Asia Pacific Resources International Limited (APRIL) one of the world’s largest pulp-and-paper companies, has been under spotlight because extensive rainforest destruction and a large number of social conflicts.
Since 2014, a number of Indonesian and international NGOs contacted ABN AMRO and other banks to ask the bank to stop supporting APRIL and its conglomerate Royal Golden Eagle Group (RGE), because of its repeated failure to implement its own policy, to comply with regulations in Indonesia. In March 2015, ABN AMRO in fact told Greenpeace that it would not provide any further further loans to APRIL. But this promise was short-lived.
In November 2017, the International Consortium of Investigative Journalists reported that ABN AMRO continued to lend to April’s offshore subsidiaries despite environmentalists’ concerns and the banks’ own sustainability policies. And in December 2018, ABN AMRO was part of a large new syndicated loan to APRIL.
EPN wrote again to the bank, asking it to divest from APRIL. On 19 April 2019, ABN AMRO responded that the bank prefers to engage, rather than divest but that, for client confidentiality reasons, it cannot provide information on their engagement with APRIL. In fact, the bank decided to turn a blind eye to the continuous violations of ABN AMRO’s forest policy by APRIL, alongside with violation of APRIL’s own policy and of legislation in Indonesia.
APRIL has failed to robustly implement the Forest Conservation Policy it announced in June 2015. In December 2016, both Greenpeace and WWF broke off their engagement with APRIL, with the final straw being the discovery of 3km of canals through deep peat on Padang Island off the eastern coast of Sumatra, in violation of its own sustainability standards, government regulations and a letter of instruction issued by the Ministry of Environment and Forestry the previous year asking companies to block existing canals.
APRIL’s activities represent a direct threat to global climate: concessions on dried peat imply huge impacts on the global climate, emitting up to 80 tonnes of CO2 per hectare per year. APRIL’s greenhouse gas emissions from peat management are higher than 18 million tonnes of CO2 per year, more than the emissions of 24 countries around the world. Dried peat provides large volumes of fuel for the spread of wildfires, such as those that raged in Sumatra and Borneo two years ago, causing damage to a value of US$16 billion.
Instead of working to mitigate this problem, APRIL’s subsidiary RAPP sued the Indonesian government in 2017, as it refused to comply with the new anti-haze legislation, which were passed to prevent new disastrous wildfires like the ones from the 2015 haze crisis.
Furthermore, in August 2018, a report by 10 NGOs exposed both APRIL and APP buying wood fibre linked to deforestation. Unlike its competitor APP (Asia Pulp & Paper), APRIL refused to admit its failure, claiming that the company had done a conservation assessment, though it failed to produce the proof.
And in November 2018, APRIL supplier PT Tanjung Redeb Hutani (TRH), was found still clearing the equivalent of 190,000 football fields to expand its pulpwood plantations in East Kalimantan.
Despite all these gross violations by APRIL, ABN AMRO continues to “engage”, while doing business with APRIL, putting in question the seriousness of its policies. Which are really nice indeed, but apparently, when it comes to implementation, other interests prevail.