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Last update: 2019-07-26 11:49:34 Mandy Haggith – Environmental Paper Network
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Since its forestry activities started in 1993, APRIL has a long history of social impacts human rights abuses and being responsible for adverse impacts of deforestation.
Asia Pacific Resources International Holdings Limited (APRIL) is Indonesia's second largest pulp and paper producer. It develops fibre plantations and owns of one of the world's largest pulp and paper mills. APRIL mainly produces bleached hardwood kraft pulp and uncoated, wood-free paper. APRIL is the world’s second largest producer of bleached hardwood kraft pulp. In addition to its own paper production, the company’s pulp is used by paper companies in China, Korea, Indonesia, India, Japan, and Europe.
APRIL is based in Singapore, and is part of the Royal Golden Eagle group (RGE), which includes a large number of affiliated paper companies.
APRIL’s paper products are sold in over 75 countries globally under a variety of brands such as: PaperOne, A Plus, APRIL Premium, ARIA, Ace, All Pass, Artica, Ascend, Asia Symbol, Asiabase, Brand names: B/K, Baishun, Board One, Combat King, Copy & Laser, Crystal, Dunia Mas, Enjoy, Excellent Copy, Gaopinle, Gold Bo, Golden Color, Lazer IT, Noval, PK King Kong, Perfect Print, Pioneer, Premium (Inkjet, Laser, Pre-print+, Script, Riaupulp Acacia, Riaupulp MTH, SSYMB Pulp, Tinkle, To Crown, Ya Wen, Zap. (EPN forest products database).
The company’s primary mills are in Indonesia and China, including subsidiary Riau Andalan Pulp & Paper, which operates one of the world’s largest paper mills in Riau Province, Sumatra. APRIL’s fibre is sourced primarily from Indonesia and Latin America.
Companies directly associated with APRIL include: APRIL Fine Paper Trading Pte Ltd, APRIL Fine Paper Trading Ltd., LwarcelCelulose, Bracell, Alkira Trading (Macao Commercial Offshore) Limited, Asia Symbol, AP Enterprises (Macao) Commercial Offshore Limited, Primeyield Enterprise Pte Ltd, APRIL Fine Paper Macao Commercial Offshore Limited, APRIL Fine Paper (Guangdong) Co. Ltd., Shandong Asia Pacific SSYMB Pulp and Paper, Suzhou Industrial Park Asia Pacific Paper Converting, Suzhou Ascend Pulp & Paper Co., Ltd. (Source: EPN forest products database)
Other companies controlled by APRIL owner Sukanto Tanoto, include Toba Pulp Lestari (TPL), Sateri and Asia Pacific Rayon (APR). TPL is involved in social conflicts with indigenous Batak people in North Sumatra, for converting their ancestral forests that provided them clean watersheds and shelter, medicine, food, and livelihoods. Sateri is the world’s largest producer of viscose staple fibre (VSF), based in China. APR produces rayon for Sateri, in a “fully integrated viscose rayon producer in Asia from plantation to viscose fibre” inside the APRIL mll of Kerinci. (Source: EPN forest products database)
Jl M.H.Thamrin (d/h Jl. Teluk Betung) No. 31, Kebon Melati – Tanah Abang
Praveen Singhavi |
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.
Human rights and social issues
Since the beginning of its forestry activities in 1993, APRIL has a long history of social impacts and human rights abuses. Indigenous people and other local communities have been massively impacted by APRIL’s forest conversion. Communities that rely on cultivating rubber, sago, and other crops within the forest landscape have been at issue with APRIL since 2009, including on Riau’s Kampar Peninsula and coastal islands, causing some residents to resort to drastic protest measures, including sewing their mouths shut.
Despite a new policy that commits APRIL and its suppliers to respect Free and Prior Informed Consent (FPIC) and to resolve all its social conflcits, there has been little change for communities embroiled in land disputes with the company. Hundreds of land conflicts remain. APRIL has failed to involve affected communities and other key stakeholders in the identification, analysis and resolution of these conflicts. According to APRIL, just one supplier (PT RAPP) and its partners have 880 unresolved conflicts, involving at least (in the few known cases) 21,000 hectares of land.
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.
Deforestation APRIL started its forestry activities in 1993 and commercial pulp production in 1998. Since then, its paper production has grown at the cost of Indonesian rainforests. The conversion of natural rainforests into tree plantations inevitably reduces the habitat of species, driving them to extinction. As an example, in 2005 APRIL started to clear the precious rainforests of in Bukit Tigapuluh and Kerumutan landscapes, one of the last habitats of the Sumatran Tiger.
In 2013, FSC had “dissociated” itself from APRIL, for that company “being involved in large-scale deforestation activities in Indonesia and bringing negative social and environmental impacts to areas with high conservation values.”
In June 2015, after many years of campaigning to stop deforestation by APRIL and after many brands started to avoid their products, APRIL announced a Sustainable Forest Management Policy version 2.0 (SFMP 2.0). However APRIL’s implementation of its own commitments has been unsatisfactory:
Violation of the zero deforestation commitment has been discovered soon after the new policy has been issued. APRIL has been found by NGOs in sourcing by plantation companies involved in deforestation. APRIL did not even admit its wrongdoing. In November 2018 APRIL supplier PT Tanjung Redeb Hutani (TRH), was found still clearing the equivalent of 190,000 football fields to expand its pulpwood plantations in East Kalimantan.
In November 2018, APRIL supplier PT Tanjung Redeb Hutani (TRH), was found still clearing the equivalent of 190,000 football fields to expand its pulpwood plantations in East Kalimantan.
Forest Fires In autumn 2015 APRIL was identified as one of the top companies responsible for the fires occurring in Indonesia, burning 2.6 million hectares of plantations, forests and peatlands throughout Sumatra, Kalimantan and Papua. An estimated 1.75 billion tonnes of carbon dioxide equivalent was released in just a few months, more than Germany's or Japan’s total annual emissions. Daily emissions during the peak weeks of the fires exceeded the daily fossil fuel emissions of the entire USA economy. The fires created a smoke and haze crisis affecting all of South East Asia, triggering national emergencies across Indonesia and into Singapore, Malaysia and other countries, resulting in diplomatic tensions between Indonesia and its neighbouring countries. The human cost was terrible: 19 people died and an estimated 500,000 cases of respiratory tract infections were reported at the time of the fires.
Greenhouse gas emissions Despite APRIL claiming to manage its plantations on peat according to “best management practices”, these practices have been shown to insufficiently curb drainage effects in the long term. According to a scientific field study based on APRIL’s concessions in Indonesia, the release of CO2 from an acacia plantation on peat has been identified as around 80 tonnes per year per hectare. APRIL's supplier plantation on peat stretches on more than 265,000 hectares. As a result, APRIL’s plantations emit 19.4 million tonnes GHG, nearly as much as the whole Slovenian country emission, and as much as 24 low emitting countries combined. In 2017, the company has been also repeatedly sanctioned for violations of the new peat legislation and tried to keep ofiificial inspection put of its concessions. When in October 2017 the government declared the work-plan of APRIL's major and biggest subsidiary and plantation company (PT RAPP) invalid, APRIL responded by bullying the government, threatening mass firing to mobilize workers against the government, and suing the government itself with a court case that APRIL eventually lost. This way APRIL showed how reluctant actually it is to implement protection and conservation of their peatland areas.
Transparency According to an investigative report, based on the Panama Papers APRIL has shuffled billions of dollars through a web of offshore companies stretching from the Cook Islands in the South Pacific to the British Virgin Islands in the Caribbean. This resulted in receiving financing from banks despite being involved in the forest fires in Indonesia.
Expansion of production Despite a commitment to keep any increase of its production within the availability of sustainable fibre to source them, APRIL continued expanding beyond that capacity, including development of a dissolving pulp production line at APRIL’s Kerinci mill complex with a possible capacity of 350,000 tons per year. APRIL is also developing the Kutai Chip Mill (KCM), which supplies wood chips to its sister company Asia Symbol in China, processing up to one million tonnes of wood.
Expansion by acquisitions In September 2018, APRIL/RGE completed the take over of the Brazilian pulp producer Lwarcel Celulose (250,000 tpy). The company plans a further expansion of its production capacity of 750,000 tpy including a new pulp mill in Mato Grosso do Sul (Brazil) that could lead to further deforestation in the region.
Indonesian and International NGOs have been monitoring APRIL progresses becoming more and more sceptical in the process. In December 2016, both Greenpeace and WWF broke off their engagement with APRIL, with the final straw being the discovery of three kilometers of canals through deep peat on Padang Island off the eastern coast of Sumatra. This was in violation of its own sustainability standards, government regulations and a letter of instruction issued by the Ministry of Environment and Forestry the previous year asking companies to block existing canals. APRIL remains dissociated from the certification standard FSC.
For more detailed analysis of APRIL’s social and environmental risk and its violations of its 2014 forest policy, see this February 2015 Fact Sheet from the European Environmental Paper Network.
In 2013, the Forest Steward Council (FSC) had “dissociated” itself from APRIL, on account of APRIL “being involved in large-scale deforestation activities in Indonesia and bringing negative social and environmental impacts to areas with high conservation values.”
ABN AMRO exposed to risk for financing APRIL
Despite continued deforestation, ABN AMRO continues to “engage”, with APRIL, while doing business with the company. In December 2018, ABN AMRO was part of a large new syndicated loan to APRIL.
NGOs publish Performance Verification Criteria and Indicators
In December 2017, various NGOs published Evaluating the Environmental, Social and Corporate Governance Performance of Sinar Mas Group (SMG) and Royal Golden Eagle (RGE) Companies Criteria and Indicators for Assessing and Verifying Performance to set specific measurable performance requirements and independently verify the on-the-ground performance of APP, APRIL and affiliates. These Performance Verification Criteria and Indicators have been developed to provide a clear framework for APP/Sinar Mas and the APRIL/Royal Golden Eagle groups to be measured against, so that companies and other stakeholders can adequately evaluate performance. In addition, these Criteria and Indicators will inform the critical Forest Stewardship Council process of developing “Roadmaps” toward a possible reversal of their disassociation of APP and APRIL.
Companies Criteria and Indicators for Assessing and Verifying Performance
In December 2017, various NGOs published a new document, Evaluating the Environmental, Social and Corporate Governance Performance of Sinar Mas Group (SMG) and Royal Golden Eagle (RGE) Companies Criteria and Indicators for Assessing and Verifying Performanceto set specific measurable performance requirements and independently verify the on-the-ground performance of APP, APRIL and affiliates. These Performance Verification Criteria and Indicators have been developed to provide a clear framework for APP/Sinar Mas and the APRIL/Royal Golden Eagle groups to be measured against, so that companies and other stakeholders can adequately evaluate performance. In addition, these Criteria and Indicators will inform the critical Forest Stewardship Council process of developing “Roadmaps” toward a possible reversal of their disassociation of APP and APRIL.
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 arose as an APRIL's subsidiary, PT RAPP, as reported by Bloomberg, seeks a 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
It was understood that ABN AMRO was involved in May 2016 in providing a syndicated loan to APRIL for USD 800 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 not finance 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.
Greenpeace and WWF break off their engagement with APRIL
In December 2016, both Greenpeace and WWF broke off their engagement with APRIL, with the final straw being the discovery of 3km of canals through deep peat on Padang Island off the eastern coast of Sumatra, in violation of its own sustainability standards, government regulations and a letter of instruction issued by the Ministry of Environment and Forestry the previous year asking companies to block existing canals. APRIL remains dissociated from the certification standard FSC.
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.
More updated information on financiers of APRIL and RGE is available via the Forests and finance database (flagging "Royal Golden Eagle Group").
More updated information on financiers APRIL / RGE financiers are availavle on forests & finance (flagging "Royal Golden Eagle Group").