Paper Tigers - APP's polluting China arm seeks IPO

Feature Story - 2008-08-14
(Updated 7 October) Greenpeace East Asia and local green groups are lobbying the Chinese government to reject Gold East Paper's application for a domestic listing because of its shocking environmental record.

A Greenpeace researcher surveys an area of forestland in Yunnan province destroyed by APP.

Gold East Paper is an affiliate of Indonesian logging giant APP, which is suspected of illegal forest destruction in Indonesia and China.

Greenpeace recommends that China's Ministry of Environmental Protection (MEP) carefully consider whether this company, which breaks pollution laws and illegally destroys forests, should have the right to attract investment by listing its shares on the Shanghai stock market.

Read an English translation of our letter (pdf format) to the MEP.

Following a response to our first letter from MEP which said the ministry would carefully consider our suggestions, we uncovered further evidence that Hainan Jinhai Pulp & Paper Co, a subsidiary of Gold East Paper has long been discharging polluting gases and wastewater exceeding allowable limits.

This has damaged the environment and hurt local people by poisoning their drinking water and killing off fish stocks so that fishing is now no longer a viable means of making a living.  Some locals also suspect the pollution has caused illness.

We sent a second letter with this new evidence to MEP, again strongly urging them not to approve Gold East Paper's listing.

Read an English translation of this second letter (pdf format).

Watch a video of locals talking about the problems pollution from Jinhai's plants have caused them (Chinese language only).

Gold East Paper submitted its initial public offering (IPO) application on August 5.

Investigations by Greenpeace China and fellow green groups, including Global Village, Friends of Nature, Green SOS and Green Watershed have found that since August 2005, Gold East Paper and its seven subsidiaries in China, have been guilty of eight serious environmental offences.

These include:

On June 10, 2008, Suzhou City Environmental Protection Bureau found that Gold Hua Sheng Paper had exceeded legal pollution limits.

And on July 4, 2008, Hainan Jinhai Pulp and Paper was found guilty of discharging illegal black effluent.

Gold East Paper's subsidiaries operating in Yunnan and Hainan provinces are also suspected of illegal logging and inflicting serious damage to nature reserves.

In 2007, Greenpeace China discovered that Hainan Jinhai Pulp and Paper had been illegally clearing forest for eucalyptus plantations.

China's environmental ministry first has to approve the listing before it goes to the securities regulator.

While the ministry was conducting a ten-day assessment on the enterprise from August 5 to 14, Greenpeace and many local green groups have been urging the watchdog to pay attention to the enterprise's environmental shortcomings when considering whether to approve the IPO.

It is clear that APP, Gold East Paper and its subsidiaries have shown a complete lack of sincerity in keeping their environmental promises.

And until these issues are resolved, Greenpeace China recommends that Gold East Paper not be allowed to proceed with a domestic listing.

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