Asia Pulp & Paper: Suspended suppliers independently owned

In this picture taken on Oct 30, 2015, a firefighter attempts to extinguish fires in forest and peatlands surrounding Palangkaraya city in Central Kalimantan. PHOTO: AFP

Asia Pulp & Paper (APP) said the two suppliers that have had their business licences suspended by the Indonesian government over accusations of illegal forest fires are independently owned.

APP also noted on Wednesday that it had suspended contracts with the firms - PT Bumi Mekar Hijau (BMH) and PT Sebangun Bumi Andalas Wood Industries (SWI) - last month while investigations remained ongoing. In response to a Straits Times query, its spokesman said: "Both suppliers are independently owned and operated entities which have entered into supply contracts with APP. APP has engaged with both suppliers to clarify reports as a matter of urgency and will ensure all suppliers concerned respect this process."

APP, BMH and SWI are reportedly under the Sinar Mas Group, one of Indonesia's largest conglomerates, which has separately denied any links or affiliations with these companies.

On Monday, the Indonesian authorities released the initials - but not the full names - of 16 plantation companies it said were responsible for illegal fires that caused the haze. Their business licences have been suspended and the authorities are considering legal proceedings.

APP said as part of its zero burning policy introduced in 1996, "any supplier found to have breached this policy will be disengaged".

Two months ago, senior executives of APP and Sinar Mas told the Singapore media they did not start the fires behind the haze crisis.

Sinar Mas agribusiness and food chairman and chief executive Franky Widjaja said in a press conference that APP and its suppliers did not start the fires in South Sumatra, which have been identified as the chief source of the haze.

The region's largest manufacturer of tissue, stationery and other paper products, APP was thrust into the spotlight in September when the National Environment Agency (NEA) demanded information on its subsidiaries in Singapore and Indonesia, as well as what its suppliers were doing to fight fires. NEA said that it has received information from APP following its earlier request and has sent the company another set of questions to clarify the information it has submitted.

Meanwhile, major retailers like Watsons Singapore and FairPrice are working with their suppliers to ensure they do not have links with firms that have been identified by the Indonesian government.

During the three-month-long haze, FairPrice and Watsons Singapore signed a Singapore Environment Council (SEC) declaration saying they procure their wood, paper and/or pulp materials from sustainable sources.

In response to queries from The Straits Times on Tuesday, the SEC said the council and the Consumers Association of Singapore are glad that the Indonesian government has released the initials of the companies involved in slash and burn activities which have caused the haze.

"We are monitoring the situation very closely and are waiting for the full names of the companies to be made known publicly before deciding on the next course of action," a spokesman said.

• Additional reporting by Jalelah Abu Baker

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A version of this article appeared in the print edition of The Straits Times on December 25, 2015, with the headline Asia Pulp & Paper: Suspended suppliers independently owned. Subscribe