Japan may reject APP products
Rendi A. Witular, Yogyakarta
Major Japanese importers are planning to reject pulp and paper products produced by Indonesia-based Asia Pulp and Paper Co. (APP) in September amid accusations that the company uses illegally felled timber for its raw material.
Spokesman of the Ministry of Forestry Transtoto Handadhari told The Jakarta Post on Monday that there was a plan by several giant Japanese companies, such as Ricoh Co. to reject APP products, following campaigns by non-governmental organizations in Japan against APP.
According to Transtoto, APP's total exports to Japan may worth about US$500 million per year, with 20 percent of the exports destined for Ricoh.
"Due to the problem, the ministry has decided to help APP as it may jeopardize the country's overall pulp and paper export to Japan. We are afraid that Japanese buyers may think that our pulp and paper products are mostly derived from illicit sources," said Transtoto.
Transtoto said the ministry was suspicious that the rejection was mainly a result of unfair trade practices conducted by Japanese companies with affiliates in Asia that wanted to takeover the huge market of APP.
Transtoto led the Indonesian delegation on Aug. 24, along with Indonesian Ambassador to Japan Abdul Irsan, to clarify the problem with representatives from the Japanese government, the business community and several local non-governmental organizations.
However, Transtoto said until now it remained unclear whether the Japanese companies would proceed with their plan.
APP's buyers are largely from Japan, the European Union and the United States.
The plan to reject APP products was made following the refusal by the World Wild Fund for Nature (WWF) and other local Japanese NGOs to endorse APP'a action plan to ensure a sustainable wood supply for the world's 10th largest pulp and paper mill.
Yuji Imaizumi, assistant director for international forestry cooperation at the Forestry Agency of Japan told the Post that the rejection was a sign that Japanese companies were aware of environmental issues in wood exporting countries, such as Indonesia.
"Japanese companies have been increasingly aware of environmental problems and sustainable development of forests. The Japanese government was not involved in the rejection. Consumers acted according to their conscience," said Imaizumi.
He explained that the government's main function was to raise awareness of illegal activities in wood-producing countries in order to help reduce illegal trade of wood-based products.
The Sinar Mas Group, founded by tycoon Eka Tjipta Widjaja, is the controlling shareholder of APP. The company is currently trying hard to restructure its defaulted debts totaling US$13.9 billion.