WWF urges global firms to stop buying illegal plywood from RI
The Jakarta Post, Jakarta
The World Wide Fund for Nature (WWF) is currently running a campaign to urge global companies to stop buying plywood from Indonesian firms suspected of retaining illegal logs and damaging the environment.
An executive from WWF Indonesia, Agus Setyarso, told The Jakarta Post on Monday that currently WWF was in the process of lobbying companies abroad to take part in what he called the global forestry trade network.
Agus explained that the network would consist only of plywood buyers which had committed to reject Indonesian plywood products drawn from illicit resources.
"The program is still being developed and we hope that it can be applied in 2006. We are hoping that the possible risk of losing global customers will push local plywood firms to seriously take care of the environment," Agus said.
He said companies included in the network would only receive logs accompanied with an environmental certificate, issued by an independent auditor. By doing so, the public would be able to trace the origin of the logs.
Agus was optimistic that many companies would join the network because global firms are becoming more sensitive to environmental issues due to pressure from non-governmental organizations, as recently shown in the case of pulp giant Asia Pulp and Paper (APP).
APP's major Japanese customers -- among them copy machine company Ricoh Co. -- threatened to stop buying plywood from the company unless it cleaned up its environmental record in Indonesia.
Stung by the action, APP signed an agreement with WWF last week to set aside 58,500 hectares of its concessions in Riau province as a conservation area.
The company also pledged to tighten up procedures to stop illegally logged wood ending up in its mills and to publish a plan to make its forestry operations self-sustaining over the next few years.
Agus said that APP's move was commendable and urged other local companies to do the same thing.
"Without the initiative of the company itself, such an agreement would not have taken place. We hope other companies follow the same steps," he said.
Indonesia is the largest plywood producer in the world with some 80 percent of output exported, providing nearly 100 percent in foreign exchange revenues, because the import component is very small.
From 1993 to 1999, foreign exchange earnings from this industry averaged around US$5 billion per year, which accounted for 9.5 percent of the country's total foreign exchange revenue each year.
However, due to a shortage in raw materials, earnings from the industry plummeted to an average of $2.3 billion per year during the last three years.
The government, under pressure from international donors, is determined to protect the country's forest areas, which have been heavily damaged due to over-exploitation by forest-related industries such as plywood and pulp.
The government has limited the timber supply quota at home to only 6.89 million cubic meters, compared to more than 12 million cubic meters in previous years.
The restriction has forced the plywood industry to cut down its production capacity by up to 60 percent.
Currently, there are some 128 plywood companies operating in the country, employing some 16 million workers and with total investments reaching $27 billion.