Indonesia project to meet pulp demand moving slowly

Indonesia project to meet pulp demand moving slowly

Prime Gracia Sarmiento, Dow Jones/Singapore

The Indonesian government's plan to accelerate the development of
industrial tree plantations can help meet the rising demand for
pulp and paper if the program is undertaken in a time-bound
manner and without encroaching on existing rain forest areas.

However, the slow progress of the program so far is raising
concerns that the ongoing depletion of forest resources may
continue as the country's large paper mills struggle to find raw
materials to meet rising demand for paper.

Deny Kustiawan, director for the Indonesian Ministry's forest
development, said the ministry has already awarded concession
rights to 114 companies to manage 5.8 million hectares of mostly
degraded land as industrial tree plantations.

"But only 2.16 million hectares have been planted (so far). We
need to speed up development of existing industrial forests, so
that it can (meet) domestic demand for wood," he said.

According to Togu Manurung, a forestry expert at the Bogor
Institute of Agriculture, industrial plantations can boost the
supply of raw materials needed by the growing pulp and paper
industry in Indonesia.

But development of these plantations can also pose a "threat
to natural forests if it isn't done correctly." If such
plantations are developed in productive natural forest areas, it
will harm the country's forestry resources, Manurung said.

The need to service the growing demand for raw materials to
make pulp comes at a time when Indonesia is grappling with
massive deforestation.

Indonesia is among the world's biggest producers and exporters
of paper and hardwood pulp, thanks to its abundant forestry
resources.

In 1993, Indonesia produced 900,000 metric tons of pulp and
2.6 million tons of paper and paperboard. In 2004, Indonesia's
pulp output reached 5 million tons, while paper and paperboard
production soared to over 7 million tons, according to statistics
issued by the Indonesian Pulp and Paper Association, or APKI.

But this growth has come, at least partly, at the expense of
the country's natural resources.

The World Wildlife Fund reported in 2003 that the tropical
lowland forests in Sumatra "which harbor the world's highest
levels of plant diversity and beleaguered elephants and tigers,
are disappearing rapidly" because of massive destruction of
forests for various raw materials.

The government is using "a high conservation value system to
map (existing) forest areas," and ensure that industrial
plantations aren't developed in protected natural forest areas,
Kustiawan said.

In 2003 and 2004, Indonesia's ministry of forestry issued
rules stipulating only a portion of the country's forest area can
be used for industrial tree plantations. The concessions to
develop such plantations are issued by the government through an
auction.

The government's program on industrial tree plantations allows
Indonesian pulp and paper companies to "complete their industrial
plantation development according to their needs, in order to
achieve full sustainability," said Aida Greenbury, general
manager for sustainability and stakeholder engagement at Asia
Pulp & Paper Co. Ltd.

The Jakarta-based APP is one of the world's biggest pulp and
paper companies and owns a fully integrated pulp and paper mill
in Sumatra.

APKI Chairman Muhammad Mansur said the local pulp and paper
companies need these plantations, without which the industry
"will stagnate and will start importing pulp and paper again
because we can't expand our capacity."

But environmental and forestry experts are skeptical.

Manurung doubts the government can speed up the plantation
program without providing incentives for private investors.

Chris Lang, a Frankfurt-based researcher and campaigner with
the World Rainforest Movement goes a step further. The problem
isn't about looking for sustainable fiber sources for the pulp
and paper industry, he said.

It is "the pulp and paper industry itself which is the
problem," he said, adding even industrial plantations consume
vast amounts of water and displace local communities who rely on
natural forests for their livelihood.

According to a paper by the Berlin-based environmental group
Robin Wood, "legal logging inside concession areas has the same
devastating effect as illegal logging - valuable ecosystems are
either overused or completely destroyed for conversion to
plantations."

APP in particular, has been criticized by both local and
international environmental groups for its role in destroying
natural rainforests in Sumatra.

But APP's Greenbury, who's also a wood technologist by
profession, said APP "sustainably develops and manages its area,
working closely with the local community and steering them away
from illegal logging and traditional slash and burn practices."

APP "only develops wasteland and degraded areas," she said.