Innovation

KHJL was established as a platform for a program called Community Logging as initiated by Telapak as one of the non-profit organizations in Indonesia as a strategy for community-based forest management. This strategy is expected to turn the wasteland into a potential location for a wood industry development that belongs to the people and at the same time helps to replace the damage caused by illegal logging practices. This strategy should also be the solution for people around the area by giving an alternative business field for the forest communities.

Community logging is expected to be an alternative for the community toward economic independence. The main target is the development of a management system for community logging of forest resources based on village/indigenous communities where timber management, non-timber forest products and environmental services in state forest land, forest villages, forest rights, and indigenous forests comply with the prevailing law. Community logging is also an "initiative solution" for forest management and forest resources. This would be an answer to the "unfair forest resource management" to move toward the interests of local/village/indigenous communities as opposed to the interest of the business owner as it has always been.

Broadly speaking, the development of community logging will answer: (a) an effort to empower and create a source of economic income for forest communities toward local economic independence; (b) mainstreaming communities in order to achieve sustainable forest management while preserving the forests of ecological aspect as well as secure rights to forest resources, and (c) prove that the public is able to manage and utilize forest resources sustainably in the form of a cooperative.

KHJL is a legal entity in Indonesia and is the first to obtain the certificate from the Forest Stewardship Council (FSC). Telapak, as the founder of KHJL, seeks to implement forest management based on the community in several regions in Indonesia and some of them are already well underway, even getting acknowledgment for the performance that has been done. The acknowledgment is received by Konawe Selatan Regency, Kulon Progo Regency and Lampung Tengah Regency. One-third of the region has gained recognition in the national and international levels of forest management in a fair and sustainable approach by involving the local community as the main actor. The form of recognition was given through the provision of certification on Standards and Guidelines Timber Legality Verification for Private Forests (TLVs) and Forest Stewardship Council (FSC) through the accredited certification body. The operation of cooperative community logging generally will achieve:

• Illegal logging is reduced drastically

• Forest coverage has increased significantly

• Welfare of the society is getting better

How do they accomplish this?

1. By working with the forest and not against or exploiting them. FSC-certified forest management had raised the income of the communities because certified wood is valued higher than illegal timber.

2. Through collaboration with local stakeholders, including government agencies, civil society organizations and the private sector, they managed to prevent the re-entry of those who want to make profits without considering the communities and the forests.

3. By creating a sustainable model that has the potential to meet the needs of local and global timber, they can reduce the threat of illegal logging of natural forests.

To increase the added value of wood, KHJL also established PT Konsel Jaya Lestari (“KJL”) which is a joint investment between KHJL and his business partner, which is owned 60% by KHJL. KJL produces square logs (wood pieces, flooring (wood tiles)) and prepares a number of productions to diversify into furniture, crafts, and others.

In addition, Telapak, as the founder of KHJL, and his business partners also established PT Solusi Bisnis Indonesia (“SOBI”) and has affiliated with KHJL with the mission of using a business mindset and the power of the market to solve social and environmental issues based on two principles: shared ownership and sustainable management of the resources. In the initial phase, SOBI will apply this concept in the forestry business by acting as a trading arm and a manufacturer of wood-related products. The wood that is used will be sourced from smallholder-owned forests that are managed with a strict sustainability standard. SOBI’s roles will be to oversee the implementation of best practices in forest management, group-certify the forest under its management, professionally manage the wood-related business, and consolidate the marketing effort of wood-related products, allowing the smallholder forest owners to earn a better living, which then impacts their families and communities. For the initial phase, SOBI engages two cooperatives under the management of Telapak, namely Koperasi Wana Lestari Menoreh and KHJL.

Inspiration

The issues of illegal logging and forest land owned by the government that is unproductive, critical, and abandoned are classic issues that have not been fully resolved. Indonesia's population living in the forest area includes about 48.8 million people, 10.2 million of whom are poor. (http://mediaindonesia.com/news/read/18883/koperasi-hutan-jaya-lestari-sultra-sukses-atasi-illegal-logging/2015-08-06).

For one of the efforts to overcome these problems, the government has developed community plantation forests (HTR) to provide 15 hectares of land allocated to each family. With a total land area of 5.4 million hectares reserved, there are about 360,000 families who receive rations of HTR.

“KJHL is also a way to achieve ‘social conglomerate’ as an opposite form of a conglomeration of individual that just enriches the individual,” said Silverius Oscar Unggul. In the ideal level, the real form of the implementation of community logging, which is the spirit of KJHL, is a communal management of forest resources and a cooperative organized under the control of the people by the principles of unity, cohesion, fairness, equality rights and capacity with the principles of conservation and sustainability.

The real result of this movement are the eight successfully governed community logging cooperatives with a total area of 4,500 hectares. Two cooperatives have acquired FSC certification, and six cooperatives are targeted in the remaining stages of the process to get the legality of timber in 2017. “Community logging through cooperative is an original idea of Indonesia,” said Silverius Oscar Unggul.

Silverius Oscar Unggul, the figure behind the establishment KJHL, in his explanation during the interview stated that in carrying KHJL and its trading arm, namely SOBI, they adopted the concept of "If there is no duit (money), just do it." It is different to the concept of running a business in general which is "if there is no duit (money), don’t do it."

Overall impact

The sales price of teak from KHJL increased after KHJL obtained the FSC certificate. For example, the ranges of the price increases that occurred in the period 2005-2008 are as follows:

• In 2005, the sales price to the buyer KHJL was Rp. 3.2 million / M3 (size 13 cm up)

• In 2006, the sales price to the buyer KHJL rose to an average of Rp. 5 million / M3 (size 13 cm up)

• In 2007-2008 the sales price to the buyer KHJL rose to an average of Rp. 6 million / M3

KHJL also increased the purchase price of teak squares from the members, from the previous Rp. 600,000 per M3 to Rp. 1.445,000, and in the period 2007-2008 increasing to an average of Rp. 1,750.000.

In addition, the FSC certification in Konawe Selatan provided a beneficial domino effect, among other things:

1. For local government levies to raise funds.
2. Ecology: There is an increasing amount of teak plant populations, both members and non-members.
3. Social: There was a change in community behavior from illegal loggers to becoming forest conservationists.

The FSC certificate is a reference and an official public document which states that timber is legal and does not come from illegal logging. KHJL also obtained Timber Legality Verification System/Sistem Verifikasi Legalitas Kayu (SVLK) from the Government of Indonesia. The production of timber that complies with prevailing law finally brought KHJL as the first cooperative in Indonesia managing environmentally friendly forest products. One piece of evidence is that KHJL in 2009 obtained the Conde Nast Traveller Award for the environment category in New York and the Social Entrepreneurship Award from Scoll and Schwab Foundation in 2011 in London, England.

KHJL also eliminates the middleman or broker and barons who became receivers of timber from illegal logging. Through its presence, KHJL strives to promote sustainable forest management and the balance between people, planet and profit. But the most important benefits of the movement that carried through KHJL is campaigning to the public to live in harmony with forests and maintain sustainable forest management.

Business benefit

With sustainable forest management and some certifications obtained, the resulting wood produced by KHJL has a trend of increasing in a good price range with the target of marketing for domestic sale and export. The price increase of timber or processed timber at the end benefits the business continuity of KHJL and its members. According to information from Mr. Silverius Oscar Unggul, the price of wood, which was originally only around Rp. 1,000,000 / M3, currently reaches Rp. 6,000,000 / M3. Good prospects of exploitation of sustainable timber through a platform of cooperation and implementation of community logging at the end made the founder of KHJL decided to invite business partners and establish SOBI, which acts as a trading arm and a manufacturer of wood-related products in the early stages of business.

Social and environmental benefit

The benefits of community logging through KHJL are as follows:

a. Economic benefits

1. Prices of timber have an upward trend.
2. Contributing to the increase in local revenues.
3. Contributing to the increase in people's income.
4. Windfall profit from the wood-based products after obtaining multiple certification and recognition of sustainable wood processing.

b. Social benefits

1. Change in the behavior of illegal loggers into forest conservationists.
2. Encourage re-plantation.
3. Encourage the culture to preserve water resources and biological diversity.
4. Prevent using pesticides and land-burning approaches.

c. Ecology benefits

1. Increase the potential of forests, especially teak.
2. Increase the proliferation of fauna.
3. Grow crops on private land.
4. CO2 absorption.
5. Increase in water discharge.

Interview

Silverius Oscar Unggul, Commisioner - PT Sosial Bisnis Indonesia and President of Telapak Association