Growing back trust: Asia Pulp & Paper

Growing back trust: Asia Pulp & Paper
ProPrint news reporter April Glover heads to the APP Indonesian HQ to assess its progress.

Trust is a lot like broken glass; once it has been shattered it can be difficult to put back together. For Indonesian-based paper manufacturer Asia Pulp & Paper, trust is regrowing in the form of millions of trees.

The pulp and paper giant has managed to break a 30-year path of rainforest destruction in a few small years. After mortal combat against Greenpeace, countless NGOs, and major supplier boycotts, APP says it has accomplished business transformation, evidenced by Greenpeace itself, once a sworn enemy now a partner in development.

Commercial deforestation of virgin trees has now been abolished, both by APP and its concessions, and APP has committed itself to planting and growing more trees than it logs.

The natural relationship between a paper company and trees was historically a destructive one – however APP has managed through a sustainability plan to convince its jungle of suppliers and the global media that the name Asia Pulp and Paper is now synonymous with sustainability.

APP is a $12bn company that operates nine major production facilities in 120 countries on six continents, employs 79,000 people and has the capacity to produce 20 million tonnes of pulp and paper annually. It was easy for a company of this magnitude to break the rules and cut a few corners. But now, APP is defining where the corners lie and says it is committed to ensuring the rules aren’t broken by anyone else either.

ProPrint visited APP’s worldwide headquarters in Jakarta, Indonesia, and spoke to director of sustainability Aida Greenbury who vowed it was APP’s duty to spread environmentally-conscious behaviour across the global paper industry.

“It’s time to make others responsible too. Everybody is responsible for zero deforestation so it is time to work together for a solution,” says Greenbury.

Turning over a new leaf

Turning off the chainsaws and backing away from natural forest was APP’s only real chance at redemption. Since August 2013, APP has not used a single leaf of natural forest in its mills and steers clear from using suppliers involved in land clearing.

The root of the cause was pinpointed, but a canopy of other problems needed to be addressed. In order to push its full transparency to clients and stakeholders, APP shared is four pillars of conservation which it painted as both long-term goals and guidelines for best practice: zero deforestation, peatland management, community engagement and responsible suppliers.

It’s safe to say zero deforestation was at the top of APP’s priority list. Even those with limited knowledge of the paper making industry could understand paper was not an infinite resource. The paper giant could no longer pull the wool over its suppliers’ eyes and knew that at some point, something had to give. Initially, the resource first to collapse came from the deep pockets of suppliers. APP could no longer slash and burn forest without consequence, and company decided zero deforestation could only be achieved if the paper supplier controlled the natural supply.

One of APP’s value propositions to potential clients is now its ability to plant and grow their desired plant species. Visiting its colossal mill in Pekanbaru, ProPrint was privy to APP’s fresh approach to paper production. A significant portion of the mill is dedicated to the meticulous task of picking, planting and growing baby plant seeds in a laboratory before they are ready to touch natural Indonesian soil. This process, according to APP, ensures more trees are planted in its region than they destroy – thus virtually producing an eternal cycle of tree logging.

However, making discernible progress can be slow and painstaking as the cycle of a plantation is generally 5-6 years. Since first committing to deforestation, APP has been audited countless times and stamped with ‘moderate progress’ – however the adjective is disingenuous in terms of the scale of the company’s work. Even making a dent in decades worth of negligence is impressive, and APP asserts there is no finish line; they want to embody the conventional paper business model.

Peatland Management milestones

APP’s destruction also stemmed from its canal blocking practices which it desperately needed to curtail. Since turning over a new leaf – quite literally, APP introduced its Peatland Best Practice Management initiative, and it promised to construct over 3,000 perimeter canal dams with a goal of completion by this year. Since 2013, it has reported accelerated year-on-year progress in the form of restoring water levels in its concessions.

The revised concession models involve raising the natural water levels which create buffer zones between natural forest and the pulpwood plantation that APP readily uses.

“On the third anniversary of our Forest Conservation Policy launch we are pleased to report that our continued work to implement the policy, together with efforts to align our ambitions with those of other actors in Indonesia’s forests have resulted in tangible progress,” says Greenbury.

Cultivating community

APP’s commitment to restore Indonesian forest has cultivated into a greater sustainability project encompassing people, wildlife and communities. The paper giant literally provides a living ecosystem for its employees at its Pekanbaru mill in Riau, West Sumatra.

APP wants its suppliers to know that buying from it not only means they are supporting best practices given the stamp of approval from The Programme for the Endorsement of Forest Certification (PEFC) and Greenpeace, but are sustaining the livelihood of families and native communities across Indonesia. Inside the Pekanbaru paper mill in West Sumatra, APP provides internal housing and facilities for employees and their families, proving to both itself and its stakeholders that the paper merchant can no longer be pigeonholed as a tree-logging conglomerate. For some APP staff members, the Indonesian mill is their entire life – funding is provided by the paper giant to put their children through school and build homes. “We have essentially constructed mini cities,” says Greenbury. APP’s culture of neglect has been abandoned and a culture of nurturing has grown in its place.

Around 1400 villages also surround APP’s concessions and peatlands, and as part of its community engagement commitment, APP has also pledged to restore the livelihood of indigenous populations it had previously threatened. Its Integrated Forestry and Farming System Programme – which was launched by APP during COP21 in Paris - aims to assist local communities develop alternative livelihoods to achieve economic development while also keeping Indonesia’s forests intact.

APP is offering farming equipment, horticultural training and microfinance support to 500 villages across its supply chain, with $10m expected to be invested over the next five years.

Moving forward, APP says it needs to develop a new business model to involve the community so closely they can almost be considered as a business partner in protecting forest sustainability.

Progress to date has seen 11 villages in Riau operating under APP’s program, 6 villages in Jambi and 12 villages in South Sumatera. APP believes the economic empowerment of the communities surrounding its supply chain as a top priority, and their compliance – according to APP – is just as crucial as APP’s fortitude is to the pledge’s overall success.

Sustaining supplier trust

At APP’s lowest point, big paper merchants around the world were dropping its paper products as its perceived bad behaviour came to light. IT wasn’t necessarily APP itself but its multitude of suppliers that were giving scant regard to environmental considerations. Some argued that they had no need to, why should they when the western world cut a swathe through the earth during its industrial revolution. But we live and trade in a globalised market, and western buyers were having none of it, so change had to come.

Guzzling timber without a thought to environmental destruction doesn’t look good on any paper merchant’s rap sheet. Major Australian supplier Spicers ditched APP paper completely, and KW Doggett treaded carefully whilst keeping an eye on its certification.

Speaking with paper suppliers, all who had previously shunned APP for its malpractices are now happy to resell APP branded paper due to thestamp of approval.

“Over three years we have seen a number of suppliers come back to APP,” says APP reseller Paper Force MD Larry Jackson.

“We have many more green lights than red right now, and we are comfortable with the work that has been done so far. Of course some suppliers are not engaged yet, but we want them to be engaged with APP and Paper Force not just on the environmental platform, but through our total value proposition.”

A force in Aussie paper

ProPrint also spoke to Paper Force managing director Larry Jackson about the flow on effect of APP’s transformation on Australian shores. Jackson says company culture is at the heart of maintaining its position as a fierce competitor in the paper market, as well as being a competitor that plays fair.

“By approaching the environment the way we have, we have built up a lot more trust points with our suppliers and customers. Transparency really has been the cornerstone, genuinely backed up with our legitimate commitment,” says Jackson.

“The Western markets – particularly Australia and North America – have generally been more demanding on the environmental platform. Australian suppliers seek a more rigorous environmental commitment.”

Commenting on APP’s physical progress over the last three years, Jackson says Paper Force has reaped the benefits of a far more transparent supply chain from the Indonesian soil to Australian factory floors.

“Our customers strongly believe that we are doing the right thing, and are rewarding us with orders. APP is on a sensational path and there is genuinely great work being done,” says Jackson.

“For Paper Force it has always been business as usual, and we are very happy with how Aida Greenbury and APP has conducted this transformation.”

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