A broad swathe of deforested land in Borneo. Indonesia has the fastest deforestation rate in the world, and palm oil and paper companies have come under increasing pressure to delink their businesses from forest clearance. Image: Rich Carey / Shutterstock.com

Indonesia’s Asia Pulp and Paper Group (APP) has made “moderate progress” on fulfilling its ambitious Forest Conservation Policy (FCP) announced two years ago, but the company must do more to stop deforestation in its concessions by third parties, protect peatlands, and resolve social conflicts.

These are the findings of a new audit report released on Thursday in Jakarta by international non-profit Rainforest Alliance, which was asked by APP to assess their efforts to implement its forest policy, which pledged to preserve forested areas and peatlands, respect community rights, and ensure that third-party suppliers also practice responsible forest management.

After looking at APP’s operations from February 2013 to last August, Rainforest Alliance said that APP had delivered on commitments such as stopping deforestation, peatland canal construction, and the use of natural forest pulpwood fibre.

APP had also done well in holding its existing suppliers to guidelines for responsible fibre procurement and processing, and ensuring that future suppliers would do the same.

However, there were also several areas where only limited progress had been made, the report showed.

While plans to address problems were in place, there is “still work to be done in implementing some of those policies and procedures in the field”, said Richard Donovan, Rainforest Alliance’s senior vice president for forestry. 

“This is a gap APP must address as it continues to implement its FCP,” he added.

Announced in 2013 as part of the company’s sustainability efforts, APP’s FCP applies to its current operations and future expansion, its suppliers in Indonesia, and Indonesian fibre used by all APP mills.

Palm oil and paper companies have long been linked to illegal forest clearance, which has plagued Indonesia for decades. In 2014, it was found to have the world’s highest rates of deforestation.

This has also led to rising greenhouse gas emissions, the annual haze from forest fires that blankets Southeast Asia and the violation of community rights by agribusiness giants.

Better protection needed 

“Many building blocks essential for change – policies and standard operating procedures, training and outreach, for example – are in place. There is still work to be done in implementing some of those policies and procedures in the field. This is a gap APP must address as it continues to implement its Forest Conservation Policy.
~ Robert Donovan, senior vice president, forestry, Rainforest Alliance

Rainforest Alliance identified several areas where APP fell short. 

For one thing, the company’s framework to meet the commitments on peatland in future are already in place, but implementation efforts were not enough.

Apart from preventing canal development, there had been no change in management practices of peatlands to protect them, prevent drainage or burning, and reduce greenhouse gas emissions.

Although APP had completed over forty assessments to identify areas on its concession that were deemed to have high carbon stock (HCS) or high conservation value (HCV), some recommendations from the assessments had not been implemented, said auditors.

APP could also do more to protect community and labour rights, the report found.

While the company had mapped out the various social conflicts that existed between the company and surrounding communities, just one pilot conflict resolution had been completed, and resolution plans only existed for a tenth of the hundreds of conflicts mapped.

Rainforest Alliance’s interviews with local communities also indicated that limited progress had been made by APP to obtain ‘Free, Prior and Informed Consent’ (FPIC) from indigenous groups and communities when developing forestry operations.

Mixed reviews  

Environmental groups had mixed views about the report.

Conservation group WWF were “very concerned” at the shortcomings identified in the audit report. Aditya Bayunanda, forest commodity leader, WWF-Indonesia, said that Rainforest Alliance’s findings confirmed those of WWF’s and local NGOs’ that APP’s inability to stop deforestation in its concessions by third parties meant “the company has even failed to protect forests they are legally required to conserve”.  

Rod Taylor, director of the forest programme at WWF International, added that “APP customers should be alert to the risk of doing business with a company that has not yet eliminated deforestation and peat carbon emissions from its wood supply areas”. 

WWF’s Bayunanda also expressed concern at the hundreds of unresolved social conflicts, saying that this “should send high alerts through APP headquarters”.

On the other hand, environmental campaigners Greenpeace, which in 2011 criticised APP for ‘greenwashing’ its environmental practices to visiting journalists, published a blog post on Thursday expressing confidence that the company was “still be on track to deliver its commitments” despite the many challenges pointed out by Rainforest Alliance.

The group also emphasised that the industry in general had to take greater responsibility for stopping deforestation in Indonesia, and called out rival local paper company Asia Pacific Resources International Holdings Limited (April) on being a laggard in this regard.

In contrast to APP’s 2013 pledge, April confirmed in early 2014 that its suppliers’ bulldozers would continue clearing forest and peatland up until 2020, Greenpeace said.

On the right track

On its part, APP welcomed the report. Aida Greenbury, APP’s managing director, said in a post on the company website that “this evaluation provides invaluable feedback and it is encouraging to see that in many areas, our progress is acknowledged and verified”.

The report affirms that the company’s efforts to achieve zero deforestation are “on the right track”, she added in a statement.

In response to the report, APP launched a new FCP Implementation Plan on Friday. This plan prioritises preventing third-party forest clearance on APP concessions, managing wildfires better, developing peatland management strategies, and strengthening social conflict and FPIC systems, among others.

Greenbury added that the evaluation highlighted how despite APP’s efforts, forest loss continued because of encroachment, forest fires, and illegal activities.

The evaluation would hopefully prompt others, “including government, NGOs and the private sector to collaborate more closely to help tackle the issues across the landscape,” she said.