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Audit of ‘How Sinar Mas is Pulping the Planet’

September 2010

Audit of ‘How Sinar Mas is Pulping the Planet’
Report for Asia Pulp & Paper (APP) by ITS Global September 2010

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ITS GLOBAL International Trade Strategies Pty Ltd, trading as ITS Global Level 26, 35 Collins Street, Melbourne, 3000 Tel: (61) 3 9654 8323 Fax: (61) 3 9654 4922 http://www.itsglobal.net

Commercial-in-confidence. The views expressed in this publication are those of its authors. The consultant takes no liability for commercial decisions taken on the basis of information in this report. The information is accurate to the best of the consultant’s knowledge, however the consultant advises that no decision with commercial implications which depends upon government law or regulation or executive discretion should be taken by any person or entity without that party’s having secured direct advice from the government agency concerned in writing.

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Executive Summary
International campaign organisation Greenpeace published a report in July 2010, „How Sinar Mas is Pulping the Planet‟. Its subject is primarily the conduct of Asia Pulp & Paper (APP), an Indonesia-based pulp and paper company. This independent audit from ITS global shows the leading allegation Greenpeace makes against APP – that it secretly planned a massive expansion of its land use in Indonesia – is based on a fiction. An examination of the evidence used to support this claim shows it to be false. In total, the Greenpeace report makes 72 claims against APP. It cites over 300 footnotes and around 100 references. This evidence was systematically examined, and it does not support the claims. Quotes are provided from documents in which they do not exist; maps are provided which mark out concessions that do not exist, material with high margins of error is treated as if there is none. Most of the leading claims are misleading, speculative or based on distortions of the facts. ITS Global commissioned two independent academic experts, one in forestry and economics, and the other in agricultural science to review Greenpeace‟s claims. Both describe the Greenpeace report as „highly misleading‟. This report recommends that any information from Greenpeace be treated with the utmost caution by customers or stakeholders that are attempting to gain an impartial, non-politicised view of the market they are engaging with. The audit of Greenpeace‟s claims shows that their two major claims related to the company‟s expansion and its greenhouse gas emissions are not defensible: Expansion Greenpeace claims APP secretly planned to expand its concessions by 900,000 hectares between 2007 and 2009. The source is an in-house APP document which Greenpeace will not reveal. There is no evidence it was or is company policy. The public record confirms this. Between 2007 and 2009 APP‟s supplier concession areas increased by just over 25,000 ha. To support its case, Greenpeace has produced maps marking out APP‟s concession areas. They show four concessions that do not exist. Greenhouse Gas Emissions Greenpeace asserts APP is playing a major role in expanding greenhouse gas emissions when Indonesia is already the world‟s third largest emitter. Greenpeace further alleges that APP is engaging in extensive forestry on peatlands and contravening Indonesian law. A review of the evidence shows these claims to be either groundless or seriously in error. Greenpeace bases its peatlands claims against APP on a series of maps which, the author admits and Greenpeace disregards, have significant margins of error (up to 31 percent).

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Experts at Indonesia‟s leading agricultural university rate the margin of error as high as 90 percent. Consequently, Greenpeace‟s contention that APP is a major contributor to Greenhouse gas emissions is not legitimate. Nor is its claim Indonesian Government agencies show Indonesia is the third largest emitter in the world. It ignores that the Indonesian Government formally wrote to the United Nations stating that this was not correct. The Indonesian government is not a „climate change denier‟. It has made a larger commitment than any other developing country – and most developed nations – to reduce emissions. Credibility of the Greenpeace Report Greenpeace has indicated that it is using the „Pulping the Planet‟ report to lobby APP‟s customers to cease purchasing paper products from the company. In doing so, Greenpeace is adopting tactics that suggest it considers itself beyond reproach. Within the business world, actions that deceive or pass on false information to customers and shareholders are held to account. Greenpeace is attempting to engage the business world in relation to Asia Pulp & Paper and on a number of other fronts, yet its communications are accountable to no-one. Greenpeace states publicly that it is a campaigning organisation, not a conservation organisation or research organisation. In this regard it must be acknowledged that its views are political – and therefore partial. „Pulping the Planet‟ is a clear example of the highly politicised nature of its public work. This audit report indicates that the information Greenpeace is supplying to the market and general public is both inaccurate and misleading. This report recommends that any information from Greenpeace be treated with the utmost caution by customers or stakeholders that are attempting to gain an impartial, non-politicised view of the market they are engaging with. Not to do so presents a substantial business risk for corporations that are seeking to make the most of opportunities in high-growth emerging economies such as China and Indonesia, and in fragile markets in the developed world.

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Table of contents Executive Summary Acronyms 1. 2. 3. 4. Introduction General Claims and Evidence Used in The Greenpeace Report Key claims of the Greenpeace Report Methodology Annex I: Pulping the Planet Analysis Annex II: Greenpeace Maps Analysis 3 6 7 8 13 17 19 78

Annex III: Reviewer Statements and Qualifications 83 References 85

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Acronyms
APP ADB ASEAN CIFOR CVF EIA ENGO EOF FAO FOE GDP ha HTI HRW IKPP LEI LPPP MAI m
3

Asia Pulp & Paper Asian Development Bank Association of Southeast Asian Nations Center for International Forestry Research Conservation Value Forest Environmental Impact Assessment Environmental non-government organisations Eyes on the Forest Food and Agriculture Organization of the United Nations Friends of the Earth Gross Domestic Product Hectares Hutan Tanaman Industri (industrial timber plantation) Human Rights Watch Indah Kiat Pulp & Paper Lembaga Ekolabel Indonesia (Indonesian Ecolabelling Institute) Lontar Papyrus Pulp & Paper Mean Annual Increment Cubic metres Metric tonne Mixed Tropical Hardwood Offshore Financial Centre PT Arara Abadi PT Tebo Multi Agro PT Wira Karya Sakri Sinar Mas Group World Resources Institute World Wide Fund for Nature WWF Indonesia

MT MTH OFC PT AA PT TMA PT WKS SMG WRI WWF WWFI

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1. Introduction
ITS Global was commissioned by Asia Pulp & Paper (APP) to assess the validity and accuracy of the claims made in the report authored by Greenpeace in 2010, „How Sinar Mas is Pulping the Planet‟1 („the Report‟) based on the evidence cited in the report. The following audit assesses the claims against the evidence cited in the Greenpeace Report. It is thus an assessment of the objectivity and accuracy of the Greenpeace claims made against the company. The audit focuses on the claims made against APP, with lesser discussion of claims against other companies such as PT Sinar Mas Agro-Resources and Technology (PT SMART). The audit was reviewed by two external reviewers that are sufficiently qualified in ecology, agricultural science and forestry to review the audit.

1

Greenpeace (2010). How Sinar Mas is Pulping the Planet. Greenpeace Netherlands. Amsterdam

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2. General Claims and Evidence Used in The Greenpeace Report
2.1 The broad claims of the Greenpeace Report
The Greenpeace Report attempts to demonstrate that APP and its supplier companies are: Accelerating climate change; Destroying biodiversity; Causing deforestation; Breaking the law; Engaged in poor governance practices; Engaged in poor corporate social responsibility (CSR) activities; Engaged in nepotism; Of questionable reputation.

In addition, corporate information on the company -- such as levels of debt, size of operations -- is presented. In order to demonstrate the above practices, the Greenpeace Report describes the behaviour and performance of a number of actors. They are: The Indonesian Government (generally); The pulp and palm industries; The Sinar Mas Group (including PT SMART) Asia Pulp and Paper; The Widjaja Family (the founders and shareholders of APP‟s business operations).

The data are presented as both direct and indirect claims against APP, using a range of evidence. An analysis of the individual items based on footnotes (see Methodology) demonstrates a total of 299 datum or claims in the report text. The subject matter can be broken down as follows: Table 2.1 Thematic
Corporate Deforestation Corporate Social Responsibility (CSR) Biodiversity Climate Reputation Governance The Widjaja Family

Total claims
63 56 42 35 33 33 16 8

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Of the 299 items, 133 are claims made directly against the Sinar Mas Group. Of these 133 items, 109 are claims made directly at APP. The remainder are claims made at the pulp and palm oil sectors more generally (3), at PT SMART (17), and at the Wijaja Family (4). Of these 109 claims, 36 are repeated elsewhere in the document; leaving a total of 73 direct claims against APP out of 299 items.

2.2 Evidence used in the Greenpeace report
The Greenpeace report draws on a broad range of sources. Sources were analysed for all 296 datum within the text, with the exception of repeat claims (56 in total), leaving a total of 240 datum to be checked. Use of sources is highly flawed. A breakdown showed flaws on 102 occasions, as follows: Table 2.2 Use of data
Selective Incorrect Misleading Speculative Nonexistent

Occasions
36 31 19 13 3

In addition, Greenpeace presents a map on page 14 of the report, which purports to represent the existing planned concessions of APP‟s supplier companies, location of existing forest areas, existing peat areas, and tiger habitat areas in the provinces of Riau, Jambi and Sumatera Selatan (South Sumatra). Comparison of current forest concession maps from the Indonesian Ministry of Forestry (which Greenpeace claims to source) and the Greenpeace maps demonstrates major flaws. Specifically, errors by Greenpeace demarcate: 4 areas as existing forest concessions belonging to APP that are non-existent (non-existent data); 11 areas as „planned‟ APP forest concessions that belong to other forest companies (speculative data); 4 areas as planned APP forest concessions that are existing forest concessions (incorrect data).

Examples of the misuse of data are presented below. 2.2.1 Non-existent data On two occasions the report makes claims regarding statements from other organisations.
“In 2008, the Rainforest Alliance‟s Smart Wood programme withdrew cooperation with APP, stating that: “It is the decision of Rainforest Alliance that we do not wish to be used by APP again in order to mislead the public and the consumers.”

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The text quoted by Greenpeace does not appear in the source document.2
“In 2007, the FSC dissociated itself from APP and revoked its chain of custody certificate: “…the FSC Board of Directors decided that FSC should not allow any association of its name with APP or any company in which APP is a majority shareholder, unless APP completely and immediately stops converting natural forests and provides documented evidence of that cessation.”

The cited document3 does not contain the quoted text. The text from 'unless APP ...' is not part of the original document. FSC did not revoke the chain of custody certificate; it simply prevented APP from using the FSC logo or name in any of its communications. 2.2.2 Speculative data The Greenpeace Report states:
Sinar Mas was aiming to expand its concessions by 900,000 hectares between 2007 and 2009. In 2006, over half of this area was still forested and a quarter of it was peatland. Thirty of the new concessions encroached into some of the last forest refuges for the critically endangered Sumatran Tiger. A dozen of them – covering at least 130,000 hectares – overlapped peatland which is more than three metres deep.

The Greenpeace Report relies upon a „Confidential Sinar Mas‟ document to make these assertions, which are a speculation on activity that was ultimately not undertaken by the company. During the period referred to, APP‟s pulpwood supplier‟s concession areas increased marginally, by approximately 1 per cent – significantly short of the 900,000ha that Greenpeace claims.4
2

Rainforest Alliance (2007) ‘Rainforest Alliance Public Statement, Termination of Contract to Verify High Conservation Value Forests (HCVF) for APP in Sumatra, Indonesia’, January 2007 www.rainforest-alliance.org/forestry/documents/app.pdf 3 Forest Stewardship Council (FSC) (2007) ‘Forest Stewardship Council dissociates with Asia Pulp and Paper’, Forest Stewardship Council Press Release, December 2007 4 At the end of March 2010, concession areas were 2,519,956 ha. In the middle of 2007, total concession areas controlled by APP suppliers were 2,494,417 -- approximately 25,539 ha less than currently.. It should also be noted that the Indonesian government statistics on APP supplier concessions also differ from Greenpeace estimates; official Department of Forestry documentation states that concession areas are 2,309,511 ha. (Cf. Ministry of Forestry (2010). Laporan Perkembangan Pemanfaatan dan Penggunaan Hutan Produksi Triwulan I (Januari - Maret 2010). Ministry of Forestry, Jakarta, Indonesia). The assessment in this report is based on the concession licenses: SK Menhut No. : 743/Kpts-II/1996, 25 November 1996; SK Menhut No. : 542/Kpts-II/1997, 25 Agustus 1997; SK Menhutbun No. : 244/Kpts-II/2000, 22 Agustus 2000; Surat Menhutbun No. : SK.19/Menhut-II/2007, 5 Januari 2007; SK Menhut No. : SK.102/Menhut-II/2006, 11 April 2006; SK. Menhut No. : 366/ KptsII/2003, 30 Oktober 2003; SK. Menhut No. : 365/Kpts-II/2003, 30 Oktober 2003; Surat Menhutbun No. : 803/Menhutbun-VI/1999, 22 Juli 1999; SK Menhut No. : SK.101/Menhut-II/2006 11 April 2006; SK Menhut No. : SK.18/MENHUT-II/2007, 5 januari 2007; SK Menhut No. : SK.207/MENHUTII/2006, 8 Juni 2006; SK Menhut No. : SK.104/Menhut-II/2006, 11 April 2006; SK Menhut No. : SK. 249/Kpts-II/1998, 27 Pebruari 1998; SK Menhut No. : SK.20/Menhut-II/2007, 5 Januari 2007; SK Menhut No. : SK.554/Menhut-II/2006, 22 Desember 2006; SK Menhut No. : SK.553/Menhut-II/2006, 22 Desember 2006; SK Menhut No. : SK.555/Menhut-II/2006, 22 Desember 2006; SK Menhut No.: SK.552/Menhut-II/2006, 22 Desember 2006; SK Menhut No. : 109/Kpts-II/2000, 29 Desember 2000; SK Menhut No. : 71/Kpts-II/2001, 15 Maret 2001; SK Menhut No. : SK.122/Menhut-II/2007, 2 April 2007; SK Menhut No. 346/Menhut-II/2004, 10 September 2004; SK Menhut No. 68/Menhut-II/2004, 9 Maret 2004; SK Menhut No. : SK.401/Menhut-II/2006, 19 Juli 2006; SK Menhut No. : SK.

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2.2.3 Misleading data
“[In 2009] the Ministry of Forestry authorised the company to produce over 360,000m³ of rainforest logs (i.e. Mixed Tropical Hardwood or MTH) and around only 5,000m³ of acacia pulpwood (PT Artelindo Wiratama could, therefore, have supplied a maximum of 5,000m³ of acacia pulpwood to PT Indah Kiat. However, recent Greenpeace investigations including aerial images taken in March and April 2010, as well as Ministry of Forestry land cover maps show that the company had not yet established any harvestable acacia plantations. The only acacia plantations Greenpeace Southeast Asia investigators could find in March-April 2010 were areas of six month-old acacia plantations.”

The statement misleadingly implies wrongdoing. Greenpeace attempts to assert that APP could or should have supplied the approved quantity of plantation forest timber, but instead supplied timber sourced from natural forests, and that it should have established forest plantations by the time of writing. Yet the Greenpeace documents cited indicate that the timber harvested was within the limits of its legal, government-approved annual workplan. APP supplied around 12% of the quantity of timber that had been approved by the workplan and is still in the process of establishing the plantations. 2.3.4 Incorrect use of data
“According to recent government estimates, Indonesia ranks as the world‟s third largest GHG emitter”

The Greenpeace Report makes this claim citing various estimates of Indonesia‟s emissions with the following footnote:
According to recent estimates published by various governments, Indonesia‟s emissions (2005) are higher than Brazil‟s (2005), Russia‟s (2005) and India‟s (2005), but lower than USA‟s (2005) and China‟s (2004): No 1: USA 6.18 GtCO2 in 2005. Source: EPA 2010: 14 No 2: China 5.6 GtCO2 in 2004. Source: Government of China (2007) No 3: Indonesia 2.25 GtCO2 in 2005. (See endnote 5) No 4: Brazil ~2.2GtCO2 in 2005: Source: MCT (2009): 19 No 5: Russia ~ 2.0 GtCO2 in 2005. Source: UNFCCC (2009): 1 No 6: India ~ 1.6GtCO2. Source: Ministry of Environment and Forests (2009): 53

The Report cites data that uses different methodologies that have not been standardized. This is a grossly inaccurate misuse of data. Looking at the Climate Analysis Indicators and Tools (2010) from the independent World Resources Institute, Indonesia ranked fifth in terms of emissions, behind USA, China, EU and Brazil, for the year Greenpeace cites. The WRI also indicates that Indonesia is ranked 57th in terms of per capita emissions. Excluding land-use emissions for that year, Indonesia ranks 13th.

347/Menhut-II/2004, 10 September 2004; SK Menhut No. : SK. 29/Menhut-II/2006, 13 Pebruari 2006; SK Menhut No. : 337/Menhut-II/2004, 7 September 2004; SK Menhut No. : 417/Menhut-II/2004, 10 Oktober 2004; SK Menhut No. : 339/Menhut-II/2004, 7 September 2004; SK Menhut No. : SK.90/Menhut-II/2007, 22 Maret 2007; SK Menhut No. : SK.79/Menhut-II/2009, 5 Maret 2009; SK Menhut No. : 750/Kpts-II/1996, 2 Desember 1996; SK Menhut No. : SK.332/Menhut-II/2007, 17 September 2007; SK Menhut No. : SK.179/Menhut-II/2007, 1 Mei 2007; SK. Menhut No. : 156/KptsII/1996, 8 April 1996; SK. Menhut No. : SK.87/MENHUT-II/2007, 22 Maret 2007

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Greenpeace also ignores the Indonesian Government‟s Second National Communication under the United Nations Framework Convention on Climate Change in November 2009, which soundly dismissed the calculations leading to the conclusion that it is the world‟s third largest emitter of greenhouse gases.5 2.3.5 Selective data “The Red List reports that the Sumatran tiger is losing up to six percent of its forested habitat per year, “due to expansion of oil palm plantations and planting of Acacia plantations.” The data cited is incomplete. The full entry for the Sumatran tiger notes that more than three quarters of tiger deaths are due to poaching. The full entry states:
"The Sumatran tiger is declining due to high rates of habitat loss (3.2-5.9%/yr; Achard et al. 2002, FWI/GFW 2001, Uryu et al. 2007) and fragmentation, which also occur, to a lesser extent, inside protected areas (Gaveau et al. 2007, Kinnaird et al. 2003, Linkie et al. 2003, 2004, 2006). There are high levels of human-tiger conflict (Nyhus and Tilson 2004, Browne and Martyr 2007), as well as illegal trade in tiger parts (Nowell 2000, Nowell 2007). From 1998-2002 at least 51 tigers per year were killed, with 76% for purposes of trade and 15% out of human-tiger conflict (Shepherd and Magnus 2004). Ng and Nemora (2007) found the parts of at least 23 tigers for sale in market surveys around the island."

Moreover, the data cited does not give a full account of land use change and its drivers in Indonesia. By way of example, current total plantation forestry concessions in Indonesia total 8.7 million ha. Natural forest concessions exceed 25 million ha. Smallholder palm accounts for 14.2 million ha. Commercial palm estates exceed 25 million ha. Total harvested agricultural land (excluding palm) is 19.7 million ha, and has expanded by 1.34 million between 2007-2009.6 Tiger habitat loss is as much to do with fragmentation – a function of spatial planning – as it is to do with area lost – noted in the cited source.

Republic of Indonesia (2009). Draft Second National Communication under the United Nations Framework Convention on Climate Change: Summary for Policymakers. Jakarta 2009
5

6

Ministry of Forestry (2010). Laporan Perkembangan Pemanfaatan dan Penggunaan Hutan Produksi Triwulan I (Januari - Maret 2010) and BPS (2009). Perkembangan Beberapa Indikator Utama. Sosial-Ekonomi Indonesia: Trends of the Selected Socio-Economic Indicators of Indonesia Oktober Katalog BPS: 3101015

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3. Key claims of the Greenpeace Report
3.1 Greenpeace’s key claims
The Greenpeace Report makes two key claims. 3.1.1 Expansion concessions

It purports to document plans by APP to significantly expand its operations through the acquisition of further forested areas. The fibre sourced from these areas, as either natural forest fibre or plantation forest fibre, would be used as feedstock for its two pulp mills on Sumatra, Indah Kiat Pulp and Paper (IKPP) and Lontar Papyrus Pulp and Paper (LPPP). The Greenpeace Report defines these areas as „expansion concessions‟ or „expansion areas‟. 3.1.2 Plantations on peat lands

It claims to have found evidence of wrongdoing by the company with regards to the establishment of plantation concessions or of clearing of natural forest on areas of peat with a depth greater than 3 metres. An Indonesian Presidential Decree states that areas with a peat depth greater than three metres should be designated as protected areas. The relatively high organic matter content of peat soils and the increased rate of oxidation once disturbed provides a basis for Greenpeace to make further claims that the company is directly responsible for increased carbon emissions.

3.2 Evidence supporting the major claims
Few, if any, of the claims are supported by the evidence used. In the cases where the evidence does appear to support the Greenpeace case, the evidence itself is questionable, or is disputed among academic circles. There are three such key pieces of evidence: 3.2.1 ‘Confidential Sinar Mas document, copy held by Greenpeace International’

Greenpeace claims APP secretly planned to expand its concessions by 900,000 hectares between 2007 and 2009. The source is an in-house APP document which Greenpeace will not reveal. There is no evidence it was or is company policy. The public record confirms this. Between 2007 and 2009 APP‟s supplier concession areas increased by just over 25,000 ha. ITS Global does not question the existence of the document despite Greenpeace‟s unwillingness to release it publicly. Closer inspection of the Greenpeace Report and a follow up document by Greenpeace indicates that the source was a presentation during an internal management meeting in
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2007. It was not approved nor implemented by Sinar Mas management. All claims derived from the document must therefore be considered at best speculative and at least of no consequence.7 3.2.2 Wahyunto, S. Ritung & Subagjo H (2003) ‘Peta Luas Sebaran Lahan Gambut dan Kandungan Karbon di Pulau Sumatera (Maps of Area of Peatland Distribution and Carbon Content in Sumatra), 1990-2002’, Wetlands International - Indonesia Programme and Wildlife Habitat Canada (WHC) Greenpeace‟s claim that APP has been undertaking activity on „deep peat‟ of a depth greater than 3 metres relies upon the overlay of a map contained within the „Confidential document‟ and maps produced by Wahyunto, et. al. The maps used, which were published by Wetlands International, contain significant error margins, as much as 31 per cent as admitted by the author. 8 The margin for error associated with the methodology are described by a soil hydrologist from a leading Indonesian University as high as 90 per cent. 9 Given such a high margin for error – 90 per cent – Greenpeace has no basis for the allegations it makes concerning „deap peat‟. 3.2.3 Presidential Decree 32 of 1990’

Presidential Decree 32 of 1990 states that „peat soil with 3 meters thickness or more, existing in the upstream river and swamp‟ is to be classified as a „protected zone‟. The Decree prohibits cultivation activities in protected zones, except those „not disturbing the protection function‟. The protection function of peat zones is defined as „controlling the territorial hydrology, functioning as a water binder and prevention of flood as well as protecting the specific ecosystem in the zone concerned‟. The Decree 32/1990 provides authorities to the local governments to determine the protected zones, but retains management functions with the National Government. Article 38 of the Decree states that cultivation activity - and even mining - may take place in protected zones, if the activity is managed in such a way that the protection function of the zone is maintained and that the activity is regulated by the relevant Minister. The blanket illegality of the 'three metre rule' is therefore not clear-cut. The conditions of the decree permit any number of industrial activities within peatland areas, including mining, forestry and agriculture. The Decree itself overlaps with a number of other spatial planning laws. The Decree is significantly different to Agricultural guidelines, which identify that areas with up to 76 cm deep peat are suitable for conversion to agriculture. Similarly, Provincial Spatial Planning (Rencana Umum Tata Ruang Wilayah Propinsi, RUTRW) issued in 1992
7

Ministry OF FORESTRY (2006). STRATEGIC PLAN OF THE MINISTRY OF FORESTRY 20052009 (REVISED), Jakarta, August 2006 Published by : Centre of Forestry Planning and Statistics Forestry Planning Agency; Manggala Wanabakti Building, Block VII, 5 Floor; Jl. Gatot Subroto Jakarta, 10270. 8 Wahyunto and I Nyoman N. Suryadiputra. 2008. Peatland Distribution in Sumatra and Kalimantanexplanation of its data sets including source of information, accuracy, data constraints and gaps. Wetlands International – Indonesia Programme. Bogor. xiii + 52. 9 Professor Budi Setiawan, Bogor Agricultural Institute, personal communication.

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indicates the delineation of all peat swamp areas to fall under the status of Protected Areas. There is, in other words, a need for institutional rationalisation of spatial planning laws; moreover, there is a further need for implementing regulations once rationalisation has taken place.10 Current legislative overlaps prevent the Decree from being used in spatial planning implementation.11

3.3 Gross inaccuracies in the major claims
Notwithstanding the problems with the evidence used in the Greenpeace Report, there are also significant problems with the way the evidence is applied. In particular, a map in the report (p. 14) claims to indicate Sinar Mas‟ existing forestry concessions and the location of its hypothetical „expansion concessions‟. This is based, according to the Greenpeace report on the „Confidential Document‟ and concession maps released by the Indonesian Ministry of Forestry. The Greenpeace Report map demarcates four areas that it claims are „Sinar Mas‟ Existing Concessions‟. However, the Ministry of Forestry map indicates that these areas are not forestry concessions of any description. The map also demarcates 11 existing concessions are „Sinar Mas Expansion Targets‟, which have been allocated to different companies. It also demarcates four concessions as „Targets‟ that are, in fact, existing concessions that are licensed to APP suppliers. The below image is included in a large format in Annex II.

10

Ministry of Forestry / IFCA (2009). REDDI: Reducing Emissions from Deforestation and Forest Degradtion in Indonesia -- REDD Methodology and Strategies. 11 MoFor 2008, IFCA 2007 Consolidation Report : Reducing Emissions from Deforestation and Forest Degradation in Indonesia, Published by FORDA Indonesia

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4. Methodology
4.1 Text Analysis
The allegations made against APP in the Greenpeace Report were split into individual items using Greenpeace‟s extensive footnoting. These are presented in Annex I, along with the cited evidence, an assessment of the evidence, an assessment of the use of data and an overall assessment of the claim. Where deemed necessary the authors have introduced a counterpoint and cited response sources. The 305 individual items were broken down by thematic area, based on the Greenpeace text. This was based on the general contentions of the report that APP is: Damaging the climate (Climate) Destroying biodiversity (Biodiversity); Undertaking deforestation (Deforestation); Breaking the law (Illegal conduct); Demonstrating poor governance (Family and Governance); Engage in poor corporate social responsibility activities (CSR); Has a poor reputation (Reputation); Is a large company (Corporate).

The datum were then assessed as to whether they are a direct or indirect claim against the Sinar Mas Group. For example, a claim about Indonesia‟s emissions more generally is not a direct claim, but a claim about APP‟s management of forest concessions is. The datum were then assessed to distinguish the subject of the claim, e.g. whether it is APP specifically being named or PT SMART. The data sources were then checked to assess whether the claim is supported by the cited source. The use of data was subdivided as follows: Non-existent – no supporting data found within the Greenpeace claims; Speculative -- the claim is being made against events that are yet to take place or are hypothetical; Misleading – the data is cited in a way that is unclear or could easily be misinterpreted; Incorrect – the claim is not supported by the cited data; Selective – the source cited contains relevant additional data that does not support the Greenpeace claim, or there is publicly available data that supports a credible alternative viewpoint.

4.2 Map analysis
The Greenpeace map was overlaid with gazetted concession areas utilising the two commercial forestry concession licenses in Indonesia:

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Izin Usaha Pemanfaatan Hasil Hutan Kayu – Hutan Tanaman Industri (IUPHHK-HTI – plantation forestry concession) Izin Usaha Pemanfaatan Hasil Hutan Kayu – Hutan Alam (IUPHHK-HA – selective forestry concession)

The maps used were: Direktorat Inventarisasi Dan Pemantauan Sumber Daya Hutan Dan Direktorat Jenderal Planologi Kehutanan Departemen Kehutanan (2009) Peta Pemanfaatan Dan Perubahan Peruntukan Kawasan Hutan, Provinsi Riau, Provinsi Jambi, Provinsi Sumatera Selatan. Maps were downloaded in Adobe PDF format; concession areas were extracted using Adobe Creative Suite (CS5) software. Concession areas were scaled accordingly and overlaid on the Greenpeace map along with the accompanying data relating to companies operating concessions. Extraneous Greenpeace data that could be isolated (tiger habitat information, pulp mill locations) was removed. Licence numbers and approval dates were extracted from Ministry of Forestry (2010). Laporan Perkembangan Pemanfaatan dan Penggunaan Hutan Produksi Triwulan I (Januari - Maret 2010). Ministry of Forestry, Jakarta, Indonesia. They have been included in the Annex.

4.3 Independent Review
The audit was assessed by independent reviewers. Their statements and qualifications can be viewed in Annex III.

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Annex I: ‘Pulping the Planet Analysis’
See explanatory notes below.12
FN 1 CL REPORT TEXT AND SOURCE RESPONSE TO DATA COUNTERPOINT / SOURCE DATA USE / REPEAT Incorrect

Tropical forest destruction is responsible for around 20 per cent of global greenhouse gas (GHG) emissions..1 1 UNFCCC 2007: Figure SPM.1; NCCC (2009a).

2 CL

Ending deforestation will not only preserve biodiversity but it must be a central part of a global strategy to tackle climate change. Peatlands are perhaps the world’s most critical carbon stores and a key defence against climate change; they store somewhere between a fifth and a third of the total carbon contained in the terrestrial biosphere, including all soils and vegetation.2 2 UNEP (2002) There are about 22.5 million hectares of peatlands in Indonesia3 3 Hooijer et al (2006): 6

The UNFCCC 'Summary for Policymakers' document cited does not assert this 20 per cent figure; the detailed section of the AR4 report cites disagreement among experts as to the extent of emissions from tropical forests. In addition, the NCCC press release cited does not contain any such information The document cited is a proposal to GEF but it is not available through the GEF website, suggesting the findings are not agreed nor adopted.

Selective

3 CL

4 CL

The vast majority of which are on the Indonesian island of Sumatra.4 4 Hooijer et al (2006): 6

The assertion that the 'vast majority' of peatlands is not supported by the document. Page 9 of the document indicates that Papua has a greater peat area than Sumatra. There are also very significant areas in Kalimantan.

Incorrect

12

Explanatory notes: (1) The codification for themes in the footnote (FN) column is as follows: CL (Climate), DF (Deforestation), BD (Biodiversity), FA (Family), CO (Corporate), CS (Corporate Social Responsibility). SC (Social Conflict), IL (Illegal conduct), RE (Reputation). (2) Claims made directly against APP are shaded.

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The destruction of rainforests and carbon-rich peatlands5 5 Indonesia’s deforestation-related – including peatland – emissions were 1.88 GtCO2 in 2005. Source: DNPI (2008a). An additional 0.36 GtCO2 are peat emissions that were classified as ‘non-commercial’ and should be included in Indonesia’s total , as they result from ongoing peatland emissions (‘Restoration of 5 million ha of non-commercially used peatland could result in a further reduction of 360 MtCO2e’). Source: NCCC (2009b). Fact sheet: 2

6 CL

7 CL

is the key reason why Indonesia accounts for around a quarter of all GHG emissions caused by deforestation.6 6 2.26 (1.88 + 0.36) GtCO2 / 8.88GtCO2 = 25%. Global deforestation-related – including peatland – emissions in 2004 (latest year available) were 8.88GtCO2. Source: UNFCCC 2007: Figure SPM.1; (NCCC 2009a). Also see endnote 5 According to recent government estimates, Indonesia ranks as the world’s third largest GHG emitter.7 7 According to recent estimates published by various governments, Indonesia’s emissions (2005) are higher than Brazil’s (2005), Russia’s (2005) and India’s (2005), but lower than USA’s (2005) and China’s (2004): No 1: USA 6.18 GtCO2 in 2005. Source: EPA 2010: 14 No 2: China 5.6 GtCO2 in 2004. Source: Government of China (2007) No 3: Indonesia 2.25 GtCO2 in 2005. (See endnote 5) No 4: Brazil ~2.2GtCO2 in 2005: Source: MCT (2009): 19 No 5: Russia ~ 2.0 GtCO2 in 2005. Source: UNFCCC (2009): 1 No 6: India ~ 1.6GtCO2. Source: Ministry of Environment and Forests (2009): 53

The first source is not included in the bibliography and cannot be verified. However, an additional cited source (NCCC 2008b) contains the figure of 1.87GtCO2. The Greenpeace figure conflates non-deforestation and deforestation emissions on peat soils. According to the document cited, Indonesia's total deforestation emissions from deforestation on forests and peatlands are 0.78GtCO2: one-third of the Greenpeace figure, and less than 9% of global deforestation emissions. Including forest degradation emissions takes the figure to 1.022GtCO2. Additionally, the figure Greenpeace cites confuses existing emissions with projected emissions savings and/or offsets in the cited document; this is not specified by Greenpeace. The assumption Greenpeace uses in its calculation is incorrect (see fn5).

The World Resources Institute Database indicates that Indonesia's land-use change emissions for that year were 1.459GtCO2 [1]. While there are problems with the WRI data that have been documented [2], the data is freely available and often used by NGOs in determining emissions. [1] Climate Analysis Indicators Tool (CAIT) Version 7.0. (Washington, DC: World Resources Institute, 2010). [2] van der Werf, G.R., D.C. Morton, R.S. DeFries, J.G.J. Olivier, P.S. Kasibhatla, R.B. Jackson, G.J. Collatz, and J.T. Randerson. 2009. CO2 emissions from forest loss. Nature Geoscience 2: 737–38.

Incorrect

Incorrect

The conclusion cites data that uses different methodologies that have not been standardized accordingly, which is a misuse of data.

Climate Analysis Indicators and Tools (2010) for the year Greenpeace cites indicates that Indonesia ranked fifth in terms of emissions, behind USA, China, EU and Brazil. The source also indicates that Indonesia is ranked 57th in terms of per capita emissions. Excluding land-use emissions for that year Indonesia ranks 13th. Climate Analysis Indicators Tool (CAIT) Version 7.0. (Washington, DC: World Resources Institute, 2010).

Incorrect

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The palm oil and pulp and paper industries are two of the major drivers of these escalating emissions.8 8 MoFor (2008) XV, XXI

The report cited does not assess the drivers of deforestation in Indonesia; nor does it name either the pulp or palm as a major driver -- the methodology of the paper distinguishes between planned/unplanned deforestation, not the individual proximate causes. There are a number of contributors to forest loss in Indonesia (see counterpoint); technological improvements and increased knowledge on deforestation ultimately improve forest and land management.

Causes of deforestation in Indonesia are numerous: the conversion of forestlands to agriculture for smallholders or otherwise; the clearfelling of timber (illegally or otherwise) for sawnwood or roundwood; rapid urban development; transmigration.[1] A number of studies cite population pressure as one of the causes of deforestation[2]; [1] For an overview of related literature, see Sunderlin, W.D. and Kesosudamo, I.A.Y. (1996). Rates and Causes of Deforestation in lndonesia: Towards a Resolution of the Ambiguities. Center For International Forestry Research Occasional Paper No. 9. http://www.cifor.cgiar.org/publications/pdf_files/ OccPapers/OP-09n.pdf. [2] Scotland, N. (2000). Indonesia Country Paper on Illegal Logging. Prepared for the World Bank-WWF Workshop on Control of Illegal Logging in East Asia Jakarta, 28 August 2000, p.1. Department for International Development and WWF. Murdiyarso, D., Puntodewo, A., Widayati, A. and van Noordwijk, M. (2006). Determination of eligible lands for A/R CDM project activities and of priority districts for project development support in Indonesia. Center for International Forestry Research, Bogor, Indonesia.

DATA USE / REPEAT Incorrect

9 BD

10 BD

The destruction of Indonesia’s forests and peatlands also has a devastating impact on biodiversity. The endangered orang-utan and the Sumatran tiger are just two of the species under threat of extinction,9 9 Chundawat et al (2008) in part due to the loss of natural forest habitat.10 10 UNEP (2007): 9; Chundawat et al (2008)

The Chundawat article only assesses tiger populations, not orang-utan populations

Selective

There are two problems with the way this data is sourced. I. Orang-utan populations in Indonesia are split between two sub-species --

Orang-utan species have been found to survive well within an acacia forest plantation complex. A study conducted by The Nature Conservancy and

Misleading

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the Borneo and Sumatran subspecies. The critically endangered Sumatran orang-utan is not under threat from pulp and paper plantations. The Borneo subspecies has actually adapted to well to acacia plantations in Indonesia (see counterpoint). II. The IUCN data sourced for tiger species more broadly -and not the Sumatran subspecies. The IUCN data for the Sumatran subspecies states: "The Sumatran tiger is declining due to high rates of habitat loss (3.2-5.9%/yr; Achard et al. 2002, FWI/GFW 2001, Uryu et al. 2007) and fragmentation, which also occur, to a lesser extent, inside protected areas (Gaveau et al. 2007, Kinnaird et al. 2003, Linkie et al. 2003, 2004, 2006). There are high levels of humantiger conflict (Nyhus and Tilson 2004, Browne and Martyr 2007), as well as illegal trade in tiger parts (Nowell 2000, Nowell 2007). From 1998-2002 at least 51 tigers per year were killed, with 76% for purposes of trade and 15% out of human-tiger conflict (Shepherd and Magnus 2004). Ng and Nemora (2007) found the parts of at least 23 tigers for sale in market surveys around the island." [1] Care must be taken to minimise fragmentation of habitat, but the nature of spatial planning in Indonesia does not always make this feasible.
11 FA

USAID's OCSP program found populations of close to 5,000 individuals within an acacia plantation complex. The study recommended that "Acacia plantation concessions should be considered in future orangutan conservation strategies, given the large population of orangutans they host." [2] [1] Linkie, M., Wibisono, H.T., Martyr, D.J. & Sunarto, S. 2008. Panthera tigris ssp. sumatrae. In: IUCN 2010. IUCN Red List of Threatened Species. Version 2010.2. <www.iucnredlist.org>. Downloaded on 12 August 2010. [2] Guillaume Albar M2 BGAE-IEGB Under supervision of Erik Meijaard. "Study of orangutan (Pongo pygmaeus morio) densities and distribution in Acacia mangium plantation concessions in East Kalimantan, Indonesian Borneo." OCSP, The Nature Conservancy, University Montpellier.

Controlled by the Indonesian Widjaja family,11 11 See eg Studwell (2007): 164-167

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the Sinar Mas group is one of the largest conglomerates in Indonesia engaged in clearing rainforests and destroying peatlands.12 12 See eg Greenpeace International (2008a,b)

The source is a Greenpeace report and cannot be considered impartial or accurate; this is an associative or circumstantial conclusion rather than a careful calculation.

Rainforest destruction' is a term used by Greenpeace for land-use change, as recognised by governments and intergovernmental organisations. The reasons for land-use change in a developing country context are myriad; the primary is the conversion of land for fuel and food. It has also been noted by CIFOR and FAO [2] -- the world's two leading forestry research organisations -- that causes of deforestation are often outside of the forest sector external to the operation of the forest industry with quite independent causes and drivers. [1] Seymour, Frances. Speech presented at United Nations Food and Agriculture Organisation Committee on Forestry Meeting 19, Rome, Italy, March 17, 2009. http://www.fao.org/forestry/media/17189/0/0/. [2] Jan Heino (2008). Statement by Jan Heino Assistant Director-General, FAO Forestry Department on behalf of the Collaborative Partnership on Forests (CPF); Forest Day 2 6 December 2008, Poznan, Poland.

DATA USE / REPEAT Partial

13 CO 14 FA

15 CO

The group also has significant interests in coal mining, amongst other sectors.13 13 e.g. Sinar Mas Group website: www.sinarmas.com According to Globe Asia magazine, the Indonesian tycoon that founded Sinar Mas, Eka Tjipta Widjaja, is considered to be the second richest person in Indonesia, with a fortune worth USD 4 billion.14 14 Globe Asia (2010) Sinar Mas palm oil and paper is used in a range of products sold in stores and supermarkets around the world, from toilet paper and luxury shopping bags to chocolate bars and doughnuts.15 15 Greenpeace International investigations 2009/2010. See also GAR (2009a)

The source is a Greenpeace report and cannot be considered impartial or accurate

Partial

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Between November 2007 and April 2010, Greenpeace released a series of investigative reports on Sinar Mas16 and other key players in the Indonesian palm oil sector. They revealed that Sinar Mas was expanding its operations and encroaching on Indonesia’s remaining rainforests and peatlands. 16 Greenpeace International (2007); Greenpeace International (2008a, b) Greenpeace UK (2009); Greenpeace International (2010a)

I. The source is a Greenpeace report and cannot be considered impartial or accurate. II. The term 'remaining' implies that loss of these areas is imminent, which is incorrect, and can be considered emotive language.

According to the most recent FAO data, Indonesia has 94,432 million ha of forests -- more than 50 per cent of all land cover. Of this forest, 40 per cent has been set aside for protection and conservation purposes -- an area roughly equal to Germany or Japan [1]. FAO (2010). GLOBAL FOREST RESOURCES ASSESSMENT 2010 COUNTRY REPORT INDONESIA. FAO 2010/95. Rome, 2010

DATA USE / REPEAT Misleading

17 RE 18 RE 19 RE 20 RE 21 CO

22 CO 23 CO

24 CO

As a result, a growing number of international consumer companies, including Unilever,17 17 Unilever (2009) Kraft18 18 Kraft Foods (2010) and Nestlé,19 19 Nestlé (2010) suspended multimillion dollar palm oil contracts with Sinar Mas.20 20 GAR (2009b) Asia Pulp and Paper (APP), is Indonesia’s largest pulp and paper producer.21 21 APP (2009b): 21; APP’s main rival in Indonesia is APRIL, which has an annual capacity of 2.6 million tonnes of pulp and 0.75 million tonnes of paper. Source: APRIL (2009) With its expansion into China in 1992,22 and, in 2008, 22 APP China, Chairman’s Address www.app.com.cn/english/ aboutus_chairman.html viewed 8 June 2010 it became the fourth largest worldwide23 23 RISI (2009b). RISI does not include APP or APRIL in this ranking, as neither company publishes reliable figures on its paper and paperboard (P&B) production. Greenpeace International estimates APP’s global P&B production to have been 10 million tonnes in 2007 it ranked as the world’s fifth largest tissue producer.24

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24 Tissue World (2008)
25 CO 26 CO

27 CO 28 CO 29 CO 30 CO 31 CO 32 DF

33 CS

34 CS

The group has recently set up new sales networks in the US,25 25 Eagle Ridge Paper, USA. Source: RISI (2009a) the UK26 26 Arco Paper website refers its APP mills in China as ‘Our mills at Gold East, Gold Huasheng and Ningbo Zhonghua.’ Source: http://arcopaper.com/About__our_products.html; and Spain,27 27 Pers. Comm. with paper industry contact and expanded its production capacities in Australia,28 28 Solaris Paper (2010) Canada,29 29 Gazette (2010); Reuters (2010) China30 30 Chang 2010 and the US.31 31 Associated Press (2010) According to mapping analysis conducted by the World Wildlife Fund (WWF), APP’s two pulp mills in Sumatra cause more loss of rainforest than any other company on the island.32 32 WWF 2009 Over the last five years, APP has repeatedly claimed that it is on a responsible ‘path toward sustainability’ and will soon have no need to pulp Indonesian forests to meet its fibre requirements. Written for its customers and other stakeholders, its ‘sustainability’ reports have proclaimed: … will be fully reliant on renewable, plantationgrown fibre from socially, environmentally and legally responsible sources.”33 33 APP (2004): ii “the current 623,409 hectares of plantation forests will more than adequately provide the fibre requirements for APP’s two pulp mills in Sumatra by end of 2009.”34 34 APP (2007): 58

The statement is taken from a press release, which has no methodology for the statement and does not indicate mapping has taken place and is therefore unverifiable.

Incorrect

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40 DF

APP has recently released a series of adverts entitled “APP Cares” 35 Newsmaker (2010); Youtube website www.youtube.com/wa tch?v=rEyduROW8Sk&feature=related environmental message to the world”.36 36 ProPrint (2009) The adverts, broadcast on CNN International37 37 Newsmaker (2010) and published in The Times (UK),38 38 The Times (2010) amongst other media outlets, aim to highlight APP’s efforts to conserve the environment, protect biodiversity, alleviate poverty and mitigate climate change.39 39 Newsmaker (2010); Youtube website www.youtube.com/wa tch?v=rEyduROW8Sk&feature=related How Sinar Mas is Pulping the Planet provides new evidence which shows that APP never intended to source its pulpwood from plantations alone after 2009, in spite of the promise it made to its customers and other stakeholders. A confidential document written by Sinar Mas in 2007,40 40 Confidential Sinar Mas document, copy held by Greenpeace International

It is impossible to assess the veracity of the document as it has not been made public by Greenpeace. However, Greenpeace's subsequent report, 'Expanding the Empires', contained pictures of the document and indicated that the report was an internal presentation. The auditor does not dispute the provenance of the document but, on balance of probabilities, must assume this was not a management commitment, based on the decrease in forest area under the company’s control. The document was shown as a 'Skill Development Activity' presented at the Sinar Mas Management by Olympic System (MBOS) conference in 2007. This context is significant in that the MBOS Conference is a competitive management system that encourages small teams within business units to propose ideas that achieve a clearly defined goal (e.g. 20 per cent ROI) [1]. The Conference presents these ideas in a competitive environment; the

That Greenpeace has chosen not to publicly release this document through an anonymous website -- such as the widely used Wikileaks -indicates a hesitation in revealing the full context of the document. Further, the Indonesian Government in 2005 called for a significant expansion of the Indonesian pulp and paper industry, calling on the sector to expand its concession areas by 5 million ha. [2] Chen Kuan-Cheng (2008). The Ethnic Chinese Style of Corporate Innovation. PICMET Proceedings, 2731 July, Cape Town, South Africa, 2008. [2] MINISTRY OF FORESTRY (2006). STRATEGIC PLAN OF THE MINISTRY OF FORESTRY 2005-2009 (REVISED), Jakarta, August 2006 Published by : Centre of Forestry Planning and Statistics Forestry Planning Agency; Manggala Wanabakti Building, Block VII, 5 Floor; Jl. Gatot Subroto Jakarta, 10270.

Speculative

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41 DF

and held by Greenpeace International, shows that the group was implementing plans to acquire new forest areas through its ‘Area Development Project for Supporting Mill License Capacity’. … to government” (i.e. used to lobby government) in order to gain approval for a massive increase of the group’s existing licensed pulping capacity and landbanks (i.e. new forest areas to clear for plantation development).41 41 Confidential Sinar Mas document, copy held by Greenpeace International

presentation of an idea does not necessarily entail its adoption or implementation. Any interpretation of the document as being an adopted or implemented plan is therefore speculative; this assertion is further supported in the claims below. The Greenpeace statement effectively makes two speculative claims based on the document: I. APP was intending to expand its concession areas between 2007 and 2009, approximately by an area of 900,000ha, referring to these areas as 'expansion concessions', based on a map contained within the document; II. APP was intending to increase its pulp capacity in the same period.

In response to I. At the end of March 2010, concession areas were 2,519,956 ha. During 2007, total concession areas controlled by APP were 2,494,417 -- approximately 25,539 ha less than currently. In response to II. APP's pulp capacity in Indonesia has not changed since the beginning of 2007; this is indicated in other documentation cited by Greenpeace throughout the report. [1] Ministry of Forestry (2010). Laporan Perkembangan Pemanfaatan dan Penggunaan Hutan Produksi Triwulan I (Januari - Maret 2010). Ministry of Forestry, Jakarta, Indonesia. [2] Based on the concession licenses for: PT Arara Abadi, SK Menhut No. : 743/Kpts-II/1996, 25 November 1996; PT Riau Abadi Lestari, SK Menhut No. : 542/Kpts-II/1997, 25 Agustus 1997; PT Satria Perkasa Agung, SK Menhutbun No. : 244/KptsII/2000, 22 Agustus 2000; PT Satria Perkasa Agung - KTH Sinar Merawang (partnership) Surat Menhutbun No. : 634/Menhutbun-VI/1999, 16 Juni 1999; PT Satria Perkasa Agung - (Serapung) SK Menhut No. : SK.102/Menhut-II/2006, 11 April 2006; PT Sekato Pratama Makmur, SK. Menhut No. : 366/ Kpts-II/2003, 30 Oktober 2003; PT Bukit Batu Hutani Alam, SK. Menhut No. : 365/KptsII/2003, 30 Oktober 2003; PT Dexter Timber PI. KTH Wana Jaya (partnership), Surat Menhutbun No. : 803/Menhutbun-VI/1999, 22 Juli 1999; PT Mitra Hutani Jaya, SK Menhut No. :

Speculative

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SK.101/Menhut-II/2006, 11 April 2006; PT Ruas Utama Jaya, SK Menhut No. : SK.46/MENHUTII/2006, 6 Maret 2006; PT Bina Duta Laksana, SK Menhut No. : SK.207/MENHUT-II/2006, 8 Juni 2006; PT Putra Riau Perkasa, SK Menhut No. : SK.104/Menhut-II/2006, 11 April 2006; PT Perawang Sukses Perkasa Industri; SK Menhut No. : SK. 249/Kpts-II/1998, 27 Pebruari 1998; PT Rimba Rokan Perkasa, SK Menhut No. : SK.554/MenhutII/2006, 22 Desember 2006; PT Prima Bangun Sukses, SK Menhut No. : SK.553/Menhut-II/2006, 22 Desember 2006; PT Bina Daya Bentala, SK Menhut No. : SK.555/Menhut-II/2006, 22 Desember 2006; PT Rimba Mandau Lestari, SK Menhut No. : SK.552/Menhut-II/2006, 22 Desember 2006; PT Mutiara Sabuk Khatulistiwa, SK Menhut No. : 109/Kpts-II/2000, 29 Desember 2000; PT Suntara Gajapati, SK Menhut No. : 71/Kpts-II/2001, 15 Maret 2001; PT Wirakarya Sakti, SK Menhut No. 346/Menhut-II/2004, 10 September 2004; PT Rimba Hutani Mas, SK Menhut No. 68/Menhut-II/2004, 9 Maret 2004; PT Tebo Multi Agro SK Menhut No. : SK.401/MenhutII/2006, 19 Juli 2006; PT Sebangun Bumi Andalas, SK Menhut No. : SK. 347/Menhut-II/2004, 10 September 2004; PT Sumber Hijau Permai, SK Menhut No. : SK. 29/Menhut-II/2006, 13 Pebruari 2006; PT Bumi Persada Permai SK Menhut No. : 337/Menhut-II/2004, 7 September 2004; PT Bumi Mekar Hijau, SK Menhut No. : 417/MenhutII/2004, 10 Oktober 2004; PT Bumi Andalas Permai, SK Menhut No. : 339/Menhut-II/2004, 7 September 2004; PT Finnantara Intiga, SK Menhut No. : 750/Kpts-II/1996, 2 Desember 1996; PT Surya Hutani Jaya, SK. Menhut No. : 156/Kpts-II/1996, 8

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April 1996. The three concessions approved in 2007 were: PT Acacia Andalan Utama, SK. Menhut No. : SK.87/MENHUT-II/2007, 22 Maret 2007; PT Balai Kayang Mandiri, SK Menhut No. : SK.20/Menhut-II/2007, 5 Januari 2007; PT Artelindo Wiratama, SK Menhut No. : SK.122/Menhut-II/2007, 2 April 2007
42 CO

43 CO

While the overall capacity of its two pulp mills in Sumatra was 2.6 million tonnes per year in 2006 42 42 Confidential Sinar Mas document, copy held by Greenpeace International the Sinar Mas document indicates that APP was proposing to raise that to 17.5 million tonnes per year,43 a sevenfold increase in APP’s pulp capacity in Indonesia. 43 Confidential Sinar Mas document, copy held by Greenpeace International

See responses to fn 40-41

Speculative

See responses to fn 40-41. While the claim is speculative, there is the additional possibility that the Greenpeace reading of the 17.5 million figure mistakes pulp output for log input. Based on this revision, speculated pulp output would be increased by 3.89Mt/yr – a 50 per cent increase. This is a much more plausible result, but does not, however, alter the speculative nature of the claim.

In addition to the speculative nature of the claim, the logistical assumptions behind the claim are so ridiculous as to make the claim unbelievable. The pulp production capacity of the entire nation of Canada -- one of the world's largest pulp producers -- is approximately 20 million mty; Greenpeace is proposing that APP would effectively have the equivalent pulp capacity of Canada; third, the rough benchmark for the cost of installing pulp capacity is US$1000/tonne -such an expansion would require an investment of USD17.5 billion, significantly larger than total annual FDI in Indonesia.

Speculative

44 DF

Pulping the Planet reveals – from analysis of Indonesian Government and confidential Sinar Mas maps and data, as well as on-the-ground investigations – that APP continues to acquire and destroy rainforest and peatland to feed its two pulp mills in Sumatra. In the Sumatran provinces of Riau and Jambi alone: Sinar Mas was aiming to expand its concessions by 900,000 hectares between 2007 and 2009. In 2006, over half of this area was still forested44 44 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed MoFor (2009d) Landcover 2006 map

See responses to fn 40-41. In addition, the statement implies that Sinar Mas was intending to acquire this area and clear cut the existing forest within these concessions. Given that it appears APP’s supplier never intended to do so, nor that any of these plans eventuated, the claim is both speculative and incorrect.

Speculative

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and a quarter of it was peatland.45 45 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed with maps from Wahyunto, S. Ritung & Subagjo, H. (2003)

46 DF

Thirty of the new concessions encroached into some of the last forest refuges for the critically endangered Sumatran Tiger.46 46 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed with maps from Dinnerstein et al. (2006)

47 IL

A dozen of them – covering at least 130,000 hectares – overlapped peatland which is more than three metres deep.47 47 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed with maps from Wahyunto, S. Ritung & Subagjo, H. (2003)

See responses to fn 40-41 and above. The data cited contains the following problems. I. The maps used, which were published by Wetlands International, contain significant error margins, as much as 31 per cent as admitted by the author. [1] The margin for error associated with the methodology are described by one Indonesian soil hydrologist as high as 90 per cent. [2] This is supported by the recent investigation of Greenpeace claims against Sinar Mas' agricultural operation (PT SMART), which found that the Greenpeace claims of planting on deep peat (based on FFI field assessments that have a more stringent methodology than that used by Wahyunto et al) were for the most part incorrect [3]. See responses to fn 40-41, 44, 45. In addition, the Greenpeace use of data is a simplistic use of the methodology and purpose of the Dinnerstein et. al maps, which set out a strategy for conservation priorities, rather than being a current account of tiger range. See responses to fn 40-41, 44, 45

[1] Wahyunto and I Nyoman N. Suryadiputra. 2008. Peatland Distribution in Sumatra and Kalimantan-explanation of its data sets including source of information, accuracy, data constraints and gaps. Wetlands International – Indonesia Programme. Bogor. xiii + 52. [2] Professor Budi Setiawan, Bogor Agricultural Institute, personal communication. [3] BSI-CUC (2010). Verifying Greenpeace Claims Case: SMART

DATA USE / REPEAT Speculative

Speculative

Speculative .

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It is illegal to destroy peatland over three metres deep under Indonesian law.48 48 Government of Indonesia (1990)

The use of the Greenpeace sentence is misleading, notwithstanding the inaccuracies in both the data cited by Greenpeace and Greenpeace accusations against PT SMART (see above). The blanket illegality of the 'three metre rule' is not clear-cut. I. The conditions of the decree permit any number of industrial activities within peatland areas, including mining, forestry and agriculture. Presidential Decree 32 of 1990 states that ‘peat soil with 3 meters thickness or more, existing in the upstream river and swamp’ is classified as a ‘protected zone’. The Decree prohibits cultivation activities in protected zones, except those ‘not disturbing the protection function’. The protection function of peat zones is defined as ‘controlling the territorial hydrology, functioning as a water binder and prevention of flood as well as protecting the specific ecosystem in the zone concerned’. The Presidential Decree 32/1990 provides authorities to the local governments to determine the protected zones, but retains management functions with the National Government. Article 38 of the Decree states that cultivation activity - and even mining may take place in protected zones, if the activity is managed in such a way that the protection function of the zone is maintained and that the activity is regulated by the relevant Minister. II. The Decree itself overlaps with a number of other spatial planning laws. The Decree is significantly different to Agricultural guidelines, which identify that areas with up to 76 cm deep peat are suitable

The authors of the report are oblivious and to the political history of land-use planning in Indonesia. The decree referred to was rarely honoured during the term of its creator, President Suharto. The clearest example of this was the institution of the 1 million acre Peat lands development Project (Proyek Pengembangan Lahan Gambut PPLG), based on Presidential decrees No. 83/1995 and 74/1998. Vast sections of this project were on peat with depths greater than 3 meters according to Wahyunto et. al. Further, many of the spatial planning laws created during this period have no implementing regulation or even possible sanctions for non-complaiance. [3] [1] Ministry of Forestry / IFCA (2009). REDDI: Reducing Emissions from Deforestation and Forest Degradation in Indonesia -- REDD Methodology and Strategies. [2] MoFor 2008, IFCA 2007 Consolidation Report : Reducing Emissions from Deforestation and Forest Degradation in Indonesia, Published by FORDA Indonesia [3] Effendi, E. 2002. Rationalizing the facts: Forest Zone rationalization in the context of local spatial planning and development programs. Paper for the World Bank. Jakarta, Indonesia.

DATA USE / REPEAT Speculative

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… Mas’ 900,000 hectares of expansion concessions had either been approved by the Indonesian government or were in the process of being acquired.49 49 75,000 hectares had already been fully acquired or taken over from other companies and had been approved by the Indonesia government. The remaining 385,000 hectares concessions were in acquisition. Source: Confidential Sinar Mas document, copy held by Greenpeace International

for conversion to agriculture. Similarly, Provincial Spatial Planning (Rencana Umum Tata Ruang Wilayah Propinsi, RUTRW) issued in 1992 indicates the delineation of all peat swamp areas to fall under the status of Protected Areas. There is, in other words, a need for institutional rationalisation of spatial planning laws; moreover, there is a further need for implementing regulations once rationalisation has taken place. [1] Current legislative overlaps prevent the Decree from being used in spatial planning implementation. [2] Regarding 'expansion concessions', see responses to fn 40-41, 44, 45; regarding the acquisition of '75,000ha' see fn50

Misleading

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Greenpeace recently carried out an on-the-ground investigation into two key rainforest areas in Sumatra. Sinar Mas has recently acquired new concessions in the Bukit Tigapuluh Forest Landscape in Central Sumatra, one of the last refuges for the critically endangered Sumatran tiger.50 50 WWF et al. (2008); APP (2009a); see also Chundawat et al (2008)

The source for assertion that APP has acquired new concessions is incorrect; the statement says that an APP supplier has applied to develop a pulpwood plantation. The plantation development -- which was approved -- was within existing gazetted concession areas. [1]

The statement is also misleading because of the use of the term 'Bukit Tigapuluh Forest Landscape', which is a term that has no basis in law; it has been conflated with the Bukit Tigapuluh National Park by a number of campaign groups including WWF. In 2008, WWF Indonesia accused PT Wira Karya Sakri (PT WKS, an SMF company operating in Jambi province) of illegal logging in the Bukit Tigapuluh National Park . In response, APP commissioned a British-based consultancy Oxford Index (www.oxindex.com) to conduct an independent inquiry into the claims. Following an on-ground investigation (which included discussions with NGOs, APP and APP’s fibre suppliers, and examination of documents and concession areas), Oxford Index found that PT WKS did not engage in logging in the Bukit Tigapuluh National Park. Areas pointed out by WWF Indonesia as those outside WKS concessions were in fact within PT WKS concessions. Oxford Index also observed that WWFI misattributed the term “national park” to the whole of Bukit Tigapuluh Forest Landscape area . Additional errors in their reporting of APP's conduct were also conceded by WWF in the findings. [2] [1] The former concessions were: PT. Dalek Hutani Esa, 586/Kpts-VI/1999 (approved 29-07-1999; 52,480ha) and PT. Hatma Hutani, 593/KptsVI/1999 (26-02-1998, 41.000ha); the revised concession area was 43,600ha -- less than half the original concession areas. [2] Oxford Index (2008)

DATA USE / REPEAT Selective

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It is also targeting the Kerumutan Peat Swamp forest for further expansion; this is another important tiger habitat and area of carbon-rich peatland.51 51 IUCN. Kerumutan peat swamp forest ecosystem protection initiative in Riau. http://nciucn.nl/projecten/kerumutan_ peat_swamp_forest_ecossytem_protection_initiative_in_riau/

52 RE

Some international companies, such as Staples,52 52 Staples (2009)

The use of the term 'targeting' is speculative; the author assumes this is based on the 'expansion concessions' referred to earlier in the text, in turn based upon a speculative and non-emergent claim on APP's expansion plans. Further, the source cited states: “The main problems in KWR are illegal logging, poaching, forest fires and an access road to the pulp and paper industries in bufferzone that provides access to illegal loggers and poachers, and the planning by the provincial government to build a highway to connect regencies near the KWR. In the project area the government tends to change the forests in the peat swamp area from logging concession allotment to both oil palm and pulp & paper industry. Beside the government policy, communities conduct illegal logging in these areas, after which they plant it with oil palm. Logging companies have apparently gone bankrupt, so all illegal logging is done by local communities.” Staples paper procurement policy shifted to mandate fiber under FSC certification (first preference); or, alternatively PEFC requirements. Indonesia has no certified FSC pulpwood forests, nor has its national certification scheme (Lembaga Ekolabel Indonesia, LEI) been put forward for assessment under the PEFC system. Staples' procurement policy would, therefore automatically exclude APP's fiber supply.

DATA USE / REPEAT Speculative

Staples (2010). Staples Inc. Sustainable Paper Procurement Policy, last revised January 28 2010

Selective

53 RE

Office Depot53 53 Office Depot (2009)

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and Woolworths (Australia),54 54 ABC (2008)

Woolworths altered its procurement policy to require the purchase of paper certified under either FSC or PEFC sustainable forest management standards; this was a result of pressure from the Australian Construction Forestry Mining and Energy Union [1]

[1] See Woolworths (2009). Corporate Sustainability Report.

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55 RE

56 RE 57 RE 58 RE 59 RE 60 RE 61 RE 62 RE

have stopped buying or selling paper products connected to APP. However, recent research by Greenpeace shows that many other international companies continue to do so. These include: French supermarket chain Carrefour (e.g. in Indonesia, China);55 55 Greenpeace China investigations 2010 US supermarket chain Walmart (in China);56 56 Greenpeace China investigations 2010 French supermarket chain Auchan (in China);57 57 Greenpeace China investigations 2010 British supermarket chain Tesco (in China);58 58 Tesco stocks various APP China brand products in its retail outlets in China. Greenpeace China investigations 2010 British retail group WH Smith (in the UK);59 59 WH Smith stocks various stationary products of APP-related company Collins (Nippecraft) US information technology multinational Hewlett Packard (in Brazil);60 60 APP Brasil (2008) US fast-food chain Kentucky Fried Chicken (in China);61 61 Greenpeace China investigations 2010; see also Ningbo Asia Paper website, Products www.nbasia.com.cn/en-products.asp Dutch Office supplies company Corporate Express;62 62 Corporate Express (2010)

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64 CS

65 CO

66 CO

and Australian global paper merchant PaperlinX (e.g. in Australia and the UK).63 63 PrintWeek (2009); See also Spicers Global products www. spicers.com.au/index.asp?menuid=100.030.080&artid=232 (viewed 8 June 2010). Sinar Royal and Sapphire are Sinar Mas brands. PaperlinX operates worldwide through subsidiaries including PaperCo, Robert Thorne & Howard Smith (all UK), Papernet (AT), Deutsche Papier (DE), Polyedra (IT), Spicers Paper (HK, MY, SG, AUS, CDN, US), Paperpoint (AUS), Coast Paper (CDN) and many others Other international companies including Kimberly Clark, Kraft, Nestlé and Unilever, are in the process of implementing global sustainability policies for pulp and paper. These policies will exclude paper products from APP unless it makes substantial improvements to the sustainability of it’s *sic+ fibre supplies.64 64 Kraft, Nestlé and Unilever pers. comms. with Greenpeace UK; Kimberly Clark pers. comm. with Greenpeace USA APP China’s Gold East Paper mill is the single largest export destination from APP Indonesia’s Riau-based pulp mill, PT Indah Kiat.65 65 Confidential 2009 trade data, copy held by Greenpeace International Customers of Gold East’s Paper include many international and high-profile magazines and books including Chinese National Geographic; CNN Traveller; COSMO (published by National Geographic); Cosmo Girl (published by Cosmopolitan); ELLE; Esquire; and Marie Claire.66 66 See APP Print Awards 2007-2009 www.sinarmasprintawards.com/ Application requirement: ‘At least 70% of paper used in entries must be Gold East Paper or Gold Huasheng Paper’s product.’

The implication of the Greenpeace statement is that these companies source from APP; at least one of the companies, Kimberley Clark, does not. The company released a clarifying statement following the reporting of Greenpeace claims in the Australian media [1].

[1] Kimberley Clark Australia (2010). KimberlyClark is not supplied by Sinar Mas or Asia Pulp and Paper, 23 July 2010. http://www.kca.com.au/news/news82.html

Incorrect

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68 CO

69 CO

70 CL

71 CL

72 CL 73 CL 74 CL

Some international companies, including Kraft, Nestlé and Unilever, have also stopped buying palm oil from Sinar Mas. However the following companies, listed as customers of Sinar Mas’ palm oil division in June 2009, have not yet made similar commitments:67 67 GAR (2009a):13 Campbell Soup Company (US); Burger King (US); Dunkin Donuts (US); Pizza Hut (US); and Shiseido (Japan). Two of the largest palm oil traders in the world – Cargill (US) and Wilmar (Singapore) – are still buying from Sinar Mas and trading to a variety of their global customers.68 68 Confidential 2010 trade data, copy held by Greenpeace International In addition, the French supermarket chain, Carrefour, is still selling Sinar Mas branded palm oil products in Indonesia.69 69 e.g. Carrefour (Indonesia) Java catalogue for Bali, Java and Makassar, 7-20 April 2010. Peatlands are perhaps the world’s most critical carbon stores and a key defence against climate change. Covering just 3% of the earth’s land surface,70 70 Hooijer et al (2006): 1 they store somewhere between a fifth and a third of the total carbon contained in the terrestrial biosphere, including all soils and vegetation.71 71 UNEP (2002) There are about 22.5 million hectares … 72 72 Hooijer et al (2006): 6 the vast majority of which are on the … 73 73 Hooijer et al (2006): 6 Some of these are up to 15 metres deep; some of the deepest in the world.74 74 UNEP (2002)

Repeat

See fn2

Repeat

See fn3 See fn4 See fn2

Repeat Repeat Repeat

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Sumatra’s peat swamp forests not only provide habitat for endangered species such as the Sumatran tiger, they are also of critical importance in mitigating climate change. The clearing and draining of peatlands is the key reason why Indonesia is the world’s third largest GHG emitter.. As peat dries out and oxidises, it degrades and emits GHG for up to 150 years.75 75 Germer and Sauerborn (2007) In 2006, Sinar Mas controlled over 400,000 hectares of oil palm and acacia pulpwood concessions on peatlands in the Sumatran province of Riau alone. This area of peat is projected to emit approximately 2.3 billion tonnes of GHG emissions over 150 years – more than twice the annual emissions from Germany.76 76 Greenpeace International (2008b): 51 Tropical forest destruction is responsible for around 20 per cent of global published by the International Union for greenhouse gas (GHG) emissions.77 77 UNFCCC 2007: Figure SPM.1; NCCC (2009a). Ending deforestation will not only preserve biodiversity but it must be a central part of a global strategy to tackle climate change. The destruction of rainforests and carbon-rich peatlands78 78 Indonesia’s deforestation-related – including peatland – emissions were 1.88 GtCO2 in 2005. Source: NCCC (2009a). An additional 0.36 GtCO2 are peat emissions that were classified as ‘non-commercial’ and should be included in Indonesia’s total , as they result from ongoing peatland emissions (‘Restoration of 5 million ha of non-commercially used peatland could result in a further reduction of 360 MtCO2e’). Source: NCCC (2009b). Fact sheet: 2

The first part of the statement is a repeat of earlier claims; the second assertion is not supported by the cited source, which assesses peat oxidation levels over a 25-year time horizon.

DATA USE / REPEAT Incorrect

76 CL

The data cited is a Greenpeace report and cannot be considered impartial. Notwithstanding this, the data cited within the source is from Wahyuanto (2006), also cited within the current Greenpeace report. See response to fn 46.

Selective

77 CL

See fn1

Repeat

78 CL

See fn5

Repeat

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80 CL

81 CL

82 CL

83 DF

is the key reason why Indonesia accounts for around a quarter of all GHG emissions caused by deforestation.79 79 2.26 (1.88 + 0.36) GtCO2 / 8.88GtCO2 = 25%. Global deforestation-related – including peatland – emissions in 2004 (latest year available) were 8.88GtCO2. Source: UNFCCC 2007: Figure SPM.1; NCCC (2009a). Also see endnote 5 According to recent government estimates, Indonesia ranks as the world’s third largest GHG emitter.80 80 According to recent estimates published by various governments, Indonesia’s emissions (2005) are higher than Brazil’s (2005), Russia’s (2005) and India’s (2005), but lower than USA’s (2005) and China’s (2004): No 1: USA 6.18 GtCO2 in 2005. Source: EPA 2010: 14 No 2: China 5.6 GtCO2 in 2004. Source: Government of China (2007) No 3: Indonesia 2.25 GtCO2 in 2005. (See endnote 5) No 4: Brazil ~2.2GtCO2 in 2005: Source: MCT (2009): 19 No 5: Russia ~ 2.0 GtCO2 in 2005. Source: UNFCCC (2009): 1/ No 6: India ~ 1.6GtCO2. Source: Ministry of Environment and Forests (2009): 53 The Indonesian Government admits responsibility for at least 5 per cent of global GHG emissions, 80 per cent of which is related to natural forest loss and peatland degradation.81 81 NCCC (2009a) The government has also identified palm oil and pulp and paper as two of the major drivers of deforestation and escalating GHG emissions.82 82 MoFor (2008) XV, XXI A report published by the United Nations Environment Programme (UNEP) in 2007 warned that, if current rates of deforestation continue unabated, 98 per cent of Indonesia’s lowland rainforests could be destroyed by 2022.83 83 UNEP (2007): 7 Most of Indonesia’s peatland forests are lowland rainforests. 84 84 There are some peatlands in the central highlands area of Papua, Indonesia

See fn5

DATA USE / REPEAT Repeat

See fn7

Repeat

See fn8

Repeat

The claim within the report cited does not cite a source, nor provide a methodology for the prediction. A similar claim within the same report regarding the loss of forests in Borneo is attributed to WWF, but this is not cited to a specific source.

Speculative

84 DF

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Greenpeace documented Sinar Mas in the act of clearing rainforests and destroying peatland in these areas. The destruction of Indonesia’s forests and peatlands also has a devastating impact on biodiversity. The endangered orang-utan and the Sumatran tiger are just two of the species under threat of extinction,85 85 Chundawat et al (2008); UNEP (2007)

See fn9 regarding the data cited in relation to biodiversity. Additionally, phrases 'the act of clearing rainforests' and 'destroying peatlands' imply wrongdoing. The activity referred to later in the document (p.16) is within the boundaries of the Sinar Mas/PT Artelindo Wiratama concession [1] and subject to a government-approved annual working plan [2]. Plantation clearing activities are also subject to planning and AMDAL assessment for conservation value [3] [4] as well as Macroand Micro-Delineation for the existing landscapes to ensure that high conservation value areas remain protected[5]. See also fn10, 11, 76.

[1] PT Artelindo Wiratama, SK Menhut No. : SK.122/Menhut-II/2007, 2 April 2007; [2] RKT 15/BPHT-3/2009, dated April 15 2009; [3] [3] 1) Eksekutif DATA STRATEGIS KEHUTANAN 2007, DEPARTEMEN KEHUTANAN, Direktorat Jenderal Bina Produksi Kehutanan (BPK) 2008; 2) Statistik Kehutanan Indonesia 2006, 2007, Departemen Kehutanan; 3) Keputusan Menteri Kehutanan tentang Penunjukkan Kawasan Hutan dan Perairan; 4) Tata Guna Hutan Kesepakatan, 1984 [4] [2] RI Ministry of Forestry Decree SK.101/Menhut-II/2004 and Government Regulation No. 34/2002 [5] RI Ministry of Forestry Decree SK.101/Menhut-II/2004 and Interpretation Ministry of Forestry S.06/MENHUT-VI/2006 regarding acceleration of the development of estate forest to accommodate the raw material requirement for the pulp and paper industry, http://www.euflegt.org/images/reference/law/2004%20SK%20M enhut%20No101%20eng.htm

DATA USE / REPEAT Repeat

86 DF 87 BD 88 BD

in part due to the loss of natural forest habitat.86 86 UNEP (2007): 9; Chundawat et al (2008) The Red List of Endangered Species, published by the International Union for Conservation of Nature (IUCN),87 87 Chundawat et al (2008) classifies the Borneo orang-utan (Pongo pygmaeus) as ‘endangered’ and the Sumatran orang-utan (Pongo abelii) as ‘critically endangered. Recent estimates indicate that there are between 45,000 and 69,000 Sumatran, orang-utans left in the wild.88 88 UNEP (2007): 9 The Red List classifies the Sumatran tiger (Panthera tigris sumatrae) as ‘critically endangered’.89 89 Chundawat et al (2008)

See also fn10, 11, 76.

Repeat Repeat

The use of this data is misleading. Sumatran orang-utans are endemic to Aceh in Sumatra; there are no APP pulp and paper operations there. Similarly, orang-utans have been documented as adapting well within buffer zones of acacia plantations.

Selective

89 BD

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Recent estimates indicate that there are only 400-500 left in the wild.90 90 Chundawat et al (2008) In the Sumatran province of Riau, which has the highest rates of deforestation,91 91 See e.g. MoFor (2009a): table I.1.4.

92 BD

the number of tigers has declined by 70 per cent in the last 25 years.92 92 Uryu et al. (2008)

93 BD

The Red List reports that the Sumatran tiger is losing up to six percent of its forested habitat per year, “due to expansion of oil palm plantations and planting of Acacia plantations.” 93 93 Chundawat et al (2008)

The interpretation of the data is incorrect; the table cited does not mention rates of deforestation, only gross deforestation. On the table cited, East Kalimantan had significantly higher gross deforestation The use of this data is selective; WWF has also reported that 80 per cent of tiger deaths are due to poaching [1]; this number has been specified more clearly as 76 per cent -- see data and sources below The data cited is incomplete. The full entry notes that more than three quarters of tiger deaths are due to poaching. The full entry states: "The Sumatran tiger is declining due to high rates of habitat loss (3.2-5.9%/yr; Achard et al. 2002, FWI/GFW 2001, Uryu et al. 2007) and fragmentation, which also occur, to a lesser extent, inside protected areas (Gaveau et al. 2007, Kinnaird et al. 2003, Linkie et al. 2003, 2004, 2006). There are high levels of human-tiger conflict (Nyhus and Tilson 2004, Browne and Martyr 2007), as well as illegal trade in tiger parts (Nowell 2000, Nowell 2007). From 1998-2002 at least 51 tigers per year were killed, with 76% for purposes of trade and 15% out of human-tiger conflict (Shepherd and Magnus 2004). Ng and Nemora (2007) found the parts of at least 23 tigers for sale in market surveys around the island."

Incorrect

[1] http://wwf.panda.org/what_we_do/endangered_s pecies/tigers/about_tigers/sumatran_tiger/threats /poaching/
Selective

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If this loss is not stopped, the critically endangered Sumatran tiger could well follow other species of tiger in Indonesia – the Javan tiger (Panthera tigris sondaica) and the Bali tiger (Panthera tigris balica) – into extinction.94 94 Chundawat et al (2008)

The cited source does not account for the extinction of these subspecies.

The species cited were lost due primarily to population pressures. [1] Seidensticker, J. (1986) Large Carnivores and the Consequences of Habitat Insularization: Ecology and Conservation of Tigers in Indonesia and Bangladesh. Pp 1-42 In: Miller, S.D., Everett, D.D. (eds.) Cats of the world: biology, conservation and management. National Wildlife Federation, Washington DC.

DATA USE / REPEAT Incorrect

95 SC

In Sumatra, the expansion of pulp plantations into rainforest is destroying the natural resources that indigenous communities depend on for their livelihoods, including the Teluk Meranti95 95 FPP (2009) and Talang Mamak communities96 96 WWF (2009b)

96 SC

The document cited relates to an area that APP’s pulpwood supllier does not operate in; the company is mentioned only in passing in the referred document. This source is therefore irrelevant. The document cited is a press release; the evidence is a quote from a local environmental campaigner and cannot be considered authoritative or accurate. The document cited is a press release regarding the construction of a road by the provincial government; it does not refer to the expansion of concession and/or plantation areas. See fn76

Selective

97 SC

in Riau province and the Orang Rimba community in Jambi province.97 97 EoF (2009)

Both the Orang Rimba and Talang Mamak tribes are present in the Bukit Tigapuluh National Park, with populations of 364 and 6,000 respectively. This is distinct from the ‘Forest Landscape’ referred to by WWF. Both the Orang Rimba and Talang Mamak tribes are present in the Bukit Tigapuluh National Park, with populations of 364 and 6,000 respectively. This is distinct from the ‘Forest Landscape’ referred to by WWF.

Selective

Selective

98 CL

In 2006, Sinar Mas controlled over 400,000 hectares of oil palm and acacia pulpwood concessions on peatlands in the Sumatran province of Riau alone. This area of peat is projected to emit approximately 2.3 billion tonnes of GHG emissions over 150 years – more than twice the annual emissions from Germany.” 98 Greenpeace International (2008b): 51 Founded by Eka Tjipta Widjaja in the 1970s,99 99 APP website. History & Overview www.asiapulppaper.com/ the Sinar Mas group (SMG) has established itself as a dominant global player in the pulp and paper and palm oil sectors.100

Selective

99 FA 100 CO

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100 eg Sinar Mas Group website: www.sinarmas.com
101 CO 102 FA

103 GV

The group now has significant interests in coal mining, property development, banking and finance.101 101 eg Sinar Mas Group website: www.sinarmas.com According to Globe Asia magazine, the Indonesian tycoon, Eka Tjipta Widjaja is now considered to be the second richest person in Indonesia, with a fortune worth USD 4 billion.102 102 Globe Asia (2010) The Widjaja family maintains control of the Sinar Mas group though a complex network of offshore holding and trust companies.103 103 eg GAR (2010a): 44 – main section; GAR (2010a): 26 – Financial Statement section; Thomson Reuters (2010)

104 GV

According to Joe Studwell, author of Asian Godfathers, the Widjajas are masters of the ‘godfather arts’; they pyramid companies and practice opaque interplay between private and public businesses.104 104 Studwell (2007): 164-167

105 GV

106 GV

For example, Sinar Mas’s palm oil business is largely controlled through Golden Agri Resources (GAR), a Sinar Mas company listed on the Singapore Exchange.105 105 GAR (2010a): 44 – main section The company is incorporated in the tax haven of the Republic of Mauritius, through the registered office of Multiconsult Ltd.106 106 GAR (2010a): 44 – main section

The implication is that the use of offshore finance centres is somehow deceptive or opaque, when in fact the opposite is true. The use of OFCs is a conventional business practice for a number of reasons; moreover, the use of OFCs is actively promoted by both the US and UK governments. The assertion is that the family's business practices are opaque. This could be regarded as an assertion that is culturally insensitive, bordering on racist. Company structures throughout Asia and South-East Asia have been well-documented as being significantly different from Western corporate structures, and that the principles of governance differ significantly between the two. This is counterintuitive to the assertion that the company's business practices are opaque; all information cited was in publicly available company documents, e.g. Annual reports. This is counterintuitive to the assertion that the company's business practices are opaque; all information cited was in publicly available company documents, e.g. Annual reports.

Misleading

Selective

Incorrect

Incorrect

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108 GV 109 GV 110 GV

The Widjajas own almost 50 per cent of GAR through the ‘Widjaja Family Trust (2)’ account, which controls Flambo International Ltd, an offshore corporate trust account in the British Virgin Islands. This in turn controls Massingham Ltd, another offshore corporate trust account in Singapore, which is major shareholder in GAR.107 107 GAR (2010a): 44 – main section; GAR (2010a): 26 – Financial Statement section; Thomson Reuters (2010) The Widjaja family is probably best known for escaping the Asian financial crisis of the 1990s.108 108 Forbes (2009) The APP group, considered the Widjaja ‘family treasure’,109 109 Forbes (2009) defaulted on nearly USD 14 billion in debt.110 110 eg Ex-Im Bank (2003); Davis (2004): 3; Forbes (2009)

This is counterintuitive to the assertion that the company's business practices are opaque; all information cited was in publicly available company documents, e.g. Annual reports.

DATA USE / REPEAT Incorrect

111 GV

Although APP was technically bankrupt, the Widjaja family succeeded, with support from the Indonesian Government,111 111 Davis (2004): 3

The source cited indicates that the complexities of the case are much more significant than the Greenpeace statement reveals, and that many of the company's financial problems can be directly traced to the Asian financial crisis of 1997. See above.

Selective

To imply that government support for debt restructuring during a time of financial harship is somehow unscrupulous would pose similar questions for a number of government-assisted debt restructurings taking place in the United States.

Selective

112 GV 113 GV 114 GV

In restructuring approximately USD 6.5 billion of the original debt billion of the original debt.112 112 White & Case (2003) This was the largest ever restructuring in Southeast Asia.113 113 Shearman and Sterling (2005) The final restructuring agreement meant that the Widjajas managed to keep control of APP114 114 White & Case (2003)

The Greenpeace statement implies that there was impropriety in the debt restructuring; however, as other documents cited by Greenpeace demonstrate, the restructuring process was a negotiation process between debtors and creditors.

Selective

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118 FA

119 CO 120 CO

121 CO

122 CO

and would only have to start paying the bulk of the debt between 2015 and 2025.115 115 Indah Kiat (2009): 44-45; Tjiwi Kimia (2009): 45-49 At the end of 2009, APP’s Indonesian mills still owed at least USD 4.2 billion of the restructured debt.116 116 Indah Kiat (2009): 44-45; Tjiwi Kimia (2009): 45-49 In October 2007, APP China owed approximately USD 1 billion to overseas private banks as well as government export credit agencies.117 117 Debtwire (2008) The APP group is now run by one of Eka Widjaja’s sons, Teguh Ganda Widjaja. In 2008, Pulp & Paper International magazine rated him the most powerful man in the pulp and paper sector worldwide.118 118 RISI (2008) With a total pulp and paper capacity of over 7 million tonnes per year,119 119 APP (2009b): 21 the group is now Indonesia’s largest pulp and paper producer and,120 120 APP’s main rival in Indonesia is APRIL, which has an annual capacity of 2.6 million tonnes of pulp and 0.75 million tonnes of paper. Source: APRIL (2009) together with its production capacities in China, is the fourth largest worldwide.121 121 RISI (2009b) RISI does not include APP nor APRIL in this ranking, as neither companies publishes reliable figures on their paper and paperboard (P&B) production. Greenpeace International estimates APP’s global P&B production to have been 10 million tonnes in 2007 (4.5 million in Indonesia and around 5.5 million in China. Source: APP (2009b); APP China website www.app.com.cn Its pulp mill PT Indah 122 APP (2009b): 21 Kiat is one of the largest mills in the

See above

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world, producing nearly two million tonnes of pulp per year.122 Following a massive expansion of its tissue production in the last few years, in 2008 the APP group became the fifth largest tissue producer worldwide.123 123 Tissue World (2008) More recently, it has set up new sales networks in the US,124 124 Eagle Ridger Paper, USA: Source: RISI (2009a) UK125 125 Arco Paper refers to APP mills in China as ‘Our mills at Gold East, Gold Huasheng and Ningbo Zhonghua.’ Source: http://arcopaper.com/About__our_products.html; and Spain,126 126 Pers. Comm. with paper industry contact and expanded its production capacities in Australia,127 127 Solaris Paper (2010) Canada,128 128 Gazette (2010); Reuters (2010) China129 129 Chang 2010 and the US.130 130 Associated Press (2010) Part of Sinar Mas’ expansion strategy has been to establish itself as a key player in the tissue paper markets of North America,131 131 Associated Press (2010) Europe132 132 APP China increased its tissue products exports to Europe from almost zero in 2008 to over 7,000 tonnes in 2009, over half of this going to the UK, with Spain, Belgium and France being further important markets. Source: CTI (2010)

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and Australia.133 133 Solaris Paper (2010), ABC (2010) Note: From 2008 to 2009, Australian tissue products imports from APP China alone more than doubled in volume. Source: CTI (2010) Sinar Mas affiliated companies, such as Solaris and Mercury, market both APP branded products (Livi, Paseo), and manufacture own label products for retailers.134 134 see company web-sites http://www.solarispaper.com.au/; http://www.solarispaper.com/; http://www.mercurypaper.com/ These products include facial and toilet tissue, paper napkins and towels.135 135 see company web-sites http://www.solarispaper.com.au/; http://www.solarispaper.com/; http://www.mercurypaper.com/ In China, APP recently set up the world’s largest paper machine at its Hainan Jinhai Pulp & Paper mill, where it expects to produce almost 1.5 million tonnes of coated fine paper per year136 136 Chang (2010) for products such as magazines and brochures. APP now claims to be the largest producer of pulp, paper and tissue products in China.137 137 APP China website. Chairman’s address www.app.com.cn viewed 8 June 2010 By the end of 2007, Sinar Mas Forestry – APP’s “exclusive supplier” in Indonesia138 138 APP (2009b): 2 controlled at least 2.4 million hectares of concessions for conversion into pulpwood plantations.139 139 Of these, 1.9 million hectares are in the Sumatran provinces of Riau, Jambi and South Sumatra, and 0.5 million hectares are in East and West Kalimantan. APP claims to have set aside 962,000 hectares of these 2.4 million for conservation purposes. Source: APP (2009b)

The statement effectively asserts that APP's supplier’s entire concession areas are converted into plantations. This is incorrect. Plantable areas – the ground area that can be planted with plantation species -- vary significantly from concession to concession for a number of reasons, such as slope, soil quality, local community presence, conservation value. For example, the Surya Hutani Jaya HTI concession (SK Menhut 156)

[1] Romain Pirard and Christian Cossalter (2006). Revival of Industrial Forest Plantations in Indonesia’s Kalimantan Provinces Will they help eliminate fiber shortfalls at Sumatran pulp mills or feed the China market? CIFOR, Bogor, Indonsia.

Incorrect

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had a plantable area of less than 50 per cent following submission of workplans. [1] See also fn51.

140 DF 141 DF

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Over a quarter of these concessions were still forested in 2006 140 140 Greenpeace International mapping analysis based on MoFor (2009d) Landcover 2006 maps. Almost half of the area established with pulpwood plantations is located on peatland.141 141 Total area of established pulpwood plantations in 2006 was 427,000 hectares. Greenpeace International mapping analysis based on MoFor (2009d) Landcover 2006 maps. Over 50,000 hectares of plantations is on peat deeper than three metres.142 142 Greenpeace International mapping analysis based on MoFor (2009d) Landcover 2006 maps.

See above

Incorrect

The cited document cannot be used to reach this conclusion; the MoFor Landcover maps do not provide detail establishment of plantations

Incorrect

143 IL 144 DF

145 DF

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It is illegal to destroy peatland over three metres deep under Indonesian law.143 143 Government of Indonesia (1990) According to mapping analysis conducted by the World Wildlife Fund (WWF), APP’s two pulp mills in Sumatra are responsible for more loss of rainforest on the island than any other company.144 144 WWF (2009) Since APP began operations there in the 1980s, the company is estimated to have pulped more than one million hectares of rainforest (an area a third the size of Belgium)145 145 US Central Intelligence Agency (2010) in the Sumatran provinces of Riau and Jambi alone.146 146 WWF (2009)

The cited document cannot be used to reach this conclusion; the MoFor Landcover maps do not provide detail of peatland or peat depth. Notwithstanding this, the peat data relied upon by Greenpeace has significant problems as outlined elsewhere in this document. See fn 48

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While APP is one of the biggest producers of pulp and paper in the world, Sinar Mas is also a key player in the palm oil industry within Indonesia.147 147 GAR (2010a): 11 Franky Oesman Widjaja, Eka’s son and Teguh’s younger brother, is the CEO of Golden Agri Resources (GAR), a parent holding company for all Sinar Mas’ palm oil interests.148 148 GAR (2010a): 12 Through GAR subsidiaries, such as PT SMART, Sinar Mas is Indonesia’s biggest palm oil producer, responsible for 10 per cent of the country’s palm oil production.149 149 Greenpeace International (2008b) In 2009, GAR controlled 427,000 hectares of palm oil plantations.150 150 GAR (2010a): 16 PT SMART, a member of the Roundtable on Sustainable Palm Oil (RSPO), 151 151 See RSPO website www.rspo.org/?q=membersearch has been involved in large-scale and often illegal clearing of forests and peatlands in Kalimantan and Sumatra.152 152 See eg Greenpeace International 2009; Greenpeace International (2010a, b); EoF (2010) It has been aggressively trying to increase the size of its concession areas for future oil palm development by over one million hectares.153 153 GAR (2008): 9 Unilever, the global consumer goods giant, decided to suspend its €30 million palm oil contract with the company in December 2009.154 154 Unilever (2009); PT SMART (2009) This followed the publication of the Greenpeace reports Burning up Borneo155 155 Greenpeace International (2008a)

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164 FA 165 FA 166 CO

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and Illegal Forest Clearance and RSPO Greenwash: case studies of Sinar Mas.156 156 Greenpeace International (2009) In March 2010, major food producers including Kraft,157 157 Kraft Foods (2010) Mars158 158 Email from Mars to Greenpeace UK, March 2010 and Nestlé159 159 Nestlé (2010) also suspended their contracts. Growing pressure on Sinar Mas from its customers160 160 Unilever (2009) has forced it to re-evaluate its environmental policies.161 161 e.g. PT SMART (2009): 1; PT SMART (2010): 1 In February 2010, the palm oil arm of the company announced that it would stop clearing all peatlands, primary forests and other High Conservation Value (HCV) forests.162 162 PT SMART (2010): 1 An investigation by Greenpeace in March and April 2010 revealed that the company was already violating these commitments and was continuing to clear areas of peatland and HCV forest in West and Central Kalimantan.163 163 Greenpeace International (2010b) Sinar Mas’ mining division is headed by Fuganto Widjaja,164 164 Crest Capital (2010) a grandson of Eka Tjipta Widjaja.165 In 2009, Sinar Mas started to expand into coal mining though PT Dian Swastatika Sentosa (DSS).166 166 DSS website www.dss.co.id/business/coal-mining.html viewed 4 June 2010 Sinar Mas aims to further expand in the coal sector by “integrated explorations” as well as by “acquiring other mining companies”.167

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167 DSS (2010):14
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In December 2009, DSS was listed on the Jakarta Stock Exchange in order to raise funds of around USD 16 million for further expansion.168 168 DSS (2010):10 DSS now operates through four coal mining and exploration companies and holds a total of five mining licences in Riau, Jambi, South Sumatra and South Kalimantan,169 169 DSS website www.dss.co.id/business/coal-mining.html viewed 4 June 2010 with estimated coal reserves amounting to 160 million tonnes.170 170 DSS (2010): 16 Some of the coal feeds the high energy requirements of Sinar Mas’ pulp and paper mills PT Indah Kiat (in Riau, Sumatra) and PT Pabrik Kertas Tjiwi Kimia (on Java).171 171 Investor Daily (2009) In 2008, APP hired a “very reputable risk management and PR firm, Weber Shandwick to further convey [its] environmental message to the world.”172 172 ProPrint (2009) The same year, Weber Shandwick proclaimed that “companies have awakened to the fact that corporate responsibility and reputation go hand in hand.”173 173 Weber Chandwick (2008) In 2009, Sinar Mas launched a major global advertising campaign which was broadcast on CNN International174 174 Newsmaker (2010) and published in The Times (UK), 175 175 The Times (2010) among other media outlets, in an attempt to promote its green credentials.176 176 NewsMaker 2010)

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178 CS

The adverts, which used the slogan “APP: Building a sustainable future today”, aim to highlight APP’s efforts to conserve the environment, protect biodiversity, alleviate poverty and mitigate climate changee.177 177 Newsmaker (2010); Youtube website www.youtube.com/wa tch?v=rEyduROW8Sk&feature=related Aida Greenbury, APP’s Director of Sustainability and Stakeholder Outreach, stated:178 "let there be no doubt: while APP wishes to be a world leader in the pulp and paper-making industry, we will do so in a responsible and sustainable manner. We are on a path toward sustainability and will not be deterred.” 178 Newsmaker (2010) Over the last five years, APP has repeatedly claimed that it is on the responsible ‘path toward sustainability’ and will soon no longer need to pulp Indonesian forests to meet its fibre requirements.179 179 eg APP (2004): ii Written for its customers and other stakeholders, APP’s 2004 Sustainability Action Plan, referred to the group’s commitment to become sustainable in plantation-grown fibre by 2007: “This means that, after this date [2007], APP/SMG will be fully reliant on renewable, plantation-grown fibre from socially, environmentally and legally responsible sources.”180 180 APP (2004): ii Published in May 2007, APP’s 2005-2006 environmental report – also written for its customers and other stakeholders – showed that it would fail to meet the 2007 target and could, in theory, now only meet it at the end of 2009:181 181 APP (2007): 58 The document cited demonstrates that APP was transparent about its efforts to meet this target, subject to government policy and regulations; the Greenpeace claim implies wrongdoing.
Selective

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183 DF

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It is forecast that, with current pulp-mill capacity requiring 16 million cubic meters of pulpwood per year at an average mean annual increment of 25 m3/ha/yr, the current 623,409 hectares of plantation forests will more than adequately provide the fibre requirements for APP’s two pulp mills in Sumatra by end of 2009.” (emphasis added by Greenpeace.) A confidential 2007 Sinar Mas document, held by Greenpeace International, shows that, despite its claim, APP never intended to source its pulpwood exclusively from plantations alone after its 2009 deadline, in spite of its assurance to its customers and other stakeholders. In fact, it was planning to maintain its reliance on rainforest logs (i.e. Mixed Tropical Hardwood or MTH).182 182 Confidential Sinar Mas document, copy held by Greenpeace International The document reveals that Sinar Mas was starting to implement plans to acquire new forest areas through its ‘Area Development Plan for Supporting Mill License Capacity’. The Project would be “exposed to government” (i.e. used to lobby government) in order to gain approval for a massive increase of its existing licensed pulping capacity and landbanks (i.e. new forest areas to clear for plantation development).183 183 Confidential Sinar Mas document, copy held by Greenpeace International While the overall capacity of its two pulp mills in Sumatra was 2.6 million tonnes per year in 2006,184 the Sinar Mas document indicates that APP was 184 Confidential Sinar Mas document, copy held by Greenpeace International proposing to raise that to 17.5 million tonnes per year,185 185 Confidential Sinar Mas document, copy held by Greenpeace International

See responses to fn 40-41, 44, 45. Greenpeace is asserting that the statements made by APP over the past two years relating to sourcing were meaningless, based on its assumptions relating to the MBOS document.

DATA USE / REPEAT Repeat

See responses to fn 40-41, 44, 45.

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See responses to fn 40-41, 44, 45.

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See responses to fn 40-41, 44, 45.

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187 DF

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a sevenfold increase in its pulp capacity in Indonesia, involving:186 Increased pulp capacity at two existing mills in Sumatra, PT Indah Kiat and PT Lontar Papyrus (from 2.6 to 7.5 million tonnes per year); One new pulp mill in South Sumatra (2 million tonnes per year); Two new pulp mills in Kalimantan (with a total capacity of 8 million tonnes per year). 186 Confidential Sinar Mas document, copy held by Greenpeace International As the Sinar Mas document sets out,187 in order to supply the increased pulp mill capacity, the company would need to massively expand its pulpwood concession area. 187 Confidential Sinar Mas document, copy held by Greenpeace International In 2007, the company acquired 0.57 million hectares and obtained initial permits for a further 0.75 million hectares.188 188 Confidential Sinar Mas document, copy held by Greenpeace International

See responses to fn 40-41, 44, 45.

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See responses to fn 40-41, 44, 45.

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In total, this means an expansion of 1.3 million hectares during 2007.189 189 Confidential Sinar Mas document, copy held by Greenpeace International Sinar Mas estimates that 70 per cent of the total expansion area would be available for development, of which it would deforest 460,000 hectares generating 23 million tonnes of rainforest logs (i.e. Mixed Tropical Hardwood or MTH).190 190 Confidential Sinar Mas document, copy held by Greenpeace International

See responses to fn 40-41, 44, 45. The claim is, however, grossly inaccurate. APP’s supplier companies gained three licenses in 2007, totalling 256,280ha. This is less than half the area stated by Greenpeace. No concessions were approved for the company in 2008 and only one concession was approved ni 2009 at 24,050ha. These concession approval ocuments are publicly available online through the Ministry of Forestry See above

Incorrect

Incorrect

See responses to fn 40-41, 44, 45.

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For 2009-2010, APP declared to Greenpeace191 that only 10 percent of its current pulp production capacity is met through sourcing rainforest logs (i.e. Mixed Tropical Hardwood or MTH). 191 APP (2010): 2 The total 2007 expansion area of expansion of 1.3 million hectares would therefore facilitate APP’s continued reliance on rainforest logs for a further 20 years.192 192 Confidential Sinar Mas document, copy held by Greenpeace International However, Sinar Mas had not finished acquiring new forested areas by the end of 2007. Greenpeace analysis, based on the latest pulpwood concession statistics released by the Ministry of Forestry, shows that between 2008 and early 2010 Sinar Mas acquired at least another 116,000 hectares of forested concessions.193 193 Greenpeace International analysis based on the latest concession statistics released by the Ministry of Forestry, Indonesia (MoFor (2010b)

See responses to fn 40-41, 44, 45.

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194 DF

195 DF

By the first quarter of 2010, Greenpeace estimates that Sinar Mas controlled 2.9 million hectares of partially forested concessions,194 194 MoFor (2010b) some in areas of tiger habitat and carbon-rich peatlands. 195 Greenpeace International mapping analysis used in this report

See fn41. Further, the cited source does not support this conclusion. In the period cited by Greenpeace, approximately 819,000ha of new pulpwood concessions were approved on Sumatra along (Riau, Jambi and South Sumatra provinces); a further 569,000ha of pulpwood concessions were approved in Indonesian Borneo. None of these new approvals are documented by management group within the document, only individual company, with a total given for management groups APP and RAPP, based on net concession areas. See responses to fn 40-41, 44, 45.

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However, APP is in the process of acquiring even more concessions, which suggests that it uses or plans to use a higher percentage of rainforest logs (i.e. Mixed Tropical Hardwood or MTH) in its paper products.196 196 MoFor (2010a)

197 CO

198 GV 199 DF

Whilst Sinar Mas has successfully achieved a substantial increase in its pulpwood concession areas, as set out in its internal document, it has not made any formal announcements that it plans to increase its pulp mill capacity in Indonesia. It would require a minimum investment of USD 19 billion to fund its intended increase in pulp capacity.197 197 Sinar Mas’ latest newly built pulp mill, Hainan Pulp & Paper, with a capacity of one million tonnes of bleached hardwood pulp, required an investement of USD 1.275 billion in 2005. Source: Solaris Paper website www.solarispaper.com/mills. php. Solaris Paper is a Sinar Mas group affiliate. As indicated above, APP still bears a debt of over USD 5 billion, most of which is due for repayment between 2015 and 2025.198 198 Indah Kiat (2009): 44-45;Tjiwi Kimia (2009): 45-49 It is therefore plausible that, although the Sinar Mas document discusses an expansion to 17.5 million tonnes of pulp capacity per year, the company might have had other intentions when presenting its ‘Area Development Plan for Supporting Mill License Capacity’ to the Indonesian Government. It raises the question as to whether Sinar Mas ever seriously planned to develop build an additional 15 million tonnes of pulping capacity, or whether it actually only ever intended to acquire new forested concessions in order to maintain APP’s long-term reliance on rainforest logs (i.e. Mixed Tropical Hardwood or MTH). No citation

The document cited lists applications for 78 concessions by a number of different companies. The application is by PT Rimba Hutani Mas for 52,000ha, which was previously approved (Approvals listed: SK. Pencad No. SK.461/Menhut-VI/2008 tanggal 12 Desember 2008 Nomor SP1 : No. S.777/Menhut-VI/2008 tanggal 12 Desember 2008 SP2 : Nomor : .383/MenhutVI/2009, tanggal 22 Mei 2009). This statement is completely speculative; it is based on an incorrect assumption regarding the expansion of concession areas.

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Speculative

This claim is both speculative and based on incorrect assumptions

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201 CS

In several APP documents and communications, the group proclaims that its suppliers “only develop least valuable degraded forests and denuded [barren] wasteland 199... and prior to any development these areas are subjected to several independent ecological and social assessments in order to protect any high conservation value that might exist.”200 199 APP Myths and Realities: www.app-mythsandrealities.com; 200 APP Myths and Realities: www.app-mythsandrealities.com APP clearly wants to communicate that it has no interest in developing rainforests that are important for critically endangered species (e.g. tiger habitat) or for climate mitigation (e.g. carbonrich peatlands). APP also suggests that the rainforests it ‘develops’ into plantations actually benefit biodiversity and the climate: • “…pulpwood plantations indeed help to protect biodiversity…. The lower value land developed into pulpwood plantations play important roles as a buffer or security zone to protect the integrity of high value natural forests within and surrounding the plantations”.’201 201 APP China (2009) “The mixed residue material generated from the development of wasteland and low value or degraded forest is allocated for the pulp industry by the government as the most environmentally friendly option202 202 APP China (2009)

The Greenpeace claim implies that APP is being dishonest in its public/CSR communications. In response to the claims see fn85 regarding AMDAL assessments.

DATA USE / REPEAT Misleading

The Greenpeace claim implies that APP is being dishonest in its public/CSR communications. In response to the claims: see response sources (right).

See Guillaiam (op. cit) and Daniel Piottoa, Florencia Montagnini, Luis Ugaldea and Markku Kanninena. “Performance of forest plantations in small and medium-sized farms in the Atlantic lowlands of Costa Rica”. Forest Ecology and Management. Volume 175, Issues 1-3, 3 March 2003, Pages 195204.

Misleading

202 CS

The Greenpeace claim implies that APP is being dishonest in its public/CSR communications.

The use of forest residues in pulp production is permitted under IPK permits and TPTI permits, as well as condoned by the Indonesian Government. See source for full summary of the use of forest residues in Indonesian forest product production. Asian Development Bank and National Development Planning Agency (BAPPENAS) (1998). PLANNING FOR FIRE PREVENTION AND DROUGHT MANAGEMENT PROJECT. Asian Development Bank TA 2999-INO July 1998 – March 1999; Logging Residue and Policy Implications WORKING PAPER 4. Jakarta, February 1998

Misleading

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as opposed to leaving it on the ground or burning it, which will create forest fires and the release of methane into the atmosphere and lead to forest disease outbreaks”.203 APP wants its customers to believe that the ‘mixed residue material’ (Mixed Tropical Hardwood, MTH) it uses in its pulp mills is simply wood-waste that is lying on the ground in the areas it develops. 203 RISI (2010) However, Greenpeace investigations show that Sinar Mas continues to acquire and destroy forested tiger habitat, and continues to clear carbon-rich peatlands to feed its Sumatran pulp mills. In the Sumatran provinces of Riau and Jambi alone, Sinar Mas was aiming to expand its concessions by 900,000 hectares between 2007 and 2009. In 2006, over half of this area was still forested and a quarter of it was peatland.204 204 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed MoFor (2009d) Landcover 2006 map Thirty of the new concessions encroached into some of the last forest refuges for the critically endangered Sumatran Tiger.205 205 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed with maps from Dinnerstein et al. (2006) A dozen of them – covering at least 130,000 hectares – overlapped peatland which is more than three metres deep.206 206 Confidential Sinar Mas maps (copy held by Greenpeace International) overlayed with maps from Wahyunto, S. Ritung & Subagjo, H. (2003) It is illegal to destroy peatland over three metres deep under Indonesian law.207 207 Government of Indonesia (1990) By the end of 2007, over half of Sinar Mas’ 900,000 hectares of expansion concessions had either been approved by the Indonesian government or were in the process of being acquired.208 208 75,000 hectares had already been fully acquired or taken over from other companies and approved by the Indonesia

See above

See above

DATA USE / REPEAT Misleading

204 DF

See response to fn40-46

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205 DF

See response to fn40-46

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206 DF

See response to fn40-46

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207 DF 208 DF

See response to fn40-46

Repeat

See response to fn40-46. The phrases "in acquisition" or "in the process of being acquired" is not supported by government documentation or the change in size of Sinar Mas concessions during the period.

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government. The remaining 385,000 hectares concessions were in acquisition. Source: Confidential Sinar Mas document, copy held by Greenpeace International

209 BD

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Sinar Mas’ expansion concessions encroach into the Bukit Tigapuluh Forest Landscape in Central Sumatra, one of the last refuges for the critically endangered Sumatran tiger.209 209 WWF et al. (2008); APP (2009a); see also Chundawat et al (2008) Sinar Mas planned to expand into 210,000 hectares in this area.210 210 Confidential Sinar Mas document, copy held by Greenpeace International In 2007, Sinar Mas acquired concessions covering 36,000 hectares in the region through PT Artelindo Wiratama (Riau Province) and PT Tebo Multi Agro (Jambi Province).211 211 Confidential Sinar Mas document, copy held by Greenpeace International; MoFor (2009c); see also WWF et al. (2008) Other expansion concessions encroach into the Kerumutan Peat Swamp forest located in the province of Riau, another important forested tiger habitat.212 This is also an area of deep peat. 212 IUCN. Kerumutan peat swamp forest ecosytem protection initiative in Riau. http://nciucn.nl/projecten/kerumutan_ peat_swamp_forest_ecossytem_protection_initiative_in_ riau/ In 2006, Sinar Mas acquired a concession area covering 30,180 hectares through PT Bina Duta Laksana,213 213 MoFor (2009b,c) and targeted a further 41,000 hectares through the acquisition of the neighbouring selective logging concession, PT Mutiara Sabuk Khatulistiwa.214 214 Confidential Sinar Mas document, copy held by Greenpeace International

See response to fn40-46. The claim is made based on the speculative 'expansion concessions' -- which is an incorrect assumption See response to fn40-46. The claim is made based on the speculative 'expansion concessions' -- which is an incorrect assumption The citation is incorrect. PT Artelindo Wiratama (Riau) was approved in 2007 covering 10,740ha; Tebo Multi was approved in 2006 covering 19,770ha. Moreover, the size of the two concessions combined ia 30,510ha. See response to fn40-46. The claim is made based on the speculative 'expansion concessions' -- which is an incorrect assumption

Incorrect

Incorrect

[1] 122/Menhut-II/2007; 22/04/2007 [2] 401/Menhut-II/2006, 19/07/2006

Incorrect

212 BD

Incorrect

213 DF

214 BD

The Greenpeace reading of the data is incorrect. The concession licence was approved in 2006 and covers an area of 28,890ha. This is incorrect. The MKS concession was approved in 2000.

PT.Bina Duta Laksana; 207/Menhut-II/2006; 08/06/2006; 28.890 ha

Incorrect

SK Menhut No. : 109/Kpts-II/2000, 29 Desember 2000

Incorrect

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This map combines several sets of data: the Sinar Mas pulpwood concession boundaries, which are based on concessions maps recently made available by the Indonesian Ministry of Forestry; confidential Sinar Mas documents held by Greenpeace; and Greenpeace analysis of concession documentation.215 215 Confidential Sinar Mas document, copy held by Greenpeace International Natural forest cover is based on 2006 maps recently made available by the Indonesian Ministry of Forestry. 216 216 MoFor (2009d)

216 BD

217 BD

Peatland distribution is based on maps published by Wetlands International. 217 217 Wahyunto, S. Ritung & Subagjo, H. (2003)

The maps are inaccurate and cite data that is non-existent . Of the 60 areas on the map that Greenpeace says are Sinar Mas 'expansion targets', 41 of are concessions belonging to other companies. The remaining 19 are not forest gazetted as forestry concessions. Moreover, the Sinar Mas 'existing concessions' are in incorrect in a number of instances. The use of the forest cover maps from 2006 is selective. The Ministry of Forestry maps contain a broader range of data, including forested area on mineral soils; the Greenpeace maps appear to indicate that tiger habitat is the only remaining source of natural forest timber (posed by the question, "Tiger habitat or APP's mixed wood residues?"). Further, the maps also imply that APP’s supplier companies are the only forest operator on the island of Sumatra. The data cited contains the following problems. I. The maps used, which were published by Wetlands International, contain significant error margins, as much as 31 per cent. Moreover, the methodology and assessment used by Wahyunto, et al for the assessment has been described by Bogor Agricultural University researchers as 'scientifically unacceptable'; the margin for error associated with the methodology are described by one researcher as high as 90 per cent.

See Annex II

DATA USE / REPEAT Nonexisten t

See Annex II

Selective

See Annex II

Repeat

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219 BD 220 BD

Sumatran tiger habitat distribution is based on maps compiled by WWF.218 218 Sumatra Important Ecosystem with Tiger Distribution map From research data of conservation Institutions: (Wildlife Conservation Society (WCS), Fauna and Flora International (FFI), Yayasan Badak Indonesia (YABI), World Wildlife Fund (WWF), Zoological Society of London (ZSL) and Leuser International Foundation (LIF). Source: Roosita and Sulistyawan (2010) and WWF/SaveSumatra.org www. savesumatra.org/index.php/newspublications/map/0/ Species%20Distribution%20 Map downloaded May 2010 Priority Tiger Conservation Landscapes are based on maps published by the Save the Tiger Fund.219 219 Maps from Dinnerstein et al. (2006) Spanning over half a million hectares, the Bukit Tigapuluh Forest Landscape in Central Sumatra is one of the last refuges for the critically endangered Sumatran tiger.220 220 WWF et al. (2008); see also Chundawat et al (2008)

The WWF maps for tiger distribution cited were compiled in 1996, almost 15 years ago. These distributions differ considerably from the habitat maps in another cited source (Dinnerstein 2006)

See Annex II

DATA USE / REPEAT Repeat

See Annex II

Repeat

See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area.

In 2008, WWF Indonesia accused PT Wira Karya Sakri (PT WKS, an SMF company operating in Jambi province) of illegal logging in the Bukit Tigapuluh National Park[1]. In response, APP commissioned a British-based consultancy Oxford Index (www.oxindex.com) to conduct an independent inquiry into the claims. Following an on-ground investigation (which included discussions with NGOs, APP and APP’s fibre suppliers, and examination of documents and concession areas), Oxford Index found that PT WKS did not engage in logging in the Bukit Tigapuluh National Park. Areas pointed out by WWF Indonesia as those outside WKS concessions were in fact within PT WKS concessions. Oxford Index also observed that WWFI misattributed the term “national park” to the whole of Bukit Tigapuluh Forest Landscape area[2].

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DATA USE / REPEAT

222 BD

223 BD 224 BD 225 BD

It has been designated one of the twenty highest global priority landscapes for conserving tigers.221 221 Global Priority Tiger Conservation Landscapes are habitats that can support at least 100 tigers and where there is evidence of breeding. Source: Dinerstein et al. (2006) Of this landscape, 144,000 hectares are designated as the Bukit Tigapuluh National Park.222 222 MoFor website. Bukit Tiga Puluh National Park www. dephut.go.id/INFORMASI/TN%20INDO-ENGLISH/bukit30_ NP.htm Bukit Tigapuluh is the island’s largest lowland rainforest region,223 223 FZS website. Biodiversity, Frankfurt Zoological Society www.orangutan-lifeboat.de hosting incredible biodiversity:224 224 WARSI website. Bukit Tigapuluh National Park www.warsi. or.id/Forest/forest_tnbt.htm 660 plant species, 200 species of birds and 60 mammal species, including the highly endangered clouded leopard (Neofelic nebulosa), Malayan tapir (Tapirus indicus) and elephant (Elephas maximus). Bukit Tigapuluh has the only reintroduction project for the Sumatran orang-utan; over 100 have been released into the wild.225 225 Perth Zoo website www.perthzoo.wa.gov.au/Conservation-Research/Projects-in-the-Wild/Sumatran-Orangutan-PilotProject/; GRASP (2009)

See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area.

See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area.

See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area. See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area. See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area.

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The re-established orang-utan population now inhabits large parts of the Bukit Tigapuluh landscape, especially in the southern buffer zone.226

227 SC

228 SC

229 BD

The area is also home to Orang Rimba forest-dwelling tribal communities. These communities face increasing abuse and marginalisation as a result of rapid deforestation.227 227 WARSI website www.warsi.or.id/Forest/forest_tnbt.htm As one Orang Rimba leader stated:228 “One day [the company] came and told us to leave, we were pushed out. They cut down our homes and the forests. We no longer have the forest to live. We don’t have food or protection.” 228 ABC News (2009) Despite the social and ecological importance of this area, APP and its pulpwood suppliers are associated with ten licensed or proposed pulpwood concessions that encroach into the Bukit Tigapuluh Forest Landscape in Riau and Jambi. According to WWF, these pulpwood concessions cover 358,047 hectares, half of which are in the landscape’s natural forest.229 229 WWF et al. (2008) One of Sinar Mas’ pulpwood concession holders in the area is PT Artelindo Wiratama.230 230 WWF et al. (2008)

The Greenpeace statement misattributes a conflicting set of priorities within the Indonesian Government to Sinar Mas. The Directorate General of Conservation within the Indonesian Ministry of Forestry supported an orang-utan reintroduction program under the auspices of Frankfurt Zoological Society; this program commenced in 2001 and finished in 2009 [1]. The inactive concessions [2] were approved for reactivation under the company PT RImba Hutani Mas [3]. See fn95-97

[1] VIII.10. DAFTAR PROYEK/ PROGRAM KERJA SAMA LUAR NEGERI (KLN) DI LINGKUP DEPARTEMEN KEHUTANAN TAHUN 2006; Ministry of Forestyr and Frankfurt Zoological Society (2009). The Bukit Tigapuluh Ecosystem Conservation Implementation Plan. [2] PT. Dalek Hutani Esa, 586/Kpts-VI/1999 (approved 29-07-1999; 52,480ha) and PT. Hatma Hutani, 593/KptsVI/1999 (26-02-1998, 41.000ha); [3] PT.RIMBA HUTANI MAS SK.461/Menhut-VI/2008 tanggal 12 Desember 2008

DATA USE / REPEAT Selective

Repeat

See fn95-97

Repeat

See fn41-46; this is a speculative claim. See footnote 51. The 'Bukit Tigapuluh Forest Landscape' is a term that has no legal meaning and is not a gazetted area.

Speculative

230 BD

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The PT Artelindo Wiratama concession area is of critical importance for the Sumatran tiger because it forms a corridor for migration between Bukit Tigapuluh National Park and the Rimbang Baling nature reserve to the northwest, in Riau province.231 231 WWF et al. (2008) As such, according to WWF, “the natural forest being converted should tentatively be considered High Conservation Value Forest.” 232 232 WWF et al. (2008) In its disclosure of raw material suppliers to the Ministry of Forests, PT Indah Kiat listed PT Artelindo Wiratama as supplying almost 42,000m³ of pulpwood in 2009.233 233 Ministry of Forestry document 2010, copy held by Greenpeace International In the same year, the Ministry of Forestry authorised the company to produce over 360,000m³ of rainforest logs (i.e. Mixed Tropical Hardwood or MTH) and around only 5,000m³ of acacia pulpwood (i.e. from plantations).234 234 Around 60% of which has with a diameter greater than 30cm. Source: Ministry of Forestry document 2010, copy held by Greenpeace International

The data source cited does not mention 'Rimbang Baling'.

DATA USE / REPEAT Incorrect

This phrase in the cited document is used in reference to two other concessions in the document, Wira Karya Sakti and Tebo Multi Agro; HCVF is not specified in relation to the Artelindo concession.

Incorrect

233 CO

234 DF

235 DF

PT Artelindo Wiratama could, therefore, have supplied a maximum of 5,000m³ of acacia pulpwood to PT Indah Kiat. However, recent Greenpeace investigations including aerial images taken in March and April 2010, as well as Ministry of Forestry land cover maps,235 235 MoFor (2009d); MoFor (2006)

This document is publicly available. In this section, Greenpeace is attempting to assert that APP could have supplied plantation forest timber, but instead supplied timber sourced from natural forests, and that it should have established forest plantations at the time of writing, or not at all. The statement implies wrongdoing, but the Greenpeace documents cited indicate that the timber harvested was within the limits of its legal, governmentapproved annual workplan. The speculative Greenpeace statement implies that the company had clearcut the concession, supplied 360,000m3 of timber, and had no intention of establishing a pulpwood plantation. Yet it had supplied around 12% of this quantity and is still in the process of establishing the plantations.

Selective

Misleading

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237 DF

show that the company had not yet established any harvestable acacia plantations.236 236 The only acacia plantations Greenpeace Southeast Asia investigators could find in March-April 2010 were areas of six month-old acacia plantations Instead, PT Artelindo Wiratama continues to clear rainforests in the area.237 On the ground investigations by Greenpeace in March 2009 show that the logs from this concession were transported by truck to APP’s PT Indah Kiat mill in Perawang, Riau Province. 237 Greenpeace Southeast Asia investigations (2010)

See above

DATA USE / REPEAT Misleading

See above

[1] PERKEMBANGAN PRODUKSI KAYU BULAT/KAYU BULAT KECIL IPK PROPINSI RIAU; [2] DAFTAR PENYAMPAIAN RENCANA PEMENUHAN BAHAN BAKU INDUSTRI (RPBBI) TAHUN 2009 INDUSTRI KAPASITAS > 6000 M3/TAHUN PROVINSI RIAU, KEPULAUAN RIAU DAN SUMATERA BARAT S.D. BULAN DESEMBER 2009

Misleading

238 BD

239 BD

240 BD

Covering 1.3 million hectares, the Kerumutan Peat Swamp Forest is one of the most critically threatened landscapes in the Province of Riau.238 238 Greenpeace Southeast Asia investigations (2010) It has been designated one of the regional priority landscapes for conserving tigers.239 239 IUCN. Kerumutan peat swamp forest ecosytem protection initiative in Riau. http://nciucn.nl/projecten/kerumutan_ peat_swamp_forest_ecossytem_protection_initiative_in_ riau/ A conservation initiative aims to formally protect less than 10 per cent of the area, consisting of a core area of 93,000 hectares, as a Kerumutan Wildlife Reserve and a further 52,000 hectares as a Peat Swamp Protection Area.240 240 Global Priority Tiger Conservation Landscapes are habitats that can support at least 100 tigers and where there is evidence of breeding. Source: Dinerstein et al. (2006)

"Kerumutan Peat Swamp Forest" -- like Bukit Tigapuluh Forest Landscape -- has no legal meaning. See above

Misleading

Misleading

This use of data is selective. There is already a 120,000 ha reserve in the area that was declared in 1976; it extends between the Indragiri and Kampar Rivers, due north of Rengat. It is bordered on all sides by former logging concessions.

The wildlife reserve is shared by Pelalawan and Indragiri Hulu, which presents a number of adminsitrative problems. A full case study of the problems within the area was completed by CIFOR in 2001. Lesley Potter and Simon Badcock (2001). The Effects of Indonesia’s Decentralisation on Forests and Estate Crops in Riau Province: Case Studies of the Original Districts of Kampar and Indragiri Hulu. CIFOR, Bogor, Indonesia.

Selective

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242 BD 243 IL

244 IL 245 DF

Ninety percent of the area has been designated for plantation development,241 of which Sinar Mas now controls 104,000 hectares under pulpwood concessions. 241 IUCN. Kerumutan peat swamp forest ecosytem protection initiative in Riau. http://nciucn.nl/projecten/kerumutan_ peat_swamp_forest_ecossytem_protection_initiative_in_ riau/ At this point in the report footnotes become misaligned. 242 IUCN. Kerumutan peat swamp forest ecosytem protection initiative in Riau. http://nciucn.nl/projecten/kerumutan_ peat_swamp_forest_ecossytem_protection_initiative_in_ riau/ One of Sinar Mas’ pulpwood concession holders in the area is PT Bina Duta Laksana.242 243 MoFor (2009) This concession covers more than 30,000 hectares and is, according to maps developed by Wetlands International, mostly located on peatland deeper than three metres;243 244 Wahyunto and Subagjo H (2003) it is illegal to destroy peatland of that depth to establish a plantation under Indonesian law.244 245 Government of Indonesia (1990) In their disclosure of raw material suppliers to the Ministry of Forests, PT Indah Kiat listed PT Bina Duta Laksana as supplying over 80,000m³ of pulpwood in 2009. The neighbouring concession, PT Mutiara Sabuk Khatulistiwa, was listed as supplying almost 99,000m3.245 246 Ministry of Forestry 2010 document, copy held by Greenpeace International Ministry of Forestry maps for 2003 and 2006 246 show that neither company had established any pulpwood plantations in these areas. Assuming that these maps were accurate, the pulpwood supplied from these concessions was 100 per cent rainforest logs (i.e. Mixed Tropical Hardwood or MTH). 247 MoFor (2009d); MoFor (2006)

See above

DATA USE / REPEAT Selective

In response to the claim: Ministry of Forestry documents state clearly that the concession area is 28,890ha See fn 45

Incorrect

Repeat

See fn 48

Repeat

246 DF

The Greenpeace statement implies a substantial clearance within the concession, or that it was engaged in wrongdoing. According to its annual workplan, BDL was approved to supply more that 360,000m3 of natural forest timber within the period across an area of 4150ha. Activity in both concessions is sanctioned under the annual workplan (RTK). This is selective use of data; APP had its concession approved for BDL in 2006. There is therefore no reason to assume for it to have established any operations on this land prior to this time.

BDL approval permit: SK. 04/BPHT-3/2009, 27 March 2009; MKS RKT: Kpts/522.2/Pemhut/3591

Selective

SK. 04/BPHT-3/2009, 27 March 2009

Selective

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249 CS 250 CS

251 CS

252 CS

An investigation by Greenpeace in September 2009 shows that Sinar Mas was clearing in PT Bina Duta Laksana and transporting logs by barge to APP’s PT Indah Kiat mill in Perawang, Riau Province.247 248 Greenpeace Southeast Asia investigations, September 2009 In April 2010, Greenpeace documented ongoing clearing in PT Bina Duta Laksana.248 249 Greenpeace Southeast Asia investigations 2010; 250 APP (2008): 1 Knowing that a growing number of customers are seeking products certified as not coming from illegal or controversial sources,249 250 APP (2008): 1 APP has had a number of its mills’ chains of custody certified under the Programme for the Endorsement of Forest Certification (PEFC) scheme.250 251 APP (2010): 3; To bear the PEFC logo, a product must contain 70 per cent minimum of PEFC-certified virgin fibre, and the remaining material in the product must come from ‘verified non-controversial sources’. However, as there are no PEFC-certified forests or plantations in Indonesia,251 any production of PEFC products by APP involves the import of PEFC certified pulp from other countries. 252 PEFC website. www.pefc.org/index.php/certificationservices/find-certified viewed 6 June 2010 This pulp is then mixed with ‘verified non-controversial material’252 (i.e. non-certified timber) from a number of concessions in Sumatra. 253 APP (2008):2

See response to fn 245

DATA USE / REPEAT Selective

See response to fn 245

Selective

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Serious questions remain as to how any such timber produced by APP companies can be classified as ‘non-controversial’. The company claims that its pulp mills in Sumatra, PT Indah Kiat and PT Lontar Papyrus, have introduced:253 254 APP (2008): 2

254 CS

“PEFC procedures for avoidance of raw material from controversial sources...verified by an independent third party certification body in order to provide confidence that no illegal or controversial wood enters the mills’ fibre supply chain.” (APP Stakeholder Update, May 2008) The reality is that none of the raw materials entering these mills had been officially verified under PEFC rules. In fact, at the time that this statement was written, neither of the mills even had PEFC Chain of Custody certification.254 255 Greenpeace UK communication with SGS, 18 June 2010 Following correspondence with Greenpeace, PEFC confirmed that APP has been asked to “modify the statement to avoid any potential misinterpretation”.255 256 PEFC letter to Greenpeace UK, 9 March 2010

This statement is misleading. The PEFC system of certification is a risk management system that verifies a percentage of material as 'noncontroversial'. It is a risk management system that is similar to FSC's 'Controlled Wood' standard. It does not purport to certify the remaining 30 per cent under this standard. The rather simple nature of this certification system was explained in detail to Greenpeace by PEFC Chief Executive Ben Gunneberg, however, these explanations were ignored by Greenpeace. Moreover, there was a clear call by PEFC for Greenpeace to use the formal dispute resolution system via PEFC certification. To the author's knowledge this is yet to take place. This statement is incorrect, and based upon a complaint made to PEFC by the CFMEU (Construction Forest Mining and Electrical Union, based in Australia). The complaint was not upheld by PEFC and/or SGS, the auditor in question.

Ben Gunneberg (2010). Letter to Andy Tait, Greenpeace, dated March 10 2010; Letter to Andy Tait, Greenpeace, April 22, 2010; Letter to Andy Tait, Greenpeace, July 2 2010; Greenpeace, July 9 2010

DATA USE / REPEAT Misleading

SGS (2010). Letter to CFMEU. Wednesday, 11 February 2009

Incorrect

255 CS

See above

Selective

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Elsewhere, APP has claimed that these two mills “have been verified by an independent third-party certification body in order to provide confidence that no illegal or controversial wood enters the mills’ fibre supply chain.”256 (This text appears above two images of audit certificates for these mills, issued by SGS auditors.) 257 APP website www.app-mythsandrealities.com Asked by Greenpeace for details of this verification, an SGS auditor replied:257 “I cannot confirm that SGS has actually done an audit at the mills to confirm that all material received at these mills is covered by the SGS verifications.” (SGS’ emphasis) 258 SGS email to Greenpeace UK, 23 April 2010

The statement was subsequently altered following the Greenpeace correspondence.

DATA USE / REPEAT Correct

257 CS

258 CS 259 CS

260 IL

261 IL 262 DF

SGS has more recently confirmed to Greenpeace that no such audit has taken place. 258 259 Greenpeace UK communication with SGS, 18 June 2010 In 2009, according to Ministry of Forestry data,259 PT Indah Kiat continued to receive rainforest logs (i.e. MTH). As shown above, Greenpeace investigations illustrate that the company continues to source rainforest logs from tiger habitat and peatland forests, both considered highly controversial 260 Ministry of Forestry document 2009, copy held by Greenpeace International . In addition, acacia logs were supplied to PT Indah Kiat from plantations that were established on peat deeper than three metres,260 261 Wahyunto et al (2003) which is illegal under Indonesian law.261 262 Government of Indonesia (1990) As of 2006, 213,000 hectares of acacia plantations inside Sinar Mas-controlled concessions were located on peatlands, with at least 50,000 hectares located on peatland deeper than three metres.262 263 Greenpeace International analysis based on the Ministry of

See above. This statement is misleading. The auditor cannot confirm that all the material entering the mills has been audited; but this is not what the TLTV or CoC assessments are supposed to do; they are only supposed to audit a percentage of the material, not 100 per cent of it. See above

The mills do, however, have current and valid certificates for TLTV from SGS. SGS-TLTV / LP VLO 0005; SGS-TLTV / LP VLO 0006

Misleading

Misleading

See above

Misleading

See fn 45

Misleading

See fn 48 See fn 45

Repeat

Repeat

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Forestry’s 2006 land cover map and concession data released by the same Ministry in 2010.

263 RE

While APP is actively trying to convince potential customers of its sustainability credentials, several large multinational companies have already severed ties with APP after it was unable to address their concerns. Office supplies retailer, Staples, sourced about 9 per cent of its total paper supply from APP.263 264 WSJ (2008) Following allegations against the company, Staples chose the route of positive engagement, trying to encourage APP to change. In 2008, it severed all contracts with the group, claiming that “engagement was not possible anymore” and that to remain a customer of APP would be “at great peril to our brand”.264 265 WSJ (2008) Along with Staples,265 266 Staples (2009) other well known brands and global players such as: Office Depot;266 267 Office Depot (2009) Woolworths (Australia);267 268 ABC (2008)

See fn53

Repeat

264 RE

See fn53

Repeat

265 RE 266 RE 267 RE

See fn53 See fn54

Repeat Repeat

See fn54

Repeat

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Franklin Covey; Fuji Xerox; Ricoh; Target; Unisource; H&M; and Gucci have all decided to stop buying from APP.268 269 RAN (2009a); RAN (2009b)

269 RE

Other international companies including Kimberly Clark, Kraft, Nestlé and Unilever, are in the process of implementing global sustainability policies for pulp and paper. These policies will exclude paper products from APP unless it makes substantial improvements to the sustainability of it’s fibre supplies.269 270 Kraft, Nestlé and Unilever pers. comms. with Greenpeace UK; Kimberly Clark pers. comm. with Greenpeace USA

The statement from which this is sourced is not footnoted, and despite searches of public information could not find adequate evidence that a large proportion of the companies cited had in fact chosen to cease business with APP on environmental grounds. Some companies named have implemented FSC purchasing policies that exclude non-FSC paper rather than non-APP paper. For example, Fuji Xerox – in 2007 undertook to switch to a 40 per cent FSC-certified supply chain, and consequently reduced its non-FSC suppliers. It was able to secure 40 per cent in 2007, but due to changes in FSC’s certification rules it has since only been able to meet a 17 per cent target; Ricoh undertook a commitment to use FSC-certified and recycled paper in 2002. See fn54

DATA USE / REPEAT Selective

Repeat

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Meanwhile a number of international non-governmental organisations have also dropped working relationships with APP. These include WWF, the certification body Rainforest Alliance Smart Wood (US) and the international forest certification body the Forest Stewardship Council (FSC). In 2004, WWF ended its partnership agreement with APP after the group refused to stop converting natural forest to plantations:“ In APP’s assessment, it sees any forest as ‘degraded’ and ready for conversion to plantation…APP was asked to redo their assessment. WWF said APP has been doing a lot of logging in good forest, so why not suspend all logging operations in native forest. The company said ‘not possible’”. 270 271 WWF Indonesia’s Nazeer Foead quoted on www. climatechangecorp.com/content.asp?ContentID=5218

An agreement was signed between the organisations in August 2003. This 'Letter of Intent'[1] specified certain a number of actions and conservation activities that would be undertaken by APP and WWF. The centrepiece of the Letter was the commitment to develop an Action Plan, which would develop timebound commitments to: i. achieve a Sustainable Wood Supply; ii. document its conservation policy, which protects any remaining high conservation value forests under the management of SMG and its suppliers in Riau and Jambi provinces; iii. ensure upgraded chain of custody to guarantee all suppliers are fully legal compliant and eliminating any wood deliveries that are of doubtful legality; iv. resolve legitimate social conflicts with local communities. The deadline for the completion of the Action Plan was January 31, 2004. However, the negotiation process between APP and WWF disintegrated. WWF withdrew its support for the final version of the Action Plan in mid-February 2004.

*1+ “Letter of Intent between WWF Indonesia, Asia Pulp and Paper Co. Ltd. and its fiber suppliers, the Sinar Mas Group forestry companies”, 13 February 2003. http://www.wwf.or.id/attachments/Letter%20of% 20Intent-Final.pdf.

DATA USE / REPEAT Selective

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• Since then, WWF has been calling on companies to demand that APP stop its unsustainable practices.271 272 WWF (2008)

272 CS

273 CS

In 2008, the Rainforest Alliance’s Smart Wood programme withdrew cooperation with APP, stating that:272 “It is the decision of Rainforest Alliance that we do not wish to be used by APP again in order to mislead the public and the consumers.” 273 Rainforest Alliance (2007) In 2007, the FSC dissociated itself from APP and revoked its chain of custody certificate:273 ”…the FSC Board of Directors decided that FSC should not allow any association of its name with APP or any company in which APP is a majority shareholder, unless APP completely and immediately stops converting natural forests and provides documented evidence of that cessation.” 274 FSC (2007) Footnotes 274-277 have no text 275 Confidential 2009 trade data, copy held by Greenpeace International 276 Confidential 2009 trade data, copy held by Greenpeace International

On the day that the Letter of Intent between APP and WWF expired (February 19, 2004), WWF re-commenced its campaign against APP. A lobbying campaign directed at APP customers took place over the following four months. [1] The campaign stated that APP's timber should generally be considered illegal, despite it being based on unproved allegations of the legality of timber from one supplier, and a disagreement over the legal authority of logging rights. The campaign has continued in the four years since then. WWF has continued to accuse APP of illegal logging, despite the latter implementing legality verification audits by Society General du Surveillance (SGS) for a number of its suppliers, giving it the right to apply FSC logos which verified the fact. The cited document does not contain the quoted text.

[1] APP account of events. This type of response from WWF is not unusual. For example, when negotiations between Indonesian forestry company Asia Pacific Resource International Limited (APRIL) and WWF fell apart in 2001, WWF immediately campaigned APRIL's customers and requested CNN to air a story on the company. See Steve Stecklow (2006). 'Environmentalists, Loggers Near Deal on Asian Rainforest'. Wall Street Journal, February 23, 2006

DATA USE / REPEAT Selective

Nonexisten t

The cited document does not contain the quoted text. The text from 'unless APP ...' is not part of the original document. FSC did not revoke the chain of custody certificate; it simply prevented APP from using the FSC logo or name in any of its communications.

Nonexisten t

274

275

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DATA USE / REPEAT

277 In 2008 Gold East Paper produced 2.2 million tonnes of coated fine paper. Source: Gold East Paper (2009). Chinese total production amounted to 4.6 million tonnes in the same year. Source: China Paper Association (2008) 278 CTI (2010) Recent research by Greenpeace shows that many other international companies are still buying or selling paper products sourced from APP. These include: French supermarket chain Carrefour(eg in Indonesia, China); US supermarket chain Walmart (in China);278 279 Greenpeace China investigations 2010 French supermarket chain Auchan (in China);279 280 Greenpeace China investigations 2010 British supermarket chain Tesco (in China);280 281 Tesco stocks various APP China brand products in its retail outlets in China. Greenpeace China investigations 2010 British retail group WH Smith (in the UK);281 282 WH Smith stocks various stationary products of APP-related company Collins (Nippecraft) 283 APP Brasil (2008) US information technology multinational Hewlett Packard (in Brazil);282 283 APP Brasil (2008) US fast-food chain Kentucky Fried Chicken (in China);283 284 Greenpeace China investigations 2010; see also Ningbo Asia Paper website, Products www.nbasia.com.cn/en-products. asp U Dutch Office supplies company Corporate Express;284 285 Corporate Express (2010)

277 278 CS

279 CS 280 CS 281 CS 282 CS 283 CS 284 CS

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FN 285 CS

REPORT TEXT AND SOURCE

RESPONSE TO DATA

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DATA USE / REPEAT

286 DF

287 CO

288 CO 289 CO

290 CO

and Australian global paper merchant PaperlinX (e.g. in Australia and the UK).285 286 PrintWeek 2009. See also Spicers Global products www. spicers.com.au/index.asp?menuid=100.030.080&art id=232 (viewed 8 June 2010). Sinar Royal and Sapphire are Sinar Mas brands. PaperlinX operates worldwide through subsidiaries including PaperCo, Robert Thorne & Howard Smith (all UK), Papernet (AT), Deutsche Papier (DE), Polyedra (IT), Spicers Paper (HK, MY, SG, AUS, CDN, US), Paperpoint (AUS), Coast Paper (CDN) and many others In October 2009, Greenpeace tested286 paper products from APP’s Gold East Paper mill in China to see if they were made using fibre from tropical rainforests or plantations. The tests were carried out through an independent laboratory. Out of the five papers tested, four proved positive for rainforest fibre (i.e. Mixed Tropical Hardwood or MTH). 287 Greenpeace China investigations 2009 APP China’s Gold East Paper mill accounts for almost half of China’s coated fine paper production.287 288 In 2008 Gold East Paper produced 2.2 million tonnes of coated fine paper. Source: Gold East Paper (2009). Chinese total production amounted to 4.6 million tonnes in the same year. Source: China Paper Association (2008) It exports to over two dozen countries288 289 CTI (2010) and is the single largest export destination from APP’s Riau-based pulp mill, PT Indah Kiat.289 290 Confidential 2009 trade data, copy held by Greenpeace International Customers of the mill’s paper include many highprofile magazines and books including as Chinese National Geographic; CNN Traveller; COSMO (published by National Geographic); Cosmo Girl (published by Cosmopolitan); ELLE; Esquire; and Marie Claire.290 291 See APP Print Awards 2007-2009 www. sinarmasprintawards.com/ Application requirement: ‘At least

No methodology has been made available. However, as demonstrated above, the data on the use of MTH is on the public record.

Selective

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FN

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RESPONSE TO DATA

COUNTERPOINT / SOURCE

DATA USE / REPEAT

70% of paper used in entries must be Gold East Paper or Gold Huasheng Paper’s product.’

291 CO

Some international companies – such as Kraft, Nestlé and Unilever – have stopped buying palm oil from Sinar Mas. However the following companies, listed as customers of Sinar Mas’ palm oil division in June 2009, 291 have not yet made similar commitments:291 • Campbell Soup Company (US); Burger King (US); Dunkin Donuts; Pizza Hut (US); and Shiseido (Japan). 292 GAR (2009a):13 • Two of the largest palm oil traders in the world – Cargill (US) and Wilmar (Singapore) – are still buying from Sinar Mas and trading to a variety of their customers.292 293 Confidential 2010 trade data, copy held by Greenpeace International In addition, the French supermarket chain Carrefour, is still selling Sinar Mas own brands of palm oil products in its stores in Indonesia.293 294 eg Carrefour (Indonesia) Java catalogue for Bali, Java and Makassar, 7-20 April 2010. In a letter to Greenpeace International in January 2010,294 APP claims that it “supports President Susilo Bambang Yudhoyono’s pledge to reduce carbon emissions by 26% by 2020 [and is] committed to making its carbon footprint as small as possible.” 295 APP (2010): 3

Repeat

292 CO

Repeat

293 CO

Repeat

294 CL

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DATA USE / REPEAT

In September 2009, Indonesian President Susilo Bambang Yudhoyono announced its climate change targets to G-20 leaders, stating that Indonesia will:295 “reduce *its GHG+ emissions by 26% by 2020 from BAU (Business As Usual). With international support, we are confident that we can reduce emissions by as much as 41%. This target is entirely achievable because most of our emissions come from forest-related issues, such as forest fires and deforestation.” (emphasis added by Greenpeace) 296 President Susilo Bambang Yudhoyono (2009a) President Yudhoyono’s targets could lead to substantial reductions in Indonesia’s GHG emissions:296 26 per cent target: predicted 2020 emissions would need to be cut to around 90 per cent of Indonesia’s 2005 emissions (i.e. equivalent to a reduction of 163MtCO2 on 2005 annual emissions). 41 per cent target: predicted 2020 emissions would need to be cut to nearly 75 per cent of Indonesia’s 2005 emissions (i.e. equivalent to a reduction of 586MtCO2 on 2005 annual emissions). 297 2005 emissions (2,250MtCO2) and BAU 2020 emissions (2,820MtCO2): 26% reduction on BAU 2020 is 733 MtCO2, or an equivalent reduction of 163MtCO2 on 2005 annual emissions; 415 reduction on BAU 2020 is 1,156MTCO2, or an equivalent reduction of 586MTCO2 on 2005 emissions: Source: NCCC (2009a) As 80 per cent of Indonesia’s GHG emissions are mostly from the conversion of rainforests and peatlands,297 298 NCCC (2009a) these “forest-related” emissions would have to be severely cut in order to meet President Yudhoyono’s targets as described above.298 299 NCCC (2008a) In May 2010, as a first step to achieving its targets, President Yudhoyono announced a two year moratorium on the granting of any “new concessions on conversion of natural forests and peatlands into plantations”.299 300 Government of Norway (2010).

296 CL

297 CL 298 CL

299 CL

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302 CL

303 CL

304 CL

This was part of a USD 1 billion ‘cooperation agreement’ between the Norwegian and Indonesian Governments.300 301 Government of Norway (2010). The moratorium does not apply to the conversion of natural forests and peatlands within existing concessions, so does not affect the hundreds of thousands of hectares of forested concessions that Sinar Mas has already acquired but which have not yet been converted. This includes the forested concessions that Sinar Mas controls for both pulp and oil palm plantations.301 302 EoF (2010); Greenpeace International (2007); Greenpeace International (2008a); Greenpeace International (2008b); Greenpeace UK (2009); Greenpeace International (2010a); Greenpeace International (2010b) Of the pulpwood concessions Sinar Mas acquired since 2007, around 30,000 hectares are located on peatland areas over three metres deep, and therefore illegal to destroy, and over 100,000 hectares are located on peatland less than three metres deep.302 303 Greenpeace International mapping analysis is based on the Wetlands International peat distribution maps and concession data released by the Ministry of Forestry in 2010 APP is continuing to expand its pulp and palm oil operations into Indonesia’s remaining rainforests and carbon-rich peatlands. At the same time, annual emissions from peatlands are forecast to increase by 20 per cent due to the “continued conversion of peatland.”303 304 NCCC (2008b) It is therefore clear that if APP continues business as usual it will undermine the government’s aims to reduce its contribution to global climate change. 305 Forested areas are defined as greater than 10 per cent canopy cover

Repeat

Repeat

The Government has made an initial commitment; yet there is no plan of implementation. To say that APP is undermining these commitments is akin to stating that all industry in Indonesia is doing the same. APP has also initiated several carbon reduction activities, such as the publicly available carbon footprint monitoring, CDM programs, conservation forest carbon

Misleading

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assessment & REDD programs and plantation carbon impact assessments.

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Annex II: Greenpeace Maps Analysis
PROVINCE Riau DEFINITION ON GREENPEACE MAP Sinar Mas Pulpwood Existing Concession Sinar Mas Pulpwood Existing Concession Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Existing Concession Sinar Mas Pulpwood Existing Concession Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Existing Concession Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets OFFICAL STATUS Not a concession Not a concession Plantation concession Plantation concession Not a concession Not a concession Plantation concession Selective concession Selective concession Plantation concession Plantation concession HELD BY COMPANY Not applicable LICENCE Not applicable Affiliated to Not applicable Not applicable APP’s supplier APP”s supplier Not applicable Not applicable APP’s supplier RAPP LOCATION IF UNDEFINED Directly adjacent to PT Diamond Raya, southern boundary Adjacent to PT Suntara Gajapati, southern boundary ASSESSMENT Non-existent: The area marked on the Greenpeace map is not a concession area Non-existent: The area marked on the Greenpeace map is not a concession area Incorrect: The area marked is an existing concession Incorrect: The area marked is an existing concession Non-existent: The area marked on the Greenpeace map is not a concession area Non-existent: The area marked on the Greenpeace map is not a concession area Incorrect: The area marked is an existing concession Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession

Riau

Not applicable

Not applicable

Riau Riau Riau

PT Bina Daya Bentala PT.RIMBA ROKAN PERKASA Not applicable

555/MenhutII/2006 22-Des-06 554/MenhutII/2006 22-Des-06 Not applicable

Riau

Not applicable

Not applicable

Adjacent to PT Sekato Pratama Makmur, southern boundary Directly east of PT. SATRIA PERKASA AGUNG concession

Riau Riau

PT.BALAI KAYANG MANDIRI PT SIAK RAYA TIMBER PT.BHARA INDUK (d/h BRAJATAMA) PT. WANA MUKTI WISESA PT. MALAKA AGRO PERKASA

20/MenhutII/2007 05-Jan-07 202/MenhutII/2007 16-Mei-07 SK 802/Kpts-VI/99

Riau

Not APP

Jambi

275/Kpts-II/1998 27-Feb-98 570/MenhutII/2009; 28-Sep-

Not APP

Jambi

Not APP

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Jambi

Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets Sinar Mas Pulpwood Expansion Targets

Plantation concession Selective concession Plantation concession Plantation concession Plantation concession Plantation concession Selective concession

PT.ARANGAN HUTANI LESTARI PT.BUMI PRATAMA USAHA JAYA PT.PAKERIN

09 660/Kpts-II/1995 12-Des-95 604/Kpts-II/1997; 18-09-1997 226/Kpts-II/1998 01-Feb-98 70/MenhutII/2005 29-Mei-05 378/MenhutII/2009 25-Jun-09 195/Kpts-V/1992 01-Apr-92 382/MenhutII/2005 11-Nop05

Not APP

Sumatra Selatan Sumatra Selatan Sumatra Selatan Sumatra Selatan Sumatra Selatan Sumatra Selatan

Not APP

Not APP

PT.CIPTA MAS BUMI SUBUR PT. PARAMITRA MULIA LANGGENG PT.WAY HIJAU HUTANI PT. HARAPAN TIGA PUTRA

Not APP

Not APP

Not APP

Not APP

belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company Speculative: The area marked is an existing concession belonging to another company

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Maps included in the following pages: 1. The Greenpeace Report map (p.14 of the Greenpeace Report) overlaid with Direktorat Inventarisasi Dan Pemantauan Sumber Daya Hutan Dan Direktorat Jenderal Planologi Kehutanan Departemen Kehutanan (2009) Peta Pemanfaatan Dan Perubahan Peruntukan Kawasan Hutan, Provinsi Riau, Provinsi Jambi, Provinsi Sumatera Selatan. 2. The Greenpeace Report map (p.14 of the Greenpeace Report) 3. Direktorat Inventarisasi Dan Pemantauan Sumber Daya Hutan Dan Direktorat Jenderal Planologi Kehutanan Departemen Kehutanan (2009) Peta Pemanfaatan Dan Perubahan Peruntukan Kawasan Hutan, Provinsi Riau, Provinsi Jambi, Provinsi Sumatera Selatan.

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Annex III: Reviewer Statements and Qualifications
Reviewer 1: Dr Neil Byron (dr.neil.byron@gmail.com) PhD, MA (Econ), BSc (For) (Hons) Member, Wentworth Group of Concerned Scientists Adjunct Professor, ANU‟s Crawford School of Economics & Government and Fenner School of Environment & Society; Visiting Fellow, University of Melbourne; and Wolfson College, Oxford University. Director, Earthwatch Institute Australia Former Member, IUCN‟s World Commission on Protected Areas Former Assistant Director General, Center for International Forestry Research (CIFOR), Bogor, Indonesia

Statement: The Greenpeace report “Pulping the Planet” purports to be a credible scientific presentation of facts and evidence, supported by many footnotes and an extensive Bibliography. However, from my extensive experience in Indonesia and the forestry and pulp & paper sector internationally, I conclude that the Audit of those claims has been very thorough and that the Greenpeace report is seriously misleading, due to: Misrepresentation of facts; Omissions of important contradictory and/or explanatory materials that are readily available to any serious researcher; and Inclusion of much pejorative material that is irrelevant to their claims;

through a mix of incompetence, ignorance and/or design. Dr R.N Byron, August 26, 2010 Reviewer 2: Dr David F Smith AM (dfsmith@unimelb.edu.aud) Research Fellow School of Agriculture and Food Sciences, University of Melbourne Former Director General of Agriculture (Victoria) Member of the Order of Australia in 1995 Fellowship of the Australian Institute of Agricultural Science (1984) Australian Medal of Agricultural Science (2003)

Statement: 20 August 2010. Statement: I have examined the report of Greenpeace 'Sinar Mas is Pulping the Planet‟, covering the operations and conduct of Asia Pulp and Paper (APP), and studied the analysis of that report.

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Unfortunately, the Greenpeace report is misleading with many errors and imprecisions. In my opinion it is a shabby and careless piece of work. The imprecisions often arise from their failure to appreciate the nature of land-based field work, where mapping and boundaries are often problematic because of the very nature of ecosystems. The field competencies of analysts become very important – easily leading to errors in conclusions. In this case these have been further compounded by inadequate crosschecking of the final document. I believe the audit carried out by ITS Global shows diligence and fairness. (Dr) David F Smith AM

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References
Asian Development Bank and National Development Planning Agency (BAPPENAS) (1998). „Planning for fire prevention and drought management project‟, Asian Development Bank TA 2999-INO July 1998 – March 1999; Logging Residue and Policy implications working paper 4, Jakarta BAPPENAS (2009). Perkembangan Produksi Kayu Bulat/Kayu Bulat Kecil Ipk Propinsi Riau; http://www.bsphh3.go.id/data/perkembangan%20produksi%20ipk.pdf BAPPENAS (2009). Daftar Penyampaian Rencana Pemenuhan Bahan Baku Industri (Rpbbi) Tahun 2009 Industri Kapasitas > 6000 M3/Tahun Provinsi Riau, Kepulauan Riau Dan Sumatera Barat S.D. Bulan Desember 2009 http://www.bsphh3.go.id/data/RPBBI%20K%206000.pdf BSI-CUC (2010). Verifying Greenpeace Claims Case: SMART Chen Kuan-Cheng (2008). The Ethnic Chinese Style of Corporate Innovation, PICMET Proceedings, 27-31 July, Cape Town, South Africa World Resources Institute (2010). Climate Analysis Indicators Tool (CAIT) Version 7.0. Washington, DC. Effendi, E. (2002). Rationalizing the facts: Forest Zone rationalization in the context of local spatial planning and development programs. Paper for the World Bank. Jakarta, Indonesia. FAO (2010). Global forest resources assessment 2010 country report Indonesia. FAO 2010/95. Rome, 2010 Forest Stewardship Council (2007). „Forest Stewardship Council dissociates with Asia Pulp and Paper‟, Forest Stewardship Council Press Release, December Greenpeace (2010). How Sinar Mas is Pulping the Planet. Greenpeace Netherlands Greenpeace (2010). Sinar Mas’ Expanding Empires. Greenpeace Netherlands Albar, G., (Under supervision of Meijaard E.,) Study of orangutan (Pongo pygmaeus morio) densities and distribution in Acacia mangium plantation concessions in East Kalimantan, Indonesian Borneo. OCSP, The Nature Conservancy, University Montpellier Gunneberg, Ben (2010). Letter to Andy Tait, Greenpeace, dated March 10; Gunneberg, Ben (2010). Letter to Andy Tait, Greenpeace, April 22; Gunneberg, Ben (2010). Letter to Andy Tait, Greenpeace, July 2; Gunneberg, Ben (2010). Letter to Greenpeace, July 9 Heino J., (2008). Statement by Jan Heino Assistant Director-General, FAO Forestry Department on behalf of the Collaborative Partnership on Forests (CPF); Forest Day 2 6 December 2008, Poznan, Poland. Kimberley Clark Australia (2010). „Kimberly-Clark is not supplied by Sinar Mas or Asia Pulp and Paper‟, Press Release, 23 July, accessed at http://www.kca.com.au/news/news82.html Linkie M., Wibisono H.T., Martyr D.J. & Sunarto S. (2008). „Panthera tigris ssp. Sumatrae‟ In: IUCN 2010. IUCN Red List of Threatened Species. Version 2010.2. <www.iucnredlist.org>. Downloaded on 12 August 2010.

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Ministry of Forestry (2006). Strategic plan of the ministry of forestry 2005-2009 (REVISED), Jakarta, August. Centre of Forestry Planning and Statistics Forestry Planning Agency; Manggala Wanabakti Building, Block VII, 5 Floor; Jl. Gatot Subroto Jakarta, 10270 Ministry of Forestry (2009). VIII.10. Daftar Proyek/ Program Kerja Sama Luar Negeri (Kln) Di Lingkup Departemen Kehutanan Tahun 2006; Ministry of Forestry and Frankfurt Zoological Society (2009). http://www.dephut.go.id/Halaman/Buku-buku/2007/strategis07/VIII10.pdf Ministry of Forestry (2008). Eksekutif Data Strategis Kehutanan 2007, Departemen Kehutanan, Direktorat Jenderal Bina Produksi Kehutanan (BPK) 2008 Ministry of Forestry (2007). Statistik Kehutanan Indonesia 2006, 2007, Departemen Kehutanan Ministry of Forestry (2003). Keputusan Menteri Kehutanan tentang Penunjukkan Kawasan Hutan dan Perairan; http://www.dephut.go.id/INFORMASI/STATISTIK/Stat2003/Baplan/IV1102.pdf Ministry of Forestry (2010). Laporan Perkembangan Pemanfaatan dan Penggunaan Hutan Produksi Triwulan I (Januari - Maret 2010) Ministry of Forestry / IFCA (2009). REDDI: Reducing Emissions from Deforestation and Forest Degradtion in Indonesia -- REDD Methodology and Strategies MoFor (2008), IFCA 2007 Consolidation Report: Reducing Emissions from Deforestation and Forest Degradation in Indonesia, FORDA Indonesia Murdiyarso, D., Puntodewo, A., Widayati, A. and van Noordwijk, M. (2006). Determination of eligible lands for A/R CDM project activities and of priority districts for project development support in Indonesia. CIFOR, Bogor, Indonesia Oxford Index (2008). APP, Forest Loss and Biodiversity in Jambi. A Review of the 3 Reports Produced by WWF Indonesia in January 2008 Piottoa D., Montagnini F., Ugaldea L., and Kanninena M., (2003) “Performance of forest plantations in small and medium-sized farms in the Atlantic lowlands of Costa Rica”. Forest Ecology and Management. Volume 175, Issues 1-3, Pages 195-204. Pirard R., and Cossalter C., (2006). The Revival of Industrial Forest Plantations in Indonesia’s Kalimantan Provinces - Will they help eliminate fiber shortfalls at Sumatran pulp mills or feed the China market? Working Paper No.37. CIFOR Bogor, Indonsia Potter L., Badcock S., (2001). The Effects of Indonesia’s Decentralisation on Forests and Estate Crops in Riau Province: Case Studies of the Original Districts of Kampar and Indragiri Hulu. CIFOR, Bogor, Indonesia Rainforest Alliance (2007) „Termination of Contract to Verify High Conservation Value Forests (HCVF) for APP in Sumatra, Indonesia‟, Rainforest Alliance Public Statement, January www.rainforest-alliance.org/forestry/documents/app.pdf Republic of Indonesia (2009). Draft Second National Communication under the United Nations Framework Convention on Climate Change: Summary for Policymakers. Jakarta 2009 Republic of Indonesia (1984), Tata Guna Hutan Kesepakatan (Forestry Development Plan) Republic of Indonesia, RI Ministry of Forestry Decree SK.101/Menhut-II/2004 and Government Regulation No. 34/2002

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Republic of Indonesia, RI Ministry of Forestry Decree SK.101/Menhut-II/2004 and Interpretation Ministry of Forestry S.06/MENHUT-VI/2006 regarding acceleration of the development of estate forest to accommodate the raw material requirement for the pulp and paper industry, http://www.euflegt.org/images/reference/law/2004%20SK%20Menhut%20No101%20eng.htm Scotland, N. (2000). Indonesia Country Paper on Illegal Logging. Prepared for the World Bank-WWF Workshop on Control of Illegal Logging in East Asia Jakarta, Department for International Development and WWF. Seidensticker, J. (1986) „Large Carnivores and the Consequences of Habitat Insularization: Ecology and Conservation of Tigers in Indonesia and Bangladesh‟. Pp 1-42 In: Miller, S.D., Everett, D.D. (eds.) Cats of the world: biology, conservation and management. National Wildlife Federation, Washington DC. Setiawan, B. (Prof), (2010) Bogor Agricultural Institute, personal communication, August Seymour, F. (2009) Speech presented at United Nations Food and Agriculture Organisation Committee on Forestry Meeting 19, Rome, Italy, March 17 http://www.fao.org/forestry/media/17189/0/0/ SGS (2010). Letter to CFMEU. Wednesday, 11 February 2009 SGS-TLTV – Verification of Legal Origin LP VLO 0005 (2010), SGS TLTV Statement List, 9 June, http://www.forestry.sgs.com/documents/sgs-tltv-programme-website-summary-08-06-10en-10.pdf SGS-TLTV – Verification of Legal Origin LP VLO 0006 (2010), SGS TLTV Statements List, 9 June, http://www.forestry.sgs.com/documents/sgs-tltv-programme-website-summary-08-06-10en-10.pdf Sitompul A., Pratje P., (eds.) (2009) The Bukit Tigapuluh Ecosystem Conservation Implementation Plan, Bukit Tigapuluh National Park and Frankfurt Zoological Society. Staples (2010). Staples Inc. Sustainable Paper Procurement Policy, last revised January 28 2010 Stecklow S., (2006). 'Environmentalists, Loggers Near Deal on Asian Rainforest'. Wall Street Journal, February 23, 2006 Sunderlin, W.D. and Kesosudamo, I.A.Y. (1996). Rates and Causes of Deforestation in lndonesia: Towards a Resolution of the Ambiguities. Center For International Forestry Research Occasional Paper No. 9. http://www.cifor.cgiar.org/publications/pdf_files/OccPapers/OP-09n.pdf. van der Werf G.R., Morton D.C., DeFries R.S., Olivier J.G.J., Kasibhatla P.S., Jackson R.B., Collatz G.J., and Randerson J.T. (2009). CO2 emissions from forest loss. Nature Geoscience 2: 737– 38 Wahyunto and I Nyoman N. Suryadiputra. (2008). Peatland Distribution in Sumatra and Kalimantanexplanation of its data sets including source of information, accuracy, data constraints and gaps. Wetlands International – Indonesia Programme. Bogor. Woolworths (2009). Corporate Sustainability Report. WWF and Asia Pulp and Paper Co. Ltd (2003), „Letter of Intent between WWF Indonesia, Asia Pulp and Paper Co. Ltd. and its fiber suppliers, the Sinar Mas Group forestry companies‟, 13 February http://www.wwf.or.id/attachments/Letter%20of%20Intent-Final.pdf.

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WWF, The enormous problem of tiger poaching (website accessed August 2010), http://wwf.panda.org/what_we_do/endangered_species/tigers/about_tigers/sumatran_tiger/th reats/poaching/ Ministry of Forestry, Jakarta, Indonesia. Concession licenses (SK) and annual work plans (RKT) cited: PT Arara Abadi, SK Menhut No. : 743/Kpts-II/1996, 25 November 1996; PT Riau Abadi Lestari, SK Menhut No. : 542/Kpts-II/1997, 25 Agustus 1997; PT Satria Perkasa Agung, SK Menhutbun No. : 244/Kpts-II/2000, 22 Agustus 2000; PT Satria Perkasa Agung - KTH Sinar Merawang (partnership) Surat Menhutbun No. : 634/Menhutbun-VI/1999, 16 Juni 1999; PT Satria Perkasa Agung - (Serapung) SK Menhut No. : SK.102/Menhut-II/2006, 11 April 2006; PT Sekato Pratama Makmur, SK. Menhut No. : 366/ Kpts-II/2003, 30 Oktober 2003; PT Bukit Batu Hutani Alam, SK. Menhut No. : 365/Kpts-II/2003, 30 Oktober 2003; PT Dexter Timber PI. - KTH Wana Jaya (partnership), Surat Menhutbun No. : 803/MenhutbunVI/1999, 22 Juli 1999; PT Mitra Hutani Jaya, SK Menhut No. : SK.101/Menhut-II/2006, 11 April 2006; PT Ruas Utama Jaya, SK Menhut No. : SK.46/MENHUT-II/2006, 6 Maret 2006; PT Bina Duta Laksana, SK Menhut No. : SK.207/MENHUT-II/2006, 8 Juni 2006; PT Putra Riau Perkasa, SK Menhut No. : SK.104/Menhut-II/2006, 11 April 2006; PT Perawang Sukses Perkasa Industri; SK Menhut No. : SK. 249/Kpts-II/1998, 27 Pebruari 1998; PT Rimba Rokan Perkasa, SK Menhut No. : SK.554/Menhut-II/2006, 22 Desember 2006; PT Prima Bangun Sukses, SK Menhut No. : SK.553/Menhut-II/2006, 22 Desember 2006; PT Bina Daya Bentala, SK Menhut No. : SK.555/Menhut-II/2006, 22 Desember 2006; PT Rimba Mandau Lestari, SK Menhut No. : SK.552/Menhut-II/2006, 22 Desember 2006; PT Mutiara Sabuk Khatulistiwa, SK Menhut No. : 109/Kpts-II/2000, 29 Desember 2000; PT Suntara Gajapati, SK Menhut No. : 71/Kpts-II/2001, 15 Maret 2001; PT Wirakarya Sakti, SK Menhut No. 346/Menhut-II/2004, 10 September 2004; PT Rimba Hutani Mas, SK Menhut No. 68/Menhut-II/2004, 9 Maret 2004; PT Tebo Multi Agro SK Menhut No. : SK.401/Menhut-II/2006, 19 Juli 2006; PT Sebangun Bumi Andalas, SK Menhut No. : SK. 347/Menhut-II/2004, 10 September 2004; PT Sumber Hijau Permai, SK Menhut No. : SK. 29/Menhut-II/2006, 13 Pebruari 2006; PT Bumi Persada Permai SK Menhut No. : 337/Menhut-II/2004, 7 September 2004; PT Bumi Mekar Hijau, SK Menhut No. : 417/Menhut-II/2004, 10 Oktober 2004; PT Bumi Andalas Permai, SK Menhut No. : 339/Menhut-II/2004, 7 September 2004; PT Finnantara Intiga, SK Menhut No. : 750/Kpts-II/1996, 2 Desember 1996; PT Surya Hutani Jaya, SK. Menhut No. : 156/Kpts-II/1996, 8 April 1996. PT Acacia Andalan Utama, SK. Menhut No. : SK.87/MENHUT-II/2007, 22 Maret 2007; PT Balai Kayang Mandiri, SK Menhut No. : SK.20/Menhut-II/2007, 5 Januari 2007; PT Artelindo Wiratama, SK Menhut No. : SK.122/Menhut-II/2007, 2 April 2007, PT. Dalek Hutani Esa, 586/Kpts-VI/1999 (approved 29-07-1999; 52,480ha) PT. Hatma Hutani, 593/Kpts-VI/1999 (26-02-1998, 41.000ha); PT. Rimba Hutani Mas sk.461/Menhut-VI/2008 tanggal 12 Desember 2008 PT Artelindo Wiratama, SK Menhut No. : SK.122/Menhut-II/2007, 2 April 2007; SK. 04/BPHT-3/2009, 27 March 2009; MKS RKT 15/BPHT-3/2009, dated April 15 2009; RKT: Kpts/522.2/Pemhut/3591

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