister of 
Forestry Regulation No. 8/2009).  The new system increases the cost 
of production by 3,000 Rupiah ($0.30) per cubic meter but it will 
benefit the concession including increasing market trust and selling 
price.  With this system, the MOF can more easily control and verify 
logs from the stump to the processing unit. 
 
Challenges to Implementation 
---------------------------- 
¶4.  However, the system faces some challenges.  Bambang cautions 
that the new system's implementation might be slowed down due to 
inadequate or nonexistent infrastructure (e.g. cell phone network 
coverage) and lack of human resources (trained system operators). 
He notes that not all areas, especially forested ones, have good 
network signal strength.  The system needs access to the network to 
upload data from the label or barcode. 
 
USG Support for New System 
-------------------------- 
¶5.  From June 15-19, 2009, the MOF, FLEGT and USAID's Responsible 
Asia Forestry and Trade (RAFT) program held a second training 
workshop for the online timber administration system in West 
Kalimantan.  Around 24 government officials and 15 forest management 
unit participants from Kalimantan and Sumatra attended the training. 
 The new online tracking system support RAFT's key objectives of 
increased regional timber trade from legal sources by providing 
transparency and efficiency in the administration of legal timber 
products. 
 
HUME