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Created before Nov 2016
Last update: 2017-11-28 14:30:43
Karen Vermeer, Forest and Equator Principles campaigner, BankTrack
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Asia Pacific Resources International Holdings Limited, or APRIL, is Indonesia's second largest pulp and paper producer. It develops fibre plantations and it is the owner of one of the world's largest pulp and paper mills. It also has operations in China. APRIL mainly produces bleached hardwood kraft pulp and uncoated, wood-free paper.
Jl M.H.Thamrin (d/h Jl. Teluk Betung) No. 31, Kebon Melati – Tanah Abang
10230 Jakarta Pusat
Sukanto Tanoto |
APRIL is part of the Indonesian Royal Golden Eagle Group (RGE), owned by Indonesian businessman Sukanto Tanoto, who also owns Toba Pulp Lestari, Sateri, and Asian Agri. Royal Golden Eagle is a holding company which has activities ranging from paper, palm oil, construction, and energy business sectors. It also owns palm oil firm Asian Agri.
APRIL and its subsidiaries have a long history of involvement in land and social conflicts in Riau, Indonesia. A 1998 study by the independent auditor, SGS, found that over 40,000 hectares of APRIL's concession area in Riau have been claimed by local communities as their traditional land (FOE, 2001). Social conflicts have erupted in several communities.
A comprehensive list of past social conflicts (until 2012) can be found in the Eyes on the Forest report.
- In August 2009, three people were killed and 16 wounded while resisting private security forces linked to an APRIL subsidiary during a protest over land rights in the village of Tangun. The APRIL Group claims these people died in an accident, but according to APRIL-Watch, the national Indonesian human rights commission does not believe APRIL's claim.
- In 2011, the Teluk Meranti village started a lawsuit against the Ministry of Forestry, accusing it of not protecting human rights. The villagers have been in conflict with RAPP ever since it arrived in 2009 and claimed a concession of 151,254 hectares in Pelalawan. The community claim 25,842 hectares of the concession overlap with their customary lands.
- Since 2011, when PT. RAPP started operations on the island of Pulau Padang, they have caused conflicts with the local community. In January 2012, after weeks of protest in Jakarta, 28 citizens of Pulau Padang sewed their mouths in protest against PT. RAPP's operations on their customary land. They convinced the Ministry of Forestry to temporarily suspend the forest clearance operations, but in 2013 operations resumed, after three villages were removed from the concession. In January 2015, people from four villages of Pulau Padang were still protesting against PT RAPP.
- In March 2012, residents of Gunung Sahilan in Riau, came in conflict with RAPP over a 2,000 hectares area which they claim is their traditional land. A joint statement of NGOs accused RAPP of provoking a riot by arming its 500 employees and security with machetes and heavy machinery such as skidders to ambush and assault the residents of Gunung Sahilan. During the clash, huts and rubber plantations of the residents were destroyed, 15 people were injured and 85 motorbikes were damaged, the NGOs said.
- In August 2012, a dispute mediation meeting was held on Pulau Rapat, in an attempt to solve a land conflict between local communities and APRIL's subsidiary PT Sumatera Riang Lestari (PT SRL). The conflict has been ongoing since 2007, when PT SRL arrived on the island. However, in June 2013 the indigenous Akit people still complained of lack of access to their ancestral lands.
Deforestation Extensive deforestation by APRIL suppliers has been documented, much of which in High Conservation Value (HCV) areas. According to maps produced by Eyes on the Forest (EoF), APRIL has access to pulpwood supply concessions covering more than 10% of Riau province's landmass (940,000 hectares). In 2013, Greenpeace reported that government data revealed that 60% of the fibre supply to APRIL's Riau Andalan Pulp & Paper (RAPP) pulp mill in Indonesia was from rainforest wood. In 2012, EoF analysed satellite images and estimated that APRIL suppliers had cleared at least 140,000 hectares of natural forests between 2008 and 2011 in Riau, which corresponds to more than a quarter of all forest loss in that province. APRIL claims to plant 150 million trees every year, but these industrial plantation trees are mostly planted after clearing precious rainforests to establish the pulp plantations. Below are some examples of ongoing deforestation by APRIL and its suppliers:
- Clearing of protected areas, HCV Forests and peat land on Pulau Padang, Sumatra,
- Burning forest on Pulau Rupat, Sumatra and clearing of national protected areas, protected deap peat areas and protected ramin trees,
- Clearcutting by the APRIL supplier PT Triomas Forestry in the carbon-rich peatlands of the Kampar Peninsula (Riau, Sumatra), in April 2014, and construction of an ecologically devastating logging road that split Kampar peninsula's peat ecosystem in half,
- Clearing of HCV forest in Tana Tidung, North Kalimantan by APRIL subsidiary PT Adindo Hutani Lestari, as revealed in a May 2014 report by WWF and other NGOs.
Due to its role in the deforestation of Indonesian rainforests, UPM-Kymmene (2009) and Fuji Xerox (2011) have cancelled their contracts with APRIL. In January 2014, the World Business Council for Sustainable Development (WBCSD), put APRIL's membership on probation because it did not adhere to its membership principles.
Green House Gas emissions and Forest Fires APRIL has many plantations located in deep peat areas. In order to exploit these, the peat are drained, which causes it to decompose and emit large amounts of green house gases. By the Indonesian government's own calculations, peat land is responsible for almost 40% of the country's total emissions. As it decomposes, the peat subsides, increasing the chances of flooding. A study released by the University of Helsinki shows that APRIL's Acacia plantations on peatland in Sumatra release around 80 tons of carbon dioxide per hectare per year.
The dry peat is also very susceptible to fire, which is then hard to extinguish. Despite APRIL's "no fire" policy, based on NASA Modis Fire monitoring, in the period of 13-19 February 2014, Eyes on the Forest identified 891 fire hotspots inside APRIL affiliated companies' concessions.
In April 2014, Eyes on the Forest documented apparent child labor at the timber plantation of PT Triomas (an APRIL supplier), in violation of national legislation and international standards.
APRIL's insufficient Sustainable Forest Management Policy In January 2014, APRIL published its Sustainable Forest Management Policy (SFMP), an 'evolution' from its 2005 High Conservation Value Commitment. With the SFMP, which applies to APRIL and its suppliers, the company commits to source only from non-HCV forests, to implement a moratorium on concessions where a HCV assessment has not been completed, to end establishing plantations by the end of 2014 and to source exclusively from plantations by 2019. It also commits to respect the law, to respect FPIC procedures and to resolve social conflicts in a fair and transparent way. Unfortunately, APRIL has a history of setting artificial targets to end its role in deforestation (Greenpeace, 2015).
Since January 2014, NGOs have reported that APRIL wood suppliers continued natural forest clearance and development of carbon rich peatlands in Riau and Kalimantan, in violation of its commitments. By the end of 2014, none of APRIL's concessions had completed a HCV assessment that complied with the Indonesian Toolkit and that had been peer reviewed by the HCV network.
In December 2014, KPMG published an auditing report on the implementation of APRIL's SFMP. Based on this, APRIL's SAC has made several recommendations to the company.
Lack of credible certification In 2010 SmartWood, an independent forest management certifier, suspended the interim FSC certification of APRIL pulp products. Among other things, it found APRIL had converted High Conservation Value Forests, including peatlands, and failed to resolve conflicts with communities.
APRIL claims a number of other certifications, but it has no serious certification on responsible forest management. Its PEFC certification is only for the Chain of Custody, which means its plantations are not certified under this scheme.
The legality of its PHPL/SVLK certification is questionable, since some of the certified companies have been involved in a corruption case in which they obtained concessions by bribing district and provincial leaders.
In late 2010, while a two-year moratorium on new forest concessions had already been announced by the Indonesian President, APRIL and its competitor APP obtained 17 new licenses to drain peat soil and clear natural forest.
APRIL's tax avoidance linked to deforestation and banks
The 'Paradise Papers', 13.4 million files leaked from offshore law firm Appleby, demonstrate how global corporations move money to tax havens to avoid taxes and other government regulations. Early November, the International Consortium of Investigative Journalist (ICIJ) published a report based on the Paradise Papers that analyzes Asia Pacific Resources International (APRIL) and its lenders, leading to more questions about whether banks follow their own sustainability policies and how global corporations may use tax engineering to increase funds available for deforestation.
These questions come as an APRIL subsidiary (PT RAPP), as reported by Bloomberg, seeks a potential USD 500 million loan.
On November 24, 30 Indonesian NGOs urged APRIL's financiers to not support APRIL and to disengage from any existing support or investment.
See here for the full news article.
ABN AMRO lending to APRIL despite own commitment
We understand that ABN AMRO was involved in May 2016 in providing a syndicated loan to APRIL for USD800 million, together with a number of other banks based in China, Taiwan, Malaysia, UAE and Dubai. This is despite the bank having informed Greenpeace in March 2015 that they would give no new loans to APRIL until the company had stopped deforestation and proved that it can work sustainably (see earlier updates). Meanwhile Greenpeace and WWF last month walked away from APRIL's Stakeholder Advisory Committee, while Indonesian groups Jikalahari and JMGR have written to both ABN AMRO and Credit Suisse raising concerns that APRIL is failing to implement its recent sustainability policy.
Two APRIL super concessions have been frozen
New Sustainable Forest Management Policy
APRIL has announced a new Sustainable Forest Management Policy which includes an immediate moratorium on logging in natural forests. The move comes after an intensive campaign by a group of environmental organisations, focused on pressuring both the company and its financiers to address the company's long standing social and environmental conflicts. Read more here.
Credit Suisse put future finance for APRIL under review
In response to questions from representatives of the Bruno Manser Fund, Bank Track and
Greenpeace, Credit Suisse's Chief Risk Officer confirmed the bank has engaged with APRIL and has placed future finance for the company under review.
The minutes state: "Mr. Jo Oechslin [the Chief Risk Officer] expressed his deep concern and applauded the courage and commitment of the visitors, who had come all the way from Indonesia, in their battle for their rights. It was correct that CS had received a funding request from APRIL in 2013 and had given a positive response along with a series of conditions. Progress was subsequently made. APRIL had had its operations certified, had improved its internal policies and processes and formed an independent committee together with NGO representatives. Admittedly, APRIL had subsequently made mistakes which had also been discussed in detail with CS representatives. Since that time, no transactions with APRIL had been assessed or executed, and Mr. Oechslin gave his assurance that no future transactions would be conducted with APRIL in the future without his personal involvement and explicit approval."
First Santander and then ABN Amro refuse to renew loans to APRIL
ABN AMRO will not provide APRIL with new loans until the Indonesian pulp and paper company stops clearing rainforests and can prove that it is operating in a sustainable way. The bank has also called on APRIL to immediately stop the destruction of Indonesian rainforests. ABN AMRO communicated this decision to Greenpeace Netherlands last Friday, March 6th. At the same time it posted a declaration on its website on its dedication to nature conservation. The bank's move follows a similar announcement from the Spanish bank Santander. On February 25th, Santander made a public statement in which it said that it had "decided to not renew the current funding to APRIL and will not be extending further funding at this stage". ABN AMRO's move comes after months of negotiations led by Greenpeace and supported by Banktrack and the Environmental Paper Network. ABN AMRO has now declared it will continue talks with the NGOs in order to further improve its policies to ensure that it will no longer finance rainforest destruction in the future.
Note: Santander and ABN AMRO both committed in March 2015 not to provide new loans to APRIL until it had addressed its involvement in deforestation. Shortly afterwards, Credit Suisse announced it had placed its funding under review. In May 2016 it emerged ABN AMRO had resumed lending to APRIL. See the Updates section for more details.