In recent years, global paper giants Asia Pulp & Paper (APP) and Asia Pacific Resources International Holdings Limited (APRIL) have made heavily publicized commitments to have “zero deforestation” and respect for human rights in their supply chains. Yet official wood utilization reports compiled by the Indonesian government show that in 2017 both companies purchased wood from PT Fajar Surya Swadaya, an East Kalimantan concession-holder, which has cleared nearly 20,000 hectares (ha) of natural forest since 2013. APP also purchased wood from PT Silva Rimba Lestari, another East Kalimantan forestry company which has cleared more than 12,000 ha of natural forest during the same period.
In 2015, following Indonesia’s disastrous forest and peatland fires, Asia Pulp & Paper (APP) – Indonesia’s largest pulp and paper producer – denied owning or controlling two forest plantation companies in Sumatra that had experienced some of the worst burning. While acknowledging that PT Bumi Mekar Hijau and PT Sebangun Bumi Andalas Wood Industries are suppliers of wood fiber to the group’s pulp mills, APP claimed the companies are “independently owned and operated.” Yet a detailed analysis of those firms’ corporate registry documents show apparent close links with the Sinar Mas Group, APP’s parent conglomerate.
On the eve of the fifth anniversary of APP’s Forest Conservation Policy (FCP), the undersigned NGOs highlight five issues that indicate the company is not yet on a sustainable track and progress on its commitments has not been sufficient.
A coalition of Indonesian NGOs, dubbed the ‘Break Free From Coal’ coalition, has called for nine planned coal power plants to be dropped from the power supply plan due to concerns around massive supply overcapacity, which would lead to substantial financial and economic loss.
The Anti Forest-Mafia Coalition files a report on seven sawmill companies operating in the province of Papua for allegedly violating both the regulations of SVLK (Timber Legality Assurance System) and international timber trade. Despite having obtained timber legality certification (S-LK), those companies were found illegally collecting processed wood from natural forest areas.
An analysis—a collaboration between Oil Change International and Auriga—finds that loan guarantees for coal projects through 2017 alone could end up costing between $2.1 billion and $4 billion, and could rise as loan guarantees expand beyond 2017. Billions of dollars in additional risk is being created through business variability guarantees and by state-owned enterprises assuming currency risk in new coal power plant contracts.
Indonesia's electricity plans are dominated by dirty coal-fired power plants, which not only create environmental problems, but also create significant financial risks for the Government of Indonesia and for Indonesian electricity consumers. Guarantees and similar policies that benefit coal power plants in Indonesia could result in losses to the Government of Indonesia that reach tens trillions of rupiah - billions of U.S dollars. These financial risks arise from a combination of risk insurance (guarantees) and credit enhancement programs for dirty coal electricity projects.
Jakarta, 5 February 2017 - It is a wonder to look at how progressive are the policymakers when deliberating the new bill on oil palm (RUU Perkelapasawitan). The bill, included within 2017 prioritized bill just two months ago, has already been in harmonization process. Yet, if we look closely, the bill doesn’t seem like what it promises.
Jakarta, 2 February 2015 - In light of forest and peat forest that is coming closer, the prioritized peat restoration assigned to Peat Restoration Agency meets an obstacle from corporation. Ironically, such reticence is somehow supported by Environment and Forestry Ministry (KLHK) with its secretary general saying that the peat agency has no capacity whatsoever to issue an order towards concession holders.
On December 23, 2016 Asia Pulp & Paper (APP) announced it had started production at one of the largest pulp and tissue mills in the world. The company promotes the project in Ogan Komering Ilir (OKI), South Sumatra as an engine for Indonesia’s economic development and promises it will create thousands of jobs. But the OKI mill comes with high costs for Indonesia and the global environment: the mill’s wood supply is grown mostly on drained peatlands, a production system that causes extremely high carbon emissions and, at times, catastrophic fires.