Swedish companies accused of helping destroy RI rainforests

Swedish companies accused of helping destroy RI rainforests
forest

Elna Nykaenen, Agence France-Presse, Stockholm

Swedish companies pride themselves on their high business ethics
standards, but now corporate heavyweights have come in for
stinging criticism for their alleged role in the destruction of
Indonesian rainforests.

According to a report published this week by the Swedish
Society of Nature Conservation (SSNC), several blue-chip
corporations have either equipped, bankrolled or traded with the
Indonesian logging industry, which is accused of large-scale
destruction of the country's tropical forests.

SSNC and the World Wildlife Fund accuse Indonesian companies
Indah Kiat, owned by Asian Pulp and Paper, and PT Riau Andalan
Pulp and Paper, owned by Asia Pacific Resources International
Holdings, of turning huge areas of the irreplaceable Indonesian
rainforest into acacia and eucalyptus plantations, with
disastrous consequences for local inhabitants and wildlife.

And all with the help of Swedish companies, SSNC claims in the
report, which reads like a Who's Who of the country's business
elite.

"Many Swedish companies show a happy face at home, but abroad,
they don't have control over the companies they work with and are
involved in operations that destroy the environment and violate
human rights," said SSNC chairman Mikal Karlsson.

Swedish financial services giant Nordea figures prominently in
the report for allegedly helping to fund construction of an Indah
Kiat paper plant, while ABB, the Swiss-Swedish engineering
company, delivered machinery to both Indah Kiat's and RAPP's
factories.

Others include the Swedish Export Credits Guarantee Board, a
government-backed organization, which issued Indonesian forestry
companies with loan guarantees.

Swedish firms Korimpeks and CellMark promoted the Indonesian
companies' interests in Sweden, and paper manufacturers Duni,
Klippan Paper and Munkedals all imported Indonesian pulp, it
said.

"There is a link from Swedish bathrooms to the Indonesian rain
forests," said Karlsson.

ABB confirmed it had made the deliveries to Indonesia, and
admitted it did not see any problems in doing business with the
companies at the time -- partly because the Swedish Export
Credits Guarantee Board approved.

"We have heard about this and take it seriously. We will
investigate this issue, possibly at location (in Indonesia), and
also talk to our clients," said Erik Kristov, ABB spokesman in
Sweden, responding to the report.

Lena Hoeglund-Rosen, spokeswoman for Nordea, said an
unspecified credit was granted to Indah Kiat in the mid-1990s,
but added that the bank's policy today was to deny loans to
companies which "violate international practice".

"We use something called the environmental risk assessment
tool to have a better picture of the companies we do business
with. This tool is for finding out if companies act in a correct
way when it comes to environmental issues," she said.

But last September and this January, when SSNC contacted
companies about the organization's report, it said Nordea did not
reply to their questions at all, while ABB maintained it had
operated according to Indonesian law.

The other companies accused of unethical business practices
either declined to comment or pledged that any past mistakes
would not be repeated.

"What's done is done. In the future, we will have a whole
different control on these type of things," said Duni spokeswoman
Anette Laurell.

But some appear unlikely to give up so easily. Currently, a
new paper mill in the Indonesian part of Borneo is planned, with
funding from United Fiber Systems Ltd and China National
Machinery, SSNC said.

CellMark has committed to marketing 90 percent of the plant's
acacia pulp production over a 10-year period, but according to
company Vice President Tomas Hedberg, financing of the project is
not yet clear.

"I can promise you that if this project becomes reality, it
will have gone through several environmental controls. Otherwise,
it would be completely impossible to get financing for it," he
said.

Environmental organizations both in Europe and Indonesia have
heavily criticized the plans, saying that the transformation of
rain forests into plantations destroys local villages and
threatens endangered species such as orang-utans.

"Another gigantic paper mill in Borneo would be devastating
for the rain forest and all its inhabitants," said Karlsson.