Attachment 3.8.Regulation of Director General for Forestry Business Development
Number
Date
:P.5/VI-BPPHH/2014
: 14 July 2014
Considering: Standards and Guidelines of Performance Evaluation for Sustainable
Production Forests Management and Timber Legality Verifications
IMPLEMENTATION GUIDELINE FOR TIMBER LEGALITY VERIFICATION
ON ETPIK NON-PRODUCERS
A.
SCOPE
1.
This Timber Legality Verification Guideline (VLK) includes verification on
ETPIK Non-Producers and their suppliers.
2.
LK verifications is performed on documents of ETPIK Non-Producers and their suppliers, using VLK standard as Attachment 2.10.
B.
REFERENCE
1.
Law Number 6 of 1983 concerning General Provisions and Tax Procedures.
2.
Law Number 41 of 1999 concerning Forestry.
3.
Law Number 17 of 2006 regarding the amendment of Law Number 10 of
1995 concerning Customs.
4.
Law Number 32 of 2009 concerning Environmental Protection and
Management.
5.
Law Number 18 of 2013 concerning the Prevention and Eradication of
Forest Destruction.
This translation is done by professional translator and proofreaded by Multistakeholder Forestry
Programme Team. The document is uploaded to www.mfp.or.id
per 30 November 2014. Should you have revision or suggestion to the text please email mfp@mfp.or.id
.

6.
Decree of President of the Republic of Indonesia Number 43 of 1978 concerning Ratification of the Convention on International Trade in
Endangered Species (CITES) of Wild Fauna.
7.
Regulation of Minister for Finance Number 92 / PMK.02 / 2005 concerning
Certain Type of Exported Goodsand Export Levy Tariffs as amended several times, at the latest by Number 72 / PMK.011 / 2008.
8.
Regulation of the Minister for Law and Human Rights Number M.01-
HT.01.10 of 2006 concerning Procedures for Submission of Application and
Approval of Memorandum of Association, Agreements, Submission of
Reports and Notification of Amendment of Articles of Association of a
Limited Liability Company.
9.
Regulation of the Minister for Trade Number 36 / M-DAG / PER / 9/2007 as amended by Number 46 / M-DAG / PER / 9/2009 concerning Trade
Business Permit Issuance.
10.
Regulation of the Minister for Finance Number 129 / PMK.011 / 2007 concerning Establishment of the Customs Import Tariff upon Imported
Goods.
11.
Regulation of the Minister for Forestry Number P.35 / Menhut-II / 2008 in conjunction with Number P.9 / Menhut-II / 2009 concerning Business
12.
Regulation of the Minister for Finance Number 223 / PMK.011 / 2008 concerning the Exported Goods subject to Duty and Tax.
13.
Regulation of the Minister for Industry Number 41 / M-Ind / Per / 6/2008 concerning Decision on the Granting of Industrial Business Permit,
Expansion Permit and Certificate of Industrial Registration.
14.
Regulation of the Minister for Industry Number 64 / M-IND / PER /
7/2011 concerning the types of industries under the Development of the
Directorate General and the Agency in the Ministry for Industry.
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15.
Regulation of the Minister for Forestry Number P.30 / Menhut-II / 2012 concerning the Administration of Forest Products Derived from Private
Forest.
16.
Regulation of the Minister for Trade Number 64 / M-DAG / PER / 10/2012 in conjunction with Number 81 / M-DAG / PER / 12/2013 concerning
Export provisions of Forestry Industrial Products..
17.
Regulation of Minister for Forestry Number P.41 / Menhut-II / 2014 concerning Administration of Timber Forest Products from Natural Forest.
18.
Regulation of Minister for Forestry Number P.42 / Menhut-II / 2014 concerning Administration of Timber Forest Products from Plantation
Forests in Production Forests.
19.
Regulation of Minister for Forestry Number P.43 / Menhut-II / 2014 concerning Performance Evaluation of Sustainable Production Forests
Management and Timber Legality Verifications of PermitHoldesr or Private
Forests.
20.
Regulation of the Director General of Customs and Excise Number P-06 /
BC / 2009 concerning the Amendment on the Regulation of the Director
General of Customs and Excise Number P-40 / BC / 2008 concerning
Customs Procedures in the Export Field.
21.
ISO/IEC Guide 23:1982 Methods of Indicating Conformity with Standards for Third-party Certification Systems .
22.
SNI ISO/IEC 19011:2012 Management System Audit Guidelines.
23.
SNI ISO/IEC 17065:2012 Conformity Evaluation - Requirements for
Certification Agency of Products, Processes and Services.
C.
DEFINITION
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1.
Registered Exporter of Forestry Industrial Products Non-Producer (ETPIK
Non-Producer) is a trading company that has gained recognition for doing export of forest industrial products.
2.
Auditee is verified ETPIK Non-Producer
3.
Independent Assessment and Verification Body (LP&VI) is a company having an Indonesian legal body which is accredited to evaluate the performance of Sustainable Production Forests Management and/or timber legality verifications (VLK).
4.
Timber Legality Verifications Body, (LVLK) is LP& VI that verify timber legality
5.
Independent Observer (PI) is a member of civil society either an individual or an institution having an Indonesian legal body, which runs the monitoring functions related to public services in the field of forestry such as the issuance of S-PHPL or S-LK.
6.
LK verification standards are all elements of the Principles, Criteria,
Indicators and Verifiers as listed in Attachment 2.10. of Regulation of the
Director General for Forestry Business Development.
7.
Timber Legality Certificate (S-LK) is a certificate given to the ETPIK Non-
Producer which stated that the ETPIK Non-Producer has met the standards of timber legality.
8.
Supplier’s Conformity Declaration is a conformity declaration conducted by the suppliers based on the prove of requirements fulfillment.
9.
V-Legal sign is a sign affixed on the timber, timber products or packaging, which stated that timber and timber products have met the standard of
PHPL or LK verification standards .
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10.
V-Legal Documents is a document which states that the timber products for export purposes meet the standard of timber legality verifications in accordance with the provisions of the legislation.
11.
Complaint is a written expression of dissatisfaction of individuals and / or institutions upon the activities of ETPIK Non-Producers, LVLK or KAN.
12.
Appeal is a written request from the ETPIK Non-Producerfor the review of decision on the certification process by LVLK addressed to KAN.
13.
Surveillance is a conformity assessment activity conducted systematically and recur as the basis for maintaining the validity of the conformity declaration
14.
Certification transfer is a transfer of VLK's valid management system certification from accredited LVLK (accredited LVLK issuer), to other accredited LVLK (accredited LVLK recipient) for the purpose of certification continuity, within the same scope of accreditation set by the Minister according to the scope of accreditation.
15.
Special audit or also called sudden audits is audit activity which is performed to investigate the complaint, or associated with significant changes or as the follow-up of suspended client certification.
16.
Re-certification is LK verification activities which are planned and carried out to assess the fulfillment of all requirements continuously
17.
Auditor is the qualified personnel and has the capability to perform the audit, and assigned by LVLK to implement timber legality verifications.
18.
Management Representative is management representative of ETPIK Non
Producer owner who has knowledge of all existing systems in ETPIK Non-
Producer, and is authorized in writing to assist the auditor in the verifications process and sign the verification results.
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19.
Auction timber is timber forest products which are the result of an auction derived from confiscations, findings and seizure.
20.
Minister is the Minister entrusted with the duty and responsibility in the field of forestry.
21.
Director General is the Director General assigned with duties and responsibilities in the field of Forestry Business Development.
22.
Regional Taskforce Unit (SKPD) is regional government component of province and regency / city in Indonesia.
D.
ACTIVITIES
1.
APPLICATION FOR VERIFICATION a.
Auditees apply for verification to the LVLK containing at least the scope of the verifications, the Auditee profiles, and other information required in the verifications process of LK, with a copy to the Director General. b.
Before conducting verification activities, LVLK conducts a study of verification application and maintains the records to ensure that:
1) Verification requirements are clearly defined, understood, and documented;
2) There is no difference in meaning between LVLK and Auditee;
3) LVLK able to carry out the requested LK verifications, and reach out the operations location of Auditee. c.
LVLK settles the working contract with Auditee.
2.
VERIFICATION PLANNING a.
Preparation
1) LVLK prepares plan of verification activities, such as: a) designation of the Audit Team personnel. In case the Audit Team is more than one person, one of them becomes the Lead Auditor.
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b) Schedule and time frame of the verification activities. c) Auditors working document.
2) LVLK delivers in writing to the Ministry for Forestry upon LK verifications plan not later than 14 (fourteen) calendar days prior to the LK verifications plan with a copy to Provincial Dinas in charge of
Forestry, Regency / City in charge of Forestry, Regency / City in charge of industries, local BP2HP and submits a notification letter to the villages / kelurahan of the industry location and / or the mass media, and the Independent Observer (PI) concerning the implementation plan (schedule and time frame implementation, audit team, completed with a brief profile information of the Auditee).
3) The Ministry of Forestry announces plans on the LVLK website of
Ministry for Forestry (http://silk.dephut.go.id and www.dephut.go.id
not later than 7 (seven) calendar days prior to the verifications.
4) The Verification Body of Timber Legality announces the plan for verifications in LVLK website not later than 7 (seven) calendar days before the verifications
5) Based on the announcements of verifications plan by LVLK, the
Ministry for Forestry and the related agency may provide information related to the Permit Holder to be made as consideration materials in the verifications process. b.
Planning
1) The Verification Body of Timber Legality informs the Auditee regarding the documents required in the verification process and request the Auditee to designate a Management Representative.
2) The Verification Body of Timber Legality informs the audit plan to the local SKPD.
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3.
VERIFICATION IMPLEMENTATION
LK verifications are implemented in three (3) stages: Entry Meeting,
Document Verifications and Field Observation and Closing Meeting. a.
Entry Meeting
1) The Entry Meeting is a meeting between the Audit Team with the
Auditee, which aim to provide an explanation on the purpose, scope, schedule, methodology and verification procedures, and request a power of attorney and / or letter of assignment of
Management Representative.
2) From the meeting expected the availability, the completeness and the transparency of the data required by the Audit Team can be fulfilled by the Auditee.
3) The results of the meeting are stated in the form of Minutes of
Entry Meeting signed by both parties, completed with Entry
Meeting Attendance List. b.
Documents Verification and Field Observation
1) Documents Verification is the activity performed by the Audit Team to collect, to study the data and the documents of Auditee, and to analyze using a set of criteria and indicators set in these provisions.
2) Field observation is the activity performed by the Audit Team to test the validity of data through observation, recording, random test and tracing, and to analyze using the criteria and indicators that have been established to find out its fulfillment.
3) Verifications and field observations performed at the latest for 10
(ten) calendar days, and they are ended with a Closing Meeting.
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4) Verifications arecarried out in warehouse facility of Auditee's permit holder and / or supplier's warehouse facilities. c.
Closing Meeting
1) Closing Meeting is a meeting between the Audit Team and the
Auditee, to explain the results of the verifications and to confirm the results and findings in the field.
2) The results of Closing Meeting are written in the form of Minutes of
Closing Meeting signed by both parties, completed with Attendance
List of the Closing Meeting.
4.
PROCEDURES FOR VERIFICATIONS a.
Verifications are only performed towards the Auditees who receive products from non ETPIK industrial supplier which has the S-LK or
Supplier Conformity Declaration b.
Verification is performed to the documents of Auditee and its supplier, within a period of at least the last 3 (three) t months for the first evaluation and the last 12 (twelve) months for re-certification. c.
Auditee is not permitted to submit request for the V-Legal document for the products which their raw materials derived from timber auction. d.
LVLK is not permitted to issue the V-Legal Documents for the products which their raw materials derived from timber auction. e.
In the case of surveillance or re-certification or transfer of certification, verifications are done to the documents of Auditee and its suppliers since the last audit.
E.
REPORTING
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1.
LK verification reports are made by the Audit Team,it contains complete information and presented clearly and systematically, submitted to LVLK as the decision-making materials of S-LK issuance.
2.
Submission of data and documents of Auditee which have not been complete yet, making reports, decision making and submission of the verification decision are not later than 21 (twenty-one) calendar days after the Closing Meeting.
3.
Report of the final decision of LK verifications is presented in the form of book and soft copy in CD, submitted to the Auditee, and the Ministry for
Forestry through the Director General for further development materials.
4.
If based on the verification results the Auditee is declared as “NOT PASS", the LVLK conveys the results of verifications in particular on the verifiers who are "NOT QUALIFIED" completed with the facts found in the field to the Director-General in the form of book and soft copy in CD as assessment materials.
F.
DECISION MAKING
1.
Decision-making is done by the Decision Maker with the status of permanent personnel of LVLK based on the report of the Audit Team. In case of needed, the Decision Maker may be accompanied by a personnel who understands the substance of verification, that is not originated from the related Audit Team.
2.
Auditee is declared as "PASS" if the entire assessment norm for each verifier upon LK verification standards is declared as "Qualified". The
"PASS" decision is also given to the Auditee that during verification process are found verifiers (which are not related to raw materials), who are still in handling process.
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3.
The Verification Body of Timber Legality issues S-LK for Auditees who is declared as "PASS" and makes the sub-licensing contract with the Auditee concerning the Use of V-Legal Signs.
4.
In terms of the Auditee is declared as "NOT PASS", LVLK submits a decision report to Auditee to give an opportunity to the Auditee to appeal against the results of the decision referred to.
5.
Auditee is given time to submit an appeal against the decision of verification not later than 14 (fourteen) calendar days after the submission of the results of verification decisions.
6.
In the absence of an appeal, the results of the verification decision are announced not later than 35 (thirty-five) calendar days after the Closing
Meeting.
7.
In the event of an appeal, the settlement and appeal decisions are done not later than 20 (twenty) calendar days from the admissibility of the appeal, and the results of the verification decision are to be announced not later than 55 (fifty-five) calendar days after the Closing Meeting.
8.
The announcement of the verification decision completed with a resume of verification results is to be carried out through the LVLK website and the website of the Ministry for Forestry or mass media.
G.
ISSUANCE OF CERTIFICATE AND RE-CERTIFICATION
1.
Issuance Of Certificate a.
LK Certificate is awarded to Auditee that is declared as "PASS" of LK verifications, with a validity period of the certificate for 6 (six) years, with surveillance performance not later than every 24 (twenty-four) months.
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b.
LK certificate contains at least the name of Auditee, location, permit number, name of LVLK and the logo, logo of KAN, issuance date, validity period and certificate number, as well as the LK verification standards reference. c.
Timber Legality Verifications Institution is to present recapitulation of
S-LK issuance to the Director-General every three (3) months, to then be published through the website of the Ministry for Forestry
(http://silk.dephut.go.id and www.dephut.go.id
). d.
The Verification Body of Timber Legality publishes every issuance, amendment, suspension and revocation of the S-LK in LVLK website and the website of the Ministry for Forestry (http://silk.dephut.go.id and www.dephut.go.id) or in the mass media not later than 7 (seven) calendar days after the determination of the decision. e.
Publication the S-LK issuance completed with resume of audit results, which contains information about the identity of LVLK, theidentity of
Auditee and the verifications which are the summaries of the justification of each verifier, referring to the reporting guidelines as regulated.
2.
Re-Certification a.
Not later than six (6) months prior to the expiry date of the S-LK, the
Auditees submits an application for re-certification to LVLK. b.
The decisions of re-certification results are set before the S-LK validity expires.
H.
SURVEILLANCE
1.
The surveillance shall be performed during the validity period of the S-LK.
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2.
The surveillance shall be performed not later than every 24 (twenty four) months since the previous audit orsurveillance.
3.
The decision onsurveillance results may be an extension, suspension or revocation of the S-LK.
4.
In the event of any changes in LK verification standards, in the surveillance,
LVLK is obligated to do verifications to find out its fulfillment.
5.
The surveillance results completed with a resume of the results containing information about the identity of LVLK, the identity of Auditee and the verification which is the summary of the justification of each verifier.
I.
SPECIAL AUDIT
1.
The implementation of a special audit or also called sudden audit is performed to re-verify: a.
Non-conformity to the compliance of LK verification standards performed by Auditee, based on the complaints submitted by the PI after LVLK verifications. b.
LK verification standards compliance as the follow-up to the suspended Auditee certification. c.
In case there are significant changes that affect the continuity of the timber legality compliance. d.
If case the Auditee receives timber derived from the auction after the issuance of the S-LK.
2.
Before conducting special audit, LVLK confirms the time of the audit to the
Auditee.
J.
SUSPENSION AND REVOCATION OF S-LK
1.
Matters that cause suspension of the S-LK:
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a.
The S-LK holder is not ready to be inspected according to the time frame determined in accordance with the LVLK procedures. b.
There are mismatch findings as the result of sudden audits.
2.
Matters that cause revocation of the S-LK: a.
The S-LK holder is still not ready to be inspected 3 (three) months after the determination of the certificate suspension. b.
By law proved that the S-LK holder made purchasing and / or receiving and / or storing and / or processing and / or selling illegal timber and
/ or corruption related to the licensing field. c.
The Auditee loses the right to run its business or its business permitis revoked.
K.
TRANSFER OF CERTIFICATION
1.
LK certificate which can be transferred is LK certificate issued by
LVLK,which is accredited by KAN, to the other LVLK accredited by KAN within the same scope of accreditation set by the Minister for Forestry in accordance with the scope of accreditation. Transfer of certificate is permitted with the following reasons: a.
Upon the request of the Holder of S-LK; or b.
LVLK accreditation is revoked by KAN.
2.
Procedures for transfer of certificate: a.
Request of the holders of S-LK:
1) The transfer of certificate upon the request of S-LK holders is conducted not based on unfair competition.
2) In the transfer of certificate, the holder of the S-LK has to guarantee the maintenace of the integrity and credibility of certification.
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3) In case in the future it is proved that the transfer of certificate that was conducted was based on unfair competition or did not maintain the integrity and credibility of certification, then the
Director files a complaint to KAN upon the performance of LVLK certificate recipient to be followed up in accordance with the prevailing mechanisms in KAN.
4) The transfer of certificate is submitted by the S-LK holder to preferred LVLK or a certificate recipient with a copy to the Director,
KAN, Head of Provincial Dinas, Head of Balai, and the Head of
Dinast of Regency/ City.
5) Based on the letter of notification referred to point 4) competent and authorized personnel in LVLK certificate recipient in coordination with the authorized personnel at LVLK certificate issuer to study the transfer of the certificate request. The study conducted is in the form of study documentation, and if required they may conduct a field audit for the S-LK holders.
6) The reason for not doing a field audit shall be justified and documented. If the LVLKrecipient has not received adequate information from LVLK issuer of certificate of origin, then the audit shall be conducted by LVLK recipient.
7) The study shall be documented and shall cover the following: a) Confirmation that the activities of S-LK holder which its certificate is transferred are in accordance with the scope of accreditation of LVLK recipient. b) LVLK certificate recipient must ensure to LVLK issuer that the transfer of certificate was not performed because of nonconformity or other things such as suspension and certificate
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revocation which was done by LVLK issuer of certificates of origin. If the reason for its transfer because of the above reasons, then LVLK recipient has to reject the transfer request for submitted certificates. c) Validity of certification and scope of certification that will be transferred. d) The initial audit report or re-certification and the report of the surveillance which was carried out and in case there is information of non-conformities which are not covered by the previous LVLK. This also has to include the records of certification process or the available checklist. If such information is not available and / or the surveillance has passed the specified time limit, the Auditee shall be treated as a new certification applicant. e) Records of complaints received and follow-up performed. f) Certification cycle stages. g) Information regarding legal compliance of Auditee.
8) Nonconformities that still exist, if possible, shall be covered by the
LVLK issuer of certification of origin before certification is transferred. If they do not then the LVLK certification recipient has to ensure that the nonconformity can be covered.
9) If there are no non-conformities and the potential issues identified in the study before the transfer of certificate conducted, the LVLK recipient may issue certificates by following the rules of the normal certification decision. The next surveillance program shall refer to the surveillance schedule such as certification of origin except if
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LVLK conducts an initial audit or re-certification which is in accordance with the results of studies conducted.
10) If there are doubts over the existing certification after the study,
LVLK recipient shall: a) Conduct initial assessment from the beginning to the S-LK holder; or b) Conduct audit which concentrates on the existing problem areas.
11) The decision of the LVLK recipient depends on existing conditions and the level of the problems found and has to be explained to the
S-LK holder and the justification of decisions taken has to be documented and the records is kept by LVLK recipient.
12) of TheS-LK holder is obligated to report in writing to the Director with a copy to KAN regarding the transfer of certificate along with the reason and enclosing the reasons referred to point 4) and a copy of the contract agreement with LVLK certification recipient, not later than 6 (six) working days from the date of the contract signed.
13) The LVLKrecipient publishes the decision of certificate transfer in
LVLK website, website of the Ministry for Forestry
(www.dephut.go.id and www.silk.dephut.go.id) not later than 7
(seven) calendar days after the LVLK recipient decided to accept the transfer of certificate.
14) KAN will check upon the S-LK transfer process at the time of assessment to LVLK recipient. b.
LVLK Accreditation Revoked
1) LVLK which its accreditation is revoked is obligated to transfer the
S-LK that has been issued to the accredited LVLK, and has been
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established by the Ministry for Forestry in accordance with the scope of accreditation, with the approval of LVLK certification recipient and theS-LK holder.
2) Competent and authorized personnel in LVLK certificate transferee in coordination with the authorized personnel in LVLK certificate issuer to study the request of certification transfer. The study conducted is in the form of the study documentation, and if necessary a field audit may be conducted towards the S-LK holder.
3) Further procedures follow the provisions of point 2 letter a number
4) up to number 14).
4) The suspended LK certificate cannot be transferred to other LVLK.
5) All costs accompanying the transfer of the S-LK due to the demand of S-LK Holders shall be charged to the holder of the S-LK, while the the S-LK transfer because of revocation of LVLK accreditation shall be charged to LVLK which its accreditation is revoked.
L.
MISCELLANEOUS
1.
Auditee has to report to LVLK, in the event of: a.
Matters that affect the system of timber legality, including the changes of suppliers and / or the status of the S-LK suppliers; b.
The change of the company name by attaching the approval from the licensor; c.
The changes in the structure or management or the ownership of the
Auditee.
2.
If there are things that affect the timber legality systems including change of supplier and/or the status of S-LK suppliers and / or change of the
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company name as number 1.a. and 1.b. above, LVLK is obliged to conduct further verifications.
DIRECTOR GENERAL,
Signed
BAMBANG HENDROYONO
Made as True copy
HEAD OF LEGAL AND TECHNICAL COOPERATION DIVISION,
Signed
IMAM SETIOHARGO
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