The Indonesian government recently decided to scrap their timber legality verification system, which was used by the European Union to insure that Indonesian timber imports where harvested sustainably.
This news took the European Union and the European timber industry by surprise, as Indonesia was actually moving forward to a so-called Green Lane. to exercise due diligence as stated by the EU Timber Regulation. The timber legality verification system, in place since 2016, was an important step for Indonesia for having approved this Green Lane.
Reaction to economic slowdown
The Indonesian government explained their decision by saying that the government needs to boost their industry since the corona pandemic has caused a slowdown. It also faces fierce competition by the Chinese timber industry. The European Union expressed their disappointment and is looking for a solution before May 27, when the verification system will be scrapped.
How European companies can prepare
The European timber industry should be aware that supply chain disruptions like these are common in today’s economy. European timber companies can take two measures at this point. The first step is to check if any of their timber products are coming from Indonesia and if their company qualifies as an operator under the EUTR. If this is the case, a due diligence platform should be in place. The second step is that timber companies should investigate if there is another supply of timber available within their supply chain network.
Our Timber Due Diligence Platform
ChainPoint has a Timber Due Diligence Platform available for any company in the industry. If you want to see how this platform works, we recommend watching our timber webinar. If you have any questions about our platform, please don’t hesitate to contact us at any time.