Investigative Report April 2006 released, APP replies

EoF News / 04 July 2006

EoF confirmed through its chain of custody investigation that all of the logging operators suppl ied wood to PT . Indah Kiat Pulp and Paper (IKPP), a pulp mill of Asia Pulp & Paper (APP) in Riau. EoF investigation is located in Libo Forest Block and Giam Siak Kecil Forest Block.

EoF tirelessly called on companies and contractors involved in allegedly unlawful activities to immediately halt logging operations in the concessions, to stop clearing of forest on peat deeper than 3m, and to clear of forest designated as Protection Forest in the currently active Provincial Land Use Plan.

We also call on PT IKPP/APP not to receive wood originating from such operations until written legal verification issued by the MoF is complied with. Besides, such practices violated Forestry Law No. 41/1999.

APP sent a letter today (July 4) responding to the ready-to-publish report where EoF had sent it to the company earlier. Despite APP’s denial to our findings, EoF fully appreciated the reply.

Aida Greenbury, G.M. of Sustainability & Stakeholder Engagement, Asia Pulp & Paper Co. Ltd., responds to EoF’s Investigative Report April 2006 as follow:

“As you are aware, Asia Pulp & Paper Co. Ltd. (APP) is committed to ensuring the legality of the wood coming into its mills. That Eyes on the Forest (EoF) believes it has identified an illegal source of wood in our supply chain is cause for concern, and we have launched an investigation into the matter.

As stated in our Fiber Procurement Policy, APP requires all its fiber suppliers to comply with all relevant regional, national and international regulations for sustainable forestry and land use management.

 Allow us to address each of your concerns in turn:

• As you have noted, Amal Hutemas Bina Bonai Foundation holds a valid and legal Small Scale Forest Concession License (IPK) No. 03/Forestry/IV/2005, which was issued by the District Head of Rokan Hulu on the 25 th of April 2005. Amal Hutemas Bina Bonai Foundation did not conduct any harvesting activity during the investigation by EoF. The foundation did perform inventory check and field stock extraction activities, which are based on Letter of Mandate of the Head of the Forest Service in Riau Province No. 522.05/PHH/3342, which was issued on the 21 st of December 2005. This activity ended on the 1 st of July 2006. The head of the Forest Service has reconfirmed that the harvesting activities were indeed inside the legal boundary: Logging Site: 01°00’5,53” LU - 102° 49’5,5” BT Loading Site: 01° 00’4,73” LU - 100° 50’3,65” BT

• The activity of EoF’s Chain of Custody (CoC) ID 2003 is based on a valid and legal Annual Working Plan 2006 License No. SK.KPTS/522.2/PK/211, which was issued by Ministry of Forestry on the 27 th of January 2006. EoF’s Chain of Custody (CoC) ID 2002 purely represents inventory check and field stock extraction activities only.

The two ID points are located outside both our conservation set-asides and the nationally-recognized Giam Siak Kecil Wildlife Reserve. 

• Regarding the other two issues raised, which revolve around the validity of licenses issued by local governments, APP fully supports the efforts being carried out by the Ministry of Forestry Republic of Indonesia (MoF) to review the locally issued Industrial Timber Plantation Licenses (IUPHHK-HT). Should the MoF determine that any such license is invalid, APP will immediately cease sourcing fiber from that area.

APP does not accept any wood fiber that originates within any nationally-recognized conservation forest, and APP carefully monitors the wood flow from its fiber suppliers to ensure that it has been obtained in accordance with all applicable regulations and permits.

APP’s fiber suppliers have developed and implemented raw-material tracking systems (also known as Chain of Custody systems) to ensure the legality of fiber origin and to ensure that raw materials entering APP Mills are not co-mingled with illegal wood. An independent “Verification of Legal Origin and Chain of Custody Systems” is conducted periodically throughout APP’s fiber sources and supply chain. The latest assessment, in July 2005, was conducted by SGS (Société Générale de Surveillance) in APP’s active fiber sources in Sumatra. SGS summarized its field findings and found no evidence of illegal material being supplied by APP’s fiber suppliers or through APP’s supply chain.

SGS also found that APP’s suppliers had developed and implemented credible, formalized systems to trace material through the system from registered suppliers and contractors to APP’s pulp mills. The SGS assessment of the APP fiber suppliers’ Chain of Custody systems concluded that the systems in place to ensure the legal origin of the pulpwood entering the mill were effective, and that the wood used by APP could be claimed with confidence as having been legally harvested, and uncontaminated by any illegal material.

As we have stated before, we appreciate EoF’s concerns and continued efforts to protect the forests in Riau Province. APP shares this vision of conservation and is committed to protect areas of outstanding habitat in the natural forests of Riau Province. In conjunction with the credible international conservation groups such as SmartWood/Rainforest Alliance and Sumatran Tiger Conservation Program, APP has identified and protected large scale Conservation set-asides within Riau Province. We are embarking on an expanded conservation initiative and will put even more area into conservation set-asides, in the months and years ahead.”