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Phnom Penh, Beijing, London, Hamburg, Pekanbaru, Helsinki, 12 January 2005 Does APP have any right to sue the Zhejiang Province Hotel Industry Association in China for boycotting APP’s products? On 30 November 2004, Asia Pulp & Paper (APP) filed a lawsuit against Zhejiang Province Hotel Industry Association, who issued a notice 1 to ask its 417 member hotels to quit using APP’s paper products if they wanted to be qualified for "green hotel" status according to their own Green Hotel Guideline2. The Association based this decision on the investigation report published by Greenpeace China on 16 November 2004 which reviewed APP’s involvement in natural forest destruction in China, Indonesia and Cambodia3. APP denies the allegations by Greenpeace regarding its operations in Yunnan Province by saying “the APP operation in China had never logged any natural forest” 4 and is charging the Association for infringement of its reputation and seeks 2.2 million yuan (about $266,000) in damages and a public apology from the Association. A court hearing is due 13 January 2005. The undersigning environmental organizations warmly welcome the actions by the Association as well as the hotels who followed this notice and stopped purchasing APP products and questions whether APP whether it has any right to sue the Association. APP: isolated approach and lack of fundamental change for the global operations The undersigning organizations welcome APP’s recent announcement of a moratorium on further conversion in two additional forest areas in Riau, Sumatra in Indonesia (Serapong and Siak), while conservation value assessments take place, and the company’s stated commitment to protect forest areas identified to contain high conservation values 5. The organizations also welcome APP’s recent announcement that the company adopted a wood purchase policy for the pulp mill in Hainan, China, not to source any wood from old growth forests or tropical forests with high conservation values 6. In addition to these commitments, APP has also committed to protecting some High Conservation Value Forests (HCVF) which had already been identified in two other areas in Riau (Giam Siak Kecil and Kerumutan landscapes)7. We look forward to see APP implementing all of these commitments in full. However, regarding the environmental, ecological, social and economic records and disasters that the company has been responsible for in Indonesia, Cambodia and China, we consider that these isolated commitments are not sufficient to prove that APP is willing to undergo a substantial and integral change to end its environmentally, ecologically and socially destructive operations worldwide. As we will point out below, some problems remain unaddressed by APP in Indonesia, Cambodia and China. Therefore, we consider that the Association’s decision to avoid APP’s products based on their Green Hotel Guideline is well founded and environmentally responsible. Problems in Indonesia 1. Conversion of natural forests

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Zhejiang Hotels Association, ZHA announces refusing APP’s paper products, 19 November,2004 Zhejiang Hotels Association, Green Hotels Guideline, 3 Greenpeace China Press Release (16 November 2004) Greenpeace exposes APP's illegal logging operations in Yunnan. http://www.greenpeace.org/china_en/press/release?item_id=649802 and Greenpeace China (16 November 2004) Investigative Report on APP’s Forest Destruction in Yunnan. http://www.greenpeace.org/multimedia/download/1/683863/0/APP-Report-English.pdf 4 The Economic Observer, 4 October, 2004. 5 Asia Pulp & Paper Press Release (28 October 2004) APP Announces Moratorium until Biodiversity Assessment Completed. http://www.asiapulppaper.com/ 6 Asia Pulp & Paper Press Release (2 December 2004) Asia Pulp & Paper Announces Wood Purchase Policy for Hainan Mill and Third Party Review of Yunnan Operations. http://www.asiapulppaper.com/ 7 Asia Pulp & Paper Press Release (12 October 2004) New conservation assessment shines light on Sumatra’s rainforests. http://www.asiapulppaper.com/ and Asia Pulp & Paper (6 February 2004) Sustainability Action Plan. 2


APP signed a Letter of Intent (LoI) with WWF Indonesia in August 20031 and as a result of the LoI process, produced a “sustainable action plan” (SAP) in February 20042. However, WWF Indonesia rejected the plan as it “has fallen short on several counts” and stated that, in particular, Protection of forests with high conservation values, Use of third party mediators in social conflicts and Long-term sustainability were not adequately addressed3. The “sustainability action plan” planned that a large part of APP's wood supply would still be sourced from natural forests until the end of 2005. We should all note that the World Bank predicted that Sumatra’s dry lowland plains will lose essentially all of their forest cover soon after 2005, then the logging pressure on Sumatran wetland forests will continue after that and they are expected to disappear soon after 20104. Despite the recent commitments to protect High Conservation Value Forests (HCVFs) in the four areas in Riau, APP continues to be supplied with timber from other natural forests, some of which are important as habitat for rare and endangered animals, or important for local communities, i.e. some of these forests may be HCVF’s. 2. Purchase of illegal wood by APP pulp mills As a part of the LoI with WWF Indonesia, APP commissioned its first legality verification audit of its two pulp mills in Indonesia, PT. Indah Kiat Pulp & Paper (IKPP) in Riau Province and PT 5. Lontar Papyrus Pulp & Paper Industries (LPPPI) in Jambi Province. The audit found out that during the first 10 months of 2003, IKPP and LPPPI consumed 3.8 million m 3 (47% of its total timber consumption) and 0.2 million m3 (8% of the total) of timber whose legality was far from certain 6. During a ROBIN WOOD visit in January 2004, APP was unable to present a control system for the incoming raw material. As recent as April and July 2004, WWF Indonesia 7 and Forest Rescue Alliance Riau (WALHI Riau, Jikalahari, and Ornop Association)8 collected evidence that IKPP continues to receive illegally logged wood from the proposed Tesso Nilo National Park, an area with record concentrations of plant biodiversity. In the SAP, APP had committed to a multi-stakeholder approach and some actions for improving pulpwood tracking, developing a Legal Origin Verification system and addressing the issue of illegal logging, however, during 2004, as far as we are aware, there was no stakeholder involvement, nor updates on this issue. Majority of illegal wood is supplied by so-called third parties - companies or individuals not under the management of the Sinar Mas Group. WWF Indonesia (8 June 2004) reported that during the first 10 months of 2003, IKPP and LPPPI sourced 54% and 14% of the total wood supply from third parties. We are concerned that APP may be relying on more HCVF wood or illegal wood from such external suppliers to fill the supply gap caused by the recent commitments to protect HCVFs. 3. Community conflicts Many of these forest areas, and also forests already cleared by APP, are claimed by local communities. There are hundreds of villages that have been negatively affected by APP's forest conversion operations. In August 2003, APP agreed with WWF Indonesia that it would recognise communities with legal or customary land rights, and take steps to resolve conflicts with these communities over land ownership and management. APP has not fulfilled this promise. 1

WWF Indonesia (19 August 2003) Letter of Intent between WWF Indonesia, Asia Pulp and Paper Co. Ltd. and its fiber suppliers, the Sinar Mas Group forestry companies (in this case being PT. Arara Abadi, PT. Mapala Rabda, PT. Satria Perkasa Agung, PT. Wira Karya Sakti, including their joint ventures, as detailed in Annex 1, hereto collectively referred to as “SMG”) covering the period until February 19, 2004. 2 APP (6 February 2004) Sustainability Action Plan. 3 WWF Indonesia Press Release (19 February 2004) Time is running out for APP, says WWF. http://www.wwf.org.uk/News/n_0000001126.asp 4 World Bank (February 2001) Indonesia: Environment and Natural Resource Management in a Time of Transition. 5 Indonesian Ecolabeling Institue (2003) Legal Origin Verification PT. Indah Kiat Pulp & Paper and Legal Origin Verification PT. Lontar Papyrus Pulp and Paper Industries. 6 WWF Indonesia (8 June 2004) Legality of Timber Consumed by Asia Pulp and Paper’s Mills in Indonesia, January - October 2003. http://www.wwf.or.id/attachments/Legality_of_timber.pdf 7 WWF Indonesia (16 June 2004) Monitoring of Illegal Logging Operations in Riau, Sumatra: Delkiveries of Illegally Cut Wood from Proposed Tesso Nilo National Park to APP’s Indah Kiat Pulp and Paper Mill In August 2003 and April 2004. http://www.wwf.or.id/attachments/APP_buys_illegal_wood.pdf 8 Forest Rescue Alliance Riau (14 September 2004) Strong Evidence that PT Indah Kiat Pulp & Paper Received Illegal Wood from Tesso Nilo in July 2004. http://www.jikalahari.org/eng_vers/report_inv_ilog_ik.htm


Problems in Cambodia Since APP announced on 2 December 2004 that it would conduct HCVF assessments on wood sources in Cambodia1, the illegal clearing of old-growth rear-mangrove forests and factory construction have continued unabated inside the Botum Sakor National Park. Logging, establishing plantations and industrial operations in legally defined Protected Areas are unambiguously prohibited by Cambodian Laws, but permissible due to a combination of lax law enforcement and corruption. 2Complete cessation of activities, immediate withdrawal from the National Park and public announcement of the location, nature and scope of current and future operations in Cambodia, would demonstrate APP’s commitment to its announced “no old-growth and tropical HCVF” policies. Anything short of that would show that these announcements are disingenuous and mere public relations exercises. Problems in China In 2002, APP signed a memorandum of understanding with the Yunnan provincial government regarding its eucalyptus forest-pulp-paper integration project 3 In one year’s time, APP enclosed a forest-pulp plantation of 27,500,000 mu (183,333 hectares) in southern Yunnan province, where the biodiversity is very rich. Evidence shows that among the 27,500,000 mu, 11,081,000 mu are forest land, which counts for 42% of the total enclosed area 4 APP immediately started logging natural forests to replace them with eucalyptus monoculture plantations in the region. Three field investigations by Greenpeace China in July, September and November 2004 documented that APP had no felling permit and other approvals required, therefore APP has violated Articles 23, 29, 32 and 37 of the Forest Law and Article 15 of the Regulation for the Implementation of the Forestry Law of the PR China 5 Demands by the undersigning organizations We demand APP to:  Withdraw the court case against the Zhejiang Province Hotel Industry Association as soon as possible,  Completely exclude raw material sourced from HCVFs and illegal logging of natural forests for all of its pulp mills in Indonesia and China,  Immediately adopt measures that allow verification of the legality of all of its forest operations in all countries,solutions for all land rights conflicts that remain unresolved,  Downsize their production capacity to reduce pressure on Indonesia´s remaining forests. Forestry industries in Indonesia use ten times more raw material from natural forests than the annual allowable cut set by the Minister of Forestry. It is therefore indispensable that the pulp and paper industry, especially APP and APRIL, to decrease the production.  Apply the same approach it committed for Serapong and Siak for all the natural forests from which IKPP and LPPPI sources timber come.  Put a moratorium on the operations in Cambodia and Yunan, China, commission and ensure a truly independent review We demand banks, governments and buyers not to continue or renew their business relations with the company as long as APP has no concrete work plan to resolve the problems summarized above – caused by APP in Indonesia, Cambodia and China.

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Asia Pulp & Paper Press Release (2 December 2004) Asia Pulp & Paper Announces Wood Purchase Policy for Hainan Mill and Third Party Review of Yunnan Operations. http://www.asiapulppaper.com/ 2 Global Witness Press Release, 31 Dec. 2004, Preparing to Pulp the Pulp Merchants? Cambodian Government Announces Legal Action against Predatory Paper Giant 3 China News Week, 12 July,2004 4 Greenpeace China, The Investigation Report of APP Forest Destruction in Yunnan,November,2004 5 Greenpeace China, The Investigation Report of APP Forest Destruction in Yunnan,November,2004


Jens Wieting, ROBIN WOOD, Germany Jens Wieting,ROBIN WOOD(罗宾汉森林保护机构),德国 Liu Bing, Greenpeace China 刘兵,绿色和平中国办公室 Rully Syumanda, WALHI Riau, Indonesia Rully Syumanda,印尼地球之友廖内省办公室,印度尼西亚 Mike Davis, Global Witness, Cambodia Mike Davis,全球目击者组织,柬埔寨 Alex Ryan, Greenpeace Southeast Asia Alex Ryan,绿色和平东南亚办公室 Jim Ford, Forest Ethics, London Jim Ford,森林道德机构,伦敦 Leo Stranius, Friends of the Earth Finland Leo Stranius,芬兰地球之友,芬兰 Larry Lohmann, Sarah Sexton and Nicholas Hildyard,The Corner House Larry Lohmann, Sarah Sexton and Nicholas Hildyard,Corner House 组织 Chris Lang, Plantations campaigner, World Rainforest Movement, Germany Chris Lang,世界雨林运动,德国 Bill Ritchie, Mandy Haggith, Worldforests, SCOTLAND Bill Ritchie,Mandy Haggith,世界森林组织,苏格兰 Olli Manninen, Forest Group chairperson, Board member, The Finnish Nature League (Luonto-Liitto ry) Olli Manninen,森林团体主席、理事,芬兰自然联盟,芬兰 Andrey Laletin, "Friends of the Siberian Forests",Russia Andrey Laletin,西伯利亚森林之友,俄罗斯 Reinhard Behrend,Rettet den Regenwald, Germany Reinhard Behrend, Rettet den Regenwald 组织, 德国 Barbara Happe,Urgewald Germany Barbara Happe, Urgewald 组织,德国 Tove Selin, Chairperson, Finnish Asiatic Society, Finland Tove Selin,芬兰亚洲研究会主席,芬兰 Jasmi, Kelompok Advokasi Riau, Indonesia Jasmi,Kelompok Advokasi 环保组织,印度尼西亚廖内 Ahmad Fadhilah, Elang Foundation, Indonesia Ahmad Fadhilah,Elang 基金会,印度尼西亚 Hariansyah, Kaliptra, Indonesia Hariansyah,Kaliptra 环保组织, 印度尼西亚 László Maráz, Pro REGENWALD, Germany


László Maráz, Pro REGENWALD,德国 Sylvia Hamberger , Gesellschaft für ökologische Forschung,Germany Sylvia Hamberger , Gesellschaft für ökologische Forschung,德国

Rivani Noor, Community Alliance for Pulp Paper Advocacy (CAPPA), Indonesia Rivani Noor,浆纸推广团体联盟(CAPPA),印度尼西亚 Edi Zudhi, Yayasan Keadilan Rakyat (YKR), Jambi, Indonesia Edi Zudhi, Yayasan Keadilan Rakyat (YKR), Jambi,印度尼西亚 Helmi (Pusat Studi Hukum & Kebijakan Otonomi Daerah/PSHK ODA), Indonesia Helmi (Pusat Studi Hukum & Kebijakan Otonomi Daerah/PSHK ODA),印度尼西亚 Pahrin Siregar (Forum Komunikasi Daerah Lembaga Ekolabel Indonesia/FKD LEI) Jambi Pahrin Siregar (Forum Komunikasi Daerah Lembaga Ekolabel Indonesia/FKD LEI),印度尼西亚 Hilde Stroot, Friends of the Earth, Netherlands Hilde Stroot,荷兰地球之友,荷兰


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