ITTO webinar explores the competitive advantages enabled by legality, compliance, and verification

Speakers at a recent ITTO webinar stated that timber legality is no longer merely a compliance issue, but a strategic pillar for sustainable forest development, responsible trade, and global supply chain credibility. © Tetra Yanuariadi/ITTO

Embedding legality into domestic governance is increasingly becoming a competitive advantage for tropical timber producers, experts noted at a recent webinar organized by the International Tropical Timber Organization (ITTO).

The webinar explored timber supply chain legality through experience and best practices, bringing together academics, forestry practitioners, and private sector representatives to examine how lessons from Indonesia and Viet Nam could form knowledge transfer and sharing with other tropical countries. 

Dr Rina Kristanti of the Republic of Indonesia’s Ministry of Forestry and Ngo Sy Hoai of the Viet Nam Timber and Forest Product Association (VIFOREST), shared insights from their respective countries, illustrating how implementing timber legality frameworks can positively strengthen domestic wood industries while improving sustainable forest management and market credibility.

The speakers stated that timber legality is no longer merely a compliance issue, but a strategic pillar for sustainable forest development, responsible trade, and global supply chain credibility. 

The event was held as part of an ongoing ITTO webinar series initiated under the second phase of an ITTO-BMLEH project aimed at enhancing the production of high-quality timber from teak and other plantation species. The series provides a platform for experts around the world to exchange experiences on policy developments, industry trends, and emerging challenges in building legal and sustainable tropical timber supply chains. 

Indonesia: Building credibility through systems

Dr Kristanti outlined Indonesia’s experience implementing its domestic timber legality and verification system (Sistim Verifikasi Legalitas Kayu - SVLK) with support from ITTO. With 125.7 million hectares of forest, half of which is designated for production, Indonesia faces the dual challenge of maintaining productivity while ensuring effective governance.

Indonesia’s response has been institutional. Established in 2001, SVLK verifies compliance of sustainable forest management, timber legality and forest product declarations across the country’s wood industry. Independent auditors assess compliance with the system’s standards under government-accredited oversight, helping ensure transparency and credibility.

Traceability is central to the system’s effectiveness. Dr Kristanti explained how SVLK operates alongside SIMONTANA, Indonesia’s national forestry monitoring system, which collects data and ensures accurate geolocation of raw material sources. The integration of these systems allows timber to be tracked from forest to market, strengthening accountability across the supply chain.

These efforts have produced measurable results. Indonesia’s wood sector has seen improvements in productivity alongside growth in exports, particularly to key markets in China, the United States and Japan. Recognition of SVLK by major trading partners, including the European Union, United Kingdom, and Australia, has helped bolster market confidence and support export recovery following the pandemic. 

ITTO continues to play an important role in strengthening forest governance in Indonesia. Working with the Ministry of Forestry, ITTO is engaging with SMEs, industry associations, and provincial governments to implement sustainable forest management and adherence to legality best practices. Through a series of capacity-building workshops, the project aims to strengthen understanding of SVLK and its expanded framework while improving governance practices throughout the supply chain.

This support is particularly important for SMEs, many of which face challenges accessing both international and domestic markets. To address these constraints, the project has assisted with the development of systems linking timber producers with the processing industry, enabling more efficient and transparent supply chains grounded in legality. The goal is to ensure that compliance frameworks strengthen opportunities for smallholders and community forests while supporting sustainable forestry and industry growth.

Viet Nam: Legality as economic transformation

Viet Nam’s experience, presented by Mr Hoai, demonstrates how legality frameworks can underpin broader industrial transformation. 

After banning logging in natural forests in 2003, Viet Nam shifted decisively towards a plantation-based forestry model. Today, the country has 14.8 million hectares of forest area and 42% forest cover, and is one of the world’s leading producers and exporters of wood and wood products. 

This growth has been driven by legal reforms, verification systems and strong industry participation supported by government policies and incentives. Legality assurance has become both a market requirement and a central component of Viet Nam’s national commitment to sustainable forest management and development.

The Viet Nam Timber Legality Assurance System (VNTLAS) ensures that domestically harvested timber and imported wood are legal and compliant with destination market requirements. The system emphasizes transparency through risk assessment, verification and accountability across the supply chain.

VNTLAS is supported by the landmark 2017 Law on Forestry that aligns domestic regulations with international requirements and establishes mandatory procedures for timber origin tracing and customs control. Viet Nam has further strengthened its framework through its Voluntary Partnership Agreement under the EU’s Forest Law Enforcement, Governance and Trade (FLEGT) initiative, compliance with CITES regulations and ongoing efforts to meet the requirements of the EU Deforestation Regulation.

Viet Nam’s prominence as a major wood exporter has also generated valuable lessons. Mr Hoai highlighted the importance of pursuing forest management reforms alongside broader industry development. Land tenure reforms, which allocated forest land to farmers built trust among producers, while government-supported industrial zones and trade agreements created new investment and export growth.

These policies have encouraged strong engagement from the private sector, which has come to view legality not as a constraint but as an important component to improved competitiveness and market access.

At the same time, Mr Hoai emphasized that timber legality remains a dynamic process requiring continuous improvement. Strengthening digital traceability systems, supporting SMEs in meeting compliance requirements and upgrading plantation timber quality remain key priorities. Expanded international cooperation and partnerships will also play an important role as Viet Nam continues to refine its legality framework.

As Mr Hoai noted in his concluding remarks:

“Timber legality is not simply about meeting international trade requirements but building trust in global markets, protecting forest resources for future generations and elevating Viet Nam’s position as a responsible timber processing hub.”

Legality and sustainability go hand in hand

The experiences of Indonesia and Viet Nam highlight how strong legality frameworks can support both sustainable forest management and economic growth.

Both speakers emphasized that legality forms the foundation on which sustainable supply chains are built. By strengthening governance, increasing transparency and fostering trust among producers, regulators and buyers, legality systems support and create the conditions for long-term investment and industry stability.

For tropical timber-producing countries which are yet to do so, these examples clearly demonstrate that implementing robust legality frameworks can open wider opportunities for global and regional trade while reinforcing sustainable development goals. As global demand for timber products sourced from transparent and responsible supply chains continues to grow, such reforms will play an increasingly important role in shaping the future of the tropical timber sector.

Watch the full webinar: