Prominent environmental watchdogs Greenpeace and World Wide Fund for Nature (WWF) have announced that they will suspend their engagement with Indonesian pulp and paper giant Asia Pacific Resources International Limited (APRIL) on its sustainability efforts, alleging that the company misled its stakeholders on canal construction activities in one of its concessions.
Both groups had been vocal critics of APRIL for years, but began engaging with APRIL in 2014 when the company set up a Stakeholder Advisory Committee (SAC)—a group of civil society and academic representatives tasked with monitoring and advising APRIL on its sustainability policy.
But early last December, WWF and Greenpeace released statements announcing a suspension of their membership of the SAC, citing concerns over a lack of transparency in how the company was conducting its operations, and the slow progress on the commitments made in its Sustainable Forest Management Policy (SFMP).
In response, APRIL said on December 21 that it “apologises unreservedly” to the SAC for “incorrectly referencing” a law on fire prevention, which was at the heart of the disagreement with the NGOs.
The company added that over the past 18 months it has made much progress on sustainability goals such as conserving forest areas, restoring degraded land, and allocating funds to environmental efforts.
“APRIL would never jeopardise those commitments by deliberately misleading the SAC and key stakeholders,” said the company. “There is simply too much at stake”.
Fire law sparks tension
The flashpoint for the fall-out between APRIL and the NGOs was a conflict over the company’s operations on Pulau Padang, a small island off the eastern coast of Indonesia’s Riau province.
APRIL controls some 33,000 hectares of concession areas on Pulau Padang, and its operations there have been the subject of intense NGO scrutiny for several years. The company has maintained that it has done more than what is legally required to conserve the landscape and respect the rights of the local community.
The most recent dispute on the Pulau Padang flared up last September, when security guards denied access to officials from Indonesia’s new Peatland Restoration Agency, or BRG.
BRG had visited the concession after villagers on the island complained that APRIL had opened up peat areas to build canals. This is a practice that would usually precede developing new acacia plantations, as the peat needs to be drained before planting can take place.
APRIL initially maintained that the canal was dug in accordance with an Indonesian fire prevention law known as P32, arguing that it requires companies to have hydrology equipment, canals, and water gates on their concessions.
However, Andy Tait, senior campaign advisor, Greenpeace and a member of the SAC, told Eco-Business that this is a “deliberate misinterpretation” of the law—in the original Bahasa Indonesia, the law mandates blocking canals, not building them.
Rusmadya Maharuddin, forest campaigner, Greenpeace Indonesia, added a statement that ”APRIL has repeatedly and consistently misled SAC and its independent peat expert working group regarding the continued construction of its concession areas in Pulau Padang.”
Rusmadya added: “If the company cannot be trusted to provide accurate, clear and trustworthy information regarding its operations then there is simply no point in continuing to engage with it at this time.”
WWF Indonesia, in its December 9 statement, also cited APRIL’s violation of government policies on peat protection as a reason for suspending its SAC membership, and criticised a “lack of transparency and misleading information from APRIL to hide ‘business as usual’ operations.”
APRIL, in addition to its apology to the green groups, said it would cooperate fully with a task-force set up by BRG and Indonesia’s Ministry of Environment and Forestry to investigate this issue.
The company has not yet explained how the error occurred; but its SAC has noted that a “majority of the Committee does not believe that the errors made in relation to the canal were intentional on APRIL’s part”.
Other members of the SAC include Joseph Lawson, who is a board director of the Programme for the Endorsement of Forest Certification; Al Azhar, chief executive of the Malay Custom Institution of Riau, and Jeffrey Sayer, professor of development practice at James Cook University.
Lucita Jasmin, director for sustainability and external affairs, APRIL, told Eco-Business that “there is no ducking from the truth nor the difficulty of the challenges involved.”
Other areas for improvement
Greenpeace and WWF also pointed to other issues that APRIL has yet to address. Among them is slow progress in implementing its sustainability policy, and only publishing information about two of its short-term suppliers on its sustainability dashboard when it has many more.
The NGOs also highlighted a lack of transparency in APRIL’s communication, with WWF citing a “lack of transparency and misleading information from APRIL to hide “business as usual” operations”.
However, Jasmin pointed to an independent report commissioned by the SAC early last year to provide a more objective analysis of the company’s progress.
The report, prepared by global consultancy KPMG and published on 30 December, “confirms that we have complied with our core commitments and made significant progress in areas such as such as conservation, ecosystem restoration, fire prevention and the provision of social infrastructure”, said Jasmin.
The document evaluates APRIL’s sustainability performance from June 2015 to July 2016 - before the Pulau Padang conflict occurred. It was commissioned by the SAC to give stakeholders an independent view on APRIL’s progress.
KPMG found that broadly, APRIL has upheld its promise to stop clearing forest land, stop using mixed hardwood by December 2015, and follow best practice advice on developing peat responsibly.
The latter is given by a group of academics established by APRIL known as the Independent Peat Expert Working Group (IPEWG). The group advises on issues such as how to manage existing plantations on peat, how to conserve forested peat and critical peat landscapes, and what can be done with peat areas that are not forested.
The KPMG report found three “non-conformities” in APRIL’s efforts to deliver its SFMP. These are instances where the available data, or lack thereof, is associated with a breach of the requirements of the policy.
Two of the non-conformities had to do with short-term suppliers violating the company’s moratorium on forest clearance; but KPMG noted that “both non-conformities have been closed following the completion of corrective actions by APRIL”. Measures the company had taken included restoring some of the wrongfully converted land back to native species, and terminating supply contracts with an errant company.
A third non-conformity highlighted that not all of APRIL’s suppliers were listed on its sustainability dashboard as of September 2016.
KPMG also suggested 28 areas of improvement for the company, including closer monitoring of its short-term suppliers, developing clear timelines for adopting recommendations made by the IPEWG, and making more data and concession maps available about its long-term and short-term suppliers.
The publication of concession maps, however, has been a legally fraught issue in Indonesia in recent years. Indonesian laws potentially prohibit the government from sharing maps publicly, but non-government organisations such as the Roundtable on Sustainable Palm Oil, Greenpeace and the World Resources Institute have by-passed this by publishing the maps on their own.
There is little clarity on the legality of publishing digital format maps online, as an ongoing lawsuit between Greenpeace and the Indonesian government over the issue exemplifies.
Responding to the KPMG report’s recommendations, Jasmin noted that “we remain unwavering with our commitments in our SFMP 2.0”.
She added: “We acknowledge that we make mistakes, learn our lessons and we will address this with hard work and improved processes, guided by the KPMG report’s recommendations and the SAC’s advice.”
