Eco-friendly timber firms want incentives

Eco-friendly timber firms want incentives

Adianto P. Simamora , The Jakarta Post , Hanoi Fri, 04/25/2008 12:15 PM Business

Forestry companies producing eco-friendly timber pleaded at the Asia-Pacific forest conference on Thursday for incentives to help with rising operating costs while demand for sustainable wood-related products remains sluggish.

The Hanoi conference is the leading regional meeting on forestry, attended by more than 600 participants including decision makers, governments, firms, foresters and activists.

Indonesian listed timber company PT Sumalindo Lestari Jaya said that operating costs for producing much-promoted sustainable timber were up about 30 percent.

Sumalindo president director Amir Sunarko told the conference, "When we started logging 16 years ago, we made a commitment to adopt sustainable forest management but during that time we never received incentives,"

Sunarko said government should reduce the burden for "eco-producers" by simplifying red tape while importing countries should reduce tariff barriers for sustainable wood products.

Sumalindo, which operates in natural tropical and plantation forest covering 448,986 hectares in East Kalimantan, has been certificated by the Forest Stewardship Council (FSC) for sustainable forest management of the firm's 267,000 hectares.

He said that since adopting sustainable forestry management, Sumalindo, a member of Singapore-based forestry group Samko Forest Holding, had improved market sales.

Governments in the Asia-Pacific region, which accounts for over half a billion hectares of forest, have long promoted sustainable forest management aimed at slashing poverty, particularly for communities living near forest areas.

Countries importing wood products in the region have adopted policies aimed at restricting illegal logging and promoting sustainable forestry management and eco-timber products.
However, experts said few Asian timber firms were applying for sustainable forest management certificates since local and foreign buyers continued trading in illegal timber products.

Hugh Speechly of the British Department for International Development's (DFID) Forest Governance and Trade Program said sustainable forestry management was not just an environmental goal, but raised social, political and economic issues.

"Sustainable management of forests in Asia is not just the responsibility of Asian countries but also of developed countries whose seemingly insatiable demand for timber products often drives illegal logging," he said.

"This demand impacts heavily on economies of developing countries and livelihoods of rural communities," Speechly said.

He said timber-producing nations lose more than US$15 billion a year from uncollected royalties due to illegal logging.

"Trade in illegally procured timbers is estimated to depress world prices by up to 16 percent, making it difficult for legal operators to compete," he said.

"The UK's Forest Governance and Trade Program is confronting this problem by harnessing market leverage in timber consuming countries to encourage governance reform in producing countries."

The Danish-owned timber company Dalhoff Larsen & Horneman (DHL) operating in Vietnam said that support for domestic demand for sustainable forest products was also important in promoting eco-friendly products.