Did You Know?
ECAs have played a major role in financing the pulp and paper industry by backing plantations and pulp and paper firms as well as financing equipment and machinery. ECA backed projects have contributed to environmental and social detriments such as massive deforestation, illegal logging, pollution, and human rights abuses. ECA financing of the pulp and paper industry in Indonesia during the mid-1990’s greatly harmed Indonesian forests and the local communities that depend on them for subsistence. Indonesia’s two largest pulp producers—Asia Pulp and Paper (APP) and Asia Pacific Resources Interational, Ltd (April)— increased their output between 1988 and 1999 by nine-fold. As a result, pulpwood consumption increased dramatically, exceeding the available legal timber supply: this in turn led to massive illegal deforestation. Illegal forest activities are clearly linked to the lack of due diligence on the part of ECAs.
"During the 1990's, ECAs competed with each other to push more and more pulp and paper manufacturing into what is now an industrial sector characterized by excess capacity, massive deforestation, human rights violations, extreme debt and consequent financial collapse...."
-Environmental Defense 2001
Suspected illegal logs on a barge off the coast of central Kalimantan in Indonesia.
Photo Credit: Greenpeace (February 15, 2004)
Important Background Documents on Pulp and Paper
ECA Finance in Indonesia: Ecological Destruction and Corruption
by Stephanie Fried, Environmental Defense; and Titi Soentoro, NADI
Double Destruction: the Role of ECAs in Indonesia's Forests: From Pulping the People to Looting for Palm Oil while Destroying US Jobs May 2002 Summary of a publication By Inge Altemeier, Feri Irawan (Walhi Jambi), Stephanie Fried (Environmental Defense), Rivani Noor (Walhi Jambi)
Pulp, Paper and Power: How an Industry Reshapes its Social Environment [PDF] 1995 by Larry Lohmannn, The Corner House
Export Credits: Fueling Illegal Logging [PDF] 2002 by Chantal Marijnissen, FERN
Citigroup and the Wood and Paper Products Industry [PDF] March 14, 2000 by George Draffin, Rainforest Action Network; Citigroup and its subsidiaries are involved in dozens of projects receiving financial support and political risk insurance from MIGA, OPIC and other government agencies.
Focus on International Financial Institutions 1995 by the World Rainforest Movement
Indonesia Projects Summary:
Finnish ECA Support for Pulp and Paper Projects:
Asia Pulp and Paper Faces Charges on ECA-Backed Projects February 2, 2005 (Morningstar.com) The latest developments come as APP enters nearly a fourth year of fitful debt-restructuring negotiations with ECAs.
ECA-Backed Indonesian Pulp Mill Used Illegal Wood Sources September 14, 2004 (Source: Forest Rescue Alliance Riau, Indonesia)
APP Reaches Envrionmental Agreement with ECAs June 4, 2004 (Jakarta Post)
International Banks Contributing to Destruction of Key Rainforest April 8, 2003 (Source: World Wildlife Fund)
ECAs Angst on APP March 25, 2003 (Source: Export-Import Bank of the United States)
Exim Bank Files Lawsuit Against Asia Pulp and Paper October 23, 2003 (AP World Reports)
US, Others Played A Role In Indonesian Pulp And Paper Collapse
February 13, 2001 by Environmental Defense
For more information, contact the ECA Watch Facilitator.
ECA Watch Campaign Member Links:
NADI, Titi Soentoro, Policy Coordinator - titi at apwld.org, euron at indo.net.id
Environmental Defense, Stephanie Fried, Senior Scientist: International Program - www.environmentaldefense.org
JATAM, Jaringan Advokasi Tambang - www.jatam.org
WALHI/ Friends of the Earth Indonesia - www.walhi.or.id