JAKARTA — Recent findings of deforestation by two companies with ties to the Sinar Mas Group and its pulp and paper arm, Asia Pulp & Paper (APP), have led Greenpeace to end its engagement with the Indonesian conglomerate.
According to a new mapping analysis by Greenpeace, 80 square kilometers (30 square miles) of forests and peatlands, an area half the size of Washington DC, has been cleared since 2013 in two concessions that are linked to the paper giant.
Greenpeace said this finding had put APP’s commitment to end deforestation in jeopardy.
“The group failed to provide a credible response or to take meaningful action,” the NGO said in a statement. “As a result, Greenpeace has ended all further engagement with APP/Sinar Mas.”
APP denied the allegations and said it regrets Greenpeace’s decision, saying that it might actually harm the company’s progress in implementing its zero-deforestation policy.
“APP is disappointed by the statement released by Greenpeace today,” APP said in a statement.
APP and Greenpeace have had a tumultuous relationship, with both locking horns for two decades over the company’s vast clearance of rainforest and peatland on the island of Sumatra.
In 2013, APP under pressure from Greenpeace and other NGOs, pledged to stop clearing forests and peatlands. The policy also committed to resolving conflicts over land with local communities.
The policy promised a major shift for Indonesia’s forestry sector, so much so that it turned Greenpeace from APP’s adversary into its ally, with the NGO suspending its campaign against the paper giant which had cost the company tens of millions of dollars in lost business.
Greenpeace was also instrumental in drafting the policy, and has since been involved in monitoring its implementation.
“Greenpeace has been an integral partner in our sustainability journey since 2013, and their engagement and support has resulted in much progress in the fight against deforestation in Indonesia,” APP said.
Greenpeace told Mongabay it first detected irregularities in APP’s businesses in late 2017, when an investigation by the Associated Press uncovered ownership ties between APP and more than two dozen plantation companies the paper giant had previously claimed were “independent” suppliers. Many of the companies were linked to devastating fires and deforestation in Indonesia.
Greenpeace then launched its own investigation, confirming the Associated Press’ finding that APP had undeclared connections to a number of other pulpwood companies, with some of these companies owned by employees of Sinar Mas Group companies.
At least two of these companies were discovered to be committing large-scale deforestation in Kalimantan, the Indonesian part of Borneo, after APP promised to stop clearing forest.
The first company is PT Muara Sungai Landak, which has cleared nearly 30 square kilometers (11 square miles) of forests and peatland in its pulpwood concession in West Kalimantan province.
According to Greenpeace’s finding, the company is owned by Justinus Indrayanto and Hendy Lie, two employees of Sinar Mas Forestry, whom Greenpeace identified as APP’s sister company, through a network of holding companies.
“We sent our own team to investigate the matter and indeed, we found deforestation there,” Kiki Taufik, head Greenpeace’s Indonesia forest campaign, told Mongabay. “We’re told that the employees weren’t from APP, but from Sinar Mas Forestry. But, we can’t accept that because we believe the whole Sinar Mas Group has to implement this [zero-deforestation] policy.”
The second company is PT Hutan Rindang Banua, which is owned by a Sinar Mas-branded mining company, Golden Energy and Resource (GEAR).
Kiki said PT Hutan Rindang Banua had cleared nearly 50 square kilometers (19 square miles) of forest from its 2,650 square kilometers (1,020 square miles) of pulpwood concession in South Kalimantan since 2013.
“At first, we didn’t know that Sinar Mas Group owned the PT Hutan Rindang Banua’s concession,” he said. “But after the investigative report from Associated Press was published, we tried to launch another investigation and found this. That’s what made us not be able to continue [the relationship with APP].”
Furthermore, APP said it didn’t purchase wood from these concessions.
APP also clarified its alleged connection with PT Muara Sungai Landak, saying that an independent assessment made by an auditor in 2014 had concluded that none of PT Muara Sungai Landak’s wood came through APP’s supply chain.
However, the assessment failed to detect relationships between PT Muara Sungai Landak’s shareholders and APP.
APP said that after the Associated Press article came out, it launched its own investigation and found that three of PT Muara Sungai Landak’s shareholders, not two as stated in the article and in Greenpeace’s statement, had relationships with APP.
Two were ex-employees of APP who left the company in October 2015 and November 2015 and one was a current employee who had not declared his shareholdings and position within PT Muara Sungai Landak.
“This constituted a violation of APP’s Code of Conduct as it presented a direct conflict of interest,” APP said. “The employee was terminated with immediate effect.”
APP also corrected Greenpeace’s statement on the status of Sinar Mas Forestry as APP’s sister company, saying that it’s actually a division within APP.
APP also said it didn’t receive wood from GEAR. However, the company didn’t deny the allegation that GEAR committed deforestation.
“On the other company raised in the Greenpeace statement, GEAR, we are unable to speak on their behalf,” APP said. “GEAR operates independently from us and do not supply wood to APP.”
Kiki said the problem was not whether deforesting companies supplied their wood to APP or not, but the fact that former employees of APP owned a company linked to deforestation.
“We can’t prove that the wood from deforestation enters APP’s supply chain,” he said. “But what we questioned was the link between APP’s employees with PT Muara Sungai Landak. APP should’ve done something before there’s an investigation from a third party. If they are truly committed, then they should’ve disclosed the fact from the very beginning and they should’ve detected the link.”
Despite the allegations, Kiki said APP still had to be recognized for making substantial progress in its zero-deforestation policy.
APP claimed that it had identified and protected more than 6,000 square kilometers (2,316 square miles) of natural forest through the implementation of High Carbon Stock Approach and High Conservation Value studies within its concessions and those of its third-party suppliers.
Kiki also applauded APP’s program to dam drainage canals in peatlands.
“We have to admit that there’s been some progress made in that area,” he said.