2012 ANNUAL REPORT The Borneo Initiative Foundation Public version

The Borneo Initiative Foundation · 18 PT Gunung Gajah Abadi East Kalimantan 81,000 2012 19 PT Kandelia Alam West Kalimantan 18,130 2012 20 PT Bina Ovivipari Semestra West Kalimantan

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The Borneo Initiative FoundationPublic version

visit the website www.theborneoinitiative.org June 2013

AbbreviationsAPHI Asosiasi Pengusaha Hutan Indonesia

(Indonesian Association for Forest

Concession Holders )

EU European Union

FSC Forest Stewardship Council

GFTN Global Forest & Trade Network

IDH Sustainable Trade Initiative

MoF (Indonesian) Ministry of Forestry

PT Perseroan Terbatas

(Limited Liability Company)

SVLK Sistem Verifikasi Legalitas Kayu

(Timber Legality Verification System)

TBI The Borneo Initiative

TFF Tropical Forest Foundation

TFT The Forest Trust

TNC The Nature Conservancy

USA United States of America

The Borneo InitiativeWith the publication of this public version of the

2012 annual report, The Borneo Initiative (TBI) aims

to inform a broader public about its work. This

public version is based wholly on the annual report,

which has been externally audited and approved by


TBI is a foundation established in 2008, with offices

in The Netherlands and Indonesia. Our mission is to

prevent the loss of tropical forests to deforestation

and over-exploitation.

Our target is to contribute directly to the increase

of certified natural forest areas in Indonesia, from

1.1 million hectares in 2009 via 4 million by the end

of 2013, 5 million by the end of 2014 and 9 million

in 2016.

We operate as a platform to forge partnerships

between various organisations on the ground such

as TFF, TFT, TNC and GFTN as well as with standard-

setting bodies (such as MoF and FSC), government,

forest concessions and overseas timber trading

companies. We have prepared a formal partnership

with APHI to be finalised in 2013.

We offer forest enterprises (i.e. forest concessions)

a subsidy of 2 USD/ha, with a maximum available

subsidy at USD 300,000. At the same time, we offer

a higher subsidy of 3 USD/ha to smaller forest

concessions between 35,000 and 75,000 ha, with a

ceiling of USD 150,000. The concessionaire can use

this grant to pay specific certification costs.

Our primary focus is the Indonesian part of Borneo

(Kalimantan), but coverage is to expand over time

to include Malaysia and Papua New Guinea as well.

We link up players at either end of the marketing

chain whose cooperation is required to make

certification a success: wood suppliers in Indonesia

and end users in Europe or USA.

Looking back and aheadWe have come close to the target of adding 17

forest concessions with 1.2 million ha to the portfo-

lio in 2012 – actually we have added 15 companies

with 1,093,000 ha, bringing the total portfolio size

to 3,334,000 ha. In 2013, the portfolio is to grow to

a total of 45 companies with 5 million ha – we have

already prepared a sixth group of seven companies

with 508,000 ha, bringing us close to the 4 million

ha target early in 2013.

We added four new FSC certificates in 2012,

bringing the total of FSC certificates achieved with

TBI support to 7, covering 806,400 ha of forest. This

is good progress in itself, but we had planned to

add 14 new FSC certificates by the end of 2012, so

overall progress is somewhat behind schedule. We

are keeping close coordination with the certification

coaches to speed up the momentum in all forest


Achievements in brief

- 3.3 million ha of natural forest on the way to sustainable management in Indonesia

- 2.8 ha production area with 1.5 million cu.m. roundwood output

- 260,000 ha set-aside for full protection

- 770,000 ha range area for iconic and endangered species

- 4 new forest concessions with FSC-certification in 2012, 7 overall since 2010.

In the current period 2012-2014, we plan to bring

another 5 million ha of natural forest under FSC

certified management (adding 8 million ha in total).

Now that forest certification is gaining traction,

sustained support is needed to put FSC into the

mainstream, to make a significant and durable

contribution to safeguarding Borneo’s remaining

forests. Beyond 2016, we aim for a future total of

15 million ha FSC certified forests, mostly but not

exclusively on Borneo. This implies a fund-raising

target of e 8.5 million both for forest certification

proper, and for maintaining the organization.

Forest CertificationWe have revised our TBI model in a way that dual

certification (SVLK-FSC) can be facilitated and that

action plans reflect all the steps needed for earning

both SVLK and FSC certification.

As regards Sabah and Brunei, we facilitated a FSC

readiness study early in 2012. It showed that the

potential is somewhat limited for FSC. So, the most

potential for FSC is still in Indonesia. We have

prepared a long list of forest concessions with FSC

potential for Kalimantan and Papua province, in

light of upcoming new donor contracts.

FSC roundwood

Year TBI support area (ha) FSC certificates FSC certified area (ha) output (cu.m.)

FSC in Indonesia: progress by year

Baseline 2010: 9 FSC-certified forest companies

with 1,100,000 ha

Target 2012: 6 additional FSC-certified forest


Status: 4 forest concessions achieved FSC

certification in 2012; 7 concessions since 2010

change sum change sum change sum change sum







































































* rounded figures










Overall sum*

Entry FSC

Company name Province Area (ha) year certificate

1 PT Suka Jaya Makmur West Kalimantan 171,340 2010 2011

2 PT Belayan River Timber East Kalimantan 97,500 2010 2012

3 PT Roda Mas Timber East Kalimantan 69,330 2010 2012

4 PT Sarang Sapta Putera Central Kalimantan 51,500 2010

5 PT Sarmiento Parakanca Timber Central Kalimantan 216,580 2010 2011

6 PT Indexim Utama East Kalimantan 52,480 2010

7 PT Narkata Rimba East Kalimantan 41,540 2010 2011

8 PT Kemakmuran Berkah Timber East Kalimantan 82,810 2010 2012

9 PT Dwimajaya Utama Central Kalimantan 127,300 2010 2012

10 PT Ratah Timber East Kalimantan 97,690 2010

11 PT Gema Hutani Lestari Maluku 148,450 2010

12 PT Wapoga Mutiara Timber Unit II Papua 169,170 2010

13 PT Rizki Kacida Reana East Kalimantan 55,150 2011

14 PT Salaki Summa Sejahtera West Sumatera 48,420 2011

15 PT Wukirasari West Papua 116,320 2011

16 PT Mamberamo Alas Mandiri Papua 677,310 2011

17 PT Sari Bumi Kusuma Delang West Kalimantan 60,700 2012

18 PT Gunung Gajah Abadi East Kalimantan 81,000 2012

19 PT Kandelia Alam West Kalimantan 18,130 2012

20 PT Bina Ovivipari Semestra West Kalimantan 10,100 2012

21 PT Inhutani I Meraang East Kalimantan 70,700 2012

22 PT Adhi Mitra Lestari East Kalimantan 52,100 2012

23 PT Wanasokan Hasilindo West Kalimantan 49,000 2012

24 PT Graha Sentosa Permai Central Kalimantan 44,970 2012

25 PT Sumalindo Lestari Jaya IV East Kalimantan 63,550 2012

26 PT Sumalindo Lestari Jaya V East Kalimantan 61,465 2012

27 PT Bina Balantak Utama Papua 298,710 2012

28 PT Manokwari Mandiri Lestari West Papua 83,240 2012

29 PT Mitra Pembangunan Global West Papua 83,950 2012

30 PT Telega Bhakti Persada Maluku 63,405 2012

31 Perum Perhutani/KPH Banten West Java 80,163 2012

Total 3,344,073

List of forest concessions supported by The Borneo Initiative in 2012

With the Papua buyer visit in March 2012, followed

by the year’s highlight, the FSC Business Encounter

in June 2012, we built the network for further

market links activities. We are in the process of

collecting updated production profiles of all the

TBI-supported forest concessions and industries,

which we will make accessible to leading trading

companies in the major FSC markets, EU and USA,

but potentially also Japan, China and Australia.

We have contacted leading partner organisations in

the Netherlands, United Kingdom, Denmark, USA,

and Asia-Pasific who are ready to coordinate actions

with us in 2013. Adessium Foundation generously

expanded our funding base to allow awareness

raising activities in the USA.

Programme ImpactEconomic

The 31 forest concessions combined produced a

total log output of about 1.5 million cu.m from a

harvest area of around 2.8 million ha, i.e. an average

of only 0.5 cu.m./ha – or even lower if the non-

productive areas are also taken into the equation.

Around 570,000 cu.m. of the 1.5 million cu.m.

harvested is already FSC certified. The related

industries convert this harvest into an estimated

103,000 cu.m. sawn wood products and about

241,000 cu.m of wood panel products (plywood).


The forest concessions we support employ some

6,900 regular staff in total, not counting numerous

seasonal workers.


The whole area that has been FSC certified thus far

with the support from TBI (806,400 ha) is natural

forest. 260,000 ha has been set-aside for full

protection. Moreover, 13 forest concessions share

borders with a protected area and thus have a

buffering function. And 10 forest concessions offer

habitat for such iconic endangered species like

orang-utans, proboscis monkeys and elephants.

Market links

• Expected result: FSC certified

forest concessions with

support of TBI have new

market links to the Netherlands

(75,000 cu.m/year) or wider EU

(120,000 cu.m/year).

• Target 2012: 9 FSC certified

forest concessions supply FSC

wood products to the Dutch

(20,000 cu.m) or the European

markets (10,000 cu.m).

• Status: Shipments to the

Netherlands and other Euro-

pean countries are on-going.

A survey among FSC certified

concessions is under


FundraisingWe aim for a future total of 15 million ha FSC

certified forests, mostly but not exclusively on

Borneo. This implies a fund-raising target of e 8.5

million both for forest certification proper, and for

maintaining the organization.

Adessium Foundation agreed to a second contract

for the period 2012-2015, to the amount of

e 950,000 for organisation and management,

including the development of a ‘Linking USA’


We have prepared funding proposals for other

bilateral donors, to be finalised in 2013.

Adessium Foundation e 950,000 0 e 950,000 2008 - 2011

Adessium Foundation e 950,000 0 e 950,000 2012 - 2015

IDH e 2,000,000 e 1,800,000 e 200,000 2009 - 2013

IDH e 2,000,000 e 1,500,000 e 500,000 2012 - 2015

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

Steffex e 40,000 e 36,000 e 4,000 2012 - 2013

25 housing corporations e 275,000 e 247,500 e 27,500 2010 - 2016

TOTAL (core + programme) e 9,015,000 e 6,103,500 e 2,911,500

Expenditures 2012

Certification e 385,200

Certification support activities e 23,000

Market links e 42,100

Organisation and management e 353,200

Financial costs e - 22,000

Total e 671,500

Financial report

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

Donations received

visit the website www.theborneoinitiative.org June 2013

The Netherlands:

The Borneo Initiative

De Corridor 7

3621 ZA Breukelen, the Netherlands

Email: [email protected]

Mobile phone: +31 610 665564


The Borneo Initiative

Gedung Graha Simatupang

Tower 2 Unit C Lt. 4

Jl. LetJen. TB. Simatupang

Jakarta Selatan 12540, Indonesia

Email: [email protected]

Office phone: +62 21 782 9461

Mobile phone: +62 818 401 401

Fax: +62 21 782 9462

OrganisationTBI runs its activities from two offices, one in the Netherlands and the other in Indonesia.

ColofonPictures: Rahmilyna Putri and Wim Ellenbroek

Design: Studio 10, Tineke Kooistra

Printer: drukkerij Mart. Spruijt BV, Amsterdam

This annual report is printed on 250gr FSC paper.