1. DIREKTORAT BINA PENGOLAHAN DAN PEMASARAN HASIL HUTAN 2014 Rapat Pembahasan IMM (Independent Market Monitoring) of the FLEGT-VPA EU-Indonesia

2. Dasar Pelaksanaan IMM adalah salah satu kegiatan dalam rangkaian pelaksanaan FLEGT-VPA antara Indonesia dan Uni Eropa Pelaksanaan IMM disesuaikan dengan ToR sebagaimana Lampiran 7 Annex VPA

3. 1.Objective Independent Market Monitoring (IMM) is market monitoring done by an independent third party referred to as Monitor. The objective of Independent Market Monitoring (IMM) is to collect and analyse information on the acceptance of Indonesian FLEGT-licensed timber in the Union market, and review impacts of Regulation (EU) No 995/2010 of the European Parliament and of the Council of 20 October 2010 laying down the obligation of operators who place timber and timber products on the market and of related initiatives such as public and private procurement policies.

4. 2.Scope IMM shall cover: 2.1.The release for free circulation of Indonesian FLEGT-licensed timber at points of entry in the Union; 2.2.The performance of Indonesian FLEGT-licensed timber in the Union market and the impact of market-related measures taken in the Union on the demand for Indonesian FLEGT-licensed timber; 2.3.The performance of non-FLEGT-licensed timber in the Union market and the impact of market-related measures taken in the Union on the demand for non- FLEGT-licensed timber; 2.4.Examination of the impact of other market-related measures taken in the Union such as public procurement policies, green building codes and private sector action such as trade codes of practice and corporate social responsibility.

5. 3.Output The output of IMM will comprise regular reports to the Joint Implementation Committee (JIC) containing its findings and recommendations on measures to strengthen the position of Indonesian FLEGT-licensed timber in the Union market and to improve the implementation of market-related measures to prevent illegally harvested timber from being placed on the Union market.

6. 4.Main Activities IMM includes inter alia: 4.1.Evaluation of: (a)progress with and impact of the implementation of policy measures to tackle trade in illegally harvested timber in the Union. (b)trends in imports of timber and timber products by the Union from Indonesia as well as other VPA and non-VPA timber exporting countries; (c)actions by pressure groups that could affect demand for timber and timber products or markets for Indonesia's forest products trade. 4.2.Reporting findings and recommendations to the JIC.

7. 5.Monitoring Methodology 5.1.The Monitor shall have a documented and evidence-based methodology. This shall include adequate analysis of relevant documentation, identification of any inconsistencies in the available trade data and information, and in-depth interviews with relevant actors on key indicators of the impacts and effectiveness of market-related measures. 5.2.The Monitor shall conduct observations and analysis on, inter alia: (a)The current market situation and trends in the Union for timber and timber products; (b)Public procurement policies and their treatment of FLEGT- and non-FLEGT- licensed timber and timber products in the Union; (c)Legislation affecting the timber industry, the trade in timber and timber products within the Union and imports of timber and timber products into the Union; (d)Price differentials between FLEGT- and non–FLEGT- licensed timber and timber products in the Union; (e)Market acceptance, perception and market share of FLEGT-licensed and certified timber and timber products in the Union; (f)Statistics and trends on volumes and values of imports at different Union ports of FLEGT- and non-FLEGT-licensed timber and timber products from Indonesia as well as other VPA and non-VPA timber exporting countries; (g)Descriptions of, including any changes to, the legal instruments and processes by which competent authorities and border control authorities in the Union validate FLEGT licences and release shipments for free circulation, as well as penalties imposed for non-compliance; (h)Possible difficulties and constraints faced by exporters and importers in bringing FLEGT-licensed timber into the Union; (i)The effectiveness of campaigns to promote FLEGT-licensed timber in the Union; 5.3.The Monitor shall recommend market promotion activities to further enhance the market acceptance of Indonesian FLEGT-licensed timber

8. 6. Qualifications of the Independent Market Monitor The Monitor shall: (a)be an independent third party with a proven track record of professionalism and integrity in monitoring the Union timber and timber products market and related trade issues; (b)be familiar with the trade in and markets for Indonesian timber and timber products, in particular, hardwood and for those countries in the Union producing similar products; (c)have systems to avoid any conflict of interest. The Monitor shall declare any potential conflict of interest that may arise and take effective action to mitigate it.

9. 7.Reporting 7.1.Reports shall be submitted biennially and comprise: (i) a full report containing all relevant findings and recommendations; and (ii) a summary report based on the full report. 7.2.The full report and the summary report shall be submitted to the JIC for review and approval before releasing the reports to the public; 7.3.Upon the request of the JIC the Monitor shall provide additional information to support or clarify its findings.

10. 8. Confidentiality The Monitor shall maintain the confidentiality of data it receives while carrying out its activities.

11. 9. Appointment, periodicity and financing The Monitor shall be appointed by the Union after consultation with Indonesia in the JIC; 9.2.IMM shall be carried out at intervals of no more than twenty four months starting from the date as agreed by the JIC in accordance with Article 14(5) (e) of the Agreement 9.3.The financing of IMM shall be decided by the JIC