The scale of APP’s global trade

Background - 26 November, 2011
Asia Pulp & Paper already claims to be the third largest paper company in the world, and aims to be number one. This investigation has identified how APP is breaking Indonesian law, driving Sumatran tigers and ramin trees closer to extinction, and undermining CITES – the international conservation agreement governing trade in protected species. The investigation shows that the global market for paper products from APP paper mills in Indonesia and China includes the vast majority of countries that are signatories to the CITES treaty. Companies sourcing from APP whose products contain rainforest fibre include Xerox, National Geographic and Walmart.

 

World Map
Australia Belgium Canada China
Spain France Germany Greece
Israel Italy Netherlands New Zealand
South Africa United Arab Emiratea United Kingdom United States of America

 

Australia

Belgium

Canada

China

Spain

France

Germany

Greece

Israel

Italy

Netherlands

New Zealand

South Africa

United Arab Emirates

United Kingdom

United States of America

Brands diagram

 


  • More than 80% of all direct exports from APP Indonesia and China (some 3.1 million tonnes of paper, tissue or packaging products) are through 12 paper mills belonging to 9 individual APP companies with identified trade links to Indah Kiat Perawang.
  • These APP paper mills export to 136 CITES party countries, 78% of all countries bound by the objectives of the Convention. The USA, the UK, New Zealand, Greece, Israel and Australia are major importers of products from APP paper mills in Indonesia and China shown to trade with Indah Kiat Perawang.
  • The investigation identified an initial list of specific products linked to these APP mills. Laboratory testing of these products confirms they contain natural forest fibre (MTH). These products, ranging from copy paper to tissue, books and packaging, were bought in 8 countries and relate to 12 separate corporate consumers and traders.

Any company or country importing from APP should see APP's global paper production and trade as high-risk. This investigation traced several stages in the trafficking routes through which products manufactured from Indah Kiat Perawang pulp enter international trade: from the Indah Kiat Perawang mill to APP mills in China and Indonesia; from APP mills in China and Indonesia to the countries importing those products; and to specific consumer products within those countries.

Indah Kiat Perawang's trade risks to key CITES party countries 

The investigation has sought to identify CITES party countries importing products associated with Indah Kiat Perawang's pulpwood supply. The investigation traced several stages in the trafficking routes through which products manufactured from Indah Kiat Perawang pulp enter international trade:

  1. Identifying links between MTH pulp produced at Indah Kiat Perawang and sister APP paper mills in Indonesia and China.
  2. Identifying countries importing products from these APP mills in Indonesia and China with trade links to Indah Kiat Perawang.
  3. Identifying specific consumer products available in CITES party countries that use paper produced by one of the APP paper mills in Indonesia and China with trade links to Indah Kiat Perawang and where fibre tests confirm the presence of MTH fibre together with acacia.

Identifying trade risks: APP international trade to key markets and brands

Indah Kiat Perawang to the CITES world

APP company documents together with import data and shipping information[1] have allowed the investigation to identify trade links between Indah Kiat Perawang and 12 individual APP paper mills run by 9 APP companies in Indonesia and China. These 12 APP paper mills ultimately trade to up to 136 countries that are parties to the CITES Convention.[2]

Indah Kiat Perawang to global brands

Trade information including APP company documents and import data have allowed the investigation to link global companies across multiple market sectors back to individual paper mills run by these 9 APP companies. In some cases, the data establish links between final brand items and a specific paper product manufactured by a particular APP paper mill with trade links to Indah Kiat Perawang.

MTH fibre indicates ramin risk

Fibre testing by independent laboratories is an important component of this trade-risks investigation.

Indonesia is the only large-scale producer of either MTH pulp[3] or acacia pulp.[4] Therefore, the presence of MTH together with acacia in the virgin fibre content of paper products is a strong indicator that the pulp fibre comes from Indonesia.

Where a company is buying paper products that originate with one of the APP paper mills with trade links to Indah Kiat Perawang, there is a risk that the product contains MTH fibres from the indiscriminate clearance of ramin habitat; this pulpwood supply to Indah Kiat Perawang has been documented to include illegal ramin. The presence of MTH fibre in a paper product produced by one of these APP mills is a strong indicator of this risk.

In 2010, according to official Chinese import data,[5] APP China mills imported around 560,000 tonnes of hardwood pulp from Indonesia, with three-quarters (416,000 tonnes) of this imported by APP's Gold East Paper, located in Dagang, and two of the APP Ningbo mills, located in Ningbo.

Other APP trade information[6] indicates an estimated 70% of the pulp imported by China from APP Indonesia is MTH pulp, virtually all of which originates from Indah Kiat Perawang.[7] Of the pulp shipped to Dagang, where APP's Gold East Paper is located, over three-quarters is MTH pulp from Indah Kiat Perawang. Of the pulp shipped to Ningbo, where the APP Ningbo mills are located, nearly 60% is MTH pulp from Indah Kiat Perawang.[8]

Together with these data, the combined presence of MTH and acacia fibre in materials produced by these APP China paper mills (or associated printers and converters) strongly indicates a link between that mill and the MTH pulpwood supply for Indah Kiat Perawang.

The investigation has identified and had tested various products from APP China mills Gold East Paper and Gold Huasheng, the Ningbo mills and Yalong Paper; a number of these tests have confirmed the presence of MTH together with acacia.[9]

Where the chain of custody evidence provides a clear link to a specific retail item on sale in an identifiable market, the virgin fibre content of sample items was tested to identify whether or not MTH, together with acacia, was present.

The investigation has identified:

  • The volume of imports by key APP markets from APP paper mills with trade links to Indah Kiat Perawang
  • A preliminary list of brands where the investigation has established a chain of custody link to one of these APP paper mills and where the results of one or more tests of those companies' retail goods have confirmed the presence of MTH, together with acacia

The risks of trade with APP

Any company or country importing from APP, such as those listed below and elsewhere in this evidence, should see APP's global paper production and trade as high-risk, for the following reasons:

  • Ramin is an internationally protected species under CITES trade regulations. All international trade in ramin specimens or derivatives from Indonesia is banned, with the exception of that sourced from one small selective logging operation that does not contribute to the pulp sector's raw material supply chain.[10]
  • The investigation has identified some 136 countries that are signatories to the CITES Convention that import from APP mills with trade links to Indah Kiat Perawang. This shows the extent of the international trade associated with the presence of illegal ramin logs in the MTH pulpwood supplies for Indah Kiat Perawang.
  • The presence of MTH fibre in a paper product produced by one of the APP mills with trade links to Indah Kiat Perawang illustrates the supply chain risks associated with trading with or importing from APP:
    • APP has been shown to be operating in violation of Indonesia's ramin ban and its national CITES regulations. Any final end product containing MTH fibre may include fibres resulting from the indiscriminate clearance of ramin habitat; this pulpwood supply to Indah Kiat Perawang has been documented to include illegal ramin.

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Footnotes

[1] Eg IKPP (2010a), US customs data, CTI (2010) and other confidential information held by Greenpeace
[2] Based on trade data and CITES 'List of contracting parties' accessed 22/12/2011
[3] Eg Pihlajamäki and Hytonen (2004). The authors are working for pulp and paper industry specialist consultancy Jaakko Pövry.
[4] Pulp & Paper International and plantation fibre expert D C Hillman both described Indonesian acacia plantation pulp as a new pulp type around 2002/2003. Other limited sources of acacia fibre in pulp and paper products are Sabah Forest Industries (Malaysia) and woodchips supplied from Vietnam's acacia plantations to China. Sources: Hillman (2002), Roberts (2002), BILT (2011): 16, Flynn (2005).
[5] CTI (2010)
[6] Confidential information held by Greenpeace
[7] Chinese import data (source: CTI (2010)) together with confidential information held by Greenpeace
[8] Chinese import data (source: CTI (2010)) together with confidential information held by Greenpeace
[9] IPS and IfP-GmbH test results 2010-2012. Copies held by Greenpeace
[10] CITES (2009)

Forensic testing of paper products helps link multiple APP mills, markets and corporate sectors to the rainforest log supply for Indah Kiat Perawang. The presence of mixed tropical hardwood (or MTH) fibre within paper samples originating from APP Indonesia or China mills with trade links to Indah Kiat Perawang indicates that the product may include fibres resulting from the indiscriminate clearance of ramin habitat; this pulpwood supply to Indah Kiat Perawang has been documented to include illegal ramin.

In preliminary analysis, the investigation has identified specific products, including tissue, paper and packaging materials, purchased in 8 different countries, that contain mixed tropical hardwood linked to APP mills with trade links to Indah Kiat Perawang.

Specific products confirmed to contain MTH fibre through independent testing were identified as linked to these APP paper mills.

The investigation has identified a preliminary list of 12 companies where specific products can be linked to APP paper mills in Indonesia or China with identified trade links to Indah Kiat Perawang and where fibre testing confirms that these products contain MTH.[11] Further analysis and testing is ongoing.

Fibre analysis of Xerox and Danone products

Xerox and Danone products produced by Indah Kiat contain high levels of Indonesian rainforest fibre

Xerox

Fibre analysis report from the Institute for Paper Science and Technology (Germany) shows the breakdown of fibre content within a paper sample from Astro copy paper produced for Xerox.

Xerox copy paper linked to Indah Kiat consists predominantly of Indonesian rainforest fibre.[12]

(1) Trade data showing that Xerox Astro brand copy paper is manufactured by APP’s Indah Kiat Perawang facility together with (2) independent fibre analysis of the product reveal that it contains high levels of Indonesian rainforest fibre:

  1. Confidential 2010 and 2011 trade data obtained by Greenpeace show that the Xerox Astro brand copy paper sold in Greece is manufactured by Indah Kiat Perawang.
  2. Greenpeace sent samples of this copy paper to the Institute for Paper Science and Technology in Germany for fibre analysis. Its full report for one sample taken from this copy paper indicates that 60% of the hardwood vessels counted are what the laboratory categorises as ‘unknown hardwood’ species. The evaluation was ‘a strong indication for mixed tropical hardwoods as 130 unknown vessels have been found, together with acacia’.[13]
IPS

Fibre analysis report from IPS (USA) shows the breakdown of fibre content within a paper sample from Danone Nutricia packaging. Microscopic image shows fibres classified as MTH vessels within the Danone Nutricia sample.

Danone packaging linked to Indah Kiat consists predominantly of Indonesian rainforest fibre

(1) APP promotional material showing that packaging for Danone Nutricia baby milk is manufactured at APP’s Indah Kiat Serang facility together with (2) independent fibre analysis of the product reveal that it contains high levels of Indonesian rainforest fibre:

  1. Packaging for Danone Nutricia baby milk is produced by Indah Kiat Serang, according to APP promotional material. Indah Kiat Perawang supplies virgin pulp to this sister paper mill.[14]
  2. Greenpeace sent samples of this packaging to IPS in the USA for fibre analysis. Its full report for one sample taken from the glossy printed top sheet of this packaging board (ie paper made from virgin fibre) indicates that 59% of the sample is hardwood, and virtually all (97%) of this is mixed tropical hardwoods from at least 15 different tree types.[15]

The use of fibre testing laboratories - MTH fibre as a proxy for clearance of ramin habitat

Where products have been identified as linked to APP paper mills in Indonesia or China with trade links to Indah Kiat Perawang, samples of the products have been sent to fibre testing laboratories to help map out the global nature of the problem.[16]

MTH fibres are readily identifiable in samples sent to such laboratories. MTH is a classification covering the diverse range of tropical hardwood species used by the paper industry. The presence of MTH fibres in APP paper products serves as a readily recognisable indicator that an end product may be linked to Indah Kiat's MTH pulpwood supply, which includes illegal ramin from the clearance of ramin habitat.

Limited laboratory testing in the USA of paper products imported from Indonesia has identified specimens of ramin as part of the MTH fibre. For example, in 2010, ramin vessels were identified in paper samples taken from two books printed in and exported from Indonesia.[17] This demonstrates that ramin is identifiable in samples from paper products. However, in order to confirm that a product is not contaminated with ramin, every square centimetre of paper within a given product identified as containing MTH would need testing by a laboratory.

Indonesia is the only large-scale producer of MTH pulp

Indonesia is the only large-scale producer of pulp containing MTH.[18] Within Indonesia, there are currently only two large-scale producers of pulp using MTH - APP and Asia Pacific Resources International Holdings Limited (APRIL).[19]

Overlaying Ministry of Forestry forest cover maps with maps of concession areas shows significant clearance of peat swamp forest in timber plantation concessions supplying both APP and Asia Pacific Resources International Holdings Limited (APRIL) since the institution of the 2001 ramin logging ban, and Landsat analysis shows more recent clearance.[20] The MTH cleared from these areas is likely to be used to supply pulp mills.

The process of testing

The key steps in the lab testing process were as follows:

  1. The investigation identified a selection of paper, tissue and packaging materials and brands linked to APP paper mills with trade links to Indah Kiat Perawang and traded to a number of countries around the world. Further products where other compelling evidence of a link with Indah Kiat Perawang exists were also identified.
  2. Samples of the materials were sent to testing laboratories IPS (USA) and TU Darmstadt (Germany), both global authorities for testing of paper products, widely used by the paper industry.[21]
  3. The lab expert prepared and examined the samples under a microscope to identify the wood species used.
    • For paper and tissue products, testing was conducted on products sold as 100% virgin fibre products, to avoid potential MTH contamination via a product's recycled fibre content.
    • For multi-ply packaging boards with some layers made from recycled fibre, only those layers were tested that appeared to be made of virgin fibre (usually the topmost white layer).

Test results highlight potential links to Indah Kiat Perawang MTH pulp

Test results have confirmed the presence of MTH and acacia in a range of products using APP paper from Indonesia or China.[22]

The presence of either MTH or acacia within paper samples strongly indicates that the pulp fibre originates from Indonesia.[23]

Taken in isolation, the presence of MTH within paper samples strongly indicates a) links to rainforest clearance in Indonesia and b) links to APP or Asia Pacific Resources International Holdings Limited (APRIL), with APP the dominant player.

The presence of MTH fibre within paper samples originating from APP Indonesia or China mills with trade links to Indah Kiat Perawang indictates that the product may include fibres resulting from the indiscriminate clearance of ramin habitat; this pulpwood supply to Indah Kiat Perawang has been documented to include illegal ramin.

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Related downloads

Footnotes

[11] IPS and IfP-GmbH test results 2010-2012. Copies held by Greenpeace.
[12] Both laboratories give percentages for the content of different hardwood species found; however, these are not fully comparable due to differences in methodology.
[13] IfP-GmbH test results 2010–2012. Copies held by Greenpeace.
[14]APP (2010)
[15] IPS test results 2010–2012. Copies held by Greenpeace.
[16] IPS and IfP-GmbH test results 2010-2012. Copies held by Greenpeace.
[17] Nogúeron and Hanson (2010)
[18] Eg Pihlajamäki and Hytonen (2004). The authors are working for pulp and paper industry specialist consultancy Jaakko Pövry.
[19] The other two companies producing larger amounts of pulp, Kertas Nusantara (ex Kiani Kertas) and PT Tanjung Enim Lestari, use acacia fibre only. Source: Pirard and Cossalter (2006).
[20] Greenpeace mapping analysis 2011
[21] Following industry standard TAPPI T401. Integrated Paper Services (IPS); Institute for Paper Science and Technology, Fachgebiet für Papierfabrikation und Mechanische Verfahrenstechnik an der TU Darmstadt www.pmv.tu-darmstadt.de/fachgebietpmv_1/informativ_pmv/index.de.jsp); ITS Testing Services (UK) Ltd.
[22] IPS and IfP-GmbH test results 2010-2012. Copies held by Greenpeace.
[23] If a product contains mixed tropical hardwood (MTH), it is almost guaranteed to come from Indonesia. Other countries with tropical forest do not clearcut their natural forests for pulpwood on a commercial trade scale. Acacia pulp is also largely confined to Indonesia. In other tropical regions, eucalyptus is the principal species used in pulpwood plantations.

Global markets and brands at risk

Using trade data and company documents, the investigation identified key markets importing significant volumes of paper products from APP paper mills in Indonesia and China linked to Indah Kiat Perawang. Further investigation and forensic testing identified specific products linked to these APP paper mills that contained MTH fibre. These products, ranging from copy paper to tissue, books and packaging, come from corporate consumers and traders of APP products including Xerox, National Geographic, Danone and Walmart. Below is a list of consumer goods that contain MTH and were produced by APP paper mills linked to Indah Kiat Perawang. 

Table: Consumer product links to Indah Kiat Perawang

Table: chain of custody links between global brands and APP millsClick on the image to download the pdf of the table

 

Table: chain of custody links between global brands and APP mills

Table: chain of custody links between global brands and APP millsClick on the image to download the pdf of the table

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