Post on 08-Apr-2019
IntroductionThe Borneo Initiative is a Dutch non-profit foundation
established in 2008 with offices in The Netherlands
and Indonesia. The Borneo Initiative operates in
Indonesia in partnership with APHI (Indonesian
Forest Concession Holders Association).
With this public version of the 2016 annual report,
The Borneo Initiative (TBI) aims to inform a broader
public about its work. This version is fully based on
the financial statements 2016 as externally audited
and approved by Baker-Tilly-Berk accountants.
The Borneo Initiative operates as a platform that en-
hances cooperation and synergy among sustainable
forest management initiatives especially those ope-
rated by TFF, TNC, GFTN, APCS and Wana Aksara.
Therefore, any achievements mentioned in this report
are the result of the combined efforts of these plat-
form partners.
Mission and visionThe continued loss of tropical forests is a global con-
cern when it comes to biodiversity conservation, the
prevention of carbon emissions, and the defence of
land rights of forest dwelling communities. Globally,
Borneo is one of the last remaining intact forest
blocks with its 35 million ha of tropical rain forest.
WWF conducted a campaign for a green Heart of
Borneo in 2005, and this concept became institu-
tionalised in 2007 via the so-called heart of Borneo
Declaration signed by the governments of Indonesia,
Malaysia and Brunei.
The Borneo Initiative takes its inspiration from the
Heart of Borneo campaign. Its mission is to halt the
process of forest degradation and deforestation
in Borneo via the promotion of sustainable forest
management in and around the Heart of Borneo,
forming a so-called ‘green belt’ around the core area.
Ultimately, as from year 2020, the Heart of Borneo
core area and the sustainably managed boundary
area must connect via eco-linkages to other protec-
ted areas or sustainably managed forest areas on
Borneo, forming a future eco-network.
ApproachThe Borneo Initiative aims to counteract forest de-
gradation and forest loss on Borneo via promotion
of forest certification and international trade of cer-
tified forest products. Before The Borneo Initiative
became operational, the FSC®-certified forest area in
Indonesia amounted to 0.9 million ha. The Borneo
Initiative targets a growth of the certified forest area
of 4 million ha by the end of 2017, up to 6 million ha
by the end of 2020.
The Borneo Initiative has a business focus and mainly
supports forest concessionaires managing natural
forests, but participants also include state-owned
companies and forest plantation companies, as long
as these can meet criteria of scale, feasibility and
market relevance. The Borneo Initiative offers forest
concessions support via funding, transfer of know-
how and market linkages. It provides a 2 to 3 $/ha
subsidy to forest concessions to cover part of their
costs of certification of forest management.
With the funding provided, forest concessions need
to hire a certification coach. These coaching services
are provided by TFF, GFTN, TNC, APCS and Wana
Aksara who also dedicate their own resources to this
joint initiative. Specific training or studies are provi-
ded by a list of selected subject matter experts who
are selected by the forest concessionaires via a bid-
ding process.
The Borneo Initiative’s unique characteristics are its
scale of operations; its fast-track approach to certifi-
cation; substantial direct financial support to forest
concessions; integrated with promotional activities
aimed at the establishment of new international mar-
ket links for Indonesia’s certified wood processing
industries.
With current resources, the focus is on Indonesia, and
Kalimantan in particular. But, to achieve scale and to
build a track record, participants have included forest
concessions from other parts of Indonesia too e.g.
Papua, Moluccas and Sulawesi. With time, the inten-
tion is to extend support into Malaysian Borneo too.
Forest certificationIn 2016, The Borneo Initiative signed two support
agreements with Sumalindo Lestari Jaya Units II
and V (267,600 ha 61,645 ha) aiming for full FSC and
Controlled Wood certification in 2017. Interestingly,
SLJ V is a re-entry into our program. On the other
hand, four companies had to quit the program before
achieving a certification result. In sum, at the end of
December 2016, The Borneo Initiative was suppor-
ting 38 forest concessions with 3.6 million ha, close to
our target of 4 million ha. And, given a forest area of
about 14 million ha that is still under active logging
in Indonesia, it follows that The Borneo Initiative is
supporting asbout one-quarter of all active logging
concessions. This is a major achievement by itself and
has confirmed TBI as the leading certification pro-
gram in Indonesia.
In 2016, 3 new FSC certificates could be celebrated,
with a total area of 490,521 ha plus one new Control-
led Wood certificate (169,170 ha). This raised the
Borneo Initiative’s total certification outcome to 19
FSC certificates and four Controlled Wood certifi-
cates, together 22 certified companies with 2.25 mil-
lion ha (one double certification). These 19 FSC certi-
ficates cover 2.0 million ha of natural forest, implying
that TBI has achieved 50% of its target and has more
than doubled the previous existing FSC certified fo-
rest area in Indonesia.
Another 16 forest concessions are still implementing
their certification action plans, whereby TBI expects
to reach at least 3 million ha extra FSC certified area
by December 2017, which will mean a compliance of
75% of target.
Looking beyond the current group of participants,
TBI sees a sustained interest in its support program.
TBI has a waiting list of 11 companies with 1.3 million
ha so the target of 4 million ha is still feasible as a
minimum, given a longer time span, and provided
that extra funding can be accessed.
Milestone achievements The Borneo Initiative
• Supporting 38 forest concessions with 3.6 million ha
• 19 full FSC certificates, 4 CW certificates
(1 double certification)
• Together 2.25 million ha – all natural forest
• FSC certified area in Indonesia from 0.9 million ha
in 2009 to 2.3 million ha in 2016 (net increase)
• The first ever FSC certificates for mangrove forests
globally
• The first FSC-certification in Papua
• The first FSC-audits ever for merbau concessions
in Papua
• The first FSC corporate group certification scheme
in Indonesia
Forest concessions supported by TBI (Dec 2016)
Actual
Certified FSC CW FSC FM/CoC Certification
Name concession Area (ha) Area (ha) Coach PHPL certificate certificate status
1 PT Sari Bumi Kusuma Delang 60.700 41.445 TFF average 2013 terminated
2 PT Wanasokan Hasilindo 49.000 49.000 TFF average 2013 terminated
3 PT Suka Jaya Makmur 171.340 171.340 TFF good 2011 valid
4 PT Sarmiento Parakanca Timber (Sarpatim) 216.580 216.580 TFF good 2011 valid
5 PT Narkata Rimba 41.540 41.540 TFF good 2011 valid
6 PT Belayan River Timber 97.500 97.500 TFF good 2012 valid
7 PT Roda Mas Timber 69.330 69.330 TFF average 2012 valid
8 PT Dwimajaya Utama 127.300 127.300 TFT good 2012 valid
9 PT Cloudy Bay (PNG) 148.900 148.900 TFF - 2013 terminated
10 PT Indexim Utama 52.480 50.734 TFF good 2013 valid
11 PT Ratah Timber 97.690 85.261 GFTN average 2013 valid
12 PT Gema Hutani Lestari 148.450 148.450 TFF average 2013 valid
13 PT Kandelia Alam 18.130 18.130 GFTN average 2015 terminated
14 PT Bina Ovivipari Semesta 10.100 10.100 GFTN average 2015 2015 valid
14 Certification achieved, support agreements completed 1.309.040 1.275.610
15 PT Kemakmuran Berkah Timber 82.810 82.810 TNC average 2012 valid
16 PT Carus Indonesia 72.170 72.170 TFT good 2014 valid
17 PT Bintuni Utama Murni Wood Industries (BUMWI) 82.120 82.120 GFTN good 2015 valid
3 Certified, still receiving support with annual audits 237.100 237.100
18 PT Gunung Gajah Abadi 74.980 74.980 TNC good 2015 valid
19 PT Bina Balantak Utama 298.710 298.710 TFF good 2016 valid
20 PT Telaga Bhakti Persada 63.405 63.405 TFF good 2016 valid
21 PT Wijaya Sentosa 130.755 130.755 WA average 2016 valid
4 Fully certified, preparing for first annual audit 567.850 567.850
22 PT Wapoga Mutiara Timber Unit II 169.170 169.170 TFF average 2016 valid
1 CW certified, preparing for full FSC 169.170 169.170
23 Sumalindo Unit V 61.645 APCS average
24 PT Rizki Kacida Reana 55.150 TNC good
25 PT Inhutani I Meraang 70.700 TNC good
26 PT Inhutani II Malinau 29.040 TFF average
27 PT Graha Sentosa Permai 44.970 WA good
28 PT Utama Damai Indah Timber (UDIT) 49.250 TNC good
29 PT Karya Lestari 49.123 TNC good
30 PT Gorontalo Citra Lestari 46.170 TFF VLK
31 PT Gema Nusantara Jaya 29.750 TFF average
32 PT Sumalindo Lestari Jaya IV 63.550 GFTN good
33 PT Wanabhakti Persada Utama 44.402 TNC average
34 PT Aditya Kirana Mandiri 42.700 TNC average
35 PT Hanurata Papua Barat 234.470 TFF good
36 Sumalindo unit II 267.600 APCS average
37 PT Inhutani II Semamu 71.375 TFF average
38 PT Multi Wahana Wijaya 107.740 TFF average
16 Certification action plans under implementation 1.267.635
38 Grand total Dec 2016 3.550.795 2.249.730 269.715 1.823.085 valid
37 Grand total Indonesia Dec 2016 3.401.895 2.100.830 269.715 1.823.085 valid
Legend
FSC certified concessions (1.53 mil. ha.)
FSC in progress concessions (0.90 mil. ha.)
FSC decertified concessions (0.14 mil. ha.)
Other logging concessions (16.24 mil. ha.)
Forest plantations (15.60 mil. ha.)
Kalimantan national parks (1.3 mil. ha.)
Forest Cover Kalimantan (28.2 mil. ha.)
Non Forest Kalimantan (22.5 mil. ha.)
HoB boundary (modified by TBI) 23.27 mil. ha
Kalimantan total area: 53.7 mil ha
1. Logging concessions from APHI 2016
2. Forest plantations from MoEF 2013
3. Forest cover from MoEF 2015
4. Conservation area from MoEF 2016
The Borneo Initiative Status Map 2016FSC concessions in Kalimantan
ID NAME PROGRESS LICENSE CERTIFIED AREA (HA)
1 Pt Inhutani Ii Semamu Progress 71.375 2 Pt Inhutani Ii Malinau Progress 48.300 3 Pt Rizki Kacida Reana Progress 55.150 4 Pt Sumalindo Lestari Jaya Iv Progress 100.000 5 Pt Aditya Kirana Mandiri Progress 42.700 6 Pt Wanabhakti Persada Utama Progress 44.402 7 Pt Karya Lestari Progress 47.063 8 Pt Narkata Rimba Fm/Coc 41.540 9 Pt Belayan River Timber Fm/Coc 97.500 10 Pt Sumalindo Lestari Jaya Ii Progress 267.600 11 Pt Kemakmuran Berkah Timber Fm/Coc 82.810 12 Pt Roda Mas Timber Fm/Coc 99.520 13 Pt Inhutani I Meraang Progress 70.700 14 Pt Sumalindo Lestari Jaya V Progress 61.645 15 Pt Ratah Timber Fm/Coc 93.425 16 Pt Sari Bumi Kusuma Delang Decertified 75.200 17 Pt Carus Indonesia Fm/Coc 73.281 18 Pt Graha Sentosa Permai Progress 44.970 19 Pt Dwimajaya Utama Fm/Coc 127.300 20 Pt Utama Damai Indah Timber Progress 49.250 21 Pt Gunung Gajah Abadi Fm/Coc 81.000 22 Pt Sarmiento Parakanca Timber Fm/Coc 216.550 23 Pt Suka Jaya Makmur Fm/Coc 171.300 24 Pt Wanasokan Hasilindo Decertified 49.000 25 Pt Indexim Utama Fm/Coc 52.480 26 Pt Kandelia Alam Certified 18.130 27 Pt Bina Ovivipari Semesta Fm/Coc 10.100 28 Pt Sari Bumi Kusuma (Unit I And Ii) Fm/Coc 208.300 29 Pt Erna Juliawati Fm/Coc 184.206
Total FSC Progress 903.155 Total FSC Certified 1.539.312 Total FSC Decertified 142.330
Market linksThere are no specific measurements on the number
of companies reporting increased sales to Europe or
USA, nor on FSC trade flows. The status of December
2016: 15 Dutch accounts, 20 European accounts and
24 USA accounts.
TBI maintains relations with a group of companies in
NL, Europe and US but the concept of a ‘coalition of
the willing’ still needs real operationalization. The
idea is to have a circle of business contacts on the
market side that prioritizes FSC-certified wood
products in their sourcing policies and who together
can absorb the target volumes according to the target
levels as indicated. The Borneo Initiative will service
these business accounts in the Netherlands, Europe
or USA with information, arrange meetings whenever
traders are visiting Indonesia, or will organize busi-
ness trade encounters.
Yet, Indonesian forest concessions and wood proces-
sing industries are faced with relatively high produc-
tion costs and small margins, with modest or no price
premiums. Therefore, to motivate markets to source
from Indonesia despite the price differential, a con-
certed promotion drive is needed for Indonesian
certified wood products that emphasizes the intrinsic
social and ecological qualities of Indonesian FSC cer-
tified wood products.
In 2016, A two day trade encounter was facilitated
from January 25 to 26 in Hotel Majapahit, Surabaya
with the motto: ‘Indonesian tropical hardwood pro-
ducts. Sustainable. Quality. Guaranteed’. The event
was attended by representatives of 19 overseas
timber trading companies and 28 Indonesian wood
processing industries.
TBI participated in the IWPA World of Wood annual
convention in Austin in April. Both IWPA and GFTN
are interested to host an Indonesian delegation in
next editions.
To promote also non-timber market links, The Borneo
Initiative co-funded a TNC pilot for testing its audit
protocol for a proposed VCS method (verified carbon
standard) towards quantification of the carbon sa-
vings implicit in improved forest management prac-
tices following reduced impact logging (RIL-C).
A report became available in January 2016. The pilot
was instrumental in getting the VCS method ratified
on April 28th. TNC will now implement this RIL-C car-
bon quantification method on a full harvest block in
one of the FSC certified forest concessions over the
period 2016/2017.
The Surabaya trade encounter 2016 offered a mee-
ting platform between the newly certified suppliers,
and leading overseas trading companies who have
buying policies dedicated to legal and sustainable
origin of wood products. The Indonesian manufactu-
rers present in the trade encounter offered a broad
range of wood products including wood panels (ply-
wood), veneer, indoor flooring, outdoor decking,
truck flooring, construction wood, doors and window
frames, scantlings, and garden furniture. They realize
that to grow their market share in the international
markets, quality and legal origin are key factors
Lenny Shibley, President of Inter Continental Hard-
woods explains: “sustainability, certification and le-
gality are the core values of the tropical timber trade.
TBI has facilitated all of the values effectively. The ini-
tiative to bring suppliers and customers together in a
working format has helped our company to find good
suppliers that value all of the same things that we do
as responsible buyers”.
“Certification is vital to our company to maintain mar-
ket share”, explain Henry Kumala Putra and his part-
ner William Goh of PT Jatim Sentra Utama, a manufac-
turer of hardwood garden products and decking.
“Because of the difficult market conditions in the
European market these past few years, we receive
little price margin only for being certified, however,
we managed to attract to new buyers because they
gave us preference over others. The share of FSC®
certified products was 30% in 2010, and went up to
80% in 2015. We sell mostly to do-it-yourself outlets
in the Netherlands, Germany, France, and in other
European countries and Australia.” An exit poll indi-
cated that all respondents made new trade contacts
and request a repeat event next year.
(Cited from TBI press release February 25, 2016)
Adessium Foundation e 950,000 0 e 950,000 2008-2011
Adessium Foundation e 950,000 0 e 950,000 2012-2015
IDH e € 1,492,265 e € 1,343,039 e € 149,227 2009-2014
IDH e € 1,085,532 e € 976,979 e € 108,553 2010–2016
Postcode Lottery e € 2,300,000 e € 2,070,000 e € 230,000 2010–2015
BAM e € 250,000 e € 225,000 e € 25,000 2009–2013
Bouwfonds e € 250,000 e € 225,000 e € 25,000 2009–2013
Skantrae e € 39,274 e € 35,347 e € 3,927 2012–2013
Aldrik Lifttechniek e € 1,500 e € 1,350 e € 150 2011
Foreign and
Commonwealth Office e € 19,219 e € 0 e € 19,219
25 housing corporations e € 275,000 e € 245,250 e € 27,250 2010-2016
GIZ/Forclime e € 234,223 e € 209,223 e € 25,000 2015-2016
Others e € 500,000 e € 125,000 e € 375,000 2015-2017
TOTAL (core + programme) e € 8,344,513 e € 5,456,187 e € 2,883,326
Financial report
Expenditures 2016
Certification e 415,783
Market links e 170,478
Organisation and management e 238,441
Financial income e - 2,204
Total e 822,498
Programme donors: Total donation Forest Organization Period
(90% forest certification & certification and support
10% organisation & support)
Core donors: Total donation Forest Organization Period
(100% organization & support) certification and support
Income
visit the website www.theborneoinitiative.org June 2017
OrganisationThe Borneo Initiative runs its activities from two offices in the Netherlands and in Indonesia.
Head office
De Corridor 7
3621 ZA Breukelen, the Netherlands
Email: info@theborneoinitiative.org
Mobile phone: +31 610 665564
ColofonPictures: Mark van Benthem, Alain Compost,
Maurice Spees and The Borneo Initiative
Design: Studio 10, Tineke Kooistra
Printer: drukkerij Mart. Spruijt BV, Amsterdam
This annual report is printed on 250gr FSC paper.
Indonesia office
Gedung Graha Simatupang Tower 2 Unit C floor 4
Jl. LetJen. TB. Simatupang Kav. 38
Jakarta Selatan 12540, Indonesia
Email: sekretariat@theborneoinitiative.org
Office phone: +62 21 7884 8908
Fax: +62 21 7884 8909
AbbreviationsAPHI Asosiasi Pengusaha Hutan Indonesia (Indonesian Forest Concession Holders Association)
APCS Asia Pacific Certification Solutions
CW Controlled Wood
FSC Forest Stewardship Council
WWF World Wide Fund for Nature
GFTN Global Forest & Trade Network
IDH Sustainable Trade Initiative
MoEF Ministry of Environment and Forestry
PT Perseroan Terbatas (Limited Liability Company)
TBI The Borneo Initiative
TFF Tropical Forest Foundation
TNC The Nature Conservancy