Asia Pulp & Paper (APP) Group, an Indonesian pulp and paper mill company, is the newest member of the World Business Council for Sustainable Development (WBCSD) a CEO-led global organization of more than 200 leading companies & partners working together to accelerate the transition to sustainable development.
WBCSD President & CEO, Peter Bakker, said he was delighted to welcome APP as the newest member of the WBCSD network. Their dedication to sustainability, exemplified through the Sustainability Roadmap, aligns with WBCSD’s mission to drive the transition to a world where 9+ billion people can live well, within planetary boundaries.
“We look forward to the collaborative impact that APP will bring to our network, strengthening our collective efforts to transform industries and societies towards a sustainable future,” Mr Bakker said in an official WBCSD statement, Friday (26/4/2024).
APP Group companies meet global demand for tissue, packaging and paper products in more than 150 countries. With APP joining the WBCSD, they are ready to further strengthen their sustainable development efforts and integrate sustainability principles into their business operations.
Andrie Setiawan Yapsir, Director of APP Group, claimed APP has implemented a comprehensive sustainability approach and is committed to transparent Environmental Social Governance (ESG) disclosure. Their environmental, social and corporate governance (ERM) risk management is aligned with key ESG risks.
APP’s participation as a WBCSD member, Yapsir said, aims to advance progress toward achieving ambitious sustainability goals – including net zero emissions by 2050, setting forest conservation targets, upholding human rights, promoting inclusion and diversity, and maintaining transparency in accordance with International Financial Reporting Standards (IFRS).
“Joining the WBCSD is an important step for APP Group in strengthening our dedication to environmental and social responsibility and reassuring stakeholders of our commitment to not only meet but exceed global standards. This collaboration is in line with our goals, set out in our Sustainability Roadmap Vision 2030, and allows us to further enhance our capacity to implement effective solutions for a sustainable future,” Yapsir said.
Facing the future, APP remains determined to translate its sustainability ambitions into action. For APP, joining the WBCSD is more than just a membership; it is a commitment to lead, innovate and transform. Together with WBCSD and its members, APP is dedicated to contributing to a global agenda that balances the needs of people and the planet.
Is APP’s Business Sustainable?
Greenpeace Indonesia has responded to APP Group-Sinarmas’ acceptance as a member of the World Business Council for Sustainable Development (WBCSD). According to Arie Rompas, Greenpeace Indonesia Forest Campaigner, this acceptance raises a number of notes that need to be considered.
“First, it is related to APP’s seriousness in implementing sustainability policies for all its business groups. Second, transparency in the management of concessions under their control or affiliated with them, and third, transparency in the ownership of companies connected to APP,” Arie told Tangkasi.id, Friday (26/4/2024).
APP launched its forest conservation policy (FCP) in 2013 and committed to end forest clearance within its own and suppliers’ concessions, protect remaining forests in those areas, improve peatland management and work with communities to resolve social conflicts.
However, according to Greenpeace, unfortunately in the last ten years, there has been deforestation of 46,000 to 75,000 hectares in the concessions associated with them. In addition, around 127,000 hectares of land were degraded.
“In 2022, APP changed the deforestation cut off in their conservation policy (FCP). They still allow the supply of raw materials related to deforestation until the end of 2020, whereas previously the cut off for this was in 2013. This certainly makes us question their no-deforestation commitment,” said Rompas.
Regarding peatland management, Greenpeace stated that APP has not taken significant steps to protect around 1.2 million hectares of peatland in their concessions. Data also shows that around 3,500 hectares of peatlands were destroyed in APP-linked concessions between August 2018 and June 2020.
In terms of corporate structure, in 2018, a report by a coalition of NGOs revealed the complexity of corporate structures linked to APP. There were indications that control was exercised through nominees and shadow companies.
“This non-ideal situation makes GPs question the standards used by the WBCSD to accept APP as a member. How can WBCSD ensure that APP is no longer connected to the destruction of forests and peatlands? How can they also ensure that APP is not connected to forest and land fires? These two things are certainly important to use as sustainability indicators,” Arie said.
As additional evidence, Greenpeace revealed that APP’s membership in the Forest Stewardship Council has been revoked since October 2007 due to deforestation and destruction of high conservation values, and the status is still valid today.
“APP does not deserve to be a member of the WBCSD, because of deforestation and destruction of HCV (high conservation value),” he said.
Involvement in Forest Logging
Auriga Nusantara, a non-governmental organization engaged in efforts to preserve natural resources and the environment, revealed data showing that Indonesia’s forest deforestation reached 257 thousand hectares in 2023. This figure increased by about 25 thousand hectares compared to 2022. One of the companies involved in logging is PT Hutan Rindang Banua (HRB), which has cut down 1,849 hectares of forest in Kalimantan.
“PT Hutan Rindang Banua is connected in South Kalimantan. In our mapping, it is connected to Sinarmas,” said Auriga Nusantara Foundation Chairman Timer Manurung in a discussion entitled ”Data Release: Deforestation in Indonesia 2023”, Friday (22/3/2024).
PT Hutan Rindang Banua (HRB) is a subsidiary of GEAR (Golden Energy and Resources) or its grandson PT Dian Swastatika Sentosa Tbk. The beneficial owner of the HRB business is the owner of Sinarmas, who is also the owner of APP Group Sinarmas. APP Group Sinarmas has denied that PT HRB is not its wood supplier, saying that only 13 companies are its wood suppliers.
“PT HRB, a company under Golden Energy Resources (GEAR), is accused of deforestation practices. HRB does not supply wood to APP,” said APP’s zero deforestation commitment document obtained by Tangkasi.id.
Greenpeace found similarities with the ownership of Sinar Mas’ mining company, Golden Energy and Resource (GEAR), which publicly claims to own PT Hutan Rindang Banua (PT HRB), a 265,095-hectare timber concession in South Kalimantan. Based on analysis of satellite imagery since 2013, approximately 5,000 hectares of forest have been cleared in the HRB concession, leading Greenpeace to cut ties with Sinar Mas to provide input on sustainability policies in 2018.
Highlighting APP’s corporate ownership patterns, Greenpeace stated that the situation is not surprising. The issue is of concern to them, suggesting that APP and Sinarmas as a whole have yet to implement transparency in their corporate structures.
“The company’s involvement under jurisdictional secrecy, as revealed by a coalition of NGOs in 2018, is proof that it is difficult to know who is affiliated with them. For example, HRB will easily argue that this company has nothing to do with them (APP), despite evidence indicating otherwise,” Arie said.
Greenpeace added that it has not yet decided on the next step regarding APP Group’s membership in the WBCSD. GP Indonesia will conduct further research and hopes that the WBCSD can be more proactive in gathering evidence and conducting a thorough evaluation before accepting APP as their member.
“Last year we wrote an account of 10 years of APP’s FCP policy. In addition, there are several reports from us and the coalition that can be used as references (WBCSD) before deciding to accept APP,” he concluded. (*)
In addition to AAL’s overlapping palm oil concessions with forest areas, the report’s publishers also found that at least 1,100 hectares of AAL’s palm oil plantations within these forests appear to be illegal. Three AAL subsidiaries in Sulawesi are operating without obtaining the necessary Business Use Rights (HGU) permits. “Land grabbing, human rights violations, and illegal operations by AAL should be a warning sign,” said Uli Arta Siagian, National Forest and Plantation Campaign Manager WALHI, in a press release.
She added that the Indonesian government is urged to ensure that land seized by AAL is returned to the communities and farmers. WALHI also calls on the Ministry of Agrarian Affairs and Spatial Planning to further investigate AAL’s permits and concession maps and ensure public access to this data.
“Plantation companies violating licensing regulations in Indonesia should have their permits revoked. To protect Indonesia’s remaining forests, the expansion of plantations within forest areas must be stopped,” she said.
Regarding alleged human rights violations by AAL, WALHI urges the National Human Rights Commission to investigate. The “Cultivating Conflict” report is a continuation of a report released two years ago by Friends of the Earth and WALHI in 2022. The June report also reveals evidence of environmental and human rights violations by AAL, including violent land grabs, criminalization of environmental defenders, and river pollution.
Instead of resolving prolonged conflicts with communities and addressing ongoing grievances, AAL denied the allegations by Friends of the Earth as “baseless.” In 2023, AAL initiated an investigation process that FoE deemed a flawed and unilateral attempt, failing to examine most of the violations published in the 2022 report. AAL is also accused of disregarding the fact that it never obtained Free, Prior, and Informed Consent (FPIC) from communities to open their land.
“Companies can make rhetorical commitments to uphold human rights and achieve environmental sustainability but talk alone is not enough – accountability is required,” said Gaurav Madan, Senior Forests and Land Rights Campaigner at Friends of the Earth US.
In the latest report, agribusiness traders such as Archer Daniels Midland (ADM), Bunge, Cargill, Fuji Oil, Louis Dreyfus Company, and Olam were highlighted for purchasing palm oil from mills connected to AAL subsidiaries PT Agro Nusa Abadi (ANA), PT Lestari Tani Teladan (LTT), and PT Mamuang in Central and West Sulawesi.
The report also details that at least 18 global consumer brands and financiers have benefited from weak governance and administrative failures in Indonesia to sustain their business operations.
These consumer companies, including Unilever, Barry Callebaut, and General Mills, have a history of purchasing palm oil from AAL. Meanwhile, financiers such as BlackRock, Vanguard, HSBC, and the Dutch pension fund ABP continue to provide substantial funding to AAL and its parent company.
“To stop deforestation and human rights violations, we need to shift towards community-based forest management. Financiers and palm oil buyers must stop promoting the expansion of industrial plantations,” said Danielle van Oijen, International Forest Program Coordinator at Milieudefensie (Friends of the Earth Netherlands).
“Continuing to purchase from AAL carries the risk of deforestation, legal violations, and human rights abuses. Law enforcement in the European Union must thoroughly investigate all transactions involving AAL products to ensure compliance with the European Deforestation Regulation.”
Astra Agro Lestari’s Response
Fenny A. Sofyan, Vice President of Investor Relations & Public Affairs, expressed surprise that there are still reports without confirmation regarding alleged deforestation, human rights violations, and environmental damage in the company’s supply chain attributed to AAL. According to her, Astra Agro actively engages in transparent open communication in following up on these reports, both on the company’s official website, through grievance mechanisms, email, and other platforms.
Regarding allegations from civil society groups, Fenny explained that they appointed Eco Nusantara (ENS) as an independent assessor with the capability and objectivity to review all accusations and issues mentioned in the FoE and WALHI report of September 2022. During the verification process, ENS invited the parties involved, but only WALHI did not confirm their attendance.
“Despite the verification results from Eco Nusantara and without confirmation, in June 2024, FoE and WALHI republished excerpts from a report by Yayasan Genesis Bengkulu that do not align with the data and facts on the ground. As known, Yayasan Genesis Bengkulu previously published a revised report in June 2024,” said Fenny in a written statement received by Tangkasi.id, Friday (June 28, 2024).
She emphasized that AAL and all its subsidiaries operate according to the laws and policies in effect in Indonesia. They also have a Sustainability Policy officially implemented since 2015 and have not undertaken any expansion or new land clearing since then.
Furthermore, AAL identified limitations in the data sources used in both the FoE and WALHI report as well as the report by Yayasan Genesis Bengkulu, which resulted in misleading information. Firstly, Yayasan Genesis Bengkulu only used the Nusantara Atlas Map and land maps from the Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) as research sources for deforestation allegations in forest areas attributed to AAL. Secondly, Yayasan Genesis Bengkulu also mentioned that government data on Business Use Rights (HGU) is not public.
“These two statements suggest that Yayasan Genesis Bengkulu did not use the legitimate HGU/location permits data of Astra Agro’s subsidiaries issued by the Indonesian government. HGU data is crucial for assessing overlaps between forest areas and HGU/palm oil plantation permits. Without verified HGU/location permits data, the findings can be misleading,” said Fenny.
Fenny revealed that the reference data from Genesis shows that the plantation area boundaries differ from the HGU/location permits of AAL’s subsidiaries. Additionally, the analyzed plantation areas are in two different regencies from the legitimate location permits owned by Astra Agro. Furthermore, the analyzed plantation area is much larger than the officially recorded company permits.
AAL also noted that the Genesis Bengkulu report did not consider historical regulatory developments over time, particularly regarding national spatial planning and its impact on overlaps between HGU and forest areas.
“The issue of overlaps between HGU and forest areas, interpreted as deforestation in the Genesis Bengkulu Study Report, can mislead the public. The issue of overlapping forest areas and HGU/palm oil plantation permits has been regulated under the Omnibus Law,” said Fenny.
Fenny underscored that regulatory changes continuously occur over time. In several cases in Indonesia, while implementing regional spatial planning programs, the government has repeatedly revised regulations related to spatial planning. Based on regulations, the Ministry of Forestry and Environment has gradually reassigned forest areas, resulting in many cases of parts of HGU areas being returned to forest areas, even though the HGU was previously obtained.
“Yayasan Genesis Bengkulu reported deforestation within forest areas in 15 Astra Agro subsidiaries’ concessions between 2015 and 2023. This report is highly inaccurate,” Fenny emphasized.
Fenny explained that since the implementation of the Sustainability Policy in 2015, AAL has not cleared any land for new plantation development. In initiating plantation development, AAL has complied with all applicable legal procedures, including land acquisition processes involving stakeholders, including communities.
Fenny also claimed the company always conducts socialization and reaches mutual agreements before starting projects, currently known as FPIC. (*)