NGOs urge Govts not to fund new pulp mill

EoF News / 12 June 2012

EoF News (PEKANBARU) — At least 30 European non governmental organizations filed a petition submitted to governments calling not to fund forest destruction in Sumatra as Asia Pulp & Paper plans to build a new pulp mill in South Sumatra.

A letter that delivered yesterday by the 30 European NGOs (and one Japanese)  asked Europe’s Export Credit Agencies not to fund a new pulp mill planned by Asia Pulp and Paper in South Sumatra which will produce between 1.5 and 2.0 million tons per year of bleached hardwood pulp. This will make APP the largest singe pulp line in the world.

Sergio Baffoni, Indonesian Forests Campaign Co-ordinator for the European Environmental Paper Network (EEPN), said, “unsustainable and legally questionable deforestation enables APP to continue to expand production of cheap paper.

Baffoni said the APP’s hungry for fiber will lead them to convert more and more rainforests into plantations, endangering species and violating local peoples’ rights. “This is particularly concerning where Indonesian peat-forests are involved as the conversion of this unique ecosystem into plantations releases CO2 into the atmosphere. As well as violating rights and endangering species, this new pulp mill will accelerate climate disaster.”

On the letter sent by NGOs, the group request ECAs to end support for all business developments linked to deforestation in Indonesia and elsewhere.

Deborah Lambert-Perez of the NGO coalition ECA-Watch, said, “ECAs represent one of the world’s largest sources of public financing for private-sector projects, using taxpayers’ money to help companies invest in risky overseas projects that would otherwise stall.

She said that a new EU regulation states that ECAs are not exempt from EU objectives on human rights, climate and environment. “It is not possible for ECAs to support the new pulp mill and still comply with this regulation.”

In 2001, APP was involved in what was then Asia’s biggest corporate debt default – US$13.9 billion. As part of a restructuring debt agreement it reached with its creditors, APP had the legally binding obligation to develop sustainable forestry operations and pulp and paper production.

A recent report by Eyes on the Forest disclosed that APP began clearing the forest just three years after signing this agreement, swallowing one-third of the forest that APP committed to protect. Expanding APP’s production capacity further will inevitably lead to further deforestation, and to increased violations of the terms of its environmental covenants with ECAs, the European NGOs said.