Toy sector review
2011: Mattel toy brand packaging contains Mixed Tropical Hardwoods (rainforest fibre).
The Sinar Mas conglomerate's Asia Pulp & Paper (APP) group is a largely anonymous paper company, notwithstanding its claim to rank as one of the world's top three pulp and paper producers. APP's main pulp production base is Indonesia. Mixed tropical hardwood (MTH) from the clearance of Indonesia's rainforests and peat swamp forests makes up one fifth of the fibre pulped in APP's mills.
This loss of forest is pushing critically endangered species such as tigers closer to extinction as well as driving climate change.
In 2008, Staples - the world's largest office products company - stated that remaining a customer of APP would be 'a great peril to our brand'.
Riau, 2010: Active clearance of peat swamp forests in PT BDL, an APP linked concession.
According to recent data, China has overtaken the USA as the world's largest producer of paper and board by volume. Packaging production accounts for about 60% of this. Whilst the sector does use large quantities of recycled pulp, it also makes significant use of virgin fibre.
APP's main production base for paper and packaging is in China, where it characterises itself as 'The Provider of High-Quality Paper Products'. China is the second largest market after the USA for luxury packaging. APP uses virgin fibre for high-quality packaging materials.
Riau, 2010: Recent rainforest clearance of tiger habitat by APP linked supplier in Bukit Tigapuluh area.
Key sectors for packaging include food, drinks, pharmaceuticals, home and personal care products and electrical goods. APP presents a brand risk to companies within these sectors, linking them through their paper and packaging supply chains to the destruction of Indonesia's rainforests.
The toy sector is a highly visible example of consumer brands that use a lot of glossy packaging. Publically available APP figures do not make it possible to calculate the financial importance of the toy sector to the group. However, well over half of APP's packaging material is produced in China, mainly by two mills in Ningbo, Zhejiang Province. This province also hosts many large printing houses catering for the packaging needs of the toy sector.
Unlike some progressive companies such as Unilever or Nestlé, top players in the toy sector seem oblivious to the risk to their brands through links to deforestation.
Forensic evidence links the toy sector to Indonesian rainforest destruction
Indonesia is the only large-scale producer of either MTH or acacia pulp. Within Indonesia, there are only two large-scale producers of pulp using MTH - APP and APRIL. APRIL does not produce packaging materials in Indonesia, suggesting that APP is the predominant producer of any packaging material with MTH content.
In China, there are only three obvious routes by which MTH can appear in packaging products: firstly, through importing packaging board from Indonesia, where APP is the major producer; secondly, through importing from APP or APRIL MTH pulp that is subsequently made into packaging material in China; and thirdly, through importing chipped logs from rainforest clearance in Indonesia that are subsequently pulped and then made into packaging material in China.
APP is one of the largest producers of paper and packaging in China.
Two thirds of APP China's pulp production in 2009 was based on imported wood, from countries including Indonesia. Additionally, APP China imports almost one third of its pulp needs, including from Indonesia. Given that APP China materials contain MTH, it is most logical that this is imported from APP Indonesia. Unlike other pulp companies, APP does not advertise its pulp for sale on the open market or on its website.
APP sources mixed tropical hardwoods (MTH) to produce high-quality virgin pulp for use in copy paper, tissue paper, packaging and glossy print materials. In fact, it has estimated that about 20% of the fibre going into its pulp mills comes from clearance of natural forest. The remainder comes from plantations - largely acacia.
Greenpeace investigations have sought to identify corporate consumers within the toy sector using packaging products manufactured in China or Indonesia with links to rainforest destruction and links to APP.
The key steps for Greenpeace's investigation were as follows:
- Greenpeace identified a selection of leading brands of toy products in a number of countries around the world.
- Greenpeace sent samples of the packaging materials to IPS, the global authority for testing of paper products, widely used by the paper sector.
- An IPS expert prepared and examined the packaging samples under a forensic microscope to identify the wood species used.
- In most cases, the virgin fibre content of the glossy top layer of packaging board was examined to identify the share of MTH - mixed tropical hardwood - or acacia fibre in the packaging.
- The presence of either MTH or acacia strongly indicates that the pulp fibre originates from Indonesia.
IPS has confirmed the presence of MTH and acacia in a range of samples. This forensic evidence links major players in the toy sector to the destruction of Indonesia's rainforests.
Having established a link between the packaging used by several major toy brands and the destruction of the Indonesian rainforest, Greenpeace investigations sought to confirm the trade link to APP.
Greenpeace investigations link the toy sector to APP
Mattel brand packaging containing MTH (rainforest fibre), printed by Sansico.
Many top brands within the toy sector are manufactured in China and Indonesia and are marketed in a lot of glossy packaging.
None of leading toy manufacturers Mattel, Disney, Hasbro and LEGO has organisation-wide policies to ensure that neither it nor any of its third-party suppliers or licensees are contributing to the destruction of the world's remaining rainforests.
Greenpeace decided to investigate whether there were trade links within Indonesia and China between APP and major players in the toy sector.
The key steps for the investigation were as follows:
- Greenpeace sourced a selection of toy products from leading brands in a number of countries around the world.
- Greenpeace identified and investigated printing houses or packaging manufacturers from the packaging, where possible.
- Greenpeace identified APP corporate consumers through trade data, publicity materials and confidential sources.
The investigations show that packaging for Mattel-, Disney-, LEGO- and Hasbro-branded merchandise is made using APP paper.
These investigations are just the tip of the iceberg in terms of revealing the potential scale of the trade links within Indonesia and China between the toy sector and APP, as well as the impact on Indonesia's rainforests.
Most consumer products are sold with packaging. In the absence of strong corporate procurement policies, any company or brand sourcing paper products from China or Indonesia is at risk of being linked to APP and of driving destruction of Indonesia's rainforests.