Turning over a new leaf in the rainforest

Under intense pressure from customers and conservation groups, forest-products giant Asia Pulp & Paper has embarked on a series of changes that could significantly reduce deforestation in Indonesia and serve as a model for forestry reform.

[This article originally appeared at Yale Environment 360, a publication of the Yale School of Forestry & Environmental Studies.]

 The lowland swamp forests of Riau Province in Indonesia are dense with gnarled roots and tall rainforest trees. The habitat supports critically endangered tigers and a bewildering array of other species, ranging from short-clawed otters to leaf monkeys. The peat soils also lock up massive amounts of carbon.

But the rough terrain is no match for an excavator, which, after digging canals to drain the swamp, can knock down 100-year-old trees with abandon. Logs are sawn, dumped onto barges, and eventually delivered to an industrial complex where giant machines convert the rainforest timber into a pulpy mush.

Meanwhile, the cleared land is planted with acacia trees, turning the once-biodiverse forest into a uniform landscape that is cleared and replanted on a five-year cycle with industrial efficiency. This is how paper is made.

Much of this transformation on the island of Sumatra has been driven by Asia Pulp & Paper, or APP, a Jakarta-based company that to environmentalists has long been synonymous with the decimation of Sumatra's once-vast peat forests. It's still unclear exactly how much forest has been cleared by APP over the years, but the forest products giant has planted more than a million hectares [2.4 million acres] of plantations across Sumatra and Indonesian Borneo.

As a result, communities and wildlife in places like Riau Province — where forest cover plunged from 63 percent in the early 1990s to 22 percent in 2012 — have witnessed the rapid degradation and destruction of resources on which they depend.

But if APP is a major part of the problem in Indonesia, it must necessarily be a key part of the solution. And recent developments suggest that the paper products giant may be abandoning business as usual for a very different approach — one that could change how forests are managed worldwide.

A year has passed since APP — under intense pressure from environmental groups and having lost the business of dozens of major customers, including Wal-Mart, Staples, and Xerox — announced a new conservation policy. With an endorsement from Greenpeace, which had arguably been APP’s fiercest critic, the company committed itself to a series of forestry reforms that had earlier been adopted by its sister company, Golden Agri Resources.

These include a pledge of zero deforestation in woodlands that sequester large amounts of carbon or have high conservation value, a commitment to strict monitoring of its forestry practices, a vow to acquire prior consent from communities for new tree plantation development, and an agreement to set up a disputes resolution process.

But APP went further, saying its reforms would apply to all of its suppliers and adding a peatlands management component to limit emissions in existing plantations. APP’s policy also came with apparent support from the highest levels of the company, something that was lacking with previous pledges to stop pulping Indonesia’s rainforests, which had been repeatedly broken.

Today, changes are plainly visible in APP’s operations. Most important, the company appears to have stopped converting natural, undisturbed forests. Gone are the greenwashing public relations specialists who once did everything they could to conceal the destruction that APP was wreaking on Indonesia’s forests. They have been replaced by well-established sustainability consultants and teams of biologists who have conducted assessments of high-conservation-value forests across the majority of APP’s concessions, documenting the presence of key indicator species in both plantations and areas protected under the company’s moratorium.

Remote-sensing analysts and field teams, funded by APP, are using satellite imagery and ground surveys to determine how much forest remains across the company’s holdings so these woodlands can be protected, while other specialists are conducting training in conflict mapping and dispute resolution with local communities. 

In late January, APP hired the Rainforest Alliance to conduct an independent audit of the implementation of its policies. APP has also readily admitted to some missteps, reporting two breaches of its deforestation moratorium and sending a monitoring group, The Forest Trust, to investigate complaints. 

"APP is quite brave to bring in Rainforest Alliance," said Lafcadio Cortesi, forests campaign director at the Rainforest Action Network, which remains an outspoken critic of APP despite the policy. "Independent verification is one signal that this is moving along on the right track." 

Inviting in the Rainforest Alliance indeed ups the ante for APP given the relationship between the two. Richard Donovan, the organization’s vice president of forestry, confirms that the Rainforest Alliance didn’t enter into the agreement lightly after APP reneged on earlier deforestation pledges, which prompted the alliance and other conservation groups to sever ties with the forestry giant by 2007.

"We wouldn’t put our reputation on the line if we didn’t think APP was serious this time around," he said in an interview. 

Donovan said the Rainforest Alliance agreed to monitor APP for several reasons: Top executives at the company finally seem committed to ending deforestation; Greenpeace and The Forest Trust have wrested major, verifiable commitments from APP; and deforestation and community rights are important to some of APP's customers.

"If APP doesn't address these issues, it will face intensifying market pressure going forward," Donovan said. 

This about-face has surprised longtime critics of APP, which is the largest pulp and paper producer in Indonesia, relying on a web of 38 supplier concessions that control 2.6 million hectares [6.4 million acres] in Sumatra and Borneo — equal to 1.3 percent of Indonesia's land mass. While that may seem like an exceptionally large amount of land controlled by a single corporate entity in a country with nearly 250 million people, it's not all that unusual in Indonesia.

Indeed, APP is emblematic of the status quo in Indonesia’s forestry sector. The model, perfected under the rule of former strongman Suharto, was one where the centralized authorities granted huge land concessions to cronies, ignoring traditional users and environmental consequences. APP’s growth accelerated in the 1990s with the Indonesian government’s push to turn the country into a paper-making powerhouse. 

But has APP truly transformed its operations? Among its critics, the jury is still out. WWF, RAN, and the Indonesian NGO Greenomics are waiting to see the results of assessments conducted over the past year by The Forest Trust and Indonesian auditors.

And environmentalists are now raising the bar, asking APP to not only abandon deforestation, but commit to addressing its deforestation legacy through ecosystem restoration. APP is proposing a modified form of restoration, meaning that it wouldn’t convert plantations back to natural forest, but would support efforts to return degraded natural forests in the same ecosystems back to health. WWF welcomes that, but wants APP to restore as much degraded forest land as the company has razed in recent decades. 

In the past month, two major customers have returned to APP: Staples and Australia-based BJ Ball. Both cited the forest conservation policy as the reason for resuming business. But for RAN and WWF, independent verification of APP’s compliance is key before conservation groups give the green light to customers to once again begin purchasing paper products from the company. 

"Commitment is not compliance," Cortesi said. "APP’s new commitment is just the starting point, not the finish line. The hidden story here is [APP’s] long and deep history of broken promises, land conflicts, and human rights violations across its operations. ... It is still too early to say if APP’s latest commitments will bear fruit or wither on the vine, as has happened too consistently in the past." 

Scott Poynton, executive director of The Forest Trust, which is overseeing implementation of APP’s new policy, takes a different approach, arguing that APP needs to be encouraged through market recognition of its efforts, which he says will drive other companies to adopt similar policies. 

"Customers should start buying again from APP to give encouragement … that they’re on the right track," Poynton said. "If other companies in the palm oil and pulp and paper sectors see APP taking market share because of strong implementation of their new policy, then they’ll be more likely to go down a similar route."
 Greenpeace is more cautious.

"The markets should reward companies who genuinely clean up their act," said Phil Aikman, a senior forest campaigner for Greenpeace. "Our view is that the extra layer of scrutiny that responsible buyers bring will be crucial in ensuring the longer-term delivery of APP’s commitments." 

Looking to the example of its sister company, Golden Agri Resources, which secured a $500 million loan and saw the return of former customers after it established a forest conservation policy, APP is hoping that its investments in forestry reforms will eventually pay off. But even as customers return, APP still faces the challenge of implementing its policy, which at times is frustrated by issues outside of its control.

For example, one of the breaches reported by local NGOs turned out to be the result of an overlapping permit granted to both an APP supplier and a palm oil company, which cleared the forest. Overlapping concessions are a widespread problem in Indonesia, making it difficult to assign responsibility for, and therefore address, issues like deforestation and haze-causing peat fires. 

In another case, APP is negotiating a conflict with a community that wants to fell carbon-dense swamp forest that lies within a pulpwood concession. APP says it wants to preserve the forest as part of its conservation policy, but the community won’t agree to a swap for an equivalent area of non-forested land. If the community moves forward, APP fears it will breach its moratorium.

With its public commitment, APP now has a strong incentive to address these issues, much like the Indonesian government after signing an emissions-reductions pact with Norway in 2010 that imposes a moratorium on new forestry permits across millions of hectares of forests and peatlands. 

It remains to be seen whether APP and the Indonesian government are finally addressing a wave of deforestation that has devastated large swaths of once-pristine tropical forest across the Indonesian archipelago. Environmentalists hope that once big companies like APP view forest policies as being in their best interest, they’ll push for establishing and better enforcing environmental laws that could rein in some of the worst actors.

Aida Greenbury, managing director of sustainability and stakeholder engagement at APP, says the company wants the government to enforce the law. "If we want to save our forests, we need the government’s help on these issues."

• Rhett Butler is the founder and editor of Mongabay.com, one of the leading sites on the Web covering tropical forests and biodiversity. Rhett is also the head of Mongabay.org, which runs Mongabay-Indonesia, an Indonesian-language environmental news service.