TriplePundit’s Phil Covington has just returned from a trip to Indonesia to look at deforestation issues and the sustainable turnaround of Asia Pulp and Paper, one of the world’s largest paper and pulp companies. Follow along here.
This is the third piece in this series reporting on my trip to Indonesia, investigating Asia Pulp and Paper’s evolution towards sustainability, and the progress made since they introduced their Forest Conservation Policy (FCP) announced on February 5, 2013. A key outcome of FCP was a moratorium on natural forest clearing effective on January 31, 2013, and the subsequent termination of using natural forest wood products in APP’s paper mills.
The following is an interview with Aida Greenbury, Managing Director, Sustainability & Stakeholder Engagement at APP. It took place after having seen APP’s plantation forests in Riau Province, on Sumatra, and after having met with the NGO organizations (including Greenpeace) that are helping the company to conduct assessments of the forest concession lands which supply the pulp wood to their paper mills.
The interview has been edited for length and clarity.
TriplePundit: What was the main motivation behind committing to the Forest Conservation Policy?
Aida Greenbury: We want to be a global player and we cannot be a global player without addressing the needs of our stakeholders. We have always tried to comply with what is legally required, but requirements continue to evolve and we have to play catch-up. In the last 10 years, issues [of] biodiversity protection and climate change became heavier and heavier, and until 2007-2008 we were avoiding the big elephant in the room – NGOs saying, “Stop deforestation, stop conversion of the natural forest.” We cannot just meet legal requirements anymore – if we want to be global players we have to meet the needs of global customers and stakeholders as well.
We started to develop our sustainability road map in 2010 and 2011. Greenpeace at the time was making demands [where we said] there’s no way we could implement that. That’s when we realized we needed somebody to help us – to be the bridge. That’s when we engaged TFT [Formerly, The Forest Trust] – invited them in and said, “This is what Greenpeace demands, we think it’s ridiculous, what can be done about it?”
TFT said, “Look, it’s not that difficult,” and became our translator; to translate NGO language into a corporate language, to make us understand what was being demanded by Greenpeace at the time. TFT helped us adopt those demands, and transform them into a policy – and that’s how the Forest Conservation Policy came out in February.
3p: Do you think you would have come to the same conclusions – that this is the right thing to do – to embrace sustainability and integrate it into your business plan – without pressure from customers and NGOs?
AG: No, I don’t think so. I don’t think we would have been here without the pressure of customers, NGOs, The Forest Trust (TFT). I’m in charge of sustainability policy, and part of my role is, basically, to listen and collect what is required by our stakeholders. If that voice wasn’t there, then I wouldn’t have heard it – so we developed our sustainability policy based on what is required by our stakeholders.
3p: Why February the year [to launch FCP, and stop natural deforestation]? Obviously you’ve got to pick a time to stop the bulldozers. Is that when you felt you had the action plan complete?
AG: In June 2012, we launched our sustainability road map and we said, “No more natural forest conversion in our own concessions,” and people said, “Sorry, that’s not enough. If you want to implement no deforestation, it’s got to be across your entire supply chain in Indonesia.” We talked to all the suppliers out there, and asked, can it be done in a very limited amount of time? We needed time to ensure 38 – or the 32 other suppliers – agree to an end to deforestation and finally there was a consensus. We said, look, it’s a deadline – if you cannot turn off your bulldozers by January 31st, you are no longer a supplier – and they all agreed. That’s why we made the announcement on February 5th.
3p: Greenpeace has a couple of areas where they have reservations regarding their position [towards APP] until further evidence manifests itself. One of those is the plan for peat – which is an extensive soil on the plantations. How easy do you think it’s going to be to resolve that matter to Greenpeace’s satisfaction?
AG: Greenpeace is heavily involved with climate change issues, so peat has become their first priority. In our operations peat is a priority, but not our first. Our first priority is addressing social issues. Number two is the HCV management plan. Peat is actually a part of HCV – so we want to concentrate on much wider issues than peat, but under the HCV management plan.*
Secondly, Greenpeace has been great in trying to identify the right experts for us – it’s not easy. Does anybody know what is the best process for sustainable peat-land management in tropical peat forests in Indonesia? How many of those experts exist in the world? Possibly one? Two? We finally identified international peat experts that are willing to help us, who understand the issues. The next step is to work with these experts, to digest, analyze all of the data, have a look at it and verify it on the ground. Because the best-practice management for peat in one region is not automatically the same as for another region. So, we have to analyze it on the ground to see what is the best practice for peat-land management we can adopt. We are much better placed right now in terms of peat-land management.
*Author note: HCV means, High Conservation Value, assessments of which are ongoing and can be read about here in my previous article.
3p: Greenpeace’s other concern was; is February, being such a short timeframe, enough time to get a sense of your action on the ground? Obviously there are HCS and HCV assessments still pending. What happens if the results come in and there are surprises making it difficult for you to meet the needs of those assessments and recommendations?
AG: There are several processes we need to go through in HCV assessment. The stakeholder engagement, the peer review process, and then the HCV recommendation for the management plan is going to be given to the company. It’s the company’s decision to adopt the recommendations. We already publicly stated that we are going to adopt their recommendations. But how are we going to implement it on the ground? Number one, whatever the HCV recommendations by our assessors, we have to assess that their recommendations can actually be sustainable. That’s the job of the experts that we are now putting together – consisting of experts in our own core team in APP and Sinar Mas forestry [APP’s pulpwood supplier], and also peat experts and technical experts from NGOs. This team will decide whether these recommendations can be implemented or not. If they cannot, how are we going to compensate for that? For example, if there are some restorations that need to be done, and if you restore this area and the whole concession will be gone, how are we going to address that?
3p: If your suppliers say they can’t comply with the recommendations for managing their concessions – is there any danger you won’t have sufficient supply to meet demands of the paper mills – or do you not see that as a threat?
AG: There is always a threat. There is always a risk of failure in the supply chain. But as well as making sure suppliers comply with FCP, there are also efforts internally to improve our yield, to improve our mean annual increment – basically the yield of the trees themselves. The better the yield, the less land we are going to depend on.
3p: There are obviously going to be those people out there who will remain skeptical about APP’s commitments – What would you say to those people to convince them?
AG: A lot of people are detached from our local and national issues. A lot of big companies in the U.S. have never been to Indonesia. They just see Indonesia – big risk – that’s it, exclude them from the supply chain. It’s not as simple as that.
What I would say is that, please, try to understand the issue; by excluding us or other high risk areas from your supply chains – you actually face much greater negative impacts. Excluding the suppliers….means no improvement whatsoever is going to happen in the companies they exclude.
Sustainable forest management in Indonesia is not just a regional issue, it’s actually everybody’s issue. Open up the doors, try to understand the issues and help out instead of excluding those from their supply chains, I think is very important.
3p: To what extent are you interested in pulling other companies in your industry in Indonesia along with you? At the end of the day, if it’s about the forests and maintaining the health of the forests, then everyone has to be involved.
AG: Yes, that’s correct and we rely a lot on the government of Indonesia to do that, but at the same time, we also rely a lot on the market. Also, let the market pull the other players to do the same thing that we are doing right now. The market demands that, and they have no other choice.
(Disclosure – travel and accommodations for the trip to Indonesia were covered by APP)