Cablegate: Proposed Regional Dialogue On Illegal Logging Welcome

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RR RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2550/01 2560641
ZNR UUUUU ZZH
R 130641Z SEP 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 6222
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 0783
RUEHBJ/AMEMBASSY BEIJING 4305
RUEHBY/AMEMBASSY CANBERRA 1156
RUEHUL/AMEMBASSY SEOUL 4190
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 002550

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EAP/MTS AND EB/IFD/ODF
USFS FOR CMACKIE
USTR FOR MLINSCOTT, DBROOKS
USAID FOR CBARBER, MMELNICK
TREASURY FOR TFCA - BERG
DEPARTMENT FOR OES/IET and OES/ETC
NSC FOR CEQ CONNAUGHTON, VAN DYKE

E.O. 12598: N/A
TAGS: SENV EAID ECON PGOV ID
SUBJECT: PROPOSED REGIONAL DIALOGUE ON ILLEGAL LOGGING WELCOME

1. (SBU) Summary. Assistant U.S. Trade Representative (AUSTR) Mark
Linscott held a series of meetings on September 6 and 7 related to
illegal logging. Officials at the ASEAN Secretariat welcomed the
proposal of an informal regional dialogue on illegal logging.
Government of Indonesia (GOI) officials and NGO representatives
updated Linscott on the development of Indonesia's new timber
legality standard and challenges for its implementation. They
enthusiastically encouraged U.S. engagement of China and Malaysia on
illegal logging issues. Linscott and GOI officials also agreed to
discuss firm dates for a potential bilateral Illegal Logging MOU
working group meeting in Jakarta during a joint USTR-Department of
State mission to the region later this year. End Summary.

Limited ASEAN Activity on Illegal Logging Could Change
--------------------------------------------- ---------

2. (SBU) ASEAN officials admitted during a September 6 meeting with
a delegation led by AUSTR Mark Linscott that ASEAN has done little
to address illegal logging at the regional level. However, they
expected increased activity after a potential "Bangkok Declaration"
by ASEAN Ministers of Agriculture and Forestry in Bangkok this
November that will call for strengthening forest law enforcement and
governance (septel). The draft declaration specifically refers to
illegal logging -- a first for such a high-level ASEAN meeting.
Officials acknowledged that ASEAN has not engaged China
substantively on forestry or timber trade issues. However, they
noted that ASEAN officials would raise these issues at the upcoming
EU-China Forest Law Enforcement and Governance (FLEG) Conference in
Beijing later this month.

3. (SBU) Nor is there any formal cooperation between the EU and
ASEAN on forestry issues, according to Somsak Pipoppinyo, head of
ASEAN's Natural Resources Unit. He and other officials welcomed in
principle Linscott's proposal of a regional process or dialogue on
illegal logging. They also highlighted potential areas for further
U.S.-ASEAN cooperation related to illegal logging, particularly in
customs cooperation and technical assistance for developing an ASEAN
legality standard. They agreed with Linscott on the importance of
working regionally in order to facilitate legal trade in wood
products.

4. (SBU) Pipoppinyo said that there have been slow-moving
discussions on an ASEAN timber certification mechanism, due to
ongoing disputes over defining a timber legality standard. He and
other officials noted that ASEAN would probably implement any future
legality standard and timber certification process in a phased
manner in order to account for the different capacities and levels
of development among member countries. In addition, they emphasized
that this ASEAN-wide standard would probably be a minimum standard,
and respective member countries might have much stricter national
standards. For example, Vietnam is developing a certification
modeled on Forest Stewardship Council standards and certification.

NGOs, Officials: Engaging China, Malaysia on Timber Key
--------------------------------------------- ----------

5. (SBU) AUSTR Linscott held meetings on September 6 and 7 with GOI
officials and NGO representatives, respectively. Members of the GOI
interagency working group under the U.S.-Indonesia MOU on Illegal
Logging cautiously endorsed the idea of an informal regional
dialogue on illegal logging. They emphasized that it would be
difficult to get Malaysia to cooperate, and suggested initiating
this dialogue only after the "Bangkok Declaration" (see Para 2),
during or after the November ASEAN Summit. Both they and the NGOs
enthusiastically welcomed U.S. engagement of China on illegal
logging. Ministry of Forestry (MOF) officials stated that one
reason for signing the MOU with the U.S. was in order to bring U.S.
influence to bear on importing or transshipment countries such as
China and Malaysia. The GOI seeks international support for its
"zero laundering" concept and says it has evidence of log
laundering; for example, Merbau wood smuggled through Papua New
Guinea. All sides acknowledged the complexity and challenge of
dealing with the timber trade, and Linscott emphasized the U.S.
determination to press China on this issue and create a regional
dialogue.

JAKARTA 00002550 002 OF 002

6. (SBU) Linscott informed the GOI working group and NGO
representatives that he and OES Assistant Secretary Claudia McMurray
were exploring the possibility of a joint mission to the region in
late October. They could initiate the regional dialogue at that
time, he suggested, as well as hold the next bilateral illegal
logging MOU working group meeting in Jakarta. They agreed to
discuss and decide on dates later, given the tight late-October
schedule with a pre-COP 13 ministerial in Bogor and various
ASEAN-related meetings leading up to the early-November ASEAN
Summit.

Bilateral Illegal Logging MOU: Future Directions
--------------------------------------------- ---

7. (SBU) AUSTR Linscott proposed that the next bilateral MOU working
group meeting should discuss next steps under the MOU, particularly
an increased focus on facilitating trade. Facilitating trade could
include an integrated approach to customs cooperation and law
enforcement, a project to enhance trade data, as well as
private-sector partnerships. MOF Director General of Forestry
Production (and GOI interagency working group chair) Hadi Pasaribu
informed Linscott that the GOI has designated two large ports,
Belawan near Medan in North Sumatra and Surabaya in East Java, in
which to focus MOU efforts. The MOF hopes that its action plan will
improve interagency cooperation and coordination -- including
standardizing and compiling trade data -- at these two ports.

Legality Standard: Implementation and Challenges
--------------------------------------------- ---

8. (SBU) The MOF said the timber legality standard includes overall
concession management, forest certification and chain of custody to
port, documentation, and a complaint mechanism. The MOF officials
as well as NGO representatives stated that Forestry Minister Kaban
has approved the legality standard, but that implementation will be
a challenge. Internal debate and stakeholder consultations continue
regarding the independent verifying mechanism, but they expect to
reach a decision by December, after which the Minister will sign a
formal Decree. At the NGO meeting, a representative of the EU-FLEG
program emphasized that the outstanding question is how watertight
the standard will be, and that the EU remains concerned about who
the independent verifier(s) will be. Linscott affirmed that the
U.S. strongly supports the development and implementation of the new
legality standard.

9. (SBU) MOF officials acknowledged that implementation of the
legality standard and its necessary counterpart, a strong timber
administration system, will require a great deal of
capacity-building at the central and local levels. For example, the
MOF and local governments need a great deal more assistance on
integrated mapping of forest areas and concessions, as well as land
use planning. The MOF has taken supportive steps, revising a
regulation to allow farmers land tenure for community forests, and
setting deadlines for concessions to obtain certification. NGO
representatives also asserted that timber companies would lack
sufficient incentives to meet the standard if importers continued to
accept non-certified wood. A representative of the Indonesian
Ecolabeling Institute (LEI) noted that, given the challenges, the
GOI would probably phase in implementation, requiring companies that
export to the U.S. and EU to comply first.

HUME

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