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APP: Indonesia needs a new business model

Aida Greenbury, Asia Pulp & Paper’s Managing Director Sustainability, says Indonesia needs to work toward a model that encourages forest protection.



An APP acacia timber plantation in Riau.
An APP acacia timber plantation in Riau.


In response to news that Indonesia has now surpassed Brazil as the world’s top deforester, the head of sustainability at one of Indonesia’s biggest forestry companies is calling for a new business model in how the Southeast Asian nation manages its forest.



In a letter published Friday, Aida Greenbury, Asia Pulp & Paper’s Managing Director – Sustainability, said Indonesia needs to take a more comprehensive approach to tackling deforestation by involving the wide range of actors who have interests in forests. She suggested that Brazil, which over the past decade has seen an 80 percent reduction in annual deforestation while continuing to rapidly grow agricultural output, could provide lessons to moving toward a more forest-friendly economy.



“Brazil has managed to dramatically curb deforestation in the last decade largely through multi-stakeholder initiatives by NGOs, Governments and the private sector,” Greenbury writes. “As such, it is clear that the private sector in Indonesia needs to be more proactive and to act with more urgency. Deforestation needs to be recognized as an economic and social challenge, not just an issue of policing and control.”




Forest loss in Indonesia and the Brazilian Amazon between 2001-2012.



Greenbury went on to say that zero deforestation commitments, like those adopted by APP and palm oil companies Golden Agri-Resources (GAR) and Wilmar, offer a path toward saving forests without sacrificing economic growth.



“Pioneering a new business model in a country such as Indonesia is of course not without its challenges. But the bigger picture, and my hope, is that the economic success of companies operating zero deforestation businesses, will demonstrate to others that it is possible to operate profitably, without having a detrimental impact on the landscape. International consumer brands, the NGO community and the wider business community have a key role to play in this, by supporting zero deforestation businesses.”




Peat forest clearing for a plantation in Riau, Sumatra.



“Businesses need to act now to ensure that their supply chains are deforestation free, while addressing issues of how companies and Government authorities can collaborate to protect and manage large areas of Indonesia’s rainforests. By demonstrating that zero deforestation practices bring market reward, the wider business community can establish zero-deforestation as the new norm.”



Greenbury’s full letter appears below.



What can businesses do about deforestation?
Aida Greenbury, Managing Director Sustainability, Asia Pulp & Paper



The news that Indonesia has overtaken Brazil as the nation state with the highest deforestation rate is both troubling and unsurprising news. Indonesia is one of the most populous and fastest growing economies in Asia. The resulting pressure on the country’s remaining forests, whether from industry or smallholders, is immense. The Government of Indonesia is making progress in its efforts to protect the rainforests, through its greenhouse gas emission reduction commitments and the 2011 forest clearance moratorium. However, safeguarding forests across close to two million square kilometres of land, while ensuring sustainable growth and development, continues to be a challenge.



Brazil has managed to dramatically curb deforestation in the last decade largely through multi-stakeholder initiatives by NGOs, Governments and the private sector. As such, it is clear that the private sector in Indonesia needs to be more proactive and to act with more urgency. Deforestation needs to be recognized as an economic and social challenge, not just an issue of policing and control.



Forest industries such as palm oil, rubber, pulp and paper, hardwoods or development of forest land for mining or other extractive industries have had a significant impact on Indonesia’s forests. There is however, a positive trend underway in the business sector towards zero deforestation – an approach that APP adopted in February 2013 and that has also been joined by big industry players in the palm oil sector such as GAR and Wilmar.



Pioneering a new business model in a country such as Indonesia is of course not without its challenges. But the bigger picture, and my hope, is that the economic success of companies operating zero deforestation businesses, will demonstrate to others that it is possible to operate profitably, without having a detrimental impact on the landscape. International consumer brands, the NGO community and the wider business community have a key role to play in this, by supporting zero deforestation businesses.



Zero deforestation policies are already having a significant impact and if adopted by all big business in Indonesia could revolutionize how we manage valuable rainforest.



At the same time, looking beyond major industry, the actions of smallholders and individuals living in the forests of Indonesia also need to be addressed. We need to ensure that these communities have access to markets and routes to economic prosperity that do not involve deforestation. There is certainly a lot of work to be done in ensuring that the global marketplace is set up to reward small and micro businesses that are operating sustainably.



What then can the business community do about deforestation? Businesses need to act now to ensure that their supply chains are deforestation free, while addressing issues of how companies and Government authorities can collaborate to protect and manage large areas of Indonesia’s rainforests. By demonstrating that zero deforestation practices bring market reward, the wider business community can establish zero-deforestation as the new norm.






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