Campaigners continue to notch up victories against the paper and packaging producer APP, but it’s a giant company with a huge customer base – and the rainforest’s trees are still falling

Force the Riau pulp mill to shut down, unfurl the banner and try to hold off the police as long as possible: for the 12 Greenpeace activists hoisted atop the 40-metre-high loading cranes, the intent was to take the battle to the frontline of Indonesia’s forestry war.

The aim was to achieve a lockdown – at least for one day – at Asia Pulp and Paper’s largest mill on the island of Sumatra, and send a message to world leaders gathering at the December 2009 Copenhagen Climate Summit.

“Forest Destruction: You can stop this,” read the banner.

Beyond those in the environmental community, however, few noticed, and among those who did, few thought there would be much impact. Due to the nature of illegal logging and the lack of transparency within the industry, it is very difficult to identify chains of custody. And by targeting APP, environmentalists were taking on the fantastically rich Widjaja family – owners of the powerful Sinar Mas conglomerate whose patronage relationships ran deep into the heart of the Indonesian government.

Nevertheless, three years later, the situation has changed. Environmentalists now appear to have the upper hand as a slew of big international, western-facing companies drop the now toxic APP brand whose name conjures up forest destruction and the eradication of orang-utan and tiger habitats.

By first pressuring Unilever and Nestlé into cancelling palm oil contracts with APP’s sister company Golden Agri Resources – also part of the Sinar Mas empire – forest campaigners successfully eliminated one of the two chief industrial drivers of rainforest destruction. Golden Agri chief executive Franky Widjaja is said to have seen the writing on the wall: go out of business or submit to credible third-party monitoring.

But as for APP, this strategy only caused the company to dig in its heels. APP has become notorious for greenwashing its activities, going so far as to hire high-priced PR firms and lobbyists to wage multi-million-dollar campaigns countering activist charges. In May 2012, for example, news leaked that former UK trade minister and European commissioner Peter Mandelson had been advising APP and attending meetings on the company’s behalf.

Rumours are that APP chief executive Teguh Widjaja is embarrassed by his younger brother and, having lost face, is now unable to even consider reaching a deal. Others say APP is hemmed in by a tremendous debt burden linked to an ill-advised expansion plan.

Whatever the case, one thing is clear: in the decade-plus since they began campaigning, environmentalists and human rights activists have evolved into a formidable global front. Among them, Greenpeace has become particularly adept at combining well-documented allegations with hard-hitting campaigns that shatter APP certification claims and deftly implicate some of their biggest customers.

In the process, the NGO community has concretely impacted how companies understand their link to forest and habitat destruction. A nascent FSC-certified timber industry has come of age, while post-consumer recycled content and alternative fibres are beginning to provide real options. A case in point is the recent pledge by Kimberly-Clark to have 50% alternative fibre content in its supply chain by 2025.

Still, deforestation in Indonesia has yet to be slowed to any meaningful degree, causing some to question whether the ultimate aim will be attained. At stake are millions of hectares of wildlife habitat and carbon-rich peatland, and time appears to be running out.

Greenpeace campaigning

These days, when an APP client is targeted by Greenpeace, the chief executive tends to respond within days. If the target cannot immediately shift suppliers, pledges are made and companies engaged to enable a change of course.

That’s what happened to Xerox, which has had a global policy in place since 2002 not to use APP products, but was discovered this year to have made purchases from an APP subsidiary whose fibre content contained ramin, an internationally protected tree species traced to the logyards of APP’s Indah Kiat Perawang mill.

Also caught red handed in the year-long investigation begun in 2011were National Geographic, Wal-Mart, Acer, Barnes & Noble and Danone, to name just a few. All have since pledged to sever all contacts with APP, but it’s the discovery of Xerox’s continued APP dealings that served to warn others of the seriousness of what’s at stake.

“I think this particular case demonstrates that it’s not enough to make commitments,” says Andy Tait, a senior Greenpeace campaign manager who has worked on the Indonesian forestry campaign since 2008. “You then need a system of due diligence to check that policies are properly implemented. Xerox got caught out. If they had been policing their policy implementation, that wouldn’t have happened.”

The critical thing is to always check where your materials actually come from, supply chain experts say. In this case, it is about who is providing the pulp or packaging to your suppliers. Do the homework and implement policies that, first, help to ensure you don’t end up contributing to deforestation and, second, support responsible procurement of products such as paper and packaging. Then set up due diligence to make sure the policies are implemented.

Largely as a consequence of NGO campaigning and investor pressure, 87 global corporations disclosed their “forest footprint” in 2011, according to Forest Footprint Disclosure’s 2012 annual review. That was an 11% increase over the previous year, indicating a greater awareness of risk, but not necessarily the implementation of action plans to reduce those impacts. Of the 357 global companies approached by FFD, a quarter took up the challenge.

“I work with big companies and it takes a while to educate these people on their actual impact,” says Mark Comolli of the Rainforest Alliance. Comolli credits the APP campaign with compelling huge buy-in to the Rainforest Alliance’s SmartSource management programme where, previously, companies such as Staples and Mattel “had no idea where their stuff was coming from”.

Alternative fibres

Implementing these policies is not an easy undertaking. It takes an investment of resources, says Comolli, citing Kimberly-Clark as a visionary company whose alternative fibres commitment may yield big changes in the industry.

As reported by Ethical Corporation, Kimberly-Clark will shift to bamboo and leftover wheat straw, potentially moving 350,000 tonnes of pulp demand towards alternative fibres. Bamboo plantations are planned for the south-eastern US – where growing conditions are ideal and existing pulp machinery can be easily adapted.

Currently there exists no commercial-scale pulping facility for wheat straw in North America, according to Neva Murtha, a campaigner with Canopy, an environmental group advising Kimberly-Clark on alternative fibre sourcing. Canopy has identified more than 1m tonnes of annual demand among printers and publishers, enough to keep five mills working. “We think that’s just the tip of the iceberg,” says Murtha.

Real alternatives now exist across all product lines, Comolli says. And for companies wanting to dive into their supply chains, there are customisable sourcing plans backed by internal IT solutions and a host of on-the-ground forestry experts in nearly every corner of the world.

“It’s one thing for a company to put a letter out to suppliers and it’s another thing to say ‘we have proof validated by an independent organisation that your results are real’,” Comolli says.

There are also very important economic issues at play. Big money is at stake, and for a company like Mattel the decision to totally disengage from APP was hardly trivial.

In the case of KFC, the subject of an ongoing Greenpeace campaign, Comolli says there isn’t any other packaging business being developed at the moment. “So what are they going to do?” he asks. “They can’t just quit doing business.”

Complicating matters is the breadth of the APP network. Though it is a consumer-facing company, APP often floods the market with competing brands in a way that doesn’t seem to make any business sense, says Robin Averbeck, a campaigner with Rainforest Action Network. “Part of this is them hiding from the campaign and trying to disguise that this is, in fact, APP.”

A great many US publishers were getting their fibre from APP printing presses in China, Averbeck says. Rainforest Action’s campaign launched in 2009 has peeled away much of this support, while in a recently launched WWF campaign targeting two APP tissue brands, Livi and Paseo, 17 of 20 targeted US supermarkets cancelled their orders.

Though progress is being made, only when international companies fully vet their supply chains will environmentalists truly have the leverage they need. That tipping point hasn’t yet been achieved, says Arian Ardie, a former APP sustainability manager who left the company in 2005. “The customers that are leaving are not necessarily the ones that have the greatest overall volume,” he says. “They still have their customers in Asia, especially in China, and to some degree in Japan and the Middle East.”

New strategy

In relentlessly continuing with its campaign against APP and its customers, Greenpeace and other NGO groups say they have no choice but to continue to apply pressure. Greenpeace alone claims more than 60 companies have now suspended purchases.

KFC remains an important target, owing to its large presence in India and China.

“KFC is destroying the habitat of the last remaining Sumatran tigers for potato wedges and 12-piece buckets of extra crispy chicken. It’s disgusting,” states a recent campaign linking the company’s throw-away packaging containers to Indonesian rainforests. An online campaign and parody website depicting Colonel Sanders with a raised chainsaw are reported to have hurt KFC’s image.

KFC is said to be in talks with Greenpeace, but short of shutting down the paper mill, how might APP and Greenpeace reach some kind of detente? There’s so much bad blood between the two adversaries that Ardie says he believes there may not be a way to find common ground.

Tait says a third-party-monitored, time-bound sustainability action plan might work, but would depend greatly on the specifics. It would depend on credibility of their commitments, the choice of third party, and the transparency of the reporting against any commitments made.

In May 2012, shortly after Greenpeace’s KFC campaign launch, APP attempted one more overture. It pledged to become almost wholly reliant on plantation fibre by 2015 – a pledge covering both its own concessions and those of its independent pulp wood suppliers – and announced a plan for adhering to High Conservation Value Forest (HCVF) standards. APP has since named outside experts to assist it in this work but campaigners say that unless APP commitments are sufficiently credible, these partners cannot possibly succeed.

“The process of engagement with independent suppliers is, by its nature, very different from APP owned concessions,” says Robert Arnott, via email, from Cohn & Wolfe, the agency handling global PR for APP since 2010. “In order to ensure successful implementation, there has to be a detailed assessment of the impact of changes in policy and operations. Both APP and the independent supplier must consult with a wide variety of stakeholders. Inevitably, this will take more time.”

Tom Tevlin, president of Canadian-based Greenspirit Strategies, a marketing firm that has long handled APP promotions, tells Ethical Corporation: “NGOs leverage one-sided information in order to attack a company’s valuable corporate brand, and thereby achieve the NGO campaigns’ goals. In short, we think the campaign is not fact-based.”

Rainforest harvesting

Forest campaigners insist their continued focus on APP is warranted. They report not yet seeing any suspension of natural forest harvesting from many of the rainforest areas supplying APP. Moreover, plans by APP for what’s purported to be one of the world’s largest pulp mills in south Sumatra province hardly portends a new business model. Given its enormous size, analysts say there is no way APP could source enough plantation fibre to keep the mill running at a profit.

“The burden of proof is on them to demonstrate suspended operations in natural forests while doing this audit,” says Lafcadio Cortesi forest campaign director for Rainforest Action Network. “The new mill will be a watershed for the government and for APP to see if, in fact, they can do business differently.”

Greenpeace’s Tait criticises APP for trying to spend its way out of trouble through an extraordinary greenwash campaign that cost millions of dollars at a time when it could have come clean and invested in better plantation management. “Their strategy has failed miserably, as we can see with the range of international customers that they have lost in the last few months,” Tait says.

“What should worry APP is that as time goes on, less and less campaigning is needed to convince companies to suspend purchases from APP.”

Tait maintains it is possible for APP to change its business model and  become reliant on plantation fibre. But that requires an immediate change of direction, backed by third-party verification, he adds. “If APP doesn’t do that, what’s left of Sumatra’s forests are in big trouble.”

15 years of activism

Though the Indonesian forestry war was launched in the late 1990s, environmental campaigners have come of age only in the past few years. After two failed engagements with APP by WWF and Rainforest Alliance, a much larger and more focused phase led by Greenpeace has begun to seriously damage the pulp and paper giant’s customer base.

There is now a unified front of local and global NGOs that are standing up to companies like APP, says Michael Stuewe, a US-based WWF scientist. “There has been a great evolution in data collection and communications technology available to campaigners that has brought about ever greater transparency on deforestation events.

“But on the ground the situation is as it was in the late 1990s: APP and its peers are continuing to drain tropical peatlands and deforest elephant and tiger habitats.”

Timeline:

1998 – The Indonesian president Suharto falls and a new breed of local NGO activist floods in to begin researching and documenting the country’s illegal logging practices.

2000-2 – Campaigning against APP begins with reports from the Centre for International Forestry Research, Friends of the Earth, WWF and Greenpeace linking international finance institutions to APP and its illegal logging practices.

2002 – APP products blacklisted from UK; Xerox announces global policy banning the use of APP products.

2004 – WWF rejects APP sustainability plan as it does not protect high conservation value forests (HCVF) and owing to distrust of the company’s pledge to switch to plantation wood by 2007.

2004 – NGO Robin Wood persuades Metro Group to cancel APP contract

2004 – Eyes on the Forest coalition of Indonesian campaigners is founded by Friends of the Earth and WWF, establishing a common reporting platform enabling the synchronisation of investigations across dozens of NGOs.

2005 – Greenpeace and Friends of the Earth link APP to illegal logging in Cambodia and Yunan province of China.

2005 – APP enters five-year partnership with Rainforest Alliance to identify, protect and monitor HCVF in several concessions.

2007 – Rainforest Alliance terminates agreement with APP after determining continued clearance of HCVF.

2007 – FSC revokes APP’s certificate because of continuing destruction of HCVF.

2007 – Staples cuts ties to APP

2008 – Unilever supports moratorium against Indonesian palm oil one month after Greenpeace Dove Onslaught(er) campaign

2010 – Nestlé signs palm oil moratorium after launch of Greenpeace Kit-Kat campaign and pledges broad commitments to tackling deforestation.

2011 – Sinar Mas palm oil subsidiary Golden Agri Resources signs agreement with The Forest Trust pledging support for sustainable palm oil; aims for zero deforestation footprint and certification from RSPO of all plantations by 2015.

2011 – Mattel implements new policy on wood fibre, pledges to increase amount of recycled paper and boost use of FSC wood three months after Greenpeace’s Barbie It’s Over campaign.

January 2012 – In partnership with Rainforest Action Network, Levi’s pledges to stop purchasing from APP.  

February 2012 – WWF’s Don’t Flush Tiger Forests campaign targeting 20 US supermarket chains carrying APP tissue brands, Livi and Paseo.

March 2012 – Greenpeace Ramin Paper Trail report documents APP paper mill mixing illegal ramin logs and links them to 11 companies including Xerox, National Geographic, Danone, Wal-Mart, and Barnes & Noble.

May 2012 – Greenpeace campaign KFC! No Good for Rainforest and Frying the Forest in China and India marks a shift towards consumers in developing countries.

June 2012 – Kimberly-Clark pledges that 50% of wood fibre currently sourced from natural forests to come from alternative fibre sources by 2025.

June 2012 – APP releases Sustainability Road Map, which is subsequently rejected by WWF and Greenpeace.

APP: a turbulent history

Recently dubbed Indonesia’s richest man with a net worth of $12bn, Eka Widjaja is the founding patriarch of Sinar Mas Group whose holdings boast palm oil, pulp and paper, property, banking, energy and infrastructure and, more recently, mining. Now 89 and retired, he is said to have handed the business over to his children, in particular Teguh, Muchtar, Franky and Indraw – who each look after a major component of the sprawling business empire.

APP, a cornerstone of the business, ran into severe debt trouble in 2001 and has sought to offset its problems with new operations in southern Sumatra, China and Papua New Guinea.

Logs from the clearance of Indonesia’s rainforests, including peat swamp forests, are estimated to have accounted for about 20% of the fibre pulped in APP’s mills between 2007 and 2009. APP’s facilities in Indonesia and China produce packaging papers and products for many global brands across sectors, including food, electronics, cosmetics, footwear, cigarettes and toys.

The division is responsible for about 40% of Indonesia’s total pulp production and is said to have ambitions on becoming the world’s largest paper company.

Timeline:

1984 – APP builds its largest pulp mill in Sumatra’s Riau province, ground zero for the pulp and paper industry and home to the island’s highest deforestation rate

1994 – APP builds pulp mill in Jambi, Sumatra

2004 – A group of major creditors in APP’s 2000 bankruptcy include HCVF protection and sustainable operations into an amendment of their debt restructuring agreement with APP.

2005 – APP opens pulp mill in Hainan, China.

2007 – Riau and National Police stop all logging operations by APP in Riau to investigate illegal logging.

2008 – Indonesia’s corruption court sentences a senior official of the Pelalawan district in Riau, Sumatra, to 11 years in prison for corrupt practices while issuing licences to APP.

2011 – The Indonesian president announces a two-year moratorium on the issuance of new concessions on peatlands and in forests. However, it only covers areas of primary forest and peatland outside existing concessions.

2012 – APP is sued by US Bank and JPMorgan in New York and Chicago for $1bn for default on debt repayments related to its 2000 bankruptcy.