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Stakeholder Collaboration Enables Accelerated Progress in APP's Peatland Management Efforts

On Thursday, Asia Pulp and Paper (APP) released a progress report on its Forest Conservation Policy (FCP), which involves four main corporate commitments that have regulated the company’s resource development since 2013. APP claims to have accelerated progress in its peatland restoration work and strengthened fire prevention measures, in addition to promises to provide funding for additional conservation projects this year.

On Thursday, Asia Pulp and Paper (APP) released a progress report on its Forest Conservation Policy (FCP), which involves four main corporate commitments that have regulated the company’s resource development since 2013. APP claims to have accelerated progress in its peatland restoration work and strengthened fire prevention measures, in addition to promises to provide funding for additional conservation projects this year.

APP has completed more than 3,500 perimeter canals to increase water levels in APP suppliers’ concessions located on peatland, as part of the company’s Peatland Best Practice Management Project (PBPMP). A total target of 7,000 dams is expected to be reached by the end of Q1 2016.

The dams are in addition to the unprecedented retirement of 7,000 hectares (~17,300 acres) of commercial plantation areas in Indonesia for the purpose of peatland protection, announced by APP in August. The company and its suppliers have allocated an approximate total of 600,000 hectares (~1,482,600 acres) for forest conservation and ecosystem restoration within its suppliers' concessions.

Peatland protection is of particular concern since peat stores some of the highest quantities of carbon and emits methane – creating amplified emissions and toxic smog when ablaze. APP’s conservation work goes hand-in-hand with its new Integrated Fire Management (IFM) strategy, which will support efforts to significantly lower the risk of wildfires.

The IFM includes: fire detection and response training for 400 staff members of APP and its suppliers will be provided by fire management experts TREK Wildland Services from Canada and Working on Fire (WOF) from South Africa; 2 new aircraft with thermal imaging to assist with rapid response to emerging fire threats; 2 medium lift helicopters capable of carrying up to 3,500 liters for water-bombing; and new fire patrol route maps based on past fire occurrence and local risk factors.

These direct efforts to combat fires are supported by broader efforts to reduce deforestation. APP is in the process of rolling out its Integrated Forestry and Farming System Program, which is expected to help 500 Indonesian communities develop alternative livelihoods to achieve economic development while also keeping Indonesia’s forests intact. APP will be giving equipment and funding to support local businesses, in addition to horticultural training.

APP also announced the newly appointed Advisory Board for the Belantara Foundation, an independent organization being funded by APP to establish a platform to help manage and fund landscape conservation programs in Indonesia. The Foundation is expected to work with a variety of stakeholders to oversee natural forest restoration, endangered species protection, sustainable landscape management, empower local communities, and enhance local economic development, especially in areas that rely heavily on natural resources.

“We now have the building blocks for a sustainable model of forest and pulp and paper operations whereby forests are protected, communities empowered and our supply chains strengthened,” said Aida Greenbury, Managing Director of Sustainability and Stakeholder Engagement at APP. “Looking ahead, we are ready to learn from our experience and to further collaborate with other stakeholders in our landscape, in our country, and beyond, to try to create a better world for future generations.”

Lafcadio Cortesi, the Rainforest Action Network (RAN)’s Asia Director, has a different opinion about APP's progress. “The legacy of 20 years of rogue operations is taking more time to address than APP wants paper buyers, investors, governments and industry watchers to know about,” he said in a press release. “The company’s track record, and our experience over the past year, suggest that APP’s efforts will require a medium to long term time horizon to address the structural and practical changes required to achieve improved outcomes on the ground.”

RAN claims that APP and its suppliers experienced far more fires inside their concession areas than other companies or groups did in 2015 despite legal obligations to manage fires, and have been the subject of legal action and boycotts by governments, local citizens, and Singaporean supermarkets. The non-profit also asserts that the restoration work APP has done represents less than 1 percent of APP's holdings in peatlands.

“Due in large part to a failure to adequately identify, delineate and set aside indigenous and community lands and land claims, APP has a continuing legacy of social conflict and inequity across its concessions. An evaluation of the company’s progress in implementing its commitments published by the Rainforest Alliance in 2015 found that several hundred social conflicts remain in APP concessions,” Cortesi added.

Cortesi concedes that APP has developed a system to classify and prioritize conflicts and is working with consultants to develop and implement action plans to resolve them, but he asserts that “the veracity and effectiveness of the system remain in doubt.” He claims there has been a host of complaints lodged against the company, that irregularities have been found, and that it is unclear as to whether APP's system has led to any resolutions of specific conflicts. Despite concerns, he says, APP is expanding its pulp and paper production capacity in South Sumatra with its Oki Mill complex.

“Considering the ongoing reputational and material risks associated with doing business with APP, the company’s approach to defining its own targets and priorities and asking stakeholders to take its word that it’s making progress is not sufficient,” Cortesi said. “There is an urgent need for third parties to set independent, outcome-based evaluation criteria for the company’s performance and to establish and carry out independent monitoring and verification procedures using these criteria.”

Update February 9, 2016: Greenbury responded to the criticisms from RAN in an e-mail to Sustainable Brands. She asserted that APP has maintained a regular dialogue with RAN and other NGOs and will continue to do so. She acknowledged that APP has legacy issues that need to be addressed, but maintained pride in the actions that APP has taken in light of an unprecedented attempt to transform their business model and the scale at which they operate.

To support this, she cited what Mongabay's Rhett Butler wrote recently: "Arguably no Indonesian company is doing more to atone for past sins than APP, which since early 2013 has embarked on an ambitious effort to remake how it does business, including implementing a ban on conversion of forests and peatlands for new plantations, establishing protocols for curbing conflict with local communities, and pledging to support landscape-level conservation and ecosystem restoration initiatives..."

”Since 2013, we have constructed the building blocks to transform APP into a more responsible and more sustainable business; while this is still work in progress, we are confident that these changes will yield results,” Greenbury said via e-mail. “The growing incidences of forest fires, bio-diversity loss and land conflict are evidence that business as usual doesn’t work anymore. What we need is a new model for landscape management in Indonesia and APP wants to play a role in creating this. Seeking to address the root cause of deforestation by third parties, APP is launching different initiatives.” She cited the Belantara Foundation and the Integrated Forestry & Farming Programme as examples.

Greenbury also responded to RAN's specific criticisms, including commentary on APP's fire policy, peat and forest conservation work, the Oki Mill construction, and third-party verification: “Though we all knew El Nino was coming we did not expect it to hit so hard and wreck the havoc that it did. The truth is, this is what climate change looks like,” she pointed out.

Greenbury’s reasoning included that: the majority of fires burning on APP’s suppliers’ concessions were started outside them or in areas accessible by external parties (they do not have fences or fire breaks around them); APP was the first company of its kind to adopt peatland best management practices, including mapping; and that APP established a Stakeholder Advisory Forum for third-party input and has engaged with NGOs including Rainforest Alliance and Greenpeace to assess the performance of its forest policies.

She also clarified: “The 7,000 hectares [of commercial plantation that APP retired] is only part of over 600,000 hectares of the natural forest conservation areas in our supply chain, most of these are forested peat. So instead of 1%, our conservation areas represents 50% of the established plantations in the supply chain.”

RAN also raised the issue of the death of a 22-year-old community leader, Indra Pelani, who was involved in a land dispute with an APP subsidiary in Jambi province and was killed by security guards last February. Greenbury outlined the specific measures taken by APP in response to the incident, including immediately suspending all activities in the concession, terminating the contract with the security provider, conducting a review of security arrangements across all concessions, reaching out to the Indonesian Human Rights Commission (Komnas HAM), and taking steps to compensate her family and ensure that similar tragedies do not happen again.

“Over the past 3 years we have sought to embed transparency in every aspect of our work. This has not been an easy process but we remain committed to that task. This is not the kind of email that we could have written 36 months ago,” Greenbury wrote. “We may be seen by some as a controversial company, but we now embrace this label in a positive way, we are trying to be leader in transforming our business model in our industry in Indonesia, and we believe we are responsibly addressing our social and environmental challenges.”