Jakarta, 16th May 2018
Asia Pulp & Paper (APP) is disappointed by the statement released by Greenpeace today. Greenpeace has been an integral partner in our sustainability journey since 2013, and their engagement and support has resulted in much progress in the fight against deforestation in Indonesia.
Greenpeace were instrumental in the drafting of our Forest Conservation Policy (FCP), which has helped APP achieve a deforestation-free supply chain. Among many other achievements, APP has also identified and protected more than 600,000ha of natural forest through the implementation of High Carbon Stock Approach and High Conservation Value studies within its concessions and those of its third party suppliers. Their statement today, however, has expanded the issue to the rest of the Sinar Mas Group, which is outside the scope of the FCP.
Over the past three months, we have been communicating with Greenpeace transparently to address the issues raised by Associated Press (AP) report. We had provided context on the issue of ownership within our supply chain and made clear that APP will reject any company that contravenes our FCP regardless of who their shareholders are, even if they are Widjaya-family owned organisations. Sinar Mas Forestry (SMF) is a division within APP and not a sister company, and hence, APP assumes responsibility for anything done by SMF.
However, the issues cited by Greenpeace in their statement focus on the actions of businesses not under the direct jurisdiction of APP, and which, again, sit outside our original FCP commitments.
We were informed of Greenpeace’s intention to scale back their engagement with APP in February, partly as a result of the concerns raised in the AP report, as well as, according to our understanding, a change in their approach to engagement with forestry issues. We never understood it to be an ending of all engagement as professed in their statement.
On the issue of PT Muara Sungai Landak (PT MSL), here are the facts.
In 2014, our stakeholders asked us to clarify our relationship with 70 forestry companies including PT MSL. Therefore, we appointed a big four auditor as an independent party to audit our relationship with PT MSL and other companies within and outside our supply chain to determine the economic relationship APP had with them. The audit concluded that PT MSL had no relationship with APP and none of their wood comes through our supply chain. That remains true to this day.
However, as a result of the allegation made in the AP report, we conducted an investigation and found that three of MSL’s shareholders and not two as stated in the report and Greenpeace’s statement, had relationships with APP. Two were ex-employees of APP who left us in October 2015 and November 2015 and one was a current employee who had not declared his shareholdings and position within MSL. This constituted a violation of APP’s Code of Conduct as it presented a direct conflict of interest. The employee was terminated with immediate effect.
The results of this investigation were shared with Greenpeace as well.
On the other company raised in the Greenpeace statement, Golden Energy and Resource (GEAR), we are unable to speak on their behalf. GEAR operates independently from us and do not supply wood to APP.
The land area of 8,000 ha mentioned in the statement refers to concessions not owned by APP, and which it has no jurisdiction over. APP does not purchase wood supply from these concession owners.
Greenpeace, together with other NGOs, has taken pains to show us that responsible forest management was not only important in fighting climate change, but also provides an economic benefit to the company. This has been a key factor in changing the organisational culture of APP, which has contributed to the progress made to date.
Admittedly, there are areas which has not progressed as fast as we would have liked, but we had hoped that with the collaboration of organisations like Greenpeace, we would continue to improve on those areas.
We remain committed to working with all our stakeholders and believe that we can achieve much more if we work together. The fight against deforestation in Indonesia is a complex issue and not one where any organisation can resolve by themselves. The era of cooperation between Greenpeace and APP has achieved much, but the fight is far from over.