FSC conditionally approves plan to end suspension of APP

Ten years after the Forest Stewardship Council cut off ties with Asia Pulp and Paper, the sustainability certification body has conditionally approved a plan to re-engage with the Indonesian agribusiness giant.

Harvesting in progress at an Asia Pulp and Paper-owned acacia plantation in Indonesia's Riau province. About 60 per cent of the company's concessions are on peatland, which must be drained before acacia can grow on it. Image: Eco-Business

A decade after sustainability certification body Forest Stewardship Council (FSC) suspended its relationship with Indonesian agribusiness giant Asia Pulp and Paper (APP), it announced on Thursday that it has conditionally approved a roadmap towards re-engaging with the company.

The move has been met by a mixture of optimism and concern from environmental groups, who cautiously welcomed the news but expressed reservations about elements of the plan including compensation for past damage, and the fact that APP continues to manage plantations on carbon-rich peatland.

FSC, which is headquartered in Germany and certifies sustainable forestry products such as wood and paper, dissociated from APP in October 2007 due to mounting evidence that it was involved in destructive forestry practices. 

Dissociation is an official term for the end of all contractual relationships between the organisation and the suspension of APP’s FSC certification.

The two organisations have been in discussions about possible reassociation with FSC since 2012. APP has in the interim rolled out several sustainability policies including a 2013 ‘Forest Conservation Policy’ which promises an end to natural forest clearance across the company’s supply chain; a US$10 million a year pledge to protect and restore 1 million hectares of forest; and a roadmap towards improved sustainability by 2020.

But it has also been mired in controversy in the years since FSC’s dissociation, most notably the death of a local farmer at the hands of security guards hired by an APP subsidiary, concerns by green groups that its new mega-mill in South Sumatra will drive further forest destruction; and being heavily implicated in causing Indonesia’s worst haze crisis on record in 2015 due to extensive fires on its concessions. 

After years of discussion and consultation with the company and various stakeholder groups, FSC’s board of directors gave conditional approval to a roadmap for re-engaging with APP at a recent meeting in Indonesia. The roadmap is not yet publicly available on FSC’s website, but the non-profit said it will be uploaded soon.

The conditions set by FSC’s board require APP to develop action plans to address concerns around its environmental and social legacy, and to commit to compensating for environmental damage and human rights violations once the dissociation has ended.

Firstly, APP’s action plans would need to define how much responsibility the company takes for damaging forests, and how much land it needs to conserve and restore. It would also need to say how it plans to compensate communities whose rights it has violated in the past.

FSC asked APP to prove that its supplier concessions are complying with its ‘Controlled Wood’ standard. This verifies that even though the wood does not possess full FSC certification, its harvest is not illegal, in violation of community rights, and has not destroyed conservation areas.

The organisation will develop a set of performance indicators to assess APP’s progress, and plans to independently verify it as well.

FSC also said that APP must commit to preventing future violations of its policy, and to demonstrate that it has been effective in implementing its corporate sustainability comments.

APP remains committed to our ongoing efforts to be in full compliance with the FSC’s principals and guidelines.

Aida Greenbury, managing director of sustainability and stakeholder engagement, APP

The organisation added that there are no dates or a timeline for when the roadmap will be fully implemented or dissociation will end, and that this announcement does not change APP’s dissociation status.

It also clarified that ending the dissociation does not mean that APP’s concessions would automatically be considered as responsibly managed, or eligible for FSC certification.

“It would simply constitute an acknowledgement that APP had ceased forest-related practices that are considered unacceptable under the FSC policy for association,” said the organisation.

APP said in a statement that it welcomes the conditional approval, and that it looks forward to working with FSC and other stakeholders in meeting the various preconditions for re-engagement.

Aida Greenbury, APP’s managing director of sustainability and stakeholder engagement, added: “APP remains committed to our ongoing efforts to be in full compliance with the FSC’s principals and guidelines, particularly through the continuous and consistent implementation of our Forest Conservation Policy and our landscape approach conservation initiatives”.

However, despite the many conditions set down by FSC for reassociation, stakeholders in the process said major gaps remained.

Bagus Kusuma, forest campaigner, Greenpeace, said that the campaigning group views the conditional approval as “a good step forward”.

But “along with several other NGOs, Greenpeace has reservations on various elements of the roadmap including forest conservation and restoration commitments to compensate for past forest conversion, and ensuring their suppliers’ concessions are required to meet the same standards”.

FSC should continue to factor in concerns from NGOs and amend the roadmap and action plans accordingly, said Bagus.

He added: “We also encourage APP to not wait for further discussions on the roadmap and action plan but rather move forward immediately to restore forests and re-wet peatlands, and address outstanding social conflicts with local communities.”

Drainage-based Acacia plantations on peat should not be eligible for certification under any environmental, social or economic sustainability standard.

Bas Tinhout, technical officer for climate-smart land use, Wetlands International

Bas Tinhout, technical officer for climate-smart land use, Wetlands International—which has been involved in the consultations for the roadmap—told Eco-Business that a major omission in the roadmap is the lack of adequate safeguards for peatlands. 

About 60 per cent of APP’s plantations are on peat, which must be drained before Acacia—one of the main crops of the pulp and paper industry—can be planted.

Currently, the roadmap does not pay enough attention to peatland specific issues, said Tinhout.

Responding to this criticism, FSC told Eco-Business: “The issue of sustainable peatland management, including past degradation and future management, is a critical issue regarding the APP case with FSC and therefore is an important element of the roadmap to end disassociation.”

The FSC spokesperson continued: “The current version of the roadmap specifically engages APP to take responsibility in the conservation and restoration of HCV, including peat forests in Indonesia.”

However, Tinhout said that Wetlands International believes “that drainage-based Acacia plantations on peat should not be eligible for certification under any environmental, social or economic sustainability standard.”

Wetlands International, along with other NGOs, has previously released research showing that continuing plantation development on peat diminishes agricultural productivity. This is because of peatland subsidence—that is, when drained peat dries out and starts sinking—as well as flooding and social conflict.

More sustainable ways of managing peatland include planting species that can be grown on wet peat so that it does not need to be drained, or phasing out plantations on peat altogether.

Tinhout added that Wetlands was “very worried” that the roadmap has been conditionally approved by FSC despite the major ommission of peatland concerns.

He also shared a theory that FSC and APP were eager to accelerate the re-association process because FSC’s Controlled Wood standard is under revision. The current standard does not require sustainable peatland management, and if the new version of the criteria was to include this, there was a risk that the standards would be “unreachable” for APP, said Tinhout.

He said that as part of the “best management practices” FSC is asking APP to demonstrate, it needs to include requirements around plans to stop peatland subsidence, and a time-bound plan for phasing out drainage-based plantations on peat.

“For FSC, claiming to be a certifier for environmental, social and economic sustainability, it should be imperative to address this risk of losing land productivity on a large scale, as well as huge environmental damage and social impact in peatland-based plantations,” said Tinhout.

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