Is APP deal a sign of a changing forestry sector?

Commentary by Nigel Sizer, Ruth Nogueron and James Anderson of the World Resources Institute
February 15, 2013



Asia Pulp & Paper's Anti-Deforestation Pledge: Sign Of A Changing Industry?


Indonesian Dipterocarp rainforest. Photo by Rhett A. Butler

Asia Pulp & Paper (APP), one of the world’s largest paper companies, announced earlier this month that it will no longer cut down natural forests in Indonesia and will demand similar commitments from its suppliers. The announcement was received with guarded optimism by Greenpeace, Rainforest Action Network, World Wildlife Fund, and other NGOs who have waged a persistent campaign to change APP’s forest policies.

Indeed, APP’s new policy—which includes sourcing all material from plantation-grown trees, ceasing clearing of carbon-rich peatland, and engaging more with local communities—is significant, both for the business world and forest conservation. APP and its suppliers manage more than 2.5 million hectares of land in Indonesia and produce more than 15 million tons of pulp, paper, and packaging globally every year. Strong action by APP could indicate that the industry is heading for a more sustainable future.

The question is whether APP will follow this positive announcement with action. The company does not have a strong track record, having defaulted on past commitments to end deforestation.

But APP has something else going for it this time around. A rapidly evolving world of improving corporate practices and powerful technology could provide the right enabling environment for APP’s commitment—and others like it—to succeed.

A Changing Business Environment

APP’s Forest Conservation Policy

Effective Feb 1, 2013, APP will:

Cease all clearance of natural forests, as identified through independent assessments of high conservation value and high carbon stock areas. According to the policy, “No further clearance of areas identified as forest will take place.”

Implement a new peatland management program to reduce and avoid greenhouse gas emissions from peat. This includes a moratorium on new infrastructure in peatland.

Implement new social and community engagement practices, including respecting Free, Prior, and Informed Consent for local and indigenous communities.

The policy.
The forest products industry is changing rapidly, transformed by technological innovations, new corporate practices, and an increasingly savvy consumer base. Some key developments include:

Global Supply Chains Under Scrutiny

Gone are the days when companies could buy from suppliers without due diligence. More and more business leaders are recognizing that their supply chains are under constant scrutiny.

APP has experienced this pushback firsthand. Throughout the past decade, more than 100 major companies stopped purchasing from APP on environmental grounds, including Staples, Office Depot, and Disney. With so many customers demanding higher standards and greater transparency, there are strong incentives for companies to be reliable partners and better manage their own supply chains (APP’s new policy also applies to its suppliers in Indonesia and China).

Furthermore, forest products companies face new laws designed to crack down on the trade in illegal timber, such as the U.S. Lacey Act, the European Union Timber Regulation, and the Illegal Logging Prohibition in Australia. In a recent high-profile example, Gibson Guitar faced legal action under the Lacey Act for importing illegal wood into the U.S.

“Eyes in the Sky” for Forests

Monitoring has historically been a stumbling block for “no-deforestation” commitments. Companies like APP operate in remote regions, and it can be prohibitively expensive to send teams of auditors deep into the forest to verify companies’ claims. Satellite technology offers a way to monitor forests from afar, but imagery can be expensive, hard to analyze, and out-of-date.

Enter Global Forest Watch 2.0, a near-real-time forest monitoring system to be released this spring by WRI and a host of global partners. This free, easy-to-use platform provides interactive maps of the world’s forests that are updated every 16 days. Systems like GFW 2.0 will allow anyone, anywhere to monitor APP’s progress on its commitments, with tools as basic as a computer and an internet connection.

This transparent and accessible approach to forest monitoring will complement the efforts of Eyes on the Forest in Indonesia and strengthen the work of The Forest Trust, Greenpeace, and other NGOs as they monitor APP’s concessions.

Fiber Under the Microscope

A suite of new technologies known as fiber analysis allows companies and watchdog groups to test products for “mixed tropical hardwoods,” or MTH, which typically indicates wood harvested from natural tropical forests. Laboratories use high-powered microscopes and tests to determine the composition of the wood, including whether the paper is made from plantation or wild trees, and in some cases, if it contains endangered or protected species.

Fiber analysis has been used and promoted by groups like Greenpeace, Rainforest Action Network, and World Wildlife Fund to monitor supply chains. Now, companies are sending their own samples to labs to verify the wood content in their papers. As the practice grows, APP can expect that its products will be rigorously tested.

Combating Deforestation

The advances in the forest products industry are significant, but more progress needs to be made. The world is still losing forests at a rate of 13 million hectares every year, an area the size of England. In Indonesia, a moratorium on new concessions in natural forests and peatland will expire this year, and it’s is unclear if this important policy will be renewed.

Governments also have an important role to play. On the ground, where APP and its suppliers operate, we need more consistent local law enforcement, as well as better-defined property rights and recognition of local stakeholders’ interests.

The stakes are high: If APP successfully implements its new Forest Conservation Policy, it will build momentum for other companies and governments to adopt reforms. The pledge to the world’s forests has been made—now we must ensure that it is achieved.


This commentary originally appeared at Asia Pulp & Paper's Anti-Deforestation Pledge: Sign Of A Changing Industry?.














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CITATION:
Commentary by Nigel Sizer, Ruth Nogueron and James Anderson of the World Resources Institute (February 15, 2013).

Is APP deal a sign of a changing forestry sector?.

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