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).

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.

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.

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.

Corruption – the abuse of entrusted power for private gain – undermines good governance and the rule of law. Corruption in the forestry sector further degrades the environment, threatens rural communities and robs the public of billions of dollars each year. Transparency International (TI) is committed to promote corruption-free forest governance that enables sustainable forest management, increased economic development, poverty reduction and environmental protection. To help achieve this objective, TI Indonesia (TII), through the Forest Governance Integrity Programme (FGI), will monitor the existing corruption risks and anti-corruption tools in the forestry sector in Riau, Aceh and Papua, Indonesia.
The methodology of the research is based on the FGI Risk Manual1 which provides a generic framework for assessing the impact and likelihood of corruption in the commodity chains related to the forestry sector and the anti-corruption tools that are available, in order to establish the high-risk corruption areas for focused advocacy.

EU Ecolabel is awarded to two brands of photocopy paper, produced by the Indonesian company Pindo Deli, that do not deserve it. Further- more, while documenting this case it became clear that there is insufficient information publicly available to allow consumers to check on which basis the EU Ecolabel has been awarded to companies. PT WKS’s operation in Jambi province in Sumatra have serious impacts on forests, indigenous peoples and local communities. Research by Indonesian NGOs indicates that PT WKS’s operations in the Bukit Tigapuluh forest ecosystem may not even be legal.

10 US  NGOs sent a letter to paper companies demanding to stop any eventual purchase of paper from the APP controlled Eagle Ridge Paper. APP and its fiber suppliers are the leaders in clearing and converting vast areas of rainforests in Sumatra and Borneo for pulp and paper. This is devastating biodiversity and ecological systems, and is violating the livelihoods and rights of indigenous communities. Moreover, the rapid depletion of Indonesia's natural rainforest is emitting massive amounts of greenhouse gasses as forests are destroyed and converted to biologically impoverished plantations. Because of emissions from this forest loss, analysts have listed Indonesia as the world's third largest producer of greenhouse gasses after China and the United States.

The undersigned environmental organizations are writing to inform you about some of the social and environmental concerns that we have about APP and about some of the risks that we believe result from doing business with APP and its U.S. arm Eagle Ridge.

Indonesia has one of the world’s largest areas of remaining forest but also one of the world’s highest deforestation rates. Reported exports from its lucrative timber sector were worth $US6.6 billion in 2007, second only to Brazil and worth some $2 billion more than all African and Central American nations combined. But in recent years almost half of all Indonesian timber has been logged illegally at a staggering cost to the Indonesian economy and public welfare.

In this report Human Rights Watch details these costs and their human rights impacts. Using industry-standard methodology, we estimate that the Indonesian government lost an average of nearly $2 billion annually between 2003 and 2006 due to illegal logging, corruption, and mismanagement. The total includes: forest taxes and royalties never collected on illegally harvested timber; shortfalls due to massive unacknowledged subsidies to the forestry industry (including basing taxes on artificially low market price and exchange rates); and losses from tax evasion by exporters practicing a scam known as “transfer pricing.”

Eyes on the Forest (EoF) Investigation in March, April and June 2007 has found that about 38,000 hectares of natural forests in northern Bukit Batu wildlife reserve had been clearcut simultaneously in three industry timber plantation (HTI) concessions of PT Satria Perkasa Agung (8,560 ha), PT Sakato Pratama Makmur (15,461 ha) and PT Tiara Cahaya Delima (13,984 ha). All the three companies are subsidiaries as well as timber suppliers for Asia Pulp & Paper (APP) mill in Riau. These investigations were conducted following the survey by the Landsat satellite images in August 2006. EoF analyzed the natural forests conversion inside the Giam Siak Kecil block started from June 2005 to August 2006.

Eyes on the Forest (EoF) Investigation in November 2006 has found that about 2,000 hectares of natural forests had been clearcut in a Selective Logging Concession (HPH) of PT Mutiara Sabuk Khatulistiwa, by PT Arara Abadi, a subsidiary of Sinar Mas Group (SMG), associated with Asia Pulp & Paper (APP). The logging in this concession started in 2006. PT Arara Abadi along with PT Riau Gemilang Surya Reteh, PT Sentra Baja Perkasa and PT Belawan Indah clearcut the forest in PT Mutiara Sabuk Khatulistiwa, which also an APP’s partner. This timber felling is prepared to develop a 15,000-ha Industrial Timber Plantation of PT Mutiara Sabuk Khatulistiwa.

From the 1990s on, APP have turned its logging target to the natural forests in south China. During the short period of one year beginning from August 2002, Sinar Mas Group-APP China carried through its so-called "planting forests on barren lands" program, beginning with the enclosure of a huge forest-pulp base of 27,500,000 mu in Southern Yunnan province. However, according to statistics, of its 27,500, 000 mu base, only 5,183,000 mu, which is only 20% of its area, is suitable for planting forests. In July and September 2004, in two Greenpeace field surveys, it was discovered that the company was logging in natural forests. In this report, Greenpeace China have made an objective and meticulous analysis of the problems existing in the Yunnan eucalypt forest-pulp-paper integration project executed by Sinar Mas Group-APP China, which mainly include:

• The logging of large-area natural forests, which is against the Forest Law and
• The National Natural Forest Protection Project;
• Large-scale planting of eucalypts will bring about severe damage to biodiversity in Yunnan;
• The transportation procedures of woodland and timber are not in accordance with the relevant regulations, which lead to the loss of state-owned assets and damage to the legal interests of forest farmers.

The report documents the result of spot checks by WWF Indonesia's Tesso Nilo Programme Forest Crime Unit in August 2003 and APril 2004. It investigates claims by companies regarding involvement in illegal logging activities, monitors ongoing forest operations in the Tesso Nilo - Bukit Tigapuluh landscape.

A report into how corruption on the part of Indonesian police and government officials is to blame for continued illegal logging in Indonesia’s national parks. 

The forest destruction, social conflict and financial crisis of Asia Pacific Resources International Holdings Ltd (APRIL), and the role of financial institutions and paper merchants.

This report reveals the damaging environmental and social impacts of Asia Pacific Resources International Holding Ltd, otherwise known as APRIL, one of the biggest pulp and paper companies in the world. It also examines the influential role played by financial institutions and paper merchants in fuelling this damage. It provides recommendations for urgent action to be taken by all these groups in order to help bring an end to the destruction of Indonesia’s forests, one of the most precious and threatened natural habitats on Earth.

The following reports have been produced by this project. The first of these represents a synthesis of the major findings from the nine case studies, accompanied by a historical analysis of forest administration and forestry sector development in Indonesia, and a discussion of the origins and legal-regulatory basis of the nation’s ongoing decentralisation process. Each of the nine case studies is published as a separate report (with the exception of the study districts in Riau, which have been combined) in order to make the information contained therein more readily accessible to decision-makers involved in the decentralisation process.

In 1997, a major financial crisis struck Asia. In the wake of that crisis, the International Monetary Fund and the World Bank provided large loans to the Indonesian government in return for their commitment to implement policy reforms intended to stabilize the economy and rekindle growth. Those reforms included various measures explicitly designed to improve forest management, most of which focused on forest concessions run by large Indonesian conglomerates.
The strategy those two agencies adopted had three major flaws regarding forests. First, at the same time that the two agencies were supporting forest policies intended to limit unsustainable logging, they also encouraged several non-forest policies that actually stimulated deforestation and more widespread logging. Second, by the late 1990s large forest concessions were responsible for an increasingly small portion of forest clearing and unsustainable logging. Logging outside concessions and land clearing for agriculture had become the main sources of forest destruction. Hence, focusing on concessions dealt with only a limited piece of the problem. Third, a number of the specific forest concession reforms endorsed by the IMF and the World Bank may have actually increased pressure on Indonesia's forests.

Asia Pulp & Paper (APP) is one of the biggest pulp and paper companies in the world and is responsible for destroying a large area of Indonesia’s rainforest. This briefing examines the destructive practices of APP and the Indonesian pulp and paper industry. It also reveals how international financial institutions are responsible for funding the activities of APP.