Many timber-based businesses in Indonesia made a smooth transition to the European Union’s FLEGT (Forest Law Enforcement, Governance and Trade) licensing system, because of its compatibility with the existing national Timber Legality Assurance System (Sistem Verifikasi Legalitas Kayu, SVLK). One of the major challenges has been getting small businesses on board that may not have been previously registered under the national system.
A national policy dialogue held in Jakarta on 13 July discussed how to maximize the benefits of SVLK and FLEGT for small- and medium-sized enterprises (SMEs), and ensure the best outcomes for trade, conservation and livelihoods.
Sulthon Mohammad Amin, a small business owner and member of the Jepara Small-scale Furniture Producers’ Association (APKJ), sat down with the Center for International Forestry Research (CIFOR) on the sidelines of the event to discuss the challenges faced by craftsmen in operating small businesses, achieving certification, and taking advantage of export opportunities.
Why is SVLK/FLEGT important for small businesses, like those in Jepara?
In principle, we agree that there should be an SVLK license. But our greatest hope is that the SVLK can help to grow our business.
As we heard earlier today, if at the start of the supply chain, in the forest, the timber is already considered legal, then at the end it should already carry legal documentation. But somehow, we are still kept busy filling out various administrative documents to prove that it is legal. To the point that this becomes quite a burden for SMEs. What we want to know is whether the process can be further simplified.
How do you suggest the process can be simplified?
Our input is this: If at present the simplest way to fulfill SVLK is via group certification, then what if, for example, SVLK could be obtained or acknowledged at the village or sub-district government level? There could be a guarantee that furniture businesses in that area have already registered with their village or sub-district government – a kind of local verification. So that the village or sub-district government could guarantee that those who are registered there are legal businesses, meaning that their products can automatically be considered to be legal.
Clearly there are some burdens for SMEs under SVLK/FLEGT, but what about the benefits?
For small businesses, for those who want to learn, the best way forward is through improving administrative skills.
Until now, the method carried out by many craftsmen is what you might call traditional management. Whereby, if a craftsman buys wood, for example, and is given a receipt, he just puts it in his pocket. And then when his wife washes his trousers, the document is damaged, so he is left with no data at all.
I think that under SVLK, if people are more diligent with their business administration, it will help support their success, from that perspective.
You’ve come a long way from Jepara to Jakarta. What message do you want to bring to this dialogue?
We want to convey that the life of small craftsmen today, in my opinion, is in real danger. In the case of Jepara, the town today has seen the arrival of a lot of foreign companies in non-furniture industries, like garments, fashion, cable companies and others. They have all come to Jepara.
Now, for furniture makers to achieve a certain level of skill, or to create a certain product, the training doesn’t take one or two days, one or two months, or even one or two years. Developing the skills to create a high-quality furniture product can take several years of training. But in terms of making money, for example to make 1.5 million rupiah, which is the minimum monthly wage in Jepara now, a craftsman would have to work overtime. So what about those who only have a high-school education? Well, without any level of practical skills, they can go to work at one of those new foreign factories, and in one month they’ll be making minimum wage.
The comparison between those who trained for several years, who we might call blue-collar workers, with those who only finished high school and then went straight to the factories – it’s just disproportionate. Because these craftsmen are quite skilled, yet their income remains small.
This is one of the reasons why I want furniture-making to receive better attention. Why? Because under these conditions, it’s inevitable that if furniture-making does not draw the interest of our community, of the people of Jepara, then day by day, this skilled industry will surely disappear.
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