Tue, 26 Aug 2003

Good forest management

Asia Pulp & Paper (APP), one of Indonesia's largest pulp and paper producers, signed a cooperation agreement with the World Wide Fund for Nature (WWF) last week that could become a model for good forest management for wood-based manufacturing companies in the country.

Under the agreement, APP will set aside almost 50 percent, or 58,500 hectares, of its forest concessions in Riau province as conservation areas. It also has pledged to tighten procedures to stop the supply of illegal logs to its pulp mill.

The subsidiary of the Sinar Mas Group also will prepare a multiyear action plan on the sustainability of its forest resources, the conservation of high-conservation-value forests, the legality of its wood supply and the resolution of land conflicts with local communities, all under the supervision of the WWF.

Unilaterally setting a moratorium on logging in such a vast portion of its forest concessions is a great sacrifice for APP, which has about US$6.7 billion in debts, because the initiative not only could slow production at its mill, but also could increase the costs of its pulpwood procurement.

Even though the move partly reflects the change of attitude on the part of APP toward environmental sustainability and social responsibility, this concerted environmental effort should be attributed largely to the combination of pressures from non- governmental organizations and APP buyers, notably those in Japan.

Pulp and paper companies, like plywood makers, in Indonesia, have been coming increasingly under attack from NGOs for poor forest management practices. The government's licensing of wood- based industries, whose total manufacturing volume is way above the sustainable support of forest resources, has caused concern about the reckless felling of the country's natural forests.

The rapid expansion of pulp and paper industries, especially in the early 1990s, made Indonesia one of the world's top producers but forced companies to scramble for pulpwood to feed their mills.

Environmentalists have long suspected that much of the wood for the mills came from illegal logging. NGOs allege the pulp and paper industry is one of the biggest threats to Indonesian forests, especially now when pulp and paper companies are groaning under mountains of foreign and domestic debt.

The problem should nonetheless not be blamed entirely on the greed of the companies. Forestry regulations in the era of local autonomy often make it extremely difficult for companies to ascertain the source of the wood entering their mills. And corruption among forestry officials, who are supposed to verify the documents of every truck entering the mills, also contributes to illegal logging.

The government's past policy of granting forest concessions and land concessions to pulpwood plantations only after the pulp mills were already in operation should also be blamed for the mismanagement of the forest. This policy forced the government to make some corrective measures, by allowing pulp companies to clear-cut the natural forests they had been allotted for tree plantations and to buy pulpwood from outside suppliers. These cheap outside suppliers in turn often discouraged pulp companies from immediately developing tree plantations, which require a large investment.

Because the astronomical expansion of the pulp and paper industry in Riau in the early 1990s coincided with the opening of hundreds of thousands of hectares of oil palm plantations, the government also forced pulp companies to buy wood cut on plantation lands in a bid to prevent the use of fire to clear the land.

There is indeed an urgent need for the government to strengthen its administration of the forests. But one cannot expect much improvement soon from this sector, especially during the current learning period under local autonomy.

The APP-WWF joint endeavor seems a better alternative for improving forest sustainability. This cooperation proves how effective the combination of pressure from buyers, consumers and credible NGOs can be in forcing companies to implement good forest management practices.

Hopefully, similar pressure will be exerted on other pulp and paper producers such as Kiani in Kalimantan and Riau Andalan Pulp in Riau, as well as plywood makers.

True, the effectiveness of the APP initiative and the seriousness of its commitment to good forest management has yet to tested, which it will be over the next few months when the joint projects are implemented.

We nevertheless are assured the WWF will not compromise its reputation and credibility, and will therefore see to it that all programs agreed on in the cooperation agreement will be properly implemented.