Koalisi Anti Mafia Hutan published Removing the Corporate Mask
May 30, 2018, Koalisi Anti Mafia Hutan published Removing the Corporate Mask, a report showing that 24 of APP’s 27 wood suppliers it described as “independent” in fact had links through managament and ownership to APP and Sinar Mas.
This report also examined the corporate ownership structure of APP/Sinar Mas, finding that 20 offshore companies in tax haven jurisdictions were involved.
One day later, APP issued a press release responding to Removing the Corporate Mask report
One day later, APP issued apress releaseresponding to Removing the Corporate Mask report.
It stated that APP would involve an independent auditor to review possible linkages with all forestry businesses in Indonesia.
Deforestation-tainted wood entered APP’s industry
While APP/Sinar Mas had yet to report any progress on this review, on August 5, 2018 Koalisi Anti Mafia Hutan found that a supply of deforestation-tainted wood entered APP’s industry at its Indah Kiat Pulp & Paper Mill in Riau, Sumatra from the concession of PT Fajar Surya Swadaya (FSS) in East Kalimantan.
APP confirmed this finding and said the purchase of wood was an “administrative lapse”. It acknowledged using some of the wood to make pallets and as fuel for its boilers.
This is not in accordance with APP’s “zero deforestation” commitment.
APP denied ownership or control of SBSA
In the above finding, Koalisi Anti Mafia Hutan indicated that another mill affiliated with APP/Sinar Mas, PT Sarana Bina Semesta Alam (SBSA), a wood chip mill in East Kalimantan, received wood as well from PT Fajar Surya Swadaya. PT SBSA also bought wood from the clearance of tropical rainforests from PT Silva Rimba Lestari.
In March 2019, seven months later, APP acknowledges it has “significant control” over its “partner” PT SBSA.
the Forest Stewardship Council (FSC) suspended the roadmap process to end APP’s disassociation
On August 16, 2018, the Forest Stewardship Council (FSC) suspended the roadmap process to end APP’s disassociation, citing concerns regarding APP’s corporate structure and links to unacceptable forest management activities.
APP published a report regarding its relationship to HTI (pulpwood plantation) companies in Indonesia
But it does not cover the entire corporate structure of APP. Nor is it transparent about APP’s relationship with companies that destroy forest and peatlands.
The Koalisi Anti Mafia Hutan again encourages APP/Sinar Mas to comply with Presidential Regulation 13/2018 on beneficial ownership of suppliers in Indonesia, and to be transparent about all companies under its control globally. In addition, APP/Sinar Mas should release audited financial reports of its “partner” pulpwood suppliers.