Verification of Legal Origin Program

Inspecting Merbau logs from Hanuratta at the industry of PT Karya Guna Ekatama

TFF’s efforts have finally produced results as the supply chain of PT Hanuratta III, a Papuan concession near Kaimana, and the woodworking industry of PT Karya Guna Ekatama near Surabaya, receives the SmartWood certificate of Legal Origin with chain-of-custody.

Hanuratta III becomes the first Merbau producing concession to receive a certificate of Legal Origin. Verification of this supply chain will enable DLH-Nordisk to offer VLO Merbau products to its international buyers.
A second supply chain of PT Agung Kharisma, a manufacturer of Bankirai moulding products in Surabaya and, PT Tingang Karya Mandiri, a swamp concession in Central Kalimantan, has also recently passed SmartWood VLO verification, thus further enhancing DLH’s market position for VLO products.

TFF provides technical assistance for seven complete supply chains under a VLO agreement with DLH-Nordisk Indonesia.

INFORMATION SHEET

An important first step in obtaining a certificate of legality and chain-of-custody under the DLH Nordisk Verification of Legal Origin (VLO) program, is base-line assessmewnt, which will be conducted by the TFF.

The purpose of this visit is to evaluate the readiness of the forest concession company for a legality and CoC audit and to advise on any preparatory actions, which need to be taken.

The following is a check list, of what TFF will want to see and do during the visit to the concession. TFF will also visit the collaborating industries to assess CoC requirements.

• Verify the existence of a valid concession license (SK IUPHHK) and concession operating license.
• Verify the existence of a valid RKT
• Verify the existence of LHC and LHP documentation and relevant tree distribution maps.
• Examine a map of the forest concession and a map of current and recent RKT’s
• Review evidence concerning the payment of relevant royalties and taxes (PSDH, DR, NPWP, PBB, PPN)
• Visit the active and/or recent logging area.
• Visit the log pond or TPK.
• Examine recent log transportation documents (SKSKB, DKB)

The concession visit can normally be completed in one day (plus travel time).

The company can facilitate this visit by putting in place adequate transportation and logistical arrangements and by having the indicated documentation available for viewing.

TFF will prepare a report for the company which will documents the current situation with respect to the DLH “Verification of Legal Origin” standard and basic requirements for a credible CoC system. The report will contain specific recommendations to help the concession company prepare for a third party audit against the legality and the CoC standard.

TFF’s report will be confidential and will be made available only to the participating company and to DLH.

Any questions regarding the proposed field visit should be addressed directly to Art Klassen or Hasbillah at TFF.