APP puts up smoke screen to confuse and misguide investors 

Asia Pulp & Paper has provided an inaccurate and misleading response to the evidence of a failure to implement its own Forest Conservation Policy. 

In December 2020, the Environmental Paper Network (EPN) published a paper exposing gross failures by the Indonesian paper giant Asia Pulp & Paper (APP) in implementing its Forest Conservation Policy, first released in February 2013. APP responded with a statement, promptly distributed to business partners and customers, denouncing EPN’s “misinformed allegations.” But the statement did no more than reiterate APP’s own previous, unsubstantiated claims, none of them capable of disproving the findings detailed in the EPN paper, and they failed to commit to undertake the actions set out in their own policy, namely to end deforestation, protect forests and restore peatlands, and respect local communities’ rights. 

The EPN’s report presented a compilation of evidence demonstrating APP’s failure to resolve land conflicts, end deforestation and the use of fire in the operations of its suppliers and sister companies, restore a million hectares of rainforest, and respond credibly to growing scientific evidence on the urgent need to retire plantations on peatlands. Such retirement is critical to enable peatland restoration and halt emissions resulting from ongoing production on their drained soils. 

EPN re-iterates its recommendations that buyers and financiers have the responsibility to proactively investigate the findings detailed in the EPN paper and to ensure APP is subject to credible independent verification of its compliance with their stated commitments to responsible lending, financial services or sourcing practices. Buyers and financiers cannot permit APP to hide behind unreliable self-declarations and unsubstantiated claims such as those made in its recent statements. Moreover, APP’s unwillingness to investigate and act upon these findings should be interpreted as a major red flag by financiers and buyers. 

We strongly urge buyers, financiers and investors to end and avoid any new business with APP and its brands – including any companies linked to the the APP business group (Sinar Mas and Paper Excellence conglomerates, and their sister companies controlled by APP’s owner, the Widjaya family) –until its failure to deliver on commitments as outlined in this report and summarized in the points below are fully addressed. 

Buyers and investors should furthermore avoid any business with APP until a third party independent audit proves that the Sinar Mas and Paper Excellence conglomerates are deforestation-free, protect peatlands and respects local communities rights, and actively implementing zero tolerance for violence, intimidation and criminalisation of affected communities. To date there is no such audit that has been undertaken using a credible methodology, nor has APP committed to having its operations assessed against this methodology by truly independent third parties in the near future.

EPN has compiled the following responses to the claims made in APP’s statement that demonstrate the urgent need for brands and financiers to hold APP to account for its lack of adequate implementation of its Forest Conservation Policy:    

1) Deforestation

APP claims that “No pulpwood from deforested sources have entered the APP supply chain since the implementation of the 2013 Forest Conservation Policy”. 

It looks difficult to take this claim seriously, especially as APP contradicts itself. In fact, the company had previously admitted to having acquired pulpwood by companies engaged in deforestation (such as PT. Fajar Surya Swadaya and PT Sarana Bina Semesta Alam), but it called it an “administrative lapse“. This contradiction makes it difficult to trust any of APP’s claims. Furthermore, an NGO report also shows that in at least one case, APP deliberately concealed its corporate structure to deny responsibility for deforestation committed by a controlled company (e.g PT Muara Sungai Landak).

2) Threat to the Sumatran tiger

In referring to the tiger found dead in their concession, APP claims that “the incident actually happened in May inside a conservation zone, not a production area”. The fact is that APP is responsible for protecting the conservation zones and their biodiversity inside its concessions. Another fact is that APP in the past few decades has been responsible for more than 2 million hectares of deforestation, including extensive habitat of the Sumatran tiger, leading it towards extinction. Deprived of their habitat, those animals are pushed towards human settlements, resulting in increasing human-tiger conflict. As a consequence, APP bears a great responsibility, and by dodging it only proves itself to be an unreliable partner.

3) Social conflicts with local communities

Regarding social conflicts management, APP disputes the situations in 3 cases, claiming that “the narrative presented is incomplete, the impact exaggerated”. But while APP claims to have exclusive access to the real facts, it actually shows mere unsubstantiated denial:

  • APP denies the conclusions of the social conflicts mapping report released by EPN, reiterating its claim that “51% of identified disputes have been resolved”, and pointing to  its own statement.

This claim is well known, but unsubstantiated and lacking transparency. While the EPN’s report lists by name all the 107 villages suffering social conflicts, including information for each one on the cause of the conflict, the extent of disputed land, and more, APP refuses to provide any specific information, to support its own claim. The statement only mentions the first three pilot cases that have been actually resolved with mixed results: less than 3% of all known conflicts in their plantations. The remaining 48% remains in the dark. Buyers and investors should not believe in APP’s black box, as they have the duty to verify the information provided by their partners, especially if the partner appears to be reticent.

  • In March 2020 APP’s controlled PT WKS (the same company whose security guard brutally killed a farmer union activist back in 2015) sent drones to destroy local community gardens, thus attempting to villagers food security in the middle of the pandemic crisis. APP still denies having damaged the food security of a local community in Sumatra, and points again to its own statement stating that  “​drones to deliver herbicide are part of regular silviculture practice in its own plantations​”, and that “​the issue has been resolved through mediation”​. This is not accurate. The fact is, the gardens devastated were not plantations yet, though PT WKS planned to expand onto those gardens. Also, there has been no mediation or negotiation, as confirmed by a detailed chronology put together by the local community and released by EPN. While APP keeps claiming that “Free, Prior and Informed Consent continues to be implemented across all developments on APP supplier concessions”, the chronology by the local community also reported the fact that the FPIC process was not undertaken and APP’s officials intimidated the villagers by bringing soldiers with them to the local community garden who were shooting into the air. In this specific occurence, APP’s denial of substantiated facts puts into question the company’s credibility.
  • In May 2020 a villager member of the Sakai indigenous community in Sumatra was convicted to a one-year prison sentence and a fine of 6 years’ minimum wage for planting cassava in his customary land, after being sued by APP’s subsidiary PT Arara Abadi. The case configures itself as a typical strategic lawsuit against public participation (SLAPP), a kind of legal action intended to censor, intimidate, and silence critics. In this case APP does not deny having sued the villager, it actually reclaims its right to bring the matter before a court. Also, in the linked statement, APP claims that according to its own field inspection, the disputed land was not managed by the Sakai community. But that is the company’s own version of the facts, and is contradicted by The National Commission of Human Rights and by the Riau Customary Institution (LAM Riau), who found that the Sakai community indigenous people had lived in the area long before Indonesia existed. APP also claims that as the mediation failed, the company had no other recourse except for legal means – but the mediation failed exactly because the company wanted the disputed land.  Worryingly, APP is now coming back to its old claim – which was the refrain before its 2013 commitment – that it has the legal obligations to productively manage the concession lands obtained from the Indonesian State. In brief, the company suggests that respecting the local community’s right to their traditional land by not developing them would be illegal. It therefore appears that APP is publicly promising to buyers that it will respect community rights but at the same time is saying that to respect those rights by not expanding its plantations would be illegal.

4) Forest fires

In 2015, 2017 and 2019, APP’s suppliers and subsidiaries have been repeatedly involved in massive forest and peat fires, and for this reason the company’s products have been massively boycotted by Singapore supermarket chains.

“Continuing claims that APP suppliers are ‘involved in’ damaging fires are entirely without merit”, says APP, despite satellite imaginary and field reports showing the link between the APP suppliers concessions and the peat and forest fires.

APP admits to be “ultimately responsible, as the concession holder, for putting out fires that threaten its concessions”, but it forgets that it is also responsible for preventing the fires. Actually, half of APP’s woodfibre plantations are on peat soil, that once drained to develop the plantation, becomes a potent fuelthat can makes fires unstoppable. Although a tiny amount (around 2%) of these plantations have been re-wetted, the rest is kept dry, creating ideal conditions for devastating fires and haze. APP’s practices on peatlands and the failure to act on restoration promises have created dangerous conditions that fuel the catastrophic fires.

APP also quotes its own statement to refute a Greenpeace report exposing APP primacy in forest fires related to pulpwood concessions, with more than one quarter of a million of hectares burned.

In this statement APP claims they have no linkages to two companies implicated in forest fires (PT Hutan Rindang Banua and PT Bangun Rimba Sejahtera). But a 2018 report by a coalition of NGOs proved that these companies are actually controlled by APP. The report reveals how APP deliberately concealed its corporate structure to deny responsibility for wrongdoing committed by its controlled companies.

During the very moment that APP was issuing statements reaffirming its strict no-deforestation policy, the company was clearing more peatlands. According to a Greenpeace report based on satellite imaginary, between August 2018 and June 2020 APP’s controlled concessions cleared 3,500 hectares (8,650 acres) of peatland.