STUDY OF THE TIMBER LEGALITY CERTIFICATION ON SMALL AND MEDIUM INDUSTRIES IN PUBLIC GOVERNANCE PERSPECTIVE

• Main Author: Rahmat, Agus
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/33238
• Institution: Institut Teknologi Bandung

Forest sustainability issues have continously evolved as the public has become more aware to the importance of forests for human life. Forest certification schemes have been developed since the 1990?s as an instrument to prevent illegal timber and timber product trades. Indonesia has developed a timber legality assurance system (SVLK) as a domestic certification scheme which has been made mandatory for the entire chain of the the wood-based industry activities, from upstream to downstream, large to small scale industries and formal to informal sectors. The study was conducted using qualitative methods with descriptive analysis techniques. The description of governance and the role of various actors in implementing the timber legality certification was obtained from observations and interviews with some parties who were selected by the snowball method. Based on the research, SMEs as end pipe industries seem to be in a position of “bearing the burden” of the lack of good governance in upstream forests industry. SMEs with their flexibilities in the informal position face some difficulties to comply the formal aspects of the certification scheme. By the SLVK scheme, SMEs do not have sufficient spaces and participation in term of policy conception. SMEs and their associations have been involved in the implementation stage after the attainment of certification on SMEs showing unexpected results. Some deregulation have been applied as a catalyst in accelerating the implementation of SLVK on SMEs. However, these incentive efforts does not provide a significant effect for SMEs in adopting certification. The cause of this ineffectiveness is that the active participation of SMEs has not adequately developed, so that the target approach tends to be top-down. Government efforts to organize formalization on SMEs could only be a stepping stone for the removal of informal economy if these efforts do not support the growth of SMEs business substantially. Hernando de Soto?s Formality concept in certification can be accepted as an effort to improve the capacity and learning process. However, the concept does not fully suitable since SMEs do not merely maximize profit as it works on capitalism. The empowerment as in the micro financing concept of Muhammad Yunus should be more proper in improving the capacity and capability of SMEs, and hence the constraints on certification in the regard of the cost and awareness can be minimized.