RAN: Two main things needed for APP to win marketplace trust
JAKARTA (foresthints.news) - A major question continues to hang over Asia Pulp and Paper (APP)’s long-term wood supply as the commencement of its new paper mill’s operations in Ogan Komering Ilir (OKI) in South Sumatra draws nearer. The new mill is set to be one of the largest mills in the world.
By coincidence, South Sumatra is one of the Indonesian provinces that experienced devastating land and forest fires in 2015, which resulted in the burning of almost 295,000 hectares of APP pulpwood plantations.
"I think I have a couple of pieces of advice for Asia Pulp and Paper regarding their wood supply. I really think it's important that they come up with a credible wood supply analysis that's a public document and that looks at the entire flow of wood amongst their mills and makes sure that they do have enough fiber for the OKI mill, and, if they don't, that that fiber doesn’t cause them to seek expansion," said Rainforest Action Network (RAN)'s Asia director, Lafcadio Cortesi, on last Wednesday (Feb 10) in Jakarta, while responding to questions from foresthints.news about APP’s long-term wood supply.
Lafcadio said that APP needed to do two things. "The first is to stop expansion and make a commitment that they will not expand to fill up the void if they don’t have enough capacity. And the second is to develop a transparent and a comprehensive wood supply analysis that can be properly analyzed by outside experts," he said.
"Right now, they've told us they have wood supply until 2020 – that’s only three years or four years of wood supply. We want to know what happens then – this mill will be there for fifty years or more, and so it's really important that they clean up their act in all their concession areas before there's any expansion," he continued.
Lafcadio stressed that there was a very significant correlation between wood supply and the marketplace.
"I think in order to get the trust of the marketplace, they – APP – really need to do those two things and that if they do not demonstrate that they have enough wood supply, then they are not going to be seen as a viable option for companies that buy paper around the world," he stressed.
The first priority was to increase the productivity of existing pulpwood plantations along its entire supply chain, while the second priority was to improve its partnerships with community forestry concessions. In the case of both these priorities, the fiber supply would be sourced entirely from Indonesia. Meanwhile, the third priority was to secure imports, although this priority was the last option, one that APP hoped to avoid if at all possible.
In connection with an increase in the productivity of existing pulpwood plantations across APP's entire supply chain, the land and forest fires of 2015 left APP facing a huge problem as regards its pulpwood plantation concessions in South Sumatra province as some 26% of their total area was affected by burning. The burned areas include planted pulpwood plantation concessions that were earmarked to supply APP's new OKI mill with fiber.
Not only that, its two largest pulpwood plantation concessions – covering a total area of nearly 400,000 hectares in South Sumatra, both of which are crucial suppliers to APP's existing mills – have had their licenses frozen by the Indonesian government in connection with the 2015 land and forest fires.