Asia Pulp and Paper (APP)
Asia Pulp & Paper (APP) is one of the world’s largest paper companies, with an annual combined pulp, paper, packaging product and converting capacity of over 19 million tons per annum. Its name has been long associated with massive deforestation, with human rights abuses, harassment of local communities and massive emissions of greenhouse gasses.
APP is in reality a nebula of companies, linked by a complicated and un-transparent corporate structure. Some of these companies are included in the Sinar Mas conglomerate, while some of them are formally independent, but still controlled by the Widjaya family, and operating within a single commercial strategy. Actually, Asia Pulp & Paper as a company does not even exist. Some of the corporate associations with these companies are purposely kept hidden, possibly for commercial or fiscal reasons, but also to deny links with deforestation or to keep using the FSC certification after having been banned by that standard. This un-transparent structure has been also used to avoid the payment of its 13.9 billion USD of debt when it defaulted in 2001.
On May 30, 2018, Auriga, an environmental organization, reported that PT Bumi Mekar Hijau and PT Sebangun Bumi Andalas Wood Industries, which APP claimed are “independently owned and operated”, actually have apparent close links with the Sinar Mas Group, APP’s parent conglomerate on their corporate registry documents. The case was further investigated by the forest portal Mongabay, bringing more evidence.
Commonly, APP is considered as the pulp and paper subsidiary of the Sinar Mas Group, one of the largest conglomerates in Indonesia, dealing with Palm Oil and Pulp and Paper sectors, also operates in Real Estate, Financial Services, Agribusiness, Telecommunications and Mining.
Greenpeace, Rainforest Action Network, Canopy, WWF, as well as a number of Indonesian organizations and other members of the Environmental Paper Network encourage buyers and investors to avoid brands and papers linked to APP or Sinar Mas or Paper Excellence and their sister companies controlled by APP’s owner, the Widjaya family.
APP’s first paper mill, Tjiwi Kimia, started production in 1978. This was followed by the 1986 acquisition of the pulp and paper producer Indah Kiat. The APP Group produces more than 19 million tons of pulp and paper annually, and operates in Indonesia, China, Canada and Brazil.
APP’s products include bleached hardwood pulp, stationary, printing and graphics papers, tissue, paper towels, shopping bags, packaging, and converted products. Its products are sold globally under a variety of brands like Enova, Fiora, Pursoft, and Riviera (see below for a more comprehensive list)
Other subsidiaries, affiliates or brand names include Solaris Paper, Nippecraft, Collins Debden, Eagle Ridge Paper, Arco Paper & Print, PAK 2000, Mercury Paper, Livi, Imperia, and PaperMax. (see below for a more comprehensive list)
Through Paper Excellence, a paper conglomerate outside Sinar Mas, but owned by the Widjaya family, APP also controls a number of paper companies such as Tembec Saint-Gaudens and Tarascon (France), Eldorado (Brazil), Mackenzie pulp mill, Howe Sound, Prince Albert mill, (ex Domtar), Northern Pulp Nova Scotia, Northern Timber and Catalyst Paper (Canada). APP-China’s pulp and paper mills now include Ningbo, Goldeast Paper, Ningbo Asia, Gold Huasheng, Gold Hongye, Global Paper Solutions, Hainan Jinhai Pulp and Paper, and Guangxi Jingui Pulp & Paper, Jinmei Industrial, and Universal Sovereign Trading.
APP and Sinar Mas related paper companies
APP, Arco Paper & Print, Asia Paper, Blue Ocean Printing, Bohui Group, Cathay Brasil, Charta Global, Chengdu Gold Hongye Paper, Collins Debden, Cottonsoft Ltd., CSI Paper and Pulp Industries, Debden, Diary Specialists, Dragon Paper, Eagle Ridge Paper, Elis China, EQBD Converting, Fibre Excellence, Global Paper Solutions., Gold Daio, Gold East Paper, Gold Hai Paper Products, Gold Hongye Paper, Gold Huasheng Paper, Gold Jinhai Trading, Gold Shengpu, Guang An Siping Pulp and Paper Industry, Guofa Forest & Paper, Guangxi Jingui Pulp & Paper, Hainan Gold Hongye Paper, Hainan Jinhai Pulp & Paper, Hangzhou Sinar Mas Paper Products Service, Hippo Paper Products, Hubei Sinar Mas Paper Products Service, IMPERIA Printing & Packaging, Inner Mongolia Jinxing Pulp & Paper, Jin Feng Yuan Paper, Jinguang Chuangli Paper, Jinmei Industrial Sdn Bhd, inxin Paper Industry, Jinyu Tissue Paper Industry, King Paper Source Trading, Kinno Limited, Kyokuto Associates, Lamican Oy, Lamipak, Liaoning Jinye Paper, Mercury Paper, Ningbo, Nippecraft, PAK 2000, Paper Excellence, Paper Force, Pty, Paper Max, Paperich, Phoenix Stationery Product, PT Ekamas Fortuna, PT Indah Kiat, PT Konverta Mitra Abadi, PT Lontar Papyrus Pulp and Paper Industry, PT Mangium Anugerah Lestari, PT Marga Buana Bumi Mulia, PT OKI Pulp & Paper Mills, PT Pabrik Kertas Tjiwi Kimia Tbk, PT Pindo Deli Pulp & Paper Mills, PT Purinusa Ekapersada, PT Sinar Dunia Makmur, PT The Univenus Company, Shenyang Jin Xin Pulp and Paper Co, Sichuan Jinan Pulp, Sinar Mas Paper, Solaris Paper, Synergy Paper, Tangyuan Yalong Pulp and Paper, TK Printing, Top Harvest Asia, Toprint Computer Supplies, Universal Paper, Yalong Paper Products, Yang Pu Sheng Li Paper.
(Source: EPN forest products database)
APP and Sinar Mas paper brands
APP sells products in 120 countries under a number of brand names, such as: Absolute, Allyking, Allyking Cream, Allyking Plus, Allyking Pro, Anchor, Animal Pop, Aone, Apport, Arcadia 2000, Art-tech, Asia, Asia Star, Astronaut, Avantourier, BEST, Bai Jue, Bai Yu, Benefit, Blue Flagship, Blue Snail, Bola Dunia, Breeze, Brilliant Laser Copy, Britex, Britex Plus, Caidie, Canary, Carbon Neutral, Changhe, Charta, Chieftain, Collins, Concorde, CopyMate, Corrugating Medium, CottonPosh, CottonSofts, Crosmile, Dayplanner, Debden, Delicio, Delicoa 38, Dengfeng, Digital Nevia, Dongfan, Dragon, EGIS, EKA-MAS, Ecto, Elis, Ellustra, Emporia, Encarte, Engrave, Enova, Enova Digital, Enova Facestock, Enova Flexpak, Enova Green, Enova Hi-strength, Enova Label, Enova Optima, Envova Heatset, Enza, Enza HS, Enza MF, Enza MG, Enza semi-MG, Eurostar, Exbarro, Exceedo, ExcelPro, Excelpro Recycled, Exkarro, Expert, Extra Art, Extra Preprint, Extraprint, FairPrice, Fancy, Filma, Fiora, Flagship, Foopak, Forerunner, Fountain, Four Roses, GHS Superior Pro, Galaxy Brite, Genesis, Glo, Gold Ball, Gold Bird, Gold Butterfly, Gold Flagship, Gold Mark, Golden Arrow, Golden Coin, Golden Eucalyptus, Golden Form, Golden Palm, Golden Pardus, Golden Plus, Golden Star, Good Fry Deep Frying Fat, Green Castle, H+O, Hanwei, Hello, Hi-Brite, Hi-Kote, Hi-Pack, Hoopoe, Huiermei, Hybrite, IK Copy Paper, IK Gold, IK Plus, IK X-Brite, IK Yellow, Imperia, Impression, Impression Lux, Impression plus, Impressions, Impressions Pindo 2000, Inspira, Inspira Premium Offset, Instant, Instant Pre Print, Instaprint, Integrite, Jin Cai, Jin Cai lan, Jin Die Lan, Jinbei, Jinou, Jolly, Kard, KiwiSoft, Kokoru, Kunci Mas, Kyokuto, Lamican, Lamicup, Lamipak, LiVi Basic, LiVi VPG, Likede, Little Star, Livi, Longtou, Lucky Boss, Lux Star, Luyun, Marigold, Masku, Maslino, Max Board, Max Kard, Menara, Mirage, Mitra, Mitra Margarine, Multi Copy, Natural Deli, Natural Hearty, Nevia, Nevia Cube, Nevia Plus, Nice, Ningbo Fold, Ningbo Gloss, Ningbo High Point, Ningbo Pack, Ningbo Poker, Ningbo Spark, Ningbo Star, Nireus, Nvi, Office Print, OmniStar, Optimum Partner, Ovation, PE/PET, PPC Grey, PRO-MAS, Palmboom, Palmvita, Paper Plus, Paperline, Paperline 2000, Paperline Color, Paperline Gold, Paperon, Paseo, Perfectionist, Phoenix, Pocket Week, PooPooPaper, Pro-Pack, ProPrint, Proxima, Pusaka, RAINBOW, RainbowMax, Record, Recycled, Red & Black, Red Flagship, Red Rose, Riviera, Sarasa, SavviBrite, SavviCoat, SavviPAK, Shendun, Shully, Sinar Color, Sinar Dunia, Sinar Lux, Sinar Royal, Sinar Spectra, Sinar Tech, SinarBoard, Sinarcard, Sinarfold, Sinarkraft, Sinarline, Sinarpack, Sinarplex, Sinarvanda, Smart Baker, Smart Recipes, Space Shuttle, Spark Star, Spectra Color, Stickiii, Summer, Sunbrite, Super-Pack, Test Liner, Texper, The Blues, Top Grade, Topgun, Toply, Trutone, Tuffy, Vector Lux, Virjoy, Whale King, White Top Test Liner, Willow, Winnow, Writeraze, X-Cote, XPLORE, Xx, Zenith, Zhenzhen, Zig Zag, chong ji bo, e-Paper, Enlivo, Fu gui, Hai shen, I-soc, Jin Niao, Jin qian bao, Li ke Dei, Ru jia, Si ji gui, Ya yi,
(Source: EPN forest products database)
APP fibre suppliers
APP has 6 controlled suppliers: PT Sumalindo Hutani Jaya, PT Wirakarya Sakti, PT Arara Abadi, Riau Abadi Lestari, PT Satria Perkasa Agung, Satria Perkasa Agung (KTH Sinar Merawang), PT Satria Perkasa Agung (Unit Serapung) and PT Finnantara Intiga. Beside them, APP has also 27 suppliers that it declares as “independent”, while according an NGOs report are controlled by the group: PT Acacia Andalan Utama, PT Kelawit Hutani Lestari, PT Kelawit Wana Lestari, PT Surya Hutani Jaya, PT Balai Kayang Mandiri, PT Bina Daya Bentala, PT Bina Duta Laksana, PT Bukit Batu Hutani Alam, Mitra Hutani Jaya, PT Mutiara Sabuk Khatulistiwa, Perawang Sukses Perkasa Industri, PT Riau Indo Agropalma, PT Rimba Mandau Lestari, PT Ruas Utama Jaya, PT Sekato Pratama Makmur, PT Suntara Gajapati, PT Tebo Multi Agro, PT Rimba Hutani Mas, PT Rimba Hutani Mas, PT Bumi Andalas Permai, PT Bumi Mekar Hijau, PT Bumi Persada Permai, PT Sebangun Bumi Andalas Wood Industries, PT Sumber Hijau Permai, PT Tri Pupajaya, PT Asia Tani Persada, PT Daya Tani Kalbar and PT Kalimantan Subur Permai. Two new proposed suppliers, PT Bangun Rimba Sejahtera, PT Buana Megatama Jaya, are also linked to the APP-Sinar Mas conglomerate, according the same source. (Source: “Removing the Corporate Mask” report)
Environmental & social impacts
APP has historically been responsible for more than 2 million hectares of deforestation, including habitat of tigers, elephants and orang-utan. Sinar Mas Group suppliers caused the loss of 1.4 million acres of tiger habitat between 1995 and 2008/09 in one study area alone. APP expansion and land-grabbing on local communities created hundred of social conflicts a few of them managed with brutal violence. Because of deforestation and peat draining, APP GHG emission has been estimated as much as 165 countries around the world (86 M tonnes), because of the natural forest clearance in peat areas.
Over the past two decades, these impacts led to local and international NGO campaigns seeking reform and the cancellation of more than 100 business contracts over these concerns. Companies that have announced discontinued or avoided sourcing from APP since 2000 include Adidas, Disney, Fuji, Gucci, Hasbro, Kraft, Lego, Levis, Marks & Spencer, Mattel, Nestlé, Office Depot, Scholastic, Tesco, Tiffany & Co., United Stationers, Unilever, Volkswagen, Wal-Mart, Woolworths, and Xerox.
New policy, implementation & failures
APP responded to years of sustained pressure to reform by adopting a new Forest Conservation Policy (FCP) and a commitment to zero deforestation. In February 2013, after two decades of severe environmental conflicts, and many high profile companies breaking their commercial ties with APP, the company announced a new Forest Conservation Policy. Among other commitments, the policy extended an immediate moratorium on logging in natural forests and peatlands to all its suppliers. The company also committed to protect high conservation value areas and high carbon stock forests and recognized that indigenous and local communities may have customary rights to land, overlapping with its pulp plantations. APP’s new policy was cautiously welcomed by many organisations like Greenpeace, WWF and RAN, but they also noted it arrived when the forest was almost cleared and assured they will continue to monitor its implementation. They have suggested a set of milestones to assess whether APP effectively implements and adequately improves its policy commitments.
However APP’s implementation of its own commitments has been far from satisfactory:
- Social conflicts: there has been little change for communities embroiled in land disputes with the company. Hundreds of land conflicts remain and APP has failed to involve affected communities and other key stakeholders in the identification, analysis and resolution of these conflicts. On March 2015 a local farmer and activist was tortured and brutally murdered by the company’s security in an APP’s supplier concession in Jambi. The report Conflict Plantations chapter I reveals that in just five provinces of Indonesia, at least 107 villages or communities are in active conflict with APP affiliates or its suppliers, and 544 villages were identified as sites of potential conflict, covering an area of more than 2.5 million hectares. This is equivalent to a financial risk assessed between USD 7.7 and 5.7 billion in social compensation risk.
- Greenhouse emissions: despite APP announcing removal and restoration projects on 7,000 hectares of plantations, this is just around 1% of APP suppliers plantations on peat. The rest is still drained, releasing 70-80 tonnes per year per hectare. As a result, APP’s plantations emit 43.8 million tonnes GHG, nearly as much as Norwegian country emission, and as much as 33 low emitting countries. In the past year, the company has been also repeatedly sanctioned for violations to the new peat legislation.
- Deforestation: forest clearance continued to go on after the commitments in APP suppliers protection areas. Recently APP has been found by NGOs in sourcing by plantation companies involved in deforestation and being involved in deforestation as companies connected with APP/Sinar Mas have cleared almost 8,000 hectares of forest and peatland.
- Forest Fires: In autumn 2015 APP was identified as one of the top companies responsible for the fires occurred in Indonesia, burning 2.6 million hectares of plantations, forests and peatlands throughout Sumatra, Kalimantan and Papua. An estimated 1.75 billion tonnes of carbon dioxide equivalent was released in just a few months, more than Germany or Japan’s total annual emissions. Daily emissions during the peak weeks of the fires exceeded the daily fossil fuel emissions of the entire USA economy. The fires created a smoke and haze crisis affecting all of South East Asia, triggering national emergencies across Indonesia and into Singapore, Malaysia and other countries, resulting in diplomatic tensions between Indonesia and its neighbouring countries. The human cost was terrible: 19 people died and an estimated 500,000 cases of respiratory tract infections were reported at the time of the fires. It is estimated that the fires led to more than 100,000 premature deaths in the region. A public health study estimated that 91,600 people in Indonesia, 6,500 in Malaysia and 2,200 in Singapore may have died prematurely in 2015 because of exposure to fine particle pollution. The economic cost of the fires was calculated at around US$16 billion (IDR 221 trillion), equivalent to 1.9 percent of Indonesia’s gross domestic product. In Autumn 2019 a new peat-fires and haze crisis, also related to pulpwood plantations on dried peat, led to the closure of thousands of schools across Sumatra. The report Perpetual Haze highlights the role of Indonesia’s pulp industry in recurring fire and haze episodes affecting the Southeast Asian region.
APP Acquisitions (via Paper Excellence)
- Expansion of production: APP keeps expanding beyond its capacity to source from plantation fibre. In 2017 the new giant mill OKI in South Sumatra started its operation adding 3.2 million tonnes pulp to APP production. The company even plans a new 5 million tonnes per year paper mill in India that has been reported by local media. NGOs criticized APP for expanding its paper production well beyond the capacity of its suppliers plantations to support the production, questioning the real intention of the company to keep its commitments. Despite APP insisting on having enough fibres to feed its expansion of production capacity in the last years the company kept expanding its suppliers. In 2018, APP added 17 new fibre suppliers including those linked with deforestation.
- Expansion by acquisitions: APP production and plantation expansion has been multiplied by an aggressive campaign of acquisition of pulp & paper companies from Canada to France to Brazil, expanding the production capacity of the group by millions oftonnes of paper per year (see box below).
Indonesian and International NGOs have been monitoring APP progress, becoming more and more skeptical. Many came together to send an open letter to APP on October 6, 2015 conveying their concerns. In May 2018, also Greenpeace ended its longstanding engagement with APP, following a new mapping analysis that found almost 8,000 hectares of forest and peatland has been cleared since 2013 in two concessions which are linked to APP and its parent company the Sinar Mas Group. Greenpeace International put these allegations to APP/Sinar Mas, and the group failed to provide a credible response or to take meaningful action.
On August 16, the Forest Stewardship Council (FSC) announced its decision to suspend the process it had started in early 2017 to design a roadmap to end its disassociation with APP and awaits “further information from APP related to its corporate structure and alleged unacceptable forest management activities by companies thought to be related to APP.” In 2007, FSC had “disassociated” itself from APP, citing “substantial publicly available information that suggests that APP is associated with destructive forestry practices.”
In December 2017, various NGOs published a new document, Evaluating the Environmental, Social and Corporate Governance Performance of Sinar Mas Group (SMG) and Royal Golden Eagle (RGE) Companies Criteria and Indicators for Assessing and Verifying Performance to set specific measurable performance requirements and independently verify the on-the-ground performance of APP, APRIL and affiliates. These Performance Verification Criteria and Indicators have been developed to provide a clear framework for APP/Sinar Mas and the APRIL/Royal Golden Eagle groups to be measured against, so that companies and other stakeholders can adequately evaluate performance. In addition, these Criteria and Indicators will inform the critical Forest Stewardship Council process of developing “Roadmaps” toward a possible reversal of their disassociation of APP and APRIL.