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Forestry giant’s zero deforestation commitment put to test

First of its kind audit of world’s largest pulp and paper producer yields mixed results

Plantation in Riau.

Arara Abadi acacia plantation near Pekanbaru, Riau, Sumatra. All photos by Rhett A. Butler.

An independent audit of the world’s largest pulp and paper producer found that the company had achieved a wide range of results in meeting promises to end deforestation and resolve conflicts with forest communities.

In 2013 Asia Pulp and Paper (APP) announced its Forest Conservation Policy (FCP), which included a pledge to end deforestation among its suppliers, improve communication and conflict resolution with forest communities, protecting peatlands, and sourcing fiber only from responsible suppliers.

The audit of APP’s pledges, conducted by the Rainforest Alliance and released on Thursday, found that the company met many of its pledges. Yet in some areas, the alliance found APP had achieved only “moderate” and sometimes “limited” success.

Acacia plantation and drainage/access canals within an APP concession in Riau, Sumatra. All photos by Rhett A. Butler.

Richard Donovan, Senior Vice President of Forestry for The Rainforest Alliance said on a conference call to reporters that, overall, APP had achieved “moderate progress” on meeting the goals of its FCP.

“Numerous building blocks have been put in place,” Donavan said, referring to corporate-level policy implementation and monitoring compliance among suppliers.

“On the ground the implementation is where there is major challenges,” he said. “There’s variable progress, and there are gaps in implementation when you go out in the field, which is why we spent so much time in the field.”

Aida Greenbury, manager of sustainability at APP, welcomed the findings and said that in consultation with government and non-government stakeholders the company would update its policies in an “action plan” for 2015.

“The evaluation provides valuable feedback and we are pleased in any areas where our progress is acknowledged and verified,” she said. “We believe that the report recognizes our efforts to achieve deforestation are on the right track. However, our Forest Conservation Policy and measures are not carved in stone. We must have the courage to continually improve the policy as we go.”

An APP acacia plantation in Riau, Sumatra.

The Rainforest Alliance carried out its evaluation of APP’s concessions between February 2013 and August 2014. It conducted audits of 21 APP supplier concessions in five provinces in Borneo and Sumatra. Over 500 person days were expended, including more than 400 person days spent in the field, evaluating operations. The remaining days were spent reviewing evidence, documents, and company correspondences.

The audit evaluated whether or not APP had met its publicly stated goals and did not provide a pass-fail evaluation; rather, it stated if the company had met goals or achieved moderate or limited progress.

The draft was reviewed by APP, as well as five independent organizations — two Indonesian and three international. Rainforest Alliance staff also reviewed the document.

“This has been a massive effort,” said Donovan, characterizing the audit as a first of its kind study.

Excavtor working an APP acacia plantation area with a natural forest conservation set-aside in the background. Indonesian law requires pulp and paper companies to maintain a portion of their concessions as natural forest, but APP has pledged to go beyond this requirement by supporting conservation and restoration on a landscape level.

The report found “limited” progress in the companies protection of carbon-rich peatlands and in reforesting protected areas and production concessions.

But the company, it found, made “moderate” progress in many areas, including halting the clearance of natural forests and improving engagement with stakeholders, such as forest communities and non-governmental organizations.

Indonesia’s other pulp and paper giant
Rhett Butler

Just days before Rainforest Alliance released its assessment of APP’s progress toward meeting its zero deforestation commitment, several environmental groups reiterated their criticism of APRIL, Indonesia’s second largest pulp and paper producer.

Just over a year ago, APRIL announced its own sustainability policy which it claimed went above and beyond that established by APP. At the time, environmental groups disagreed, highlighting loopholes that allowed APRIL to continue clearing natural forests until the end of the decade.

Those fears proved accurate: NGOs last week confirmed that APRIL proceeded on a business-as-usual path in 2014, bulldozing high carbon stock forests on Padung island off the coast of Sumatra well after its policy went into effect.

The audit noted that the company’s compliance with Free, Prior, and Informed Consent (FPIC) was addressing new activities, such as the construction of mills or new road construction. But it was not adequately consulting with communities when it came to major, ongoing activities, like plantation harvesting or the expansion of already existing roads.

APP had met commitments, Rainforest Alliance concluded, in ensuring compliance with the company’s FCP from third party suppliers, pointing out that APP had ended business with a supplier who was found to be in violation of the policy.

Perhaps, most significantly, the Rainforest Alliance found that APP had eliminated mixed tropical hardwoods from its supply chain.

“There is no, as far as we’re concerned, any mixed tropical hardwood in its wood supply chain,” Donovan said. Although he pointed out that tens of thousands of square meters of mixed hardwood, which was cut prior to APP’s zero deforestation pledge, remained in concessions unused.

“APP has set an ambitions agenda and has taken ownership of FCP and other public statements,” Donovan said. “But there’s a gap between some of APP’s policy statements and field implementation.”

APP concession during various stages of harvesting and regrowth in Riau.

Despite the progress documented by the Rainforest Alliance, some environmental groups remain weary of calling off boycotts of the company.

“Despite APP’s response to the Rainforest Alliance evaluation in the form of an ‘Action Plan,’ RAN’s conclusion is that it’s still too soon to resume business with APP,” Lafcadio Cortesi of the Rainforest Action Network said in a statement. “APP needs to implement its FCP policy, the new Action Plan and address the findings and gaps found in the evaluation and joint NGO report in a way that demonstrates satisfactory and verifiable positive progress on the ground.”

RAN along with several other Indonesian and international conservation and indigenous rights groups submitted detailed comments on the Rainforest Alliance report prior to publication. They raised concerns primarily about the company’s ineffectiveness at addressing conflicts with forest communities, an issue they emphasized once the final report was released.

“Rainforest Alliance’s evaluation finds that there are hundreds of land and social conflicts remaining in APP’s land bank,” said Cortesi, “and that resolution agreements have only been reach with one community.”

Truck carrying acacia logs to APP’s mill for processing.

Christopher Barr, Executive Director of Woods & Wayside International, expressed concern about the scope of the audit.

“The Rainforest Alliance report says nothing about whether APP’s existing plantation resource base will be able to meet the group’s fiber supply on a sustainable basis over the medium- to long-term,” he said. “This is especially important as APP is in the process of building the OKI pulp mill in South Sumatera, which will raise the group’s annual wood demand by approximately 7-10 million cubic meters per year, depending on the mill’s installed capacity.”

In other words: by expanding mill capacity, APP could be creating an incentive for continued sourcing of timber from high conservation value lands, high carbon stocks, or through illegal means.

In response, Donovan from Rainforest Alliance said these concerns would be addressed in a future report.

“It is difficult to imagine,” said Barr, “that APP would not have provided this data and pushed for its inclusion in the report released today if it were confident in the sustainability of its plantation fiber base.”

In the absence of clear evidence that APP can achieve productivity projections, Barr added, investors and other stakeholders should be fearful of the company defaulting on its sustainability commitments.

Acacia (top) and rainforest (below) within an APP supplier concession in Riau, Sumatra.

Meanwhile, Greenbury pointed to activities outside of the company’s control as contributing to conflicts with communities and forest destruction.

“When we started on this journey the picture painted by NGOs was quite simple: Stop converting natural forests and all concessions will be saved,” she said. “However this turned out to be an oversimplification. Our moratorium on natural forest clearance by our suppliers has been effective, but forest continues to be lost due to the actions of other actors.”

Greenbury said there were forest encroachment, wildfires, and concession boundary overlaps with other industries, like agriculture and mining.

“These are endemic to the whole of Indonesia and represent a serious challenge to our forest conservation policy,” she said.

“By the time of the third anniversary of the Forest Conservation Policy comes around,” said Greenbury, “we hope to have a functional best practices landscape approach that truly protects Indonesia’s forests and puts Indonesia on the path to becoming a global leader in attacking climate change.”


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