APP: Profit trumps good faith?

A report by the Sumatran coalition Eyes on the Forest,¹ investigates whether Asia Pulp & Paper (APP), the manufacturer of paper products, complied with its legally binding obligation to develop sustainable forestry operations and pulp and paper production. These environmental covenants were part of a restructuring agreement that APP reached with its creditors, including eight European export credit agencies, after announcing in 2001 that it would default on $13.9 billion in worldwide debt. More than 34,000 hectares of APP’s Pulau Muda forest management unit are of high conservation value and as part of its obligation, APP agreed to set these aside for conservation. 

 

According to the report, satellite images reveal that APP began clearing the forest just three years after signing this agreement, swallowing one-third of the forest that APP committed to protect. A number of mills are rumoured to start up in the current expansion of Indonesian pulpwood plantations; among them, APP’s development of the world’s largest single pulp line in Sumatra. ECA Watch support European Environmental Paper Network’s campaign against APP.²

 

_{1. www.eyesontheforest.or.id/attach/EoF%20%28Mar12%29%20APP%20default%20on%20environmental%20covenant%20report%20FINALS.pdf}

_{2. www.environmentalpaper.eu/app/}