Professional Documents
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Plantation Forestry in Indonesia:
The Greenspirit Strategies Perspective
An Assessment of Asia Pulp & Paper (APP) and
its Pulpwood Suppliers¶ Forestry Operations
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November 2010
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As the world faces the issue of climate change, myriad
environmental groups have sought ways to preserve our remaining
forests ± to capture greenhouse gases, clean the air and help restore
the environment. Among the forests of the world to attract
environmental attention are Indonesia¶s tropical forests.
As a result of our inspection, we have concluded that APP is behaving responsibly and operating in a
sustainable manner.
It is clear that APP and its pulpwood suppliers¶ resources are helping to alleviate poverty in Indonesia
and ± directly and indirectly ± reduce illegal encroachment and habitat destruction. By targeting APP
and its pulpwood suppliers, Western environmental groups are making it that much more difficult to
reduce deforestation in the country.
The tragedy here is that, as our investigation made clear, Western environmentalists have ignored a
primary cause of deforestation in Indonesia ± poverty ± to focus on an easy but innocent target: a large
Indonesian pulp and paper company.
We do not suggest APP has operated flawlessly. Nor do we believe the company has done all it can.
However, we find that APP has consistently applied its resources both to improve its own sustainability
efforts and to create opportunity for communities around its Indonesian facilities.
The following document expresses conclusions based on our field research, current science and our
personal observations. APP has not shaped our conclusions or imposed its opinions.
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Within Indonesia, APP operates six pulp and paper plants, including two ± Indah Kiat and Lontar
Papyrus ± on the island of Sumatra.
APP¶s mills are state-of-the-art in terms of both their pulping processes and emission controls. As you
will see in this report, the mills remain a key engine of Indonesia's and Sumatra's economic, social
development and poverty alleviation efforts.
The virgin fibre supply for these mills is provided by APP's fibre suppliers in Indonesia who harvest
primarily on sustainably managed eucalyptus and acacia tree plantations. Contrary to the claims of
environmental activists, 85 percent of APP's virgin fibre comes from fast growing, high yield,
renewable plantations growing on less than two percent of Indonesia¶s total landbase. Approximately
15 percent comes from " mixed tropical hardwood, which comes from trees harvested
from government forests granted to APP companies for the establishment and management of pulp
plantations. APP forestry suppliers must clear patches of natural forest trees that can be found on these
concession lands that the Government of Indonesia describes as degraded (logged over areas, non old
growth and non high conservation value forests) or denuded wasteland. The removal of these remnant
trees is necessary to make room for plantation fields.
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This report was written by Greenspirit Strategies Ltd., a Vancouver, Canada-based sustainability
consulting firm focused on the energy and natural resource sectors. Based on our ground site visits and
aerial surveys of Sumatra, this report looks at how forest management works in Sumatra and Indonesia,
highlights APP mill and pulpwood supplier plantation operations, describes the new research taking
place in Indonesian plantation forestry, explains how APP and its pulpwood suppliers engage with their
local communities and outlines what the impacts of de-selecting Indonesian pulp and paper products
would likely be. The appendix includes a pragmatic, science-based approach to policy and
procurement of Indonesian pulp and paper products for buyers worldwide.
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Greenspirit Strategies strongly believes that sustainable forest management is a primary component of
a more sustainable world and that sustainable forest management can greatly contribute to the
economic, social and environmental well-being of people in developing countries.
The Greenspirit Strategies team was composed of Dr. Patrick Moore, Chairman and Chief Scientist;
Tom Tevlin, President and CEO, and Trevor Figueiredo, Senior Vice President. Dr. Moore is a
Greenpeace co-founder and former leader with a PhD in ecology who departed Greenpeace, in part,
because of its poor understanding of science.
In August 2010, Greenspirit Strategies team members travelled to Sumatra, Indonesia to examine APP's
and its pulpwood suppliers¶ operations on the ground in iau and Jambi provinces. We interviewed
employees and community leaders, toured both APP mills on Sumatra (Indah Kiat and Lontar Papyrus),
and assessed the plantation forestry concessions that provide pulpwood to the mills ± from both the air
and the ground. We conducted detailed aerial flyovers of the Bukit Tigapuluh National Park and
nearby plantation forestry concessions in Jambi province. We also conducted detailed ground and
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aerial flyovers of the Kerumutan Peat Swamp Forest,
including the national park.We further surveyed the Giam
Siak Kecil Biosphere eservethe Kampar Peninsula and Indonesia has the opportunity
the surrounding region. to ³leapfrog´ past mistakes by
other countries and manage
The Greenspirit Strategies team also investigated APP and their forests to a world-class
its pulpwood suppliers¶ community initiatives and assessed standard.
a cutting-edge research and development facility.
We often forget that many developed countries, including the United States, Canada and those in
Europe built their high living standards on a foundation of natural resource extraction. In the past,
those extraction processes were often environmentally damaging. Yet, given technological progress
and today's immensely better understanding of how to manage forests in an environmentally sound
way, developing countries like Indonesia have the opportunity to ³leapfrog´ past mistakes and manage
their forests to a world-class standard.
Our focus in this report is to assess how well APP is doing that.
We encountered this elephant near the APP Lontar Papyrus mill in Jambi Province, Sumatra. As
you will see in this report, APP and its pulpwood suppliers are working on a range of wildlife and
habitat protection programs.
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Indonesia is the world¶s fourth most populous
country, with its more than 220 million people
spread across a relatively small land mass of
individual islands. Indonesia consists of 1,508
islands scattered over both sides of the equator,
about [,000 of these islands are inhabited. The
largest are Java, Sumatra, Borneo (shared with
Brunei and Malaysia), Papua (shared with
Papua New Guinea), and Sulawesi.
The country has weathered the global financial crisis well out of its heavy reliance on domestic
consumption as the driver of economic growth. The economy slowed significantly from the [ percent-
plus growth rate recorded in 200 and 2008, expanding at ^ percent in the first half of 2009, but still
outperformed its regional neighbors and joined China and India as the only G20 members posting
growth during the crisis.
The government made economic advances under the first
administration of President Susilo Bambang Yudhoyono
and introduced major reforms in the financial sector.
Indonesia¶s debt-to-GDP ratio has declined recently
because of strong growth in GDP and sound fiscal
stewardship.
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without any oversight and developing concessions wherever they so choose, the opposite is in fact true.
It is clearly visible from the Greenspirit Strategies team¶s air and ground observations on Sumatra that
the Indonesian government has placed a priority on balancing sustainable development and
conservation within its tropical forests.
Indonesian forest companies are, by law, required to adhere to strict land use planning and
environmental regulations. The Government of Indonesia's National Spatial Plan is the overarching
planning tool that determines land-use priorities in the country, balancing development and poverty
alleviation goals while protecting high conservation value forests.
Of the total 110 million hectares, just over G percent (roughly G.5 million hectares or 8.[ million acres)
can legally be used for sustainable pulpwood plantation development to support the pulp and paper
sector.
This fact alone should make it clear that, contrary to the allegations of Western environmental groups,
it is impossible to ³destroy Indonesia¶s biodiversity´ by
converting G.5 million of 110 million hectares to plantation
forests.
The National Spatial Plan
Within the G percent set aside for sustainable pulpwood, allocates only three percent of
APP fibre suppliers¶ projected plantable area is around 1.^ Indonesia's total landmass to
million hectares (G.5 million acres). Of the 1.^ million pulpwood plantation forestry.
hectares, according to government mandated studies, around This fact alone makes it clear
^00,000 hectares (988,^21 acres) are considered degraded it is impossible to destroy
and low-value forestry area and 1 million hectares (2.5 Indonesia¶s natural forests
million acres) are ³denuded wasteland.´ through conversion.
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Within the gross area of pulpwood
plantation concessions, the government
requires that G0 percent be retained as set
aside areas.
Assessment Process
While the government's overarching National Spatial Plan determines where plantation concessions
can be located, Indonesian forest companies must further undertake detailed and rigorous socio-
environmental assessment processes before they can operate on any concession area.
Even after these assessments are completed satisfactorily, and a concession is granted, pulpwood
suppliers must commission ± as required by law ± a feasibility study and a long-term management
plan.
Additionally, every year, a working plan must be developed for each concession area that incorporates
core sustainable forest management criteria. And every month, pulpwood suppliers must provide a
detailed report to the Indonesian Ministry of Forests, advising on areas they plan to plant and/or
harvest.
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In addition to these rigorous legal requirements and
APP pulpwood suppliers are
assessments, APP pulpwood supplier plantations and APP
responsible for planting more
mills have gone the extra step of getting certified by
than 200 million trees per year
independent, third party auditors to the ISO 1^001 standard
and, by planting more trees
as well as to the Indonesian Eco-labelling Institute (LEI)
than they harvests, they are
and the Programme for the Endorsement of Forest
progressively contributing to
Certification (PEFC) chain of custody scheme (%&
an increase in the forested
+ + ).
area.
The vast majority of APP¶s fibre supply comes from
sustainable plantation forestry, which means the trees are
planted expressly for the purpose of pulp production. In Indonesia, APP pulpwood suppliers are
responsible for planting more than 200 million trees per year and, by planting more trees than they
harvest, they progressively contribute to an increase in the forested area.
Finally, APP pulpwood suppliers in Indonesia only develop least-valuable degraded forests and
denuded wasteland, as defined by the government.
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Founded in the 190s, APP is a brand umbrella for
paper products manufactured by several pulp and paper
companies in Indonesia.Headquartered in Jakarta,
APP Indonesia is one of the world¶s leading pulp and
paper producers. With current annual combined pulp,
paper and packaging grades capacity of over seven
million tons, the eight independently owned pulp and
paper production facilities manufacture a wide range of
tissue, towel, office and graphic paper products under
the APP brand as well as a number of proprietary
brands and private labels. This tree nursery is owned by a local
community in iau Province, Sumatra.
Within Indonesia alone, APP operations include: The tree seedlings are purchased by APP
pulpwood suppliers for use on their
àc ÷ 3
(iau Province, Sumatra) plantations. Profits go directly to the
àc ÷ 3* (Banten Province, Java) community.
àc ÷ 3' (Banten Province, Java)
àc (3'4
3+ (near Surabaya, East Java)
àc , (Karawang, West Java), and
àc " (Jambi Province, Sumatra)
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The APP Lontar Papyrus mill in Jambi Province, Sumatra. This mill is among the most
advanced and environmentally-friendly in the world.
APP markets its products in more than [5 countries on six continents. APP¶s major paper mills are
certified under the ÷ . ÷ 5+.(÷ 6.÷7 and
++. + !$ 5.!$7Chain-of-Custody standards.
Greenspirit Strategies assessed APP mills Indah Kiat in iau province and Lontar Papyrus in Jambi
province. We note that these production facilities are among the most advanced and environmentally
efficient in the global pulp and paper industry, enabling cleaner production.
4arbon Footprint
According to EM¶s 2008 report which evaluated eight production facilities in Indonesia, APP¶s
weighted average carbon footprint for 200[ was 1.5[ tons of CO2 produced per ton of paper, excluding
pulpwood plantation sequestration. This is on the low end of the 1.^[ to 2.20 tons of CO2 produced per
ton of paper range of the North American paper industry.
This was the first assessment to determine opportunities for improvement. Currently APP is working
with EM to conduct Carbon Footprint Monitoring (CFM), which includes the following assessments:
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àc ISO 1^0^^ consistent assessment of the entire gate to end-use emissions of most common paper
products.
àc Methane recovery and utilization of methane for heat generation through improved wastewater
treatment (Serang)
?c Potential carbon emission reduction = 59,0[.[9 CE (Certified Emission eduction) for
next 10 years
?c Status : Validated on 9 December 2009
In 2005, UNDP reported that Indonesia¶s CO2 emission per capita was only 1. tons. These emissions
are significantly lower than its neighboring developed country of Australia, which emits 1[.2 tons of
CO2 per capita, or that of the USA, which emits 20.[ tons of CO2 per capita.
ightly, we think, Indonesia ± along with most Asian countries ± views as national priorities economic
development to alleviate poverty, social welfare, and environmental protection (including protection of
high conservation value forests, biodiversity, and endangered species), with the need for a balanced
1G
approach to GHG emissions reductions.
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APP¶s two pulp and paper mills in Sumatra, Indonesia -- Indah Kiat and Lontar Papyrus -- are fed by
its pulpwood suppliers in Sumatra and Kalimantan, Indonesia.
Greenspirit team members assessed APP pulpwood supplier plantation operations near the Indah Kiat
mill in iau Province, Sumatra, as well as near the Lontar Papyrus mill in Jambi Province, Sumatra.
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In reviewing APP pulpwood supplier plantation operations on peatlands, including those near the
Kerumutan National Park, Greenspirit Strategies
learned about the specific processes that pulpwood
suppliers are undertaking to ensure these peatlands
are managed sustainably.
àc Proactive fire prevention and suppression with active involvement and engagement from local
communities.
àc Voluntarily setting aside vast swaths of natural peatland forest considered to be of special merit
for permanent conservation and protection.
Environmental activists often act as if companies like APP operate in a vacuum. If these companies
simply stopped operating, some activists argue, conservation efforts would improve enormously. But
this is a false argument.
Our observations from the air confirm the FAO¶s general finding that a root cause of natural forest
clearing is the encroachment and burning of forestland for conversion to crops and settlement. We saw
firsthand the illegal encroachment and burning that result in the deforestation of tens of thousands of
hectares of land annually in Indonesia.
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c Encroachments like these by migrant nationals are the root cause of illegal conversion of natural
forest in Indonesia. We witnessed hundreds of these encroachments strewn across the Sumatran
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landscape.
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The best means of avoiding this illegal encroachment is to provide communities with economic
opportunities they would not otherwise have ± opportunities that APP and its pulpwood suppliers are
currently providing. APP and its pulpwood suppliers are engaged in active monitoring in areas where
they operate and work to educate communities about the benefits of preserving forest and peatlands.c
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That¶s why the further away we flew from APP¶s pulpwood
suppliers¶ operations, the more illegal encroachments we saw.
Contrary to activist claims, if these pulpwood suppliers halted APP¶s pulpwood suppliers¶
operations in their areas, illegal encroachment and forest presence on peatlands helps
burning would likely increase dramatically. protect them from illegal
c encroachment.
For more information on peatlands, please see Appendix A.
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During our assessment, the Greenspirit Strategies team flew over vast areas of wilderness that have
been voluntarily set aside by APP¶s pulpwood suppliers to ensure biodiversity and habitat protection ±
the expanse of this area cannot be understated. In total, these
suppliers have voluntarily set aside close to ^00,000 hectares
(over 988,000 acres) of allocated production forest for
conservation purposes ± that¶s roughly the size of hode In many parts of the
Island. developing world, a protected
area is often protected in
But in many parts of the developing world, a protected area is name only because of illegal
protected often in name only. Because of illegal encroachment.
encroachment, these areas often succumb to deforestation and
habitat destruction.
APP and its pulpwood suppliers work with government, local communities and NGO partners to ensure
these protected areas remain truly protected through active monitoring, management and education
efforts.
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Conservation areas that APP and its pulpwood suppliers have set aside and are assisting in protecting,
include:
àc The UNESCO designated Giam Siak Kecil-Bukit Batu (GSK-BB) Biosphere eserve in iau
province, Sumatra.
In our interview with Bastoni, he noted that APP is one of the few organizations that funds and
supports his vital work to ensure the survival of the Sumatran tiger.
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Bastoni is more than a tiger researcher. He is actively involved in projects aimed at increasing and
protecting tiger populations.
Bastoni and his multi-stakeholder working group act as intermediaries when villagers come into
conflict with tiger populations. The working group as been formed out of concern that illegal logging
and encroachment are major causes of tiger population decline. Bastoni works with villagers to educate
them on the need to protect tigers and he acts quickly to move tigers away from populated areas where
they may come into conflict with humans.
The Tiger Working Group, which APP and its suppliers fund, has developed a range of programs to
enhance tiger survival, including education and monitoring efforts to combat illegal logging and
encroachment, tiger surveillance and research using radio collars and camera traps, and enhanced
signage and fencing to clearly mark tiger areas and prevent human intrusion. It¶s important to note that
APP is working together with government and community leaders at this village near Taman
aja to develop a wildlife corridor on concession lands to link Taman aja with Bukit Tigapuluh
National Park, so tigers have a larger wilderness area to roam.
APP pulpwood supplier plantation concessions in this area act as a buffer between the tiger sanctuary
and further human encroachment. The Greenspirit Strategies
team found no evidence to support environmental activist
claims that suggest APP suppliers are destroying tiger habitat APP supplier plantation
in this area. To the contrary, our examination and interviews concessions act as a buffer
with community leaders and APP employees suggest that between the tiger sanctuary
without operations on these concessions, it¶s likely that tiger and further human
habitat would be further destroyed by illegal encroachment. encroachment.
Surprisingly, Bastoni told us that while Western NGOs are well known for their political activism and
basic research, none are involved in the kind of active tiger protection work that he and his
organization are involved in and that is so vital to the future of the Sumatran tiger.
àc Bukit Tigapuluh National Park is an area rich in biodiversity. Surrounding this 1^G,000 hectare
(G5G,G[0 acre) park are APP pulpwood supplier concessions located in areas the Indonesian
government has declared as production forest in addition to other land use such as mining and
agriculture.
A multi-stakeholder panel made up government, industry and NGOs such as the World Wildlife
Fund (WWF) and the Frankfurt Zoological Society have reviewed the ecological value of these
concession areas.
APP management committed to abide by any decision made by the Indonesian government
based on the findings of the multi-stakeholder panel.
In the interim, APP says they have voluntarily agreed to not receive any pulpwood from the
production forest surrounding the national park until the multi-stakeholder panel has completed
its assessment.
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In addition to the detailed assessments and regulations APP and its pulpwood suppliers must follow by
law (see the section on ÷ ), the Greenspirit Strategies team learned that
APP and its suppliers have pursued additional independent, third-party verified certification to
demonstrate their commitment to sustainable forest management.
The four largest APP pulpwood suppliers, PT Arara Abadi (iau), PT Wirakarya Sakti (Jambi), PT
Satria Perkasa Agung (iau) and PT Finnantara Intiga are all EMS certified under ISO 1^001.
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Lembaga Ekolabel Indonesia (LEI) is the
national standard for sustainable forestry in
Indonesia. LEI is a rigorous, independent
forest certification standard that has been
accepted by other forest certification schemes
and customers around the world. APP
pulpwood supplier PT Wirakarya Sakti (Jambi
Province) achieved LEI certification from the
independent, accredited certification body, PT
TUV International Indonesia in September
2008 for an area covering 2^[,^82 hectares
([09,00 acres). This represents the largest
An APP pulpwood supplier has the largest LEI LEI certified plantation in Indonesia.
certified plantation in Indonesia.
In 2009, APP mills ± including both Sumatran
mills, Indah Kiat and Lontar Papyrus ± were also certified to the LEI Chain of Custody, so pulpwood is
tracked from the forest floor, to the mill, and through the transportation chain in order to verify
sustainable forest management.
Separate from the LEI chain of custody certification, APP mills have also been certified to a range of
other world class sustainability standards, including Indonesia Ecolabel, European Ecolabel, Japan
Ecolabel and Programme for the Endorsement of Forest Certification (PEFC) chain of custody.
Pulpwood must meet rigorous, independent chain of custody requirements that track it from
the forest floor to the mill and through the transportation network to ensure it comes from
well-managed forests.
So, in addition to the efficiencies and emissions reductions gained through the use of modern facilities
(APP¶s mills are among the most up-to-date we have seen), these chain of custody systems and
protocols are crucial to APP¶s sustainability program, and are improved continuously based on external
audits.
To achieve all these third-party, independent certifications, over the past five years, APP has
restructured and improved its sourcing and chain of custody policies.
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Chain of custody certification protocols in use by APP include:
àc Pulpwood: Indonesian Ecolabelling Institute (LEI) chain of custody/legal origin verification (200)
& LEI sustainable forest management standard
àc Pulpwood: SGS Timber Legality & Traceability Verification (Stage 1: Verified Legal Origin)
Since most APP production facilities are PEFCchain of custody certified, regulations and guidelines
under PEFC principles are rigorously implemented. APP officials demonstrated to Greenspirit
Strategies during our site visits that the company evaluates and conducts risk assessment analysis on all
of its pulpwood suppliers according to PEFC guidelines. APP¶s procurement policy, both in HQ and at
each mill, has been restructured to accommodate this implementation.
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Because APP mills are PEFC and LEI chain of custody certified, its pulpwood suppliers must meet
rigorous legal origin verification criteria in order to ensure only legal pulpwood of known origin is
processed at these mills. To meet these criteria, APP and its pulpwood suppliers are independently
audited against Indonesian law and Ecolabel Institute and Timber Legality and Traceability Verification
(TLTV-VO) standards by one of the world¶s leading auditors, SGS.
As the Greenspirit Strategies team witnessed during our review of Indah Kiat and Lontar Papyrus mills,
APP takes such detailed measures as to check the door serial numbers of logging trucks seeking entry
into its mills in order to match each truck to its pulpwood load and legal documentation. APP officials
indicated to us that these serial numbers are much more difficult to forge than licence plates and are
simply another means of ensuring each truck entering its mills is carrying legally harvested fibre.
SGS has independently verified that these tough measures are working and that no illegal pulpwood is
being harvested by APP pulpwood suppliers or being introduced into APP mills.
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Truck loads are matched against legal documentation. SGS has independently verified that
tough measures like those pictured above are working and that no illegal pulpwood is being
harvested by APP suppliers or being introduced into APP mills.
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Over the past two years, APP¶s pulpwood
consumption in Indonesia has roughly consisted of
85 percent sustainable plantation wood and 15
percent mixed wood residues from pulpwood
plantation development in degraded areas.
As the FAO indicates, poverty alleviation is a key factor in improving environmental protection. In
Indonesia, illegal encroachment and burning of forests for agriculture, settlement and oil palm
conversion remain critical issues and are at the heart of the
deforestation in Sumatra and other parts of the country.
These issues are driven by poverty. As the FAO notes in its APP and its suppliers directly
200 *8!/9 ³the countries that employ more than 70,000
face the most serious challenges in achieving sustainable people in Indonesia. If
forest management are, by and large, the countries with the indirect jobs are also
highest rates of poverty and civil conflict.´ considered, these companies
employ more than one million
When people have to feed their families, environmental people worldwide.
protection becomes a distant priority.
According to Zulkifli, the moratorium would cause economic stagnation. Besides, he said, the country
already had programs in place for sustainable forestry management: ³If we want to blame somebody
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because of deforestation, blame the illegal loggers and
their buyers,´ he added.
Deforestation is driven by
poverty. When people have to
In 2008, the United Nations recognized APP¶s
feed their families,
contributions to poverty alleviation and sustainable
environmental protection
development by honouring its Tjiwi Kimia paper mill on
becomes a distant priority.
East Java. The mill was recognized for its efforts in
meeting the UN Millennium Development Goals
(MDGs). The MDGs are core goals focused on
sustainable development that the UN hopes the world will achieve by 2015. These goals include the
eradication of extreme poverty and hunger, achieving universal primary education, promoting gender
equality, reducing child mortality and
ensuring environmental sustainability.
Ëc Supporting education
Ëc Developing skills training
Ëc Providing medical care
Ëc Establishing entrepreneurial
community enterprises
Ëc Providing environmental
protection and education
Ëc Assisting with disaster relief
The Greenspirit Strategies team visited this village near
The Greenspirit Strategies team
the Taman aja Nature eserve. APP suppliers PT
assessed a range of these community
Wirakarya Sakti and PT imba Hutani Mas are working
development projects and sites and
closely with some 600 families on development projects
we were impressed by how involved
aimed at poverty alleviation.
and engaged APP and its suppliers
are with their surrounding communities.
Near the Taman aja Nature Preserve, APP¶s pulpwood supplier is working closely with the local
community and some [00 families on development projects aimed at poverty alleviation. As noted
previously, an important additional benefit of reducing poverty in this area is that people are less driven
to illegally encroach on protected areas in search of an income.
This boy¶s family is learning to farm fish and produce honey to earn an income.
Prior to development of the aquaculture project, many of the people in the surrounding region lived
nomadic lives, using the forest for subsistence and cutting down large areas of forest to plant crops.
As local leaders indicated to the Greenspirit Strategies team during our visit, the APP pulpwood
supplier financed aquaculture program is teaching villagers how to become fish farmers so they can
provide a livelihood for their families without destroying the surrounding forests. Some families are
participating in the project, managing their own fish ponds, and harvesting and marketing the fish to
the surrounding communities.
Local leaders told us the project has resulted in decreased illegal logging, forest burning and
conversion to agriculture. In demonstrating the effectiveness of the program, one local leader
paraphrased the well-known Chinese proverb, saying ³give a man a fish and he eats for a day, teach a
man to fish and he will eat forever.´
During our visit to Sumatra, the Greenspirit Strategies team also visited two Community Development
Centres (CDCs), one located near the APP Indah Kiat mill in iau and the other located near the APP
Lontar Papyrus mill in Jambi.
These centres play a vital part in the social, educational and economic development of surrounding
communities. The CDCs provide training in a variety of fields such as aquaculture, honey production,
farming and fertilizer production from cattle, weaving, and computer training as well as access to
books, internet and library services. The CDCs also help farmers market their products in different
areas.
Based on our experience, these community development programs compare favourably with those of
other leading companies around the world.
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APP funds community development centres (4D4s) to provide training for local
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communities in a variety of fields such as aquaculture, honey production,
c farming and fertilizer production from cattle, weaving, computer training, and
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Contrary to the portrayal promoted by
Western environmental groups, APP and its
fibre suppliers are using cutting edge
research and technology to grow more fibre
on less land ± thus reducing the impacts on
natural forests and habitat.
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Eucalyptus grandis, Eucalyptus tereticornis, and Eucalyptus brassiana.
In spite of the fact some activist groups would prefer you ignore this point completely, the company
operates on the basis of achieving full legal compliance with the national and provincial governments
where it operates. The country¶s National Spatial
Plan allocates just over G percent of Indonesia's total
1l0 million hectares of forest (roughly G.5 million
hectares or 8.[ million acres) to pulpwood plantation
forest. Of this, APP¶s plantable area is only around
1.^ million hectares.
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Third, conservation beyond compliance means APP is focussed on a wide range of large landscape
forest protection and sustainable forest management
activities that promote third-party certification of practices,
chain of custody, CO2 emissions reductions and recycling.
There are 35 million
Indonesians living below And finally, the importance of the social aspect of the
poverty line, and many of company¶s activities as we viewed them cannot be
them are driven to desperate overstated.c
measures, including
encroachment into protected There can be no doubt that poverty and social and
areas in a bid to provide a environmental degradation in developing countries are
decent life for themselves and closely linked. As we have reported earlier in this piece,
their families. there are G5 million Indonesians living below the poverty
line, and many are driven to desperate measures, including
encroachment into protected areas and forest plantations, to
provide a decent life for themselves and their families. A far
better option would be for a robust forest sector,
supported by western activists, to contribute
support toward poverty alleviation, community
empowerment, and education.
We hope this view will influence Western environmentalists to focus on the right target ± poverty
alleviation in Indonesia ± which will in turn help to reduce illegal encroachment and habitat destruction
in the country. We are convinced APP and its pulpwood suppliers are making a positive contribution in
that regard. However, by targeting APP and its suppliers, Western environmental groups are, in real
terms, making it much more difficult to reduce deforestation in the country.
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After spending 10 days reviewing APP operations in Indonesia, we feel it is important to offer a
summary of our observations:
G.c Detailed aerial surveys of areas in which APP pulpwood suppliers are located, such as PT Bina
Duta Laksana (PT BDL) and PT Mutiara Sabuk Khatulistiwa (PT MSK) in the Kerumutan area and
PT Artelindo Wiratama outside Bukit Tigapuluh National Park ± and interviews with local
community leaders ± show they are operating within the confines of government approved land use
plans. These companies have also undertaken social and high conservation value forest assessments
based on a national protocol. In Kerumutan, more than 52 percent of the companies¶ concessions
are set asides. * %
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^.c APP supplier concession operations help to protect natural forest by acting as a buffer against
further illegal encroachment of the natural
forest area.
8.c As the FAO also notes, plenty of deforestation is driven by poverty. Our detailed aerial flyovers of
Sumatra made this very clear. We saw large numbers of illegal encroachments where natural forest
had been destroyed. These areas were mostly located away from APP supplier concessions because
these suppliers carefully monitor their areas and the surrounding region. The companies work with
local communities to prevent illegal encroachment. As we saw from the helicopter, the further
away you go from company owned concessions, the more illegal encroachment you find ±because
there is little monitoring of these areas.
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11.cGrowing plantation forests on peat soil makes sense from an environmental perspective because as
acacia leaves and tree matter fall to the ground and are cut during harvesting, they add to the depth
of the peat.
12.cecently, APP announced that it will create the Kampar Carbon eserve -- an area
one quarter the size of Singapore ± on concession land held by its pulpwood
supplier PT. Putra iau Perkasa (PP). Working in partnership with the Singapore-
based NGO Carbon Conservation, APP will turn more than 15,000 hectares
(G,0[5 acres) of critical peat forest from concessions allocated for pulpwood
plantation to conservation land acting as a carbon reserve. In coordination with the
United Nations Collaborative Programme on educing Emissions from
Deforestation and Forest Degradation in Developing Countries (EDD), the
program will use EDD credits to provide education, job training and community
development programs to local villagers.
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In 200, the Forest Stewardship Council (FSC) revoked APP¶s FSC chain of custody for its mills even
though APP had complied with all chain of custody requirements and received its Forest Stewardship
Council certification from an independent, world-class
auditor, SGS.
SGS told the 8*= that FSC¶s behavior Independent auditor SGS noted
would likely make other producers in the tropics wary of that the Forest Stewardship
pursuing FSC certification, since it could be arbitrarily 4ouncil decision ³will truly drive
taken away. away most of the big players in
tropical forestry.´
SGS was quoted as saying that this ³will truly drive away
most of the big players in tropical forestry.´
A major flaw of the FSC system is that it is heavily influenced by environmental activists who appear
to have a strong bias against large companies ± whether or not those companies are operating
sustainably. It is likely the FSC received substantial pressure from members to pull APP¶s certification.
Greenspirit Strategies believes this was a purely political and trade-related decision based on zero
scientific grounding.
Nonetheless, based on our interviews with APP management, the company remains open to further
discussions with the FSC on restoring its certification.
By the same token, we strongly urge the FSC to reconsider its unfortunate decision to revoke APP¶s
chain of custody logo and rather to engage constructively with the company in a manner that is fully
transparent.
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Certification systems based on principles of sustainable forest
management emerged in the past two decades as a means of
giving customers the assurance that a forest product was
derived from sustainably managed forests. In short, the We urge procurement policies
certification system takes a highly complex subject involving be evaluated on the basis of
environmental and social sciences and economics and whether they are ³inclusive´
condenses it down to the simplest market signal ± a stamp or or ³exclusive´ ± that is,
marquee designating the product¶s sustainable production. whether or not they give
preference to range of
As new, credible certification systems have entered the independent, third-party forest
sustainable forest management marketplace, procurement certification standards.
officers have looked to these various systems in order to filter
Below is a sample procurement policy that we provide as a reference for pulp and paper buyers
worldwide. This type of policy, focused on environmental criteria rather than on geo-political locations
or brand-specific requirements, provides enhanced flexibility to buyers while ensuring the procured
forest products are from well-managed forests:
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Greenspirit Team Flight Plans
Day 1
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Day 2
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Day 3
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Greenspirit Strategies Itinerary
The Greenspirit Strategies team conducted assessments in the following key areas:
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