Financial institutions have been warned today to avoid investments in pulp and paper mills associated with deforestation and human rights abuses in Indonesia. Sixty environmental and social non-governmental organisations, including a dozen Indonesian civil society groups, have sent letters to banks and other financial institutions around the world asking for assurances that they will not invest in increased pulp milling capacity by Asia Pulp and Paper (APP) or other companies associated with the Sinar Mas Group until reforms have been achieved.

orestry giant Asia Pulp & Paper (APP) is overstating the conservation significance of its recently announced moratorium on forest conversion on the islands of Sumatra and Borneo, argues a new report issued by an Indonesian activist group. 

 

This report, published Greenomics, says that the nearly 200,000 hectares of "natural forest" APP says it won't covert to industrial plantations consists mostly of "scrubland, agriculture land or land affected by conflicts with local communities". 

 

"The use of the phrase 'suspension of natural forest clearance' [by APP] is inappropriate," states the report, which says that only 204 hectares of the 198,941 hectares APP says is now off-limits from development is actually forest in a contiguous block. 

"APP/SMG: The pulping continues"analyzes the “sustainability roadmap” issued by controversial Indonesia deforester Asia Pulp & Paper (APP). The analysis found there is no natural forest left to apply their new policies to in Riau Province, since all natural forest in their ‘own’ concessions had either already been cleared or protected under Indonesian law or APP showcase commitments which are also mostly nothing more than confirmation that the company would obey the law. The report finds "the fate of up to 1.2 million hectares, more than half of Riau’s remaining forest, remains in danger of being cleared by APP/SMG’s so-called 'independent suppliers' who can continue to deliver natural forest wood to the company’s mills unaffected by the new forest policies." These forests include some of the last refuges of the critically endangered Sumatran tiger and elephant, as well as forests on carbon-rich deep peat, whose clearing will lead to very high carbon emissions for decades to come.
Not only is APP backtracking from the broken sustainability commitments of 2004 and 2007, it also appears to be moving back from commitments made just a year ago in its “Vision 2020, a roadmap to guide sustainability principles, goals and program.” In this announcement, APP said it would “source 100 percent of its pulpwood supply from sustainable plantation stock by the end of 2015”. The 2012 roadmap switches terminology from “100 per cent sourcing” to “100 per cent capability” with the introduction of a new loophole for “Mixed Tropical Hardwood (MTH) waste & residues”.
"APP/SMG: The pulping continues" includes photographic evidence of clearfelled rainforest areas APP calls “waste and residues.

In 2001, APP was involved in what was then Asia’s biggest corporate debt default - US$13.9 billion. As part of a restructuring debt agreement it reached with its creditors, APP had the legally binding obligation to develop sustainable forestry operations and pulp and paper production. A recent report4 revealed that APP began clearing the forest just three years after signing this agreement, swallowing one-third of the forest that APP committed to protect. The letter is calling on governments not to fund a new pulp mill proposed by Asia Pulp and Paper (APP), one of the world's most controversial pulp and paper companies. Expanding APP’s production capacity further will inevitably lead to further deforestation, and to increased violations of the terms of its environmental covenants with ECAs.APP has historically been supported by European Export Credit Agencies2 (ECAs) and the letter requests that they end support for all business developments linked to deforestation in Indonesia and elsewhere. The letter is signed by more than 30 environmental non-governmental organisations (NGOs), including all members of ECA-Watch, Greenpeace and WWF. It has been delivered to ECAs from Finland, Denmark, Sweden, Austria, Germany, Italy, Spain and France.

A coalition of Indonesia’s NGOs called Anti-Forest Mafia Coalition urged global pulp buyers last week to beware of allegedly corruption-tainted pulp products following an analysis of timber companies’ involvement in graft cases that jailed government officials in Riau province. The coalition in a press conference in Jakarta also urged the government to curb logging licenses to companies who allegedly involved in forest corruption cases and bring the timber companies to justice.

 The NGOs consist of Jikalahari, ICW, IWGFF, Walhi, Sawit Watch, Telapak, Greenpeace and Huma held a press conference last week following the coalition’s submission of data on corruption to the national Corruption Eradication Commission (KPK).

Eyes on the Forest expose APP for breaching the legally binding commitments on achieving "full sustainability" by 2007 and protecting High Conservation Value Forests (HCVF) in the Pulau Muda Forest Management Unit. In the early 2000s, the Sinar Mas Group's Asia Pulp & Paper (APP) defaulted on a debt of U.S. $13.9 billion and became Asia's biggest corporate debt default.

In June 2004, APP's major creditors - comprised of the export credit agencies of Germany, Japan, France, Austria, Sweden, Finland, Italy, Spain and Denmark - announced agreement with APP over the Master Restructuring Agreements , which included some "environmental covenants" as legally binding contractual obligation. Among them, achieving "full sustainability" by 2007 and protecting High Conservation Value Forests.

APP began clearing the HCVF as early as 2007, only three years after it signed its legally binding obligation and the year by which APP had publicly committed to achieve "full sustainability". Eyes on the Forest has reported in detail on APP's history of never fulfilling its sustainability commitments . APP continued to clear HCVF until today, destroying a total of 12,000 hectares of HCVF, one third of the forest it had pledged to creditors to protect.

In May and September 2011 Eyes on the Forests investigated on clearcutting into the Bukit Tigapuluh landscape by PT Artelindo Wiratama, an affiliated to Asia Pulp & Paper.This forest clear-cutting occurs in good natural forest that should be protected.

This report highlights legal facts that APP's pulpwood suppliers cleared blocks of peat swamp forest in a planned and programmed manner after these blocks had been identified as containing ramin, a tree species that is protected both under Indonesian law and Convention on International Trade in Endangered Species (CITES).

A yearlong investigation by Greenpeace uncovered that APP is systematically violating Indonesia’s laws which protect ramin, an internationally protected tree species under the CITES treaty. Ramin trees come from Indonesia’s peat swamp forests which are also home to the endangered Sumatran tiger.

Numerous visits were made to APP’s largest pulp mill in Indonesia over the course of last year. Hidden among other rainforest species waiting to be pulped were numerous illegal ramin logs. To prove these trees were ramin, samples were taken and sent to an independent expert lab in Germany. The lab confirmed that all of these samples were indeed ramin.

A yearlong investigation by Greenpeace uncovered that APP is systematically violating Indonesia’s laws which protect ramin, an internationally protected tree species under the CITES treaty. Ramin trees come from Indonesia’s peat swamp forests which are also home to the endangered Sumatran tiger.

Numerous visits were made to APP’s largest pulp mill in Indonesia over the course of last year. Hidden among other rainforest species waiting to be pulped were numerous illegal ramin logs. To prove these trees were ramin, samples were taken and sent to an independent expert lab in Germany. The lab confirmed that all of these samples were indeed ramin.

Report on the investigations conducted in October 2011 inside concession of PT Arara Abadi of Nilo district, an APP subsidiary and main supplier in the province. Eyes on the Forest found at least 250 hectares of natural forest that has just been clearcut by APP’s subsidiary, PT Arara Abadi, where no heavy machines found there at the time when investigation conducted. The license for this concession is a part of permit granted to the company amounting to 299,975 hectares based on Minister of Forestry Decree Number 743/Kpts-II/1996, dated 25 November 1996. Data obtained from Riau Forestry Service says the concession of PT Arara Abadi distrik Nilo is around 26,438 hectares. The APP subsdiary has converted natural forest to pulpwood plantation (industrial timber plantation/HTI) since end of 1990s. It means that this concession has harvested acacia trees for 2-3 times since it was first clearcut. In early July 2011 a Sumatran tiger found dead after being trapped by snare for six days in land that part of PT Arara Abadi’s concession where it was found starving and in a worse condition.

In a press release on December 14, 2011, Asia Pulp & Paper (APP) called on WWF International to disassociate itself from The Truth Behind APP’s Greenwash, a December 2011 report of Sumatra NGO coalition “Eyes on the Forest (EoF)”.

The APP release contained the claim: “In fact, APP is regularly assessed and certified by many of the world’s leading authorities on sustainable forest management and environmental auditors - including Geneva-based SGS, TUV, AFNOR, the official French auditors for the European ‘EcoLabel’, PHPL, Indonesian sustainable forest management standard, LEI, Indonesian voluntary sustainable forest management standard, and PEFC Chain-of-Custody, the world’s largest forest certification program.”

WWF International has thus decided to verify whether the above mentioned organisations agree to the claim that they demonstrate APP’s sustainability and whether their certifications can help APP deny any of the issues raised by the Eyes on the Forest and other NGOs.

In 2009, people in North America consumed about 80 million tons of paper. But not all tissue and paper towels are made from responsible sources. According to tihs report, the fastest growing brand of toilet paper in the United States today, Paseo, has a direct link to rain forest destruction. Paseo toilet paper and tissue products are made from pulp from the Sinar Mas Group’s Asia Pulp & Paper (APP).

In response to the Eyes on the Forest, Asia Pulp and Paper issued a press release titled, "APP Calls for Facts, not Fiction, about Forest Protection." Naturally, the public at large will be inclined to ask whether the EoF investigative report is actually fiction, as implied by APP, rather than fact.
Greenomics Indonesia feels compelled to respond to the APP in the form of a Greenomics report, given that the EoF report quoted from a number of Greenomics reports as one of the grounds on which it based its conclusions. In these Greenomics reports, all of our arguments were based on legal and official documents issued by the APP Group itself, which were submitted to and approved by the Ministry of Forestry. In responding to APP’s press release, Greenomics Indonesia also feels it necessary to highlight a misleading PR effort directed at the Secretary General of the Ministry of Forestry on 16 December 2011 during a meeting that was attended by APP representatives at the request of the Secretary General of the Minister of Forestry in order to discuss the case of PT Ruas Utama Jaya (RUJ), an APP wood supplier operating in Riau Province that have a concession extending to 44,330 hectares. During this meeting, the APP representatives purported to explain various issues concerning the operations of RUJ, including the RUJ operations map and land cover conditions in the area.
It should be stressed here that the practice of clearing natural forest on the RUJ concession has become the principal issue that gave rise to the bitter war of words between EoF and APP in the wake of the publication of the EoF report. In this Greenomics Indonesia report, we shall discuss four things, namely:
* Legal concession map versus commitment to the protection of Sumatran tiger habitat in the RUJ concession;
* The clearing of Sumatran tiger habitat in the RUJ concession;
* The driving of Sumatran tigers from the RUJ concession to deep-peat concession areas; and
* Misleading PR by APP in respect of the part of the RUJ concession which APP claims has been set aside for conservation purposes.

APP continues repeating the same false statements together with some new twists, all trying to hide the ultimate foundation of the Sinar Mas Group/APP’s operations: the continuing destruction of natural tropical forest and drainage of peat soils. APP’s PR effort today is bigger and with more aggressive use of the media than ever before. APP has recruited a wide variety of publicists, individuals and supposedly independent NGOs to flack its allegedly green practices, including, Cohn & Wolfe, Environmental Resource Management, Alan Oxley and his World Growth and ITS Global, Mazars, Carbon Conservation, Patrick Moore and his Greenspirit Strategies, Bastoni and his Sumatran Tiger Conservation Foundation (YPHS). It runs its commercials globally on CNN, Sky TV and other international broadcasting channels.

In this report, Eyes on the Forest investigates APP’s PR claims. Has there been any improvement of SMG/APP’s practices on the ground? Has there been a reduction of the company’s impact on the world’s most diverse natural tropical forests, wildlife, and the world’s climate?

The answer is a straightforward: No. SMG/APP continues draining deep peat soils and clearing natural forests and its negative impact is increasing with the scale of its operations.

PT Mutiara Sabuk Khatulistiwa – which operates in Riau Province – has cleared peatland forest extending to more than half of its concession for the purpose of providing land for the planting of acacia. This sets a bad precedent for logging concession management in Indonesia. The timber resulting from the PT MSK’s land clearing operations was supplied as raw materials to PT Indah Kiat Pulp and Paper (PT IKPP/Asia Pulp and Paper) for use in its pulp and paper plants.

Seemingly indefatigable, Asia Pulp and Paper (APP) is continuing to go all out to convince the global public that the Sinar Mas Group company’s pulp and paper operations are committed to the conservation of Indonesia’s biodiversity.

In fact, just recently APP “challenged” global public opinion through an advertisement it placed in The New York Times, inviting the global public to monitor its commitment to biodiversity conservation.

APP also continues to claim that its operations have voluntarily set aside a certain portion of their concessions as an expression of its commitment to biodiversity conservation.

This Greenomics Indonesia report will reveal the true reason why APP’s flagship Taman Raja and Kampar Carbon Reserves have been set aside, something that is continually touted to the global public through advertisements as an expression of APP’s commitment to biodiversity conservation.

In fact, the reason for the two reserves is eminently simple. This report, supported by official and legal data, sets out the true situation as regards the reason for APP’s actions in setting aside the reserves.

In September, Greenomics Indonesia was afforded the opportunity to make two presentations to the Ministry of Forestry regarding the need for Indonesia to immediately reposition itself as a pulp and paper producer. The presentations were chaired by the Ministry of Forestry’s Secretary General, Dr. Hadi Daryanto. The first presentation, on 12 September, was attended by internal Ministry of Forestry figures, while the second presentation, on 14 September, was attended by representatives of APP (Asia Pulp and Paper) and APRIL (Asia Pacific Resources International Holding Limited).

The toy sector uses a lot of glossy packaging. Forensic testing shows that the packaging used by leading toy brands regularly contains Indonesian rainforest fibre. Greenpeace International investigations have also established links between these brands and APP, the largest and most notorious pulp and paper company operating in Indonesia.

• Forensic testing shows regular use of rainforest fibre (MTH) in the packaging of major toy brands manufactured in China or Indonesia.
• Chain-of-custody evidence in China and Indonesia shows that APP is an important supplier of packaging materials for major toy brands.
• Indonesian rainforests are being cleared to produce APP pulp, which is supplied to the packaging sector in both Indonesia and China.

PT Bina Duta Laksana (PT BDL) is an industrial logging and pulp wood plantation company that supplies tropical timber and plantation fiber to Asia Pulp and Paper (APP), Indonesia’s largest pulp and paper company that has recently moved its headquarters to China. With PT BDL, APP is now grabbing land, decimating the farms, wetlands and forest lands once considered useless or unprofitable for the logging sector. The new frontiers and increased impacts of industrial pulp wood plantations are taking a serious toll on Riau’s forests, leaving only 37 percent of the forest that existed in Riau in 1985.

Greenomics Indonesia has taken the initiative of assessing the level of concern that is really exhibited by APP and APRIL for the protection of the Sumatran tiger. This initiative is intended to serve as a response to the aggressive and groundless PR arguments of the two companies, which claim that their operations exhibit a high level of concern for the protection of the Sumatran tiger. We frequently read and hear of claims from the pulp and paper industry, particularly APP, to the effect that their operations reflect a high level of concern for the protection of the Sumatran tiger. Many of these claims, however, are based on public relations arguments designed purely to mislead the public. The assessment of APP and APRIL’s concern for the protection of the Sumatran tiger needs to be carried out at the level of each pulpwood plantation concession that supplies timber to the two companies. This is essential in order to evaluate the aggregate level of concern of APP and APRIL for the protection of the Sumatran tiger.