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Raz Godelnik headshot

Is APP Closer to Throwing in the Towel After Losing 9 More Customers?

By Raz Godelnik

The latest milestone in the fight between Greenpeace and Asia Pulp and Paper (APP) was announced earlier this week. Following a Greenpeace report accusing APP of cutting protected tree species in Indonesia, nine companies announced they are “taking steps to deal with APP.” This list includes Mondi, Parragon, National Geographic, Constable, Acer, Xerox and most notably Danone, which announced it is suspending all purchases from APP.

These companies joins the likes of Nestle, Kraft, Unilever, Adidas, Mattel and many more who have already dropped APP following the ongoing campaign Greenpeace is running against the company. Greenpeace’s goal is to pressure APP to change its logging practices and make them more sustainable through the company’s customers. Greenpeace believes that if enough customers will stop buying paper from APP, the company won’t have any choice but to make changes in order to stay in business. The list of customers that have left APP is indeed growing, but the company doesn’t seem to show any signs of change, at least for now. Even now, with nine fewer customers, APP seems reluctant to throw in the towel. So it gets you wondering, who will win this fight?

The trigger for the last round of departures was a report published by Greenpeace documenting illegal ramin – an internationally protected tree species – at Asia Pulp & Paper's largest pulp mill. The report included video footage and forensic evidence obtained during this investigation, which Greenpeace also made available to domestic and international authorities – the Indonesian Ministry of Forestry and the CITES Secretariat in Geneva.

Greenpeace’s investigation also identified the global market for paper products from APP paper mills in Indonesia and China, including copy paper, packaging, books and other paper products containing rainforest fibers. The report named names, pointing towards  11 major companies around the world that have been shown to buy or retail products from APP that contain rainforest fiber, including Danone, Xerox, Walmart, Countdown, Collins Debden, Acer, Barnes & Noble, Parragon, and Constable & Robinson.

The argument Greenpeace made was very strong, claiming that any company or country importing from APP should see APP's global paper production and trade as high-risk. One of the risks Greenpeace mentions is the fact thatramin is an internationally protected species under CITES trade regulations. All international trade in ramin specimens or derivatives from Indonesia is banned, with the exception of that sourced from one small selective logging operation that does not contribute to the pulp sector's raw material supply chain.” Greenpeace believed that the fear of violating international regulations will outweigh any advantage the relationship with APP provides to these companies. And they were right.

9 of the 11 companies mentioned verified that they take some sort of action. Greenpeace mentioned that even Collins Debden has confirmed that it will no longer source from APP. “This is bold move for a company whose parent company Nippecraft is majority-owned by APP,” Greenpeace added.

Interestingly, at least one of the companies is making this commitment not for the first time. Xerox, according to Greenpeace, “first claimed publicly that it stopped dealing with APP 'years ago' but has now confirmed that there were implementation problems as recently as 2011. The company has confirmed it will be reinforcing a policy banning any purchases from APP. “This remark only shows you that while getting these commitments is important, it’s also important to create a mechanism to monitor them and ensure they actually take place.

The most notable commitment came from Danone Group. Following Greenpeace report the company announced that “Danone group’s direct purchases from APP (7,500 metric tons or 1.5 percent of the group’s total cardboard packaging purchases) will thus be suspended by the end of June 2012,” and that the company “will soon publish our global forest footprint policy which includes a “zero deforestation” component / which addresses our commitment to zero deforestation.”

What was APP’s response? A spokesperson for APP told mongabay.com, "APP is also taking this allegation very seriously, and is fully cooperating with the Ministry of Forestry (MoF) of the Government of Indonesia’s investigation which is now underway. It will be the responsibility of the Ministry to announce the findings of the investigation. Until that time, APP won’t be making any more public statements on the matter."

If this sounds to you like a legalistic reply, you’re probably right. Yet, for those who follow the Greenpeace-APP fight for some time, this is an interesting development. In the past, in response to Greenpeace’s accusations (this is not the first report Greenpeace published on APP), the company usually claimed that Greenpeace’s claims weren’t accurate and tried to discredit these reports. And now? Nada.  Even not about Greenpeace’s statement that this report “shows that APP's public claim to have 'zero tolerance for illegal timber' is yet more inaccurate greenwash.”

It might be nothing, but for me this change in tone is an indication that there are some dents in APP’s armor. No company can lose so many customers and stay indifferent. Not even APP. So even though Greenpeace’s strategy didn’t change much in APP’s practices so far, my guesstimation is that the tipping point is close. Very close. A few more customers that become former customers and you will find APP at the negotiating table with Greenpeace. This is my bet. You’re welcome to place yours.

[Image credit: Greenpeace]

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.

Raz Godelnik headshotRaz Godelnik

Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.

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