APP trades paper from deforestation globally
Within the Sinar Mas Group (SMG) are companies operating across a diverse range of sectors, and it describes itself as 'one of the world's largest natural resource based companies'. Sectors in which SMG is actively expanding include pulp and paper, palm oil and coal.
Asia Pulp & Paper (APP), Sinar Mas's pulp & paper division, claims to rank as one of the world’s top three pulp and paper producers.
APP’s main pulp production base is Indonesia, and the division is responsible for around 40% of Indonesia's total pulp production.The APP Group is dependent upon clearance of natural rainforests by affiliate companies within SMG to meet its production needs. Logs from the clearance of Indonesia’s rainforests, including peat swamp forests, accounted for about 20% of the fibre pulped in APP's mills between 2007 and 2009.
China is now the main production base for APP paper, packaging and tissue products. APP's facilities in Indonesia and China produce packaging papers and products for many global brands across sectors, from food to electronics, cosmetics, footwear, cigarettes and toys.
In July 2010 Greenpeace International released the report 'How Sinar Mas is pulping the planet'. On-the-ground investigations documented the impacts of SMG/APP operations in Bukit Tigapuluh and Kerumutan on the island of Sumatra. Actions included clearance of deep peat and tiger habitat. Report investigations revealed massive expansion ambitions in terms of areas for future clearing as well as aspirations for pulp mill capacity expansion in Indonesia.
A growing number of corporate consumers who were buying products produced by APP, many identified in Greenpeace investigations, have now introduced policies that will eliminate products from companies linked to deforestation in their supply chains. These companies include Kraft, Nestlé, Unilever, Carrefour, Tesco, Auchan, LeClerc, Corporate Express and Adidas.
Same family, same logo, different business development strategy
Led by Franky Widjaja, the Sinar Mas palm oil division, Golden Agri Resources (GAR), is introducing a new forest conservation policy 'to ensure that its palm oil operations have no deforestation footprint. Core to this is [...] no development on peat lands' – in effect, this is a business development model that avoids deforestation.
By contrast, APP – led by Franky’s brother, Teguh Widjaja – is rapidly expanding its global empire through acquisition of pulp and paper mills, with the goal of becoming the world's largest paper company. Company statements confirm that Indonesia will remain a key resource base for pulp production, and it will continue to use rainforest logs to feed its production – in effect, pursuing a deforestation-dependent business development model.
APP has hired Cohn and Wolfe, a subsidiary of the world's largest PR group, WPP, to help portray it as a conservation-led company. Recent PR statements include support for the Indonesian President's two-year moratorium on the issuance of new concessions on peatlands and in forests. However, the May 2011 moratorium announcement only covers areas of primary forest and peatland outside existing concessions.
Mapping analysis by Greenpeace shows that millions of hectares of wildlife habitat and carbon-rich peatland remain threatened by pulp sector expansion. Rainforest areas targeted by APP remain unprotected by the moratorium. Forest clearance within these areas would drive climate change and push species such as the Sumatran tiger one step closer to extinction.
APP is pulping Indonesia’s rainforests
Riau, 2008: Stockpiles of logs at APP's Indah Kiat Perawang pulp mill.
© Greenpeace / Daniel Beltra.
APP has repeatedly promised over the past decade to become fully reliant on renewable plantation fibre - initially by 2007, subsequently revised to 2009 - and to end its dependence on logs from rainforest clearance in Indonesia. In 2011, APP's head of sustainability, Aida Greenbury, repeated the commitment to meet this target by the end of 2015 - eight years after the initially promised date.
In 2010, APP stated that about 20% of the fibre going into its Indonesian pulp mills in the preceding year came from clearance of natural forest. Currently, the majority of this clearance is taking place within concession areas in Riau and Jambi.
A 2007 confidential SMG/APP document identified millions of hectares of concession areas the company was targeting to meet existing production needs and allow for potential expansion in Indonesian pulp mill production. Two million hectares were targeted in Kalimantan and Sumatra.
Greenpeace analysis of government and company-related documents confirms that as of December 2010, SMG/APP had increased its supply concession area by at least 800,000 hectares. The status of the remaining targeted area remains unclear. Mapping analysis shows that about 40% of the additional area now owned by SMG/APP or for which SMG/APP has been granted preliminary approval was still forested in 2006, including significant areas of wildlife habitat and peatland.
Within the Sumatran provinces of Riau and Jambi alone, SMG/APP was aiming to expand its concessions by 900,000 hectares between 2007 and 2009. In 2006, over half of this area was forested and a quarter of it was peatland. By the end of 2007, over half of these targeted expansion concessions had either been approved by the Indonesian government or were in the process of being acquired by SMG/APP.
Two of the largest areas targeted by SMG/APP for expansion were the Bukit Tigapuluh Forest Landscape, stretching across Riau and Jambi provinces, and the Kerumutan Peat Swamp Forest in Riau. Mapping analysis by Greenpeace published in July 2010 identified the areas of forest, peatland and wildlife habitat targeted for expansion. The maps were accompanied by photographic evidence of recent or ongoing deforestation within newly acquired concessions.
Greenpeace 2011 investigations and analysis show that SMG/APP expansion continues in these areas in line with the 2007 plan.
Greenpeace investigations expose the impacts of APP
Jambi, 2010: APP linked pulpwood plantations in area that was previously rainforest.
Independent analysis of the impact of pulp and palm oil sector operations is hampered by lack of government and industry transparency; this includes difficulty in acquiring current or sufficiently detailed data. Such deficiencies in data quality and other evidence available from official sources mean that the analysis must be understood as an indicative risk assessment, and some elements need to be confirmed through field validation. On the regional scale, any margins of error within the source data even out, though any biases in assumptions behind values estimations – eg, a conservative estimate of peatland carbon stores – are amplified.
Despite these limitations, using best available official, government and expert sources, Greenpeace has employed several techniques to assess the risk SMG/APP operations and expansion plans pose to areas of forest, peatland and wildlife habitat and to monitor the impact of these operations.
Greenpeace assessment of landscape values is based on a number of sources including the Ministry of Forestry 2006 landcover map, United Nations Environment Program (UNEP) Bornean orang-utan habitat maps, WWF/WCS/Smithsonian and NFWF-STF priority tiger conservation landscapes, and Wetlands International peatland maps.
Concession data is compiled from various government sources. Data on industrial timber plantations (HTI) are available from the Ministry of Forestry. These do not identify companies controlling the concessions.
These methods are often used by governments, conservation groups and even companies holding concessions, including Sinar Mas, to assess risk and monitor change.
There are several tiers of analysis:
Risk mapping (spatial analysis)
1) Map company operations: this requires knowledge of concession boundaries. Sinar Mas does not make these publicly available, thereby hampering public scrutiny of its operations. While the Ministry of Forestry make available maps showing fully licensed pulpwood concessions, these are not always up to date and do not detail ownership beyond naming the concessionaires, which are different for almost every concession. Best available information for SMG/APP concessionaires must be compiled from a variety of sources including the Ministry of Forestry, internal company documents, district registry offices, conservation organisations and environmental assessors.
2) Map ecological values: using best available spatial mapping data (Geographic Information System, GIS) from the Ministry of Forestry, Wetlands International, United Nations Environment Program (UNEP), expert conservation groups and other authorities, GIS experts use these data layers to create an ecosystem vision. This shows, for instance, at a landscape level, quality of forest cover, expanse and depth of peatland, identified key biodiversity conservation areas and orang-utan and tiger habitat. A list of core data sets is provided below.
3) Risk analysis: identify where ecological values meriting protection fall within concession areas.
Impact mapping (temporal analysis)
1) Compare satellite imagery covering the relevant time frame: one method of determining the extent of forest clearance within a concession area is to analyse and compare satellite images from multiple dates. Unlike the Brazilian Amazon, which has one month of relatively cloud-free skies, Indonesia’s land area is often obscured by thick cloud cover, rendering satellite images of limited use in assessing changes in land cover.
2) Overlay satellite analysis with ecological values maps and concession boundaries to determine changes in the quality or extent of values within a concession area.
Field investigations and aerial monitoring (ground truthing)
1) Determine priority areas for investigation based on ecological risk analysis, impact analyses and other intelligence suggestive of potential active clearance.
2) Conduct overflight surveillance of groups of concessions to verify and document active clearance and infrastructural development within areas identified by risk mapping as holding important ecological values.
3) Gain access to concession areas to obtain documentary evidence of ecological and social values impacted by company operations. Where possible logistically, this may include evidence of peat depth, the presence of orang-utans (eg nests) or tigers (eg pawprints), quality of forest and legal compliance in operations. Further intelligence may be gathered through testimonies from workers and communities.
Land use zones:
The Ministry of Forestry makes available landuse maps. However, these maps are outdated for the provinces of Riau and Central Kalimantan. For the purposes of analysis, Greenpeace uses the 2007 draft Riau provincial planning map.
The most recent year for which Ministry of Forestry land cover data are available is 2006.
The best available landscape-level peatland maps of Indonesia were done by Wetlands International.
Bornean orang-utan habitat: The best available landscape-level orang-utan habitat maps are made available by United Nations Environment Programme (UNEP), first published in 2004 and subsequently updated.
Sumatran tiger habitat: Priority Tiger Conservation Landscape maps were developed by a coalition including WWF, WCS, Smithsonian and NFWF-STF. These identify large areas able to support a substantial number of tigers. They do not include smaller habitat areas that are also important for tiger conservation. Thus, for the purposes of analysis, Greenpeace uses habitat maps made available by WWF.
Given rapid deforestation, Greenpeace overlays this with Ministry of Forestry land cover data. Thus, the data represent 'forested' habitat as of 2006.
Data on coal concessions are not available from the Indonesian government. Maps of coal concessions may be purchased from the Indonesian Coal Mining association (Asosiasi Pertambangan Batubara Indonesia). Greenpeace has digitised 2009 data for Sumatra and Kalimantan, the principal areas targeted for coal development. Additional data subsequently became available, in November 2010. Thus, the dataset used for analysis must be understood as incomplete. Greenpeace would welcome coal concession data being centrally and freely available.
2. Oil palm
Data on oil palm concessions are not readily available centrally from the Indonesian government. The datasets used for analysis are based on 2006–2008 data compiled by several sources and partially updated by Greenpeace. The ultimate provenance is central and regional government agencies including the National Land Agency (BPN), the Agriculture Agency (DISBUN) and Regional Planning Agencies (Bapeda). Additionally, the Ministry of Forestry has made available partial data on concessions within the Forest Estate (this includes rubber as well as oil palm plantations). Given the lack of sector transparency, the dataset used for analysis must be understood as partial, best-available information. Greenpeace would welcome oil palm concession data being centrally and freely available.
Industrial timber plantations (HTI) are largely pulpwood plantations. Data on industrial timber plantations are available from the Indonesian Ministry of Forestry, but these do not identify the companies controlling the concessions. Greenpeace would welcome more comprehensive HTI concession data being made available.
4. Selective logging/ HPH
Data on selective logging concessions are available from the Ministry of Forestry.