- APRIL is Indonesia’s second-largest paper firm. It sources pulpwood from a vast network of suppliers in the archipelago country.
- It has come to light that APRIL’s fire-prevention policy exempts short-term suppliers. These compose a major portion of its supply base.
- Some suppliers defined as “short term” by APRIL have actually been supplying the company for years, according to Greenpeace.
A recent audit of a leading pulp and paper manufacturer in Indonesia has highlighted a significant gap in its sustainability policy, which the company says it is now working to address.
According to the audit conducted by Amsterdam-headquartered KPMG last year, short-term suppliers used by Asia Pacific International Resources (APRIL) — which boasts of pioneering sustainable forest management efforts in Indonesia — are not required to provide details of fires on concessions or of any related government sanctions.
The audit notes that 22 to 32 percent of the supply for APRIL’s giant pulp and paper mill in the central Sumatran province of Riau, one of the hardest-hit by the country’s devastating annual forest fires, is met by short-term suppliers.
Andy Tait, a senior campaign advisor at environmental NGO Greenpeace, said APRIL frequently seeks credit for its work on combating fires while “failing to be transparent about its entire supply chain.”
APRIL says its commitments cover “all current and future wood suppliers…as well as any future acquisitions or partnerships.”
But in reality, Tait says, the company is continuing to differentiate between short- and long-term suppliers, even as some of those defined by APRIL as being “short term” have actually been supplying the company for years, and at least one is owned by its parent company, Royal Golden Eagle (RGE).
One of APRIL’s short-term suppliers, the RGE-owned PT ITCI Hutanti, was named by Indonesia’s Ministry of Environment and Forestry in late 2015 as one of 23 companies punished in administrative sanctions for that year’s forest fires.
Another of its short-term suppliers, PT Korintiga Hutani, is part of Korean-Indonesian conglomerate Korindo Group, which was the focus of a report last year into the burning of land in Indonesia’s Papua province.
“Our contention is that APRIL is seeking to portray itself in a better light by excluding reference to these [short term] suppliers on some key issues” such as forest fires, Tait explained.
Lucita Jasmin, APRIL’s director for sustainability and external affairs, said the company has defined short-term suppliers as those used on a temporary basis to “fill production gaps” until it can be self-sufficient.
She added that the nature of a supply relationship is not determined by a supplier’s ownership.
Jasmin confirmed that all of APRIL’s suppliers are bound by its comprehensive Sustainable Forest Management Policy 2.0, including its “No Fire” rule.
“While on the whole the core commitments have been upheld, we acknowledge that one of the opportunities for improvement noted by KPMG is the strengthening of the due diligence and monitoring of short-term suppliers,” she said.
APRIL says it has been addressing this since mid last year, following earlier recommendations from the panel of experts that oversees the implementation of its sustainability policy, by taking steps including revising supply contracts to increase compliance with fire prevention standards, and requiring short-term suppliers to report their forest management performance.
The company is also collaborating with the Rainforest Alliance to address ways of improving its forest and community operations in Indonesia.
In 2013, the Forest Stewardship Council (FSC) — a multistakeholder organization that promotes responsible management of the world’s forests — ended all association with APRIL after a complaint was jointly filed by WWF-Indonesia, Greenpeace and Rainforest Action Network over the social and environmental impact of the company’s operations in Indonesia.
The new collaboration, which began in late 2016, will see Rainforest Alliance assume an advisory role for an initial period of one year, focusing largely on the changes APRIL needs to make to prepare for the process of re-association to the FSC, as well as more general efforts to improve performance, Stuart Singleton-White, director of external communications at Rainforest Alliance, told Mongabay.
While the exact details of the work are still being established, he said the issues surrounding short-term suppliers is an area of APRIL’s operations that Rainforest Alliance is “definitely interested in.”
Moving forward, “we will be not working behind closed doors. Along with APRIL, we will proactively communicate, both on specific field-level interactions with individual or multiple organizations, and at a public level so that stakeholders gradually gain more perspective on what we are doing,” he said.
“Actions speak louder than words, so both the Rainforest Alliance and APRIL will focus on the former more than the latter.”
The concerns over short-term suppliers highlighted in the audit have also led to questions over the Singapore Environment Council (SEC), which has certified APRIL under its Green Label scheme.
The SEC’s endorsement of APRIL has suggested its own failure to obtain complete information about the company’s supply chain, Greenpeace’s Tait said.
The SEC last month launched its enhanced Green Label scheme for pulp and paper products, which has also been criticized by environmentalists for being insubstantial and unclear.
Chong Khai Sin, head of eco-certifications at the SEC, said the new Green Label scheme “requires all paper products be sourced from sustainable plantations, regardless of whether it is short-term or long-term supply.”
The benefit of the enhanced criteria is that it requires a manufacturer’s entire supply chain to be assessed and audited, he said.
“If a company is found to be in breach of their undertakings, we will remove their right to use the green label on their products — and let the public know we have done so.”
APRIL’s Jasmin acknowledged that implementing the company’s sustainability policy throughout its operations is “an ongoing process”.
“Given the extent of the operations and the complexities in the landscape, this is understood by the company and our stakeholders to be a long-term, and continuous program of work for the company,” she said.