Following the Paper Trail: APP’s Ongoing Quest to Restore Indonesia’s Rainforests

Since 1990, Indonesia has lost half of its rainforests. What’s worse, the rate of deforestation, currently at roughly two million hectares per year, is still accelerating.

Heart of the issue being that ecological values remain difficult to measure in monetary terms. Such is the tragedy of the commons for a country with the world’s fourth-largest population: Its eagerness for economic development driven by the global market has made one of the planet’s most diverse natural habitats subject to exploitation for fast cash, rather than being protected as a crucial part of the global ecosystem.

To make matters worse, the easiest and cheapest method of forest clearance is the infamous practice called “slash and burn,” which is commonly used to clear forest so that palm oil, food, paper and other valuable commodities can be produced on the land. The problem is that fire is not a particularly controllable force, nor does it respect boundaries of concessions or protected forest zones. Adding on Indonesia's tropical dry seasons and abundance of highly flammable peatlands, forest fires often go wild and have become an annual event for the past twenty years, which have led to significant economic, human and environmental losses: A devastating forest fire in 2015 was estimated to have caused at least 500,000 cases of respiratory tract infection and 100,000 premature deaths in the region.

Besides the irreversible damages to public health and the global environment — i.e. loss of carbon sink and biodiversity (e.g. orangutans and Sumatran tigers) — the astonishing rate of deforestation for the interest of agribusiness operations is disastrous also for its social impact. Forest clearance is often accompanied by violations to indigenous people’s rights to their land. According to the Forest Peoples Programme, almost all of the lost rainforest were on lands of the local communities and indigenous people. Conflicts due to land rights are so deeply rooted in Indonesia’s history and politics that it takes the community, policymakers, and businesses together to develop a sustainable resolution mechanism.

This paper and pulp company has stepped up

It’s no secret that Asia Pulp and Paper (APP), one of the two global pulp and paper producers in Indonesia, used to be part of the problem. APP and its parent conglomerate, the Sinar Mas Group, have centered their production of household brands on rainforest fibres and have long been criticized for destroying forest ecosystems, displacing rural communities and contributing to global warming by developing carbon-rich peatlands.

In 2013, after years of public pressure from environmental organisations such as Greenpeace and over 100 high-profile corporates suspending commercial ties with APP,the company established its Forest Conservation Policy (FCP), which had some environmental groups celebrating as it vowed to protect natural forest, implement best practice peatland management, resolve social conflict and ensure sustainable sourcing throughout the supply chain — while others remained skeptical and vowed to hold the company accountable to its new commitments.

Zero deforestation

APP, a paper and pulp company with a capacity of over 20 million tonnes per annum (combining China and Indonesia) has made a commitment to stay clear of the natural forests, to block canals to restore peatlands and even to retire thousands of hectares of once-commercial plantation areas. At the end of 2017, APP reported its progress on the 4th anniversary of the FCP — an Independent Observer program (consisting of local, international NGOs and academia), carried out to examine the stringency of the FCP; found no breaches across APP’s or its suppliers’ activities.

Between late 2016 and late 2017, APP created manuals to guide field staff on implementation of the Integrated Sustainable Forest Management Plans — spatial planning based on conservation value and social impact assessment on the concessions were completed and used to train operational staff of APP’s suppliers. Moreover, a second round of peatland mapping was completed to increase resolution on critical peatland areas.

Then comes the question, how can APP keep its mills running without sourcing rainforest?

A crucial part of the solution is to maximise yields of existing plantations and paper mills. APP’s R&D centre conducts tree cultivation to select the fastest-growing tree species and to find the best methods (e.g. optimal spacing, etc) to ensure good harvests every five years. On the mill side, a fully integrated system ensures that a minimum amount of wood goes to waste in the process of handling, transportation or the overall production process. Moreover, what cannot be turned into paper is utilised to generate energy, which then powers the mill and can be shared with the surrounding villages.

Besides committing to protect high conservation value areas and high carbon stock forests, APP has also paid attention to the local people in their FCP.

To address land rights conflict, APP recognized that indigenous and local communities may have customary rights to land, overlapping with its pulp plantations. Throughout years of managing its concessions, APP has learned that while social conflicts are unavoidable, there is a way to manage these issues which often involves better communication and engagement with local small landholders, with the help from legal, government, civil societies and academia. There is always a way to strike a deal that benefits both parties.

APP has also gone above and beyond to support community livelihoods. Integrated forestry and farming system was launched during COP 21 aiming to help local communities develop alternative livelihoods to achieve economic development while keeping the forest intact. Many consider poverty as the root cause of deforestation, and thus helping the community to gain skills in agroforestry and business to do more with the land they already own could reduce the risk of encroachment and illegal logging. Training on horticulture and farming equipment have been provided and support in form of Microfinance have been granted to kick start sustainable businesses. Just in 2017, such programmes have been implemented in 60 villages.

Bringing partners along the journey

Besides making an effort towards conservation itself, APP extended high standards to all of its suppliers, as well. Those who don’t comply will lose APP’s business. The company also started a collaboration with the Belantara Foundation focused on community-based conservation initiatives, while also supporting the Foundation to secure investments from donors, and even committed to initial seed funding USD 10 million per year for the first five years. Transparency is also a crucial aspect of keeping the company in check according to their commitments. Conservation NGOs have been invited to monitor if APP has been effectively implementing and adequately improving its policy commitments. Once its harshest critic, Greenpeace in 2014 suspended its campaign against APP; it has since reviewed and publicly applauded APP’s commitment and actions, which sent a strong signal to the market that the company’s efforts represented a credible model for corporate social and environmental responsibilities in Indonesia’s forest sector. Greenpeace’s support assured that the risk of APP going back to its old practices is low, but further collaboration with other NGOs for third-party audits has been recommended to APP to advance the movement in the future.

Is that enough to save the Indonesian rainforests? Perhaps not. But no one company can achieve such a task alone.

As Elim Sritaba, director of sustainability at APP, expressed in the 2017 FCP progress report, “When we set out, there was no blueprint, but the best resources we had at our disposal was the support of our partners and stakeholders. They continue to be our most important resource — a source of support but also of challenge — guiding us as we continue in this challenging journey.”

How can we help catalyse action

APP has been vocal about its efforts and expressed its willingness to involve other parties to get the right business model sustained, replicated and upscaled. It has also been on the lookout for financing mechanisms and business partners, because one company simply cannot do this alone.

Policymakers and businesses have significant influence to support the movement and cultivate the right conditions for conservation efforts to be profitable and to thrive. For example, governments can leverage taxation measures to help corporates carrying out sustainability initiatives gain more competitive advantage against their competitors. Besides, as businesses and governments are often big buyers of paper products, ensuring sustainable procurement is important.

And as a consumer, you have more power to make a difference than you think. In addition to reducing waste, every penny you spend is a vote for the world you want to live in, which is why it’s important to recognise legitimate environmental certifications and support them.