Wednesday, August 25, 2010

APP - good or bad? An interview with the sustainability manager of the world's most controversial paper company

Asia Pulp & Paper (APP) is one of the largest pulp and paper companies in the world. It has also long been a target of green groups for its logging practices.

Two latest examples include RAN's report "Turning The Page on Rainforest Destruction", where APP is described as "highly controversial Indonesian pulp and paper supplier" and Greenpeace report "How Sinar Mas is pulping the planet", where they claim that APP "is destroying Indonesia’s rainforests and carbon-rich peatlands."

As I wrote here before I also had the chance to read an interesting article on Environmental Leader of Ian Lifshitz, Sustainability & Public Outreach Manager at APP, entitled "Balancing Sustainability with Economic Development in Developing Countries – The Case Study of Indonesia", where he describes the situation in Indonesia from his point of view.

I share the concerns brought up by Greenpeace and RAN, and I also don't agree with Ian Lifshitz on some of the points he made on his article. Nevertheless, I believe in the importance of an open dialogue, especially with those whom you don't agree with. I think this is an effective way to achieve positive progress and that's why I asked Ian to interview him on our blog, an offer which he gladly accepted.

Hello Ian. Can you tell us more about your job as a sustainability manager at APP?

My role as Sustainability Manager is part educator and part advocate. As an educator, it’s my responsibility to educate North American audiences about the balanced approach developing countries such as Indonesia need to take between social and economic priorities. As an advocate, it is also my role to promote globally recognized forest certification schemes, demonstrating that companies like APP are managing their business in a sustainable fashion.

What changes have you seen at APP when it comes to sustainability in the last couple of years? What were the main drivers to these changes?

APP has a set of priorities in its sustainable development plan, which are aligned with those of Indonesia and other developing countries in Asia. These priorities cover three aspects: economic development to alleviate poverty, social welfare, and environmental protection, all of which need to be addressed to attain balanced outcomes. To this end, APP’s operations in Indonesia follow strict protocols to assess conservation values and environmental impacts in line with the laws and regulations of the Indonesian government. APP also implements and maintains stringent, rigorous, externally audited Legal Origin Verification (LoV) and Chain of Custody (CoC) systems and protocols, which ensure our pulpwood supply is sourced legally and sustainably.

In addition to operational sustainability efforts, APP and its pulpwood suppliers play a leading role in the sustainable protection of endangered flora and fauna. We collaborate on four major large-landscape forest protection programs, including:

- The Giam Siak Kecil - Bukit Batu Biosphere Reserve in Riau province, Sumatra, a 172,000 hectare UNESCO-approved wildlife reserve.

- The Taman Raja Nature Preserve in Jambi province, Sumatra, a protected 10,000 hectare nature reserve.

- The Senepis Sumatran Tiger Sanctuary in Riau province, Sumatra, which include 110,000 hectares of protected tiger habitat.

-The Kutai Orangutan Program in Kalimantan.

In total, APP’s pulpwood suppliers set aside nearly 500,000 hectares for pure forest conservation efforts. No other company in the pulp and paper industry worldwide has ever implemented conservation and carbon storage initiatives similar to these on such a scale.

What's your definition for a sustainably sourced paper?

When managed sustainably, the pulp and paper making industry, unlike the fossil fuel and mining industries, is harvesting a 100% renewable, recyclable resource. The vast majority of APP’s fiber supply comes from sustainable plantation forestry, which means the trees are planted expressly for the purpose of pulp production. In fact, in Indonesia, APP suppliers plant around 200 million trees per year and, by planting more trees than are harvested, we are progressively contributing to an increase in the country’s forested area.

Plantations mostly consist of Acacia mangium, Acacia crassicarpa and Eucalyptus pelita tree species that have been selected for their fast growth and suitability to a tropical environment. These trees can be harvested after 6 years from planting, which is significantly more productive compared to trees in Northern temperate or boreal regions that can take up to 60 years before harvesting. Therefore, plantation forest in the tropics can yield the same amount of trees with a much smaller footprint, and thus smaller environmental impact, than plantations in the Northern regions.

APP’s fiber supplier’s pulpwood plantations are not monoculture, or made up of a single tree species. We use the mosaic plantation concept, which interlinks plantations with greenbelts, corridors and other conservation areas that help to ensure the protection of biodiversity and provide habitats for wildlife.

Can you tell us about the working conditions of the people working for APP in Indonesia?

In Indonesia, approximately 60 percent of the population lives in rural areas where forestry and/or agriculture are the main source of economic livelihood. APP has created more than 70,000 jobs in Indonesia and the company remains an important source of economic development in the country.

In addition to job creation, APP is committed to enhancing the communities in which we operate. During my visit in Indonesia I have seen APP deploy community-based programs including providing both land and water to local farmers, drinking water to communities during the dry season; educational opportunities through scholarships, healthcare support through subsidizing check-ups, clinics, environmental protection through conservation projects, rigorous standards at mills, and support for local NGOs.

What's your response to the agreement between Indonesia and Norway, where Norway will pay Indonesia $1 billion in return to “A two-year suspension on new concessions on conversion of natural forests and peat lands into plantations will be implemented"? How it will influence APP?

APP is committed to the sustainable development of Indonesia and is dedicated to supporting the Indonesian government and its policies of achieving its environmental and development goals.

A proposed two-year moratorium would be welcomed by APP. A moratorium, or freeze, is not uncommon in other industries worldwide, such as commercial fishing, and has a proven track record of allowing those industries to review and re-assess their sustainability issues, while allowing a period for dialogue between governments, NGOs and other third parties.

Once the final agreement between the governments of Norway and Indonesia is signed and made into law, APP will assess how it will support the objectives of this new partnership.

Last month Greenpeace published a report (Sinar Mas Pulping the Planet) that includes serious accusations against APP. At the same time, I understand that you deny any wrongdoing. This might create further confusion with the public over what is happening in the Indonesia - who should we believe here, APP or Greenpeace? Why?

To be clear, the report is unequivocally inaccurate and deliberately misleading. APP is committed to transparency, and we open our doors to credible and responsible NGOs to examine our products to understand the sustainable aspects of our raw materials and company.

Rather than investing their resources to work against us, we invite NGOs to examine our operations and work with us to seek new solutions that balance the complex and interconnected needs of the developing world. Regrettably, instead of contacting APP to have a meaningful dialogue, Greenpeace published this report, making false and misleading claims about our sustainability commitments. Below, I have highlighted some of the inaccurate claims in the report, and provide the facts of our operations.

- Greenpeace’s claim of a ‘secret’ plan by APP to increase its current pulping capacity by up to seven times, is simply false. Indonesia’s regulations require transparency for such expansion plans to be approved and supported by different levels of the provincial and central governments. Additionally, Greenpeace’s allegation is illogical since roughly an additional 20 million acres of gross pulpwood concession area would be needed to achieve the purported increase in production, yet currently in Indonesia, there is only some 14 million acres of land allocated for such plantations

- Contrary to Greenpeace allegations, APP’s pulpwood suppliers only operate on land that the government has expressly set aside for pulpwood plantation development. All of APP pulpwood suppliers’ land is subject to rigorous, multiple socio‐environment assessments, including an environmental impact assessment, as well as micro and macro‐delineation by independent third parties. This ensures that high‐conservation value areas, such as critical peatland which the government identifies as protected, remains protected.

- Finally, Greenpeace accuses APP of compromising the habitat of endangered animals such as the Sumatran Tiger. Again, this simply is not true. APP supported the conservation of261,930 acres of production forest that has been set aside by its pulpwood suppliers and other concession holder, to serve as the core of the Senepis Sumatran Tiger Sanctuary in the Riau province, a pioneering initiative that is a vital contribution to the survival of this species, not its extinction.

The Environmental Leader reported that "Several leading companies have already responded to Greenpeace evidence of the Sinar Mas conglomerate’s “illegal” environmental and deforestation practices in Indonesia and are canceling their contracts with the Indonesian palm oil and paper giant." - What's your response to this?

APP is a brand umbrella for paper products manufactured by several pulp and paper companies in Indonesia and China. APP operates independently from PT. SMART Tbk's palm oil with different entities, management and shareholders.

Despite the circulating rumours started by the GP report, overall volume of APP products to customers has not been impacted upon. Most our associates know that these rumours are unfounded.

This is not the first time when we see a pattern of a campaign of an NGO focusing on APP that is followed by big companies that stop doing business with APP (here's one example) - Did you ever try to engage with these NGOs and if you did, what was their response?

To underscore what I wrote in my original Environmental Leader post on May 28th, like any business, APP loses—and gains—customers on a daily basis and this is not an uncommon occurrence in any industry. Customers are motivated by various business decisions. By the same token, some companies are the victims of distorted campaigns by NGOs who promote misinformation about APP’s record to unfairly pressure these companies. Some of that pressure includes insisting that our customers only source FSC-certified materials, a standard that NGOs founded and arbitrarily favor, despite the existence of other recognized certifications.

Due to FSC Principles 6 and 10 that eliminate plantations developed after 1994 to be eligible for FSC certification, it is nearly impossible to obtain FSC certificated pulp and paper product in Asia unless the raw material is imported. Only 10 percent of the world’s forests are certified, and less than two percent of Asia’s forests are certified. As an alternative, APP has sought and achieved PEFC certification, a larger global certification scheme which is internationally recognized and that accounts for more than two-times as many hectares of forest as FSC.

APP is always eager to work with those NGOs and conservation groups that take an interest in exploring responsible and truly equitable solutions to the variety of challenges facing Indonesian forests and communities.

No business is perfect. There is always room for improvement. While APP is proud of its sustainability accomplishments, we are willing and eager to work with NGOs to continue making progress in these vital areas. We believe there is more we can learn from credible international NGOs and their experiences working in developed countries to build sustainability into business operations. Together we can work on crafting balanced solutions for the developing world – one that is striving to improve living standards and economic development in an environmentally sustainable way.

What's your vision for APP in 5 or 10 years from now? Is it more likely that we'll see major changes in the way you do business in Indonesia including new collaborations with NGOs, or would it be more of the same?

The dynamics of forestry in the developing world are vastly different compared to North America and Europe, and as such APP is often seen within the industry as challenging the model of the traditional pulp and paper-making companies.

APP is helping Indonesia develop a sustainable forestry and pulp and paper industry. We respect the rights and opinions of NGOs with regard to sustainability and environmental issues in Indonesia, China and elsewhere. Yet APP does not often receive the same respect in turn, APP and NGOs share many of the same objectives and we feel strongly that we can work together toward achieving our joint objectives, now and in the future.

Without question, we continue to desire to work with NGOs that are prepared to take a broad, balanced and responsible view of sustainability issues and the importance of poverty alleviation in Indonesia and elsewhere.

Is there a possibility that you will ask a neutral body to assess the Greenpeace report like Sinar Mas Group did to assess Greenpeace’s claims in the past?

APP is committed to transparency, and we open our doors to credible NGOs to examine our products and to understand how our sustainability commitments balance the complex and interconnected needs of the developing world.

Recently APP published ‘Getting the Facts Down on Paper’ a report outlining the company’s commitment to sustainability in Indonesia. This report describes how APP has been fulfilling its obligations to operate in a sustainable and environmentally conscious way. In the report we respond to allegations made by NGOs, including WWF and Greenpeace.

To further validate the report’s findings, APP worked with Mazars - an independent auditor, operating in 56 countries worldwide. The audit conducted by Mazars found that the facts contained in the APP report were accurate and, therefore, recent, allegations made by environmental NGOs were indeed inaccurate. This is of significant importance as the information contained in the APP report also rebuts the statements made by Greenpeace, their recent report and letter regarding the activities of APP.

At APP, we look forward to future opportunities to work side-by-side with members of the NGO community to develop solutions to the unique challenges of conducting sustainability efforts along with providing much needed economic development in Indonesia.

Do you think that you're losing or winning the battle on public opinion?

I don’t believe it is a win or lose scenario. There is a lot of miss-information about APP in the marketplace and we welcome the chance to help educate the public and other important stakeholders about our sustainability commitments.

I would like to thank Ian for taking the time to reply my questions and I would also invite you all to add your comments, questions and any other feedback you have on this issue.

Raz @ Eco-Libris

Eco-Libris: Promoting sustainable reading!


Inky McFee said...

Thanks for letting APP put their spin on this Raz - but - as an Australian (and owner of a printing company) who has spent time in Indonesia, there is no way i would have any faith in what APP or Sinar Mas has to say. Whilst I am critical at times of Greenpeace and WWF, i have to say that i would rather err on the side of the environment at large, rather than risk being misled once again by APP. Interestingly, they have been showing ads spinning their point of view on Australian Television recently, probably in an attempt to rebuild their image after being found to have misled purchasers of APP sourced toilet paper that was being sold by Australia's leading supermarket group, Woolworths. You can see the ad here ( )

Anonymous said...

APP should be teaching classes in spin. At the beginning Ian goes on and on about transparency, then leans on the "Getting the Facts Down on Paper" report which is not transparent at all.

We are supposed to be blown away by the fact they hired this company to vouch for them? People are not going to be fooled by their distortions no matter how many ads they buy.

WWF Indonesia has a very clear response to this report, I include a critical excerpt from it and provide a link below, which everyone should read.

"WWF invites those who want to see to come and verify for themselves. This invitation especially goes to Mazars, the latest in a series of contractors hired to ‘assure’ the public about SMG/APP’s record. Actually, Mazars distanced itself from its ‘assurance report’ for SMG/APP even in its cover letter explaining that the “Board of Directors of the [SMG/APP] Companies [who hired Mazars] are responsible for both the subject matter and the evaluation criteria. The Mazars ‘assurance report’ itself, nor any of the SMG/APP specific references APP quoted in its audited CSR report are publicly available. No published NGO report on SMG/APP operations was referenced in the APP’s audited CSR report, therefore not verified by Mazars. The public is thus provided with nothing but a cover letter on an unpublished ‘assurance report’ about documents that are not made available to public."