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June 30, 2004
How Sustainable Is the Asia Pulp & Paper Sustainability Action Plan?
    by William Baue

WWF Indonesia calls off its partnership with Asia Pulp & Paper after the company fails to implement commitments to end sourcing of illegal timber (part three of a three-part article.)


On August 19, 2003, Asia Pulp & Paper (APP) signed a Letter of Intent (LoI) to adhere to all national laws in its Indonesian timber operations with WWF Indonesia, a branch of the nongovernmental organization (NGO) Worldwide Fund for Nature (WWF). (WWF's Macroeconomics Program Office co-sponsored the seminal Profits for Paper study cited in parts one and two of this three-part article.) The agreement, which addressed four issues (high conservation value forests, legality of wood supply, recognition of community rights, and sustainability of wood supply), covered a six-month period ending in February 2004. WWF chose not to renew the LoI because the company "was unwilling to stop purchasing raw material from sources whose legality could not be assured," among other reasons.

This according to a report WWF Indonesia released on June 8 that analyzes the legality of timber consumed in the first ten months of 2003 by APP's pulp mills in Riau and Jambi, Sumatra. The report is based on an audit conducted by the Indonesian Ecolabelling Institute (LEI).

"In the space of only ten months in 2003, APP’s Indonesia pulp mills consumed almost 4 million cubic meters of timber whose legality was far from certain," the report states. "This timber, which made up more than one third of APP’s consumption for that period, was purchased from land clearing operations with authorization from district governments."

"According to national law, such district permits are only legal if they are located outside the national forest estate, but according to the results of the LEI legal origin verification exercise, this was often not the case," the report continues.

Of the five district permit sites LEI visited, the auditors could only identify one that was located outside the national forest estate and appeared to be operating legally. The largest site, the Mapala Rabda industrial timber plantation, was operating inside the national forest under a license granted in July 2002, four months after a February 2002 prohibition outlawing the issuance of such licenses for operating inside the national forest.

The report also expresses concern over APP's Sustainability Action Plan ( SAP).

"APP's SAP fails to address the fact that more than one third of APP's fiber supplies in 2003 were from sources that are legally questionable," said Patrick Anderson, a consultant for WWF Indonesia. "The SAP also accelerates the conversion of natural forests, and has overly ambitious rates of plantation establishment and yield from plantations."

"It will fail to achieve sustainability while leading to the destruction of another half million acres of rainforest--a quarter million acres destroyed by APP's own conversion of rainforests, and a quarter million destroyed by others who supply wood to APP's mills," Mr. Anderson told SocialFunds.com.

Mr. Anderson also extrapolates the implications of how APP's SAP implementation might affect Indonesia itself and sustainable timber, pulp, and paper production globally.

"Despite the SAP's plans to end sourcing from natural forests within 3 years, APP will very likely keep using natural forest wood, which is a very cheap source of fiber, as long as it is available, contributing to deforestation and impoverishment of local communities in Sumatra, Indonesia," said Mr. Anderson. "If APP had to grow all the fiber it uses,
or buy it on the open market, its costs would go up considerably."

"APP's use of large amounts of legally questionable wood is another factor keeping its costs low in comparison to companies that strictly avoid illegal or legally uncertain wood supplies," he added.

However, some feel that completely writing off APP's Sustainability Action Plan may be missing the forest for the trees.

"I feel that any move down the path of sustainability is good, but I feel emphatically that it must be an ongoing process--even the standards themselves have to get better," said Gary Dunning, executive director of Yale University's Global Institute of Sustainable Forestry (GISF). "I think all [sustainability standards and certifications] are trying to, in a very positive way, progress the debate about what sustainable forestry is and how we measure it."

"APP has plans for where it wants to be on the sustainability scale in the future--the quicker they can get there, the better, but the fact that they're moving and people are assessing that movement is a very positive thing," Mr. Dunning told SocialFunds.com.


Part one of this three-part article discusses how unsustainable forestry practices in Indonesia impact sustainable forestry practices in the US; part two explores how international financial institutions and the pulp and paper companies operating in Indonesia are addressing unsustainable forestry practices.

 

 
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