The Paper Promise
    Category: Issues & Ideas By : Ulisari Eslita Read : 1718 Date : Saturday, May 11, 2013 - 14:29:01

    Toto Santiko Budi for Forbes Indonesia

    For Teguh Widjaja, the low-profile chairman of Asia Pulp and Paper (APP), February 5 was a historic day for him and his family-owned company. First, Teguh rarely speaks in public, and usually only at ceremonial occasions, such as opening a new paper plant. Second, today he was, for the first time, giving an answer to the many critics who claimed his company, one of the largest paper companies in the world, was destroying Indonesia's last remaining rainforests. These critiques, from NGOs such as Greenpeace, had been numerous and stretching back for years. They had contributed to the reported loss to APP of some major high-profile clients such as Unilever and Wal-Mart, who had stopped buying APP's products. It was fair to say that the situation for APP was the largest challenge it had faced in over a decade, going back to a corporate debt crisis of the early 2000s.

    On this day, Teguh was intent on bolstering the company's image. He stood before a crowd of hundreds in a packed ballroom and many hundreds, if not thousands, more watching on a live Internet feed. Although lasting roughly fourminutes, his speech was one of the most significant that he has made in his career, for APP was declaring that as of February 1 it had suspended—forever—the use of natural forest wood to make its products, on a worldwide basis. “Today is a very important day for APP. We will announce our green commitment to the world,” said Teguh, 68, “As a proud Indonesian company and as a global leader, we want to set up a benchmark for forest production for others in our industry to follow.” In addition, APP would be taking major efforts to preserve existing natural forests and peat land from further destruction.

    Instead of clearing forests, APP would hencefore use wood cut from its own or others' plantations. The move from natural to plantation wood supply was one that had been in the planning for many years. The edict was not only for the APP group, but for all its suppliers as well, and extended to all its operations, including its extensive presence on mainland China.

    “There will be no more natural forest cut in Indonesia by our company or anyone who supplies us,” says Aida Greenbury, APP's managing director of sustainability and stakeholder outreach. APP says that its plantations have sufficient resources to meet all the needs of its mills. “We have 2.6 million hectares of fiber plantation. It is huge and one of the biggest plantations in the world. We will have enough supplies from there and we will no longer rely on natural forest,” says Robin Mailoa, the chief executive of Sinarmas Forestry.

    For many years, APP was accused of deforestation, degradation of high carbon peat lands and of critical wildlife habitat, and social conflict with local communities, by local and international NGOs such as Eyes on the Forest, Greenomics Indonesia, Greenpeace, Jikalahari, Walhi and World Wildlife Fund (WWF). As Aida put it at the February event: “We have been extensively criticized in the past, sometimes fairly, sometimes unfairly.”