Paper tiger, hidden dragons 2: APRIL fools
The forest destruction, social conflict and financial crisis of Asia Pacific Resources International Holdings Ltd (APRIL), and the role of financial institutions and paper merchants
APRIL Part of the Indonesian Raja Garuda Mas Group and owned by the business magnate Sukanto Tanoto, APRIL is a Singapore held company. APRIL’s main pulp subsidiary is Riau Andalan Pulp & Paper (RAPP), located in Riau Province on the Indonesian island of Sumatra. RAPP began operating in 1995 and has now developed a pulp mill with a capacity of 2.0 million tonnes per year, making it the largest pulp mill in the world. AMEC, a UK construction multinational, has helped to design and build the RAPP mill.
APRIL’s main paper subsidiary is Riau Andalan Kertas. It is also based in Riau and was integrated into the same site as RAPP in 1998. With a capacity of 350,000 tonnes per year, APRIL is intending to bring its paper production capacity up to 700,000 tonnes per year.
APRIL and Forest Destruction
In production since 1995, the vast majority of the fibre going to APRIL’s RAPP mill has been mixed tropical hardwood obtained through the clearance of natural forest. In 2000, 100 per cent of APRIL’s fibre came from cleared rainforest.
In 2001, 80 per cent of its fibre was still sourced from cleared rainforests. As a result, Friends of the Earth estimates that by the end of 2001 APRIL’s operations had already led to the destruction of 220,000 hectares of rainforest. APRIL admits that it will continue to depend upon clear-cutting natural forest until 2008, when it estimates its plantations will meet all its pulp capacity requirements. Industry analysts vigorously question APRIL’s claims regarding its acacia tree planting rates and some estimate that APRIL may be clearing rainforest well beyond 2008. By APRIL’s own estimates, it will be clearing an additional 147,000 hectares of rainforest over the next six years. There are also strong indications that legal supplies of mixed tropical hardwood may not be available within a commercial distance of the mill by 2005.
As a result of its unsustainable operations, APRIL is now running out of wood. APRIL’s logging sites are the natural habitat of numerous endangered species, including the tapir (Tapirus indicus), the Sumatran elephant sub-species (Elephans maximus) and the Sumatran tiger (Panthera tigris sumatrae). The conversion of these natural rainforests into tree plantations inevitably leads to the reduction of the area available to these species, thus making extinction increasingly likely.
APRIL Clear-cuts World’s Most Biodiverse Lowland Rainforest
Investigations into four areas of natural forest clearance in Sumatra demonstrate that APRIL’s operations are driving the clearance of High Conservation Value Forest both within and outside APRIL’s concessions. One of these areas is APRIL’s largest concession area, known as the Pelalawan sector. Two of these rainforest areas are close to the Bukit Tigapuluh National Park. The fourth is in an area of forest known as Tesso Nilo. WWF researchers have discovered that this is the most biodiverse lowland forest in the world, home to tigers, elephants, gibbons, tapirs and a staggering diversity of plant life.
A WWF investigation tracked 110 logging trucks from this rainforest to the RAPP pulp mill in Riau. There are questions over whether APRIL has the necessary legal permits for clearing this forest. These logging activities may also be in contravention of a moratorium on forest conversion agreed between the Indonesian Government and international creditors, including the IMF, in 2000. WWF and local stakeholders are demanding that APRIL stops logging this area immediately and are calling on the Government to fully protect the Tesso Nilo forest without delay.
A study by the independent auditors SGS, commissioned by APRIL in 1998, found that over 40,000 hectares of APRIL’s concession area has been claimed by local communities. The area where the RAPP factory has been built is land claimed by the indigenous people of Delik, Sering and Kerinci villages. As a result of this dispute the legal representative of these villages was imprisoned for three years. In another land dispute case at Lubuk Jambi village, a member of the community is reported to have been stabbed to death during a protest in 1998
APRIL was until recently the manager of the Indorayon pulp and rayon plant, now known as Toba Pulp Lestari, in North Sumatra. For several years, Batak communities living near the mill voiced concerns over environmental damage associated with its operations, including forest degradation and the release of noxious fumes. Violent clashes between community members and security forces led President Habibie to announce the temporary closure of the mill in March 1999. The mill remains closed due to local opposition.
Marketing of APRIL Paper & False Claims
In order to market its paper from its RAPP factory, APRIL has set up a marketing subsidiary, APRIL Fine Paper, which has established a global network of sales offices and distributors. The main brand which APRIL sells under is PaperOne. In the UK PaperOne paper is sold by an exclusive sales representative to the following paper merchants, most of whom are members of the AIMS distribution group: David John (Papers) Ltd, Davies Harvey Murrell, G F Smith, H V Sier Ltd, Ovenden Papers, Rosefox Ltd, The South Wales Paper Company, Fulton Paper & Frederick Johnston. It is not clear whether or to what extent these companies are aware of APRIL’s impacts.
The Finnish pulp and paper giant, UPM Kymmene is the biggest buyer of APRIL pulp for its Changshu paper mill based in China. APRIL would not be able to undertake its destructive activities without this market support. These companies must therefore accept partial responsibility for supporting the catastrophic damage that has occurred in recent years to Indonesia’s forests. By associating themselves with such practices they have also underestimated the reputational risk facing their businesses. APRIL has made false claims regarding the sustainability of its operations. It has claimed for instance that the forests it is clearing are degraded and that its forestry operations help preserve biodiversity. However, there is ample evidence that many of the areas that are being cleared to supply APRIL, such as Tesso Nilo, are High Conservation Value Forest.