Pulp giant APP rebuts Associated Press report

Firm denies covering up links with errant suppliers, reaffirms its sustainability claims

Asia Pulp and Paper (APP), one of the Indonesian companies blamed for the 2015 record-breaking haze in the region, has rubbished an Associated Press report implying it had covered up links to suppliers that practise deforestation or illegal slash-and-burn methods in a bid to void its sustainability claims.

In a statement yesterday, APP did not deny ownership or having links with most of the 27 suppliers the Associated Press report said it had - except one with the firm Muara Sungai Landak. But APP said its ownership structures did not weaken its sustainability commitments and that such partnerships would allow the firm to enforce them.

An APP spokesman said: "All our relationships with our suppliers are guided by our forest conservation policy and our zero-deforestation pledge." He added that there are safeguards to ensure compliance, and that contracts with rogue suppliers can be terminated.

APP, Indonesia's largest pulp and paper firm, was responding to an article published earlier this week by the Associated Press.

The article alleged that APP and its parent company, Sinar Mas, had control over 27 suppliers that it had earlier claimed were independent, citing over 1,000 pages of APP corporate records. APP had likely done so to distance itself from rogue suppliers, allowing it to minimise responsibility, the report added.

For example, in November 2015, two of APP's suppliers - Bumi Mekar Hijau and Sebangun Bumi Andalas Wood Industries - had their business licences suspended by the Indonesian government over accusations of illegal forest fires. But APP told the media then that the companies were independently owned, and that it had suspended contracts with the firms.

A check on APP's website yesterday showed that APP still sources for pulpwood from both firms.

The Associated Press report also said APP is linked to Muara Sungai Landak, a firm which has been cutting down forests on Borneo. This shows that APP is indirectly flouting its no-deforestation pledge.

In yesterday's statement, APP said Muara Sungai Landak was not its supplier and has no business relations with the pulp giant, although the Associated Press had found that the plantation firm is owned by two employees at Sinar Mas Forestry.

The Straits Times also yesterday found on APP's website a map showing hot spots from the period between Dec 6 and 13 last year which clearly lists Muara Sungai Landak as one of APP's partner concessions in West Kalimantan.

Ms Zhang Wen, executive director of Singapore-based volunteer group People's Movement to Stop Haze (PM.Haze), said if APP was found to have secret ties with suppliers which violate Indonesian law or their own sustainability standards, it weakened the firm's overall commitment. "APP has the responsibility and the ability to improve transparency and ensure their suppliers comply to high standards."

On Thursday, the Associated Press published another report alleging that one of APP's potential suppliers, Bangun Rimba Sejahtera, planned to convert community land to plantations despite resistance from villagers.

If APP does end up sourcing for wood from this company, it would renege on its promise of obtaining free, prior and informed consent, said the report.

Responding on this point, APP said yesterday it is still engaging with the supplier and would not approve sourcing from it without the consent of local communities.

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A version of this article appeared in the print edition of The Straits Times on December 23, 2017, with the headline Pulp giant APP rebuts Associated Press report. Subscribe