1 Introduction

1.1. Definition of timber legality standard, development of its institutional arrangement, and verification system has been started since 2003 based on MoU between United Kingdom and Government of Indonesia regarding combating illegal logging.

1.2. In June 2005, it was recommended by multistakeholders to harmonize the standard into the existing relevant regulations in forestry sector. It was also decided that Indonesian Eco-label Institute (LEI) as a lead organization to facilitate the development process of the standard and ensuring involvement of NGOs, indigenous people, and representative businesses during the consultation processes.

1.3. In September 2005, the workshop was carried out in order to discuss institutional arrangement and implementation scheme for the standard. The issue between mandatory and voluntary system applied for the system was debated. Thus, it was recommended that the establishment of small working group consisting of multi-stakeholders is required to outline more   detail the standard and its procedures. The Ministry of Forestry through decree No. 70/Menhut - II/2006 legalized the working group in order to speed up the process of the standard and its verification.

1.4. In 2006, the standard was further detail discussed with wide stakeholders in Jakarta, Jambi, East Kalimantan, South Sumatra, and Riau. Field tests were carried out in order to test the standard. The field tests were carried out in as follows (a) Sanggau/HTI, (b) Balikpapan/HTI, (c) Malinau/nature forest, (d) Tarakan/wood primary industry, (e) Jawa Tengah/CBFM, (f) ogor/wood secondary industry, (g) Lampung/Private Forest, (h) Surabaya/wood primary and secondary industry.

1.5. In early 2007, the working group submitted to the Ministry of Forestry the legality standard in order to legalize it as the formal regulation (or Ministry Decree). During this year, most of discussions regarding the standard were done internally within Ministry of Forestry.

1.6. In September 2008, the proposed institutional arrangement for the standard from the multistakeholders was finalized and presented to the Ministry of Forestry. Since then, the discussions regarding the harmonized standard and its institutional arrangement had not been carried out with the wide stakeholders.

1.7. In June 2009, finally Ministry of Forestry as proposed by working group issued a decree
regarding timber legality standard of sustainable forest management and verification of timber
legality for State Forest and Private Forest (P.38/Menhut-II/2009). The standard for SFM
and verification for timber legality system were outlined through Director General BPK Decree No.
P.6/Vi-Set/2009.

1.8. The implementation of these certifications (PHL and LK) would be effectively started on 1 September 2009. The both certification would be valid until 3 years in which each year would be reviewed under surveillance by the LP&VI.

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