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4/26/2013

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Sarawak’s Timber Legality Verification System

andTi b T d St ti tiTimber Trade Statistics

Annie TingSenior ManagerSarawak Timber AssociationMalaysia

Outline of Briefing

Introduction to STA

An overview of forestry in SarawakTimber Resources

Natural ForestsPlantation Forests

STA Philosophy

IWPA Annual Convention in Vancouver, Canada, 18 April 2013

Plantation ForestsDefinition of legal logs in Sarawak contextLegality verification process of logs in Sarawak Sarawak’s logs and timber products export for 2012Challenges

STA’s commitmentWork Towards Mutual Benefits

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Introduction to STA

• The Sarawak Timber Association (STA) is a trade association formed on 7 August 1971 by 3 timber associations in Sarawak

• STA represents over 450 member companies, some are multinational companies dealing with forest industry and timber trade, including forest plantations

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• Only one association in State for both upstream and downstream activities

y , g p• STA member companies are involved in

logs and timber products which include sawntimber, plywood, mouldings/dowels, furniture, furniture parts, laminated boards and other panel products


Introduction to STA

To promote, foster and enhance the relations between all members of the Association;

To promote and uphold as prudently as possible the interests and well being of all members of the

Among the objectives of STA are:-

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To promote, ascertain and protect the continuous well being of the timber trade and industry in the State of Sarawak and so on;

Association;


Introduction to STA

To promote and encourage the practice of sustainable forest management and forest conservation;

Objectives (Con’t)

To promote and improve the welfare of those communities in the vicinity of the licence area; to provide scholarships

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To encourage and promote scientific and industrial research useful to the timber and forestry industries.

licence area; to provide scholarships and financial contributions for the advancement of education and training; and


In implementing its objectives, STA has the philosophy of :-

“adopting a consultative, constructive and pragmatic

STA Philosophy

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approach to address all the issues concerning timber industry for the benefits of all parties”


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An Overview of Forestry in Sarawak

SARAWAK is one of the 13 States in Malaysia and located on the island of Borneo with a

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landmass area of 12.4 million hectares

Systematic management of Sarawak’s forest existed as early as 1919 when the Forest Rules was gazetted and with the establishment of Forest Department SarawakLand and forests are under the jurisdiction of the State, as stipulated by the Federal Constitution of Malaysia (Article 74(2)) (‘…the Legislature of a State may make laws with respect to any of the matters enumerated in the State List…’)All natural forests are owned by the State Government


Timber Resources

Natural Forests Planted ForestsTimber harvesting is presently carried out in the designated areas with total annual log production of 9,610,434m³ for 2011 and 9,458,563m³ for 2012

Approximately 300,000 hectares had been planted with fast growing indigenous and exotic timber species

Expected yield is around 120 - 150m³ per hectare

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Main tree species harvested are Meranti (Shorea spp.), Kapur (Dryobalanops spp.), Keruing (Dipterocarpus spp.) Selangan Batu (Shorea spp.), Bindang(Agathis spp.), and Nyatoh(Palaquium spp.)

120 - 150m per hectare

Main species planted is Acacia (Acacia mangium), kelampayan (Neolamarckia cadamba), batai (Paraserianthes falcataria) and Eucalyptus spp.

There are some 2,500 tree species, of which about 300 are used commercially


“Logs harvested by licensed persons from approved areas and verified by the relevant

authorities in accordance with the laws, regulations and

procedures pertaining to forestry and trade in Sarawak”

Definition of Legal Logs in Sarawak Context

9IWPA Annual Convention in Vancouver, Canada, 18 April 2013

Legality Verification Process of Logs in Sarawak

Main governing laws and regulations in the implementation of LEGALITY VERIFICATION SYSTEM of logs in Sarawak

Forests Ordinance, 1958 (Cap 126)Forest Rules, 1962

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Land Code, 1958

Natural Resources and Environment Ordinance, 1993 (Cap. 84)Wild Life Protection Ordinance, 1998 (Cap 26)Sarawak Forestry Ordinance, 1995 (Cap 17)

Sarawak Timber Industry Development Corporation Ordinance, 1973Malaysian Customs Act, 1967



Regulating Authorities (Forestry)Ministry of Resource Planning and Environment (MRPE)

www.kpps.sarawak.gov.my• Formulate policies on land, forests and minerals• 4 agencies dealing with forestry and timber industry under the

Ministry: Forest Department Sarawak (FDS)www.forestry.sarawak.gov.myEstablished in 1919

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Sarawak Forestry Corporation (SFC)www.sarawakforestry.comIncorporated in 1995

Sarawak Timber Industry Development Corporation (STIDC)www.sarawaktimber.org.myIncorporated in 1973

Harwood Timber Sdn Bhd (HTSB) (wholly-owned subsidiary of STIDC)www.harwoodtimber.com.myIncorporated in 1985

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3rd Party Certified Work Processes

12IWPA Annual Convention in Vancouver, Canada, 18 April 2013

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Forest Department Sarawak

Organisation

Venue/activities Licensing Forest/Forest

Landing Forest Checking Station Mill Export Point

Process Application for Timber Licence

Issue Timber Licence

Process & Approve General Harvesting Plan

Approve Detailed

For export

For local processing

IWPA Annual Convention in Vancouver, Canada, 18 April 2013 13

Sarawak Forestry Corporation

Harwood Timber Sdn Bhd(wholly-owned subsidiary of STIDC)

Sarawak Timber Industry Development Corporation

Royal Malaysian Customs Department

Approve Detailed Harvesting Plan

Issue Permit to Enter Coupe

(PEC) 1-5

Monitor Harvesting ,

LPI Tagging & Property Mark

Royalty Assessment

Physical Inspection & Issue ECC

Inspect & Verify Milling Logs

Provide Clearance for Export

Physical Tallying & Issue Transportation/

Shipping Pass

Log Inspection & Issue Export Clearance Certificate

(ExCC)

Verify and Issue Removal Pass (Transit/Export)

Issue Export Licence

Issue Removal Pass (Transit)

Process & Approve General Harvesting Plan (GP)

Shifting Agriculture (SA)

14Sample of GP

Terrain IV

A plan to ensure that harvesting operations in a Timber Licence area will be carried out in accordance with the prescriptions of the Forest Management Plan


Approve Detailed Harvesting Planning (DP)

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Sample of DPDP practices at the coupe level. It contains prescriptions for harvesting block layout, harvesting method to be used, surveyed road network, conservation areas for the protection of totally protected plants, critical resources and sites


Issue Permit to Enter Coupe (PEC) 1-5

The PEC operational stagesOperation Hill Forest

1 Cut, demarcate and survey coupe boundary2 Preparation of topographical work map 3 Alignment and survey of proposed road on

the ground

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4 Start road construction as planned on the map approved, demarcate and survey logging block boundaries and carry out tree enumeration

5 Fell and extract timber

The objective of PEC is to manage the orderly execution of approved harvesting activities.


Log Production Identity (LPI) number tag

Objectives(i) To ensure that the harvesting

operations are within the approved areas and comply with the terms and conditions of Timber Licence

Monitoring Harvesting, Log Production Identity (LPI) Tag, and Property Mark

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Registered Property Mark

(ii) To ensure only approved LPI tag is used by licensee and information contained in this tag is captured in ForestNet: WAN built to host Sarawak’s own Log Tracking System (LoTS) through the submission of Daily ProductionReturn (DPR) to Forest Checking Station Office

Every licensee is assigned with a Registered Property Mark to denote the ownership of the logs


Daily Production Return (DPR)

Daily record on logs production within the approved licence area

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Sample of Daily Production Report (DPR) with LoTS reference no.


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Royalty Assessment

FOR LOCAL PROCESSING(Orange)

FOR EXPORT(Yellow)

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Royalty Assessment Tag fixed at the place of royalty assessment (Forest Checking Station)

To ensure that trees felled and extracted as logs under Timber Licence are assessed for Royalty, Premium and Cess due to the State Government in an orderly and timely manner


Issue Endorsement Clearance Certificate (ECC)

Sample of Endorsement Clearance Certificate (ECC)

Conduct physical inspection to ensure logs are royalty assessed before being

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removed from Forest Checking Station

As a pre-requisite for SFC to issue Removal Pass (Transit)


Issue Transportation/ Shipping Pass

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Sample of Transportation Pass

Sample of Shipping PassIWPA Annual Convention in Vancouver, Canada, 18 April 2013

Issue Removal Pass (Transit)

Sample of Removal Pass (Transit)

To monitor and control all royalty assessed logs are removed from the Forest Checking Station to the designated mill/export point

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designated mill/export point


Inspect & Verify Milling Logs

Sample of Inspection Report – E2

To monitor and control all royalty assessed logs are removed from the

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Forest Checking Station to the designated mill/export point

Sample of Log Verification Check Form


Log Inspection & Issue Export Clearance Certificate (ExCC)

Sample of Export Clearance Certificate (ExCC)

To ensure that export logs do not form part and parcel of the reservation quota logs under Section 67A of Forest

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Ordinance


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Verify and Issue Removal Pass (Transit/Export)

Sample of Removal Pass (Export)After checking and verifying the parcel of logs deemed for export, a Removal Pass (Transit) will be issued to allow the logs to be removed from the transit log

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pond to the vessel


Issue Export Licence

26Sample of Custom Declaration Form IWPA Annual Convention in Vancouver, Canada, 18 April 2013

Issue Export LicenceSample of K2 Form

K2 Form is an electronic export declaration form endorsed with export licence issued by STIDC

Consignor details

Consignee detailse-permit

Forwarding Agent details

STIDC export permit no

Value in USD and MYR

F i ht R t (MYR)

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Container detailsFreight Rate (MYR)

Unit Value FOB (MYR)

Volume (cubic metre)

Gross Weight (kg)

Unit Value (MYR) FOB

Tariff Code

Measurement (cubic metre)Gross Weight (kg)

Applicant details


Strength of the System

Forest laws has been enacted since 1919

Four agencies (Forest Department Sarawak, Sarawak Forestry Corporation, Sarawak Timber Industry Development Corporation

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Timber Industry Development Corporation, Harwood Timber Sdn Bhd) - Check and balance


Contribution from the Forestry and Timber Industry

In 2012, total export value from the forestry and timber amounted to 7.45 MYR billion (2.41 USD billion) to the State

Collectively, forestry and timber

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industry employ some 100,000 workers in Sarawak

Source: Sarawak Timber Industry Development Corporation (STIDC)

Note: Based on conversion rate 1 MYR = 0.322997 USD and 1 USD = 3.09600 MYRSource: www.xe.com (as of 25 March 2013)


Sarawak Logs and Timber Products Export for Year 2012

Logs24.15%

Sawntimber10 53%

Veneer3.62%

Moulding0.29%

Dowels0.06%

Particle Board0.84%

Medium Density Fibreboard (MDF)

3.94%

Woodchips (tonne/kgm)0.66%

Laminated Board/ Flooring0.65%

Blockboard0.01% Other Timber Products

1.64%

Sarawak export value: 7.45 MYR

billion/ 2.41 USD billion

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10.53%

Plywood53.60%




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Sarawak Logs and Timber Products Export for Year 2012

Year 2011 2012

Timber Products Volume (m3) Value (RM) Value (USD) Volume (m3) Value (RM) Value (USD)

Logs 3,089,713 1,844,305,626 595,705,184 3,301,814 1,800,137,025 581,438,859 Sawntimber 731,666 693,380,331 223,959,767 821,505 784,958,639 253,539,286 Plywood 2,267,156 3,794,760,815 1,225,696,359 2,641,487 3,995,848,255 1,290,646,999 Veneer 202,191 232,814,726 75,198,458 226,638 269,972,384 87,200,270 Moulding 6,323 14,417,396 4,656,776 8,921 21,353,325 6,897,060 Dowels 1,139 3,898,750 1,259,284 1,112 4,841,486 1,563,785 Particle Board 107,956 55,855,330 18,041,104 120,535 62,814,478 20,288,888 Medium Density Fibreboard (MDF) 190,290 252,129,324 81,437,015 184,761 293,996,915 94,960,122

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y ( ) , , , , , , , , , ,Woodchips (tonne/kgm) 158,338 24,092,044 7,781,658 264,100 49,455,761 15,974,062 Laminated Board/ Flooring 21,024 49,843,535 16,099,312 20,593 48,362,782 15,621,034 Blockboard 1,122 1,231,433 397,749 1,056 895,837 289,353 Other Timber Products 77,205 116,415,374 37,601,816 94,671 121,894,449 39,371,541

Total 7,083,144,682 2,287,834,483 7,454,531,337 2,407,791,258




Sarawak Logs and Timber Products Export by Destination for Year 2012

Asia1

10.69%

Japan38.27%

Taiwan10.04%

Korea7.99%

Middle East2

8.79%

Europe3

0.42%USA2.02%

Others1.40%

Sarawak export value: 7.45 MYR billion/ 2.41 USD billion

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China4.37%

India15.99%


Sarawak Logs and Timber Products Export by Destination for Year 2012

Year 2011 2012Destination Value (RM) Value (USD) Value (RM) Value (USD)Asia1 758,604,609 245,027,013 797,198,530 257,492,734 Japan 2,925,366,525 944,884,611 2,853,142,701 921,556,533 China 322,811,371 104,267,104 325,842,165 105,246,042 India 1,150,765,266 371,693,729 1,192,157,820 385,063,399 Taiwan 769,428,693 248,523,160 748,779,857 241,853,647 Korea 449,437,122 145,166,842 595,302,248 192,280,840 Middle East2 427,242,382 137,998,008 655,411,975 211,696,102 Europe3 34,362,123 11,098,863 31,493,873 10,172,426 USA 125 159 140 40 426 027 150 560 082 48 630 455

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USA 125,159,140 40,426,027 150,560,082 48,630,455 Others 119,967,451 38,749,127 104,642,088 33,799,080 Total 7,083,144,682 2,287,834,483 7,454,531,337 2,407,791,258

Asia1 :Bangladesh, Brunei, Cambodia, Hong Kong, Indonesia, Malaysia, Maldives, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Thailand, Timor Leste, VietnamMiddle East2 :Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libyan Arab Jamahiriya, Oman, Qatar, Saudi Arabia, Sudan, Syrian Arab Republic, Turkey, United Arab Emirates, YemenEurope3 :Belgium, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Lithuania, Luxembourg, Macedonia, Malta, Netherlands, Poland, Romania, Slovenia, Spain, Sweden, United Kingdom, Georgia, Kyrgyzstan, Norway, Russian Federation, Switzerland, Ukraine

Includes: Logs, Sawntimber, Plywood, Veneer, Mouldings, Dowels, Particle Board, Medium Density Fiberboard (MDF), Laminated Board/Flooring, Woodchips, Blockboard, and Other Timber ProductsOther Timber Products include railway sleepers, finger-jointed, laminated veneer lumber, densified wood, door and their frames




Sarawak Logs and Timber Products Export to USA for Year 2012

Asia1

10.69%

Sawntimber0.99%

Plywood75.15%

Veneer

Moulding1.29%

Dowels1.35%

Middle East2

8.79%

Europe3

0.42%

Sarawak export value to USA: 150.56 MYR million/

48.63 USD million

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0.88%




Sarawak Logs and Timber Products Export to USA for Year 2012

Year (2012) Sarawak Total Export Sarawak Export to USA

Timber ProductsVolume (m3)

Value (RM)

Value (USD)

Volume (m3)

Value (RM)

Value (USD)

Logs 3,301,814 1,800,137,025 581,438,859 38 8,080 2,610

Sawntimber 821,505 784,958,639 253,539,286 711 1,489,306 481,041

Plywood 2,641,487 3,995,848,255 1,290,646,999 56,066 113,138,576 36,543,421

Veneer 226,638 269,972,384 87,200,270 154 1,329,717 429,495

Moulding 8,921 21,353,325 6,897,060 563 1,934,770 624,925

Dowels 1,112 4,841,486 1,563,785 470 2,037,414 658,079

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Particle Board 120,535 62,814,478 20,288,888 ‐‐‐ ‐‐‐ ‐‐‐

Medium Density Fibreboard (MDF) 184,761 293,996,915 94,960,122 ‐‐‐ ‐‐‐ ‐‐‐

Woodchips (tonne/kgm) 264,100 49,455,761 15,974,062 ‐‐‐ ‐‐‐ ‐‐‐

Laminated Board/ Flooring 20,593 48,362,782 15,621,034 8,453 28,351,143 9,157,334

Blockboard 1,056 895,837 289,353 ‐‐‐ ‐‐‐ ‐‐‐

Other Timber Products 94,671 121,894,449 39,371,541 757 2,271,076 733,551

Total 7,454,531,337 2,407,791,258 150,560,082 48,630,455


Challenges

Different legislative requirements by different importing countries for legal timber products

Ever widening definition of legality and t i bilit b diff t i t ti l

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sustainability by different international organisations as well as Non-Governmental Groups -----Non Tariff Barrier


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Work Towards Mutual Benefits

Urgent need to reach international consensus on the definition of legality and sustainability and verification method which can be adopted by all stakeholders

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All stakeholders including NGOs and the interest parties are required to play their part as well as to take effective actions for mutual benefit


STA’s Commitments

Work closely with the forestry authorities of Sarawak to ensure the supply of timber and timber products is legal, based on the Legality Verification of logs in Sarawak (LVLS)

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STA always support the trade of legal timber. This can be achieved through firm commitment from both timber producing and consuming countries


“ We hope this presentation has provided a better understanding on our legality system. With this understanding, we hope IWPA members will increase the p

import of timber products from Sarawak into American and Canadian

markets”

THANK YOU

Sarawak Timber Association11th Floor, Wisma STA,

26, Jalan Datuk Abang Abdul Rahim, 93450 K hi S k MALAYSIA93450 Kuching ,Sarawak, MALAYSIA

Tel: +(60) 82 332 222Fax: +(60) 82 487 888/999

E-mail: [email protected]: www.sta.org.my

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