APP reaches agreement with major creditors

The Jakarta Post, Jakarta

Singapore-based Asia Pulp & Paper Co. has reached an agreement with major creditors on environmental protection for the firm's affiliates in Indonesia.

The creditors comprise the export credit agencies of Germany, Japan, France, Austria, Sweden, Finland, Italy, Spain and Denmark.

The so-termed "environmental covenant" will become an integral part of Master Restructuring Agreements (MRAs) between the APP affiliates and the creditors, while the MRAs are to become effective when a defined threshold of creditor acceptance has been met, according a media statement.

The agreement has come since the export credit agencies studied the action taken by APP subsidiaries over the past 12 months with respect to the environment.

During the period, according to the media statement, the APP subsidiaries set aside 77,000 hectares of production forests for conservation to create a 165,000-hectare conservation area in Riau, put in place practices and procedures to guarantee the legality of wood supply, secured new sources of plantation fiber and developed plantations on wasteland.

Besides, APP launched the Sustainability Action Plan last February to ensure the sustainability of its subsidiaries' operations.

APP is one of the world's leading pulp and paper companies and is ranked number one in Asia, minus Japan. The combined pulp, paper and packaging capacity of Indonesian subsidiaries, including PT Indah Kiat Pulp & Paper and PT Pabrik Kertas Tjiwi Kimia, amounts to 6.3 million tons per year.