Timber | Indonesia

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Salient Themes

Areas of Most Severe Impacts

  • Culture & Indigenous Peoples
  • Land & Natural Resources
  • Labour

Early Warning

Signs of Increasing Risk

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Under DevelopmentPrograms to address adverse impacts

Under DevelopmentLocal network

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Indonesia is a net exporter of timber with key processed timber goods including plywood, mouldings and joinery, furniture, sawn timber and veneer. Timber products and exports are going worldwide with the Far East as the main destiny. In 2018, the Netherlands was the 9th most important export market for Indonesian wood products with 3.3% of export value.

Dutch Context

It was highlighted that for the Netherlands Indonesia is the second important supplier of semi-finished and finished tropical timber products, just behind China. Indonesia is also among the countries that members of the VVNH do business with.


Potential and actual adverse impacts have been reported regarding:
– Decent Work
– Occupational Safety and Health
– Freedom of Association & Collective Bargaining
– Forced/Bonded and child Labor

Reports indicate that:
• There is systemic violation of rights to freedom of association and collective bargaining.
• There is some evidence confirming compulsory and/or forced labour, but no incidents were found in the forestry sector.
• There is evidence confirming a high gender wage gap related to discrimination of women in the labour market.
• There is evidence confirming that child labour is widespread in Indonesia, including in the forestry sector; approximately 1.76 million children engaged in prohibited child labour in Indonesia (defined as working children between the ages of 5–12, children aged 13–14 engaged in non-light work activities, and children between 15–18 years engaged in hazardous work). Most were employed in agriculture, including forestry, hunting and fishery.
• The country is signatory to all 8 fundamental ILO Conventions.
• There is evidence that religious minorities including Ahmadis (the Ahmadiyah), Baha’is, Christians, and Shias do not feel adequately protected related to the right to equal opportunity and payment in the labour market.
• Violations of labour rights are not limited to specific sectors.

In Indonesia, the awareness of health and safety at work is low. Working conditions can create unsafe situations, there is no or insufficient inspection of workshops and there are typically no or little safety precautions taken. In 2015, Indonesia ratified the 2006 Promotional Framework for Occupational Safety and Health Convention. In the same year more than 2,300 people died as a consequence of work-related accidents. The government has been accused of placing economic growth over safety by Indonesian labour unions.

OSH is an important issue where a lot of risks have been identified. The most important ones are: lack of hygiene in bathrooms, exposure of workers to chemicals and substances in semi-finished and finished processing (notably glue in lamination processes, paint and sprays for finishing furniture), lack of awareness among workers on such substances and chemicals, non-fatal accidents related to old and unsafe machinery (missing of body parts and burns are seen often), hearing damage, PPEs (generally supplied, but of low quality/effectiveness or workers reluctant to use them), lack of fire safety, and lack of emergency preparedness and response.

Non-compliances with OSH requirements are a common finding in FSC assessment reports for Indonesia. FSC (2019) reports that there has been a high risk in the past that safety requirements are not implemented. Use of safety equipment is not common in Indonesia, with safety equipment being seen by some workers as a complication to their work flow. Sometimes, therefore, employees do not use safety equipment even though the company has provided it. Supervisors and managers commonly do not wear safety equipment; with a reported lack of enforcement or incentives to use it. FSC refers to the 9th Edition of the Newsletter The Monitor (March, 2018) by JPIK (7 years monitoring: Timber Processing Industries in East Java) which shows that violations against OSH standards have been found in East Java between 2011 and 2017. “These violations include the following:
1. There is low compliance with OHS regulations, especially in small-medium scale industries.
2. Fulfillment of OHS standards is carried out only during auditor visits to assess S-LK certificate. Once auditors leave the industry’s premises, workers are reluctant to implement OHS regulations.
These ongoing violations are caused by poor oversight and enforcement of the violations that occur, especially oversight by local government and related agencies”.

Additional reported observations:
• Waste wood is often used for the boiler and in those cases the production unit is also clean. In smaller factories this does not always happen and there is less cleaning.
• The water in the boiler used to heat up the glue of the Plywood process is often boiling hot, also the steam can cause burns if not used properly. Workers have burns from the water, the steam or the boiler itself, due to malpractice.

Environment & Public Health

Potential and actual adverse impacts on the Environment & Public Health have been reported regarding:
– Healthy Environment
– Climate Change

Reports indicate that:
Water scarcity is not a problem, but poor management and infrastructure causes about 13% of the population to have no access to clean water sources. The Citarum River is considered the most polluted river in the world and millions of people depend on it for their lives and livelihoods. Due to chemical impregnating of wood (chrome, copper), there is a risk these substances end up in the environment (for example through leaching during usage, storage and waste phases) and harm plants, animals and humans.

Despite significant investment in environmental policies, effective implementation is poor and slow mainly due to bad legislation with perverse incentives. In the coming years (2020-2024), the focus will be on reducing carbon emissions.

The main environmental issues identified are discharge of hazardous substances in the environment and poor waste management.

Conflict & Security

Reports indicate that:
Although information was found on very high levels of illegal logging in Indonesia no information was found indicating that timber, be it legal or illegal, has been traded at some point in the chain of custody by armed groups, be they rebel factions or regular soldiers, or by a civilian administration involved in armed conflict or its representatives, either to perpetuate conflict or take advantage of conflict situations for personal gain.


Potential and actual adverse impacts on Land have been reported regarding:
– Land and Natural Resources
– Livelihoods

Reports indicate that:
There are risks of uncertain and insecure land tenure in Indonesia. Systematic land registration is ongoing in Indonesia, but most private rights to urban and rural land remain unregistered. Communities that live in the forest who might wish to assert customary right have almost no tenure security.

Because levels of law enforcement are generally low in Indonesia, there is a high risk that companies do not comply with legal requirements. There is a high risk of illegal practice when it comes to the issue of legal documents because there is a high rate of corruption and bribery among officials in the Indonesian forestry sector. Transparency International, in the 2019 Corruption Perceptions Index, ranked Indonesia as 80 out of 198 countries, with a score of 40 which is relatively low (meaning there is a high level of perceived corruption). Indonesia’s level of corruption is slowly decreasing.

A deforestation rate of 2% per annum is a significant ongoing threat which imposes especially high costs on traditional adat communities that depend upon forest resources for their livelihood. Conflicts are common between forest-dwelling adat communities and timber companies and others who want to harvest trees, and such conflicts often turn violent.

Culture & Indigenous Peoples

Potential and actual adverse impacts on Culture & Indigenous Peoples have been reported regarding:
– Indigenous Peoples Lands, Territories, Resources and FPIC
– Indigenous Peoples Cultural Rights

Reports indicate that:
Indonesia has a population of approximately 250 million. The Ministry of Social Affairs identifies 365 indigenous communities as komunitas adat terpencil (geographically-isolated indigenous communities). While Indonesia is a signatory to the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), government officials argue that the concept of indigenous peoples is not applicable. The national indigenous peoples’ organisation, Aliansi Masyarakat Adat Nusantara (AMAN), estimates that the number of indigenous peoples in Indonesia falls between 50 and 70 million people. The lack of accurate data about the number and locations of indigenous peoples in the country impedes efforts to fully understand their current state.

There is significant evidence of violations of legal and customary rights of Indigenous people’s (IP); There are reports of excessive use of force and extrajudicial killings by the police and the military during protests, as well as reports that the State party uses its security apparatus to punish political dissidents and human rights defenders. Land allocations and concessions trigger resistance and repression by the army and police, accompanied by arrests, violence and killings. There are reports of individual and collective human rights violations against indigenous peoples, with indigenous women and children in the most vulnerable position. The problems are wide-ranging and often unresolved, including but not limited to: unclear and overlooked boundaries of indigenous peoples’ territories; overlapping licenses; manipulation of licenses by the government and companies; unresolved legal cases brought against defendants for various forms of violence against, criminalization of and systematic crimes against indigenous peoples; the bias and consolidated use of military and private security guards by corporations; and a lack of just, thorough and multi-sectoral conflict resolution.

Despite being rejected by the indigenous people in the area, the companies still try to enter their customary land. There are continuing issues about boundary conflict, low basic rights recognition of the people, and weak forest protection efforts to the holder. Therefore, the endorsement of the SVLK cannot be considered as sufficient evidence for the assessment of ther respect for customary rights.

The government classes roughly 70% of Indonesia as state controlled forests, while very few traditional landholdings are formally recognized. Customary rights holders have no legal basis to oppose large-scale forest clearance or to refuse the imposition of agribusiness developments. Local authorities often allocate lands to outsiders without visiting the areas or informing the people affected. Until recently it was almost unheard of for forestry officials to consult communities before awarding logging licenses or plantation concessions, and today compensation for loss of lands may be as low as US$20 per hectare or, more usually, about $70 per hectare.

The National Land Agency of Indonesia calculates that there are about 4,000 conflicts related to palm oil and land only in Indonesia. Sawit Watch has identified 731 cases of conflicts and land grabs of local communities’ lands linked to palm oil expansion and mentions that these are only the ones that are recorded. Over the course of Susilo Bambang Yudhoyono’s (SBY) ten-year presidency, (2004-2014) the Agrarian Reform Consortium (KPA) recorded 1391 land conflicts causing 70 deaths, involving five million hectares of disputed land and 926,700 households. According to the National Commission on Human Rights (Komnas HAM) data, last year (2014) saw the highest number of complaints, with 7,000 cases reported; 20 percent of which related to land disputes that involved police and corporations.

Grievance & Redress

Reports indicate that:
There are no recognized laws and/or regulations and/or processes in place to resolve conflicts of substantial magnitude pertaining to TP or IP rights and/or communities with traditional rights; Indigenous peoples aren’t given the option to reject projects to be carried out on their territory, even though those projects potentially affect their lives in various ways. Indigenous peoples are not provided with a space or a means to pursue dialog with the government, or with private parties that obtain concession licenses to manage indigenous territories. Those who oppose these developments face an oppressive reaction from the government, in most cases supported by security forces, either the military or the police. This is aggravated by the weak capacity of these communities to document cases and to understand dispute settlement. There is no ministerial level institution with the mandate to resolve the prolonged land conflicts.


IRBC agreement ‘Promotion of sustainable Forestry’ (2020).International responsible business conduct in tropical timber value chains.

The report is based on international research and four sources that covered Indonesia, specifically the following sub-sectors: plywood, wood working (flooring, decking), finger joinery and laminating, doors & windows fabrication, furniture making incl. finishing. There are quite a number of vertically integrated companies where multiple processes are taking place, working for different sectors in the same factory.

FSC (2019). Centralized National Risk Assessment for Indonesia.


Company data provided by SPOTT. This data assesses multiple timber and pulp producers and traders on the public disclosure of their corporate commitments to environmental, social and governance (ESG) best practice. Each company receives a percentage score as a measure of its transparency in relation to ESG risks.

Latest update: July 2020 | Next scheduled: July 2021