An open letter signed by 60 non-government organisations (NGOs) has been sent to investors in Asia Pulp and Paper (APP) urging them not to back the controversial Indonesian company.
The letter, which was sent to banks and financial institutions in 12 countries on Monday (5 November), asks funders to "carefully screen any pulp industry investment projects related to Indonesia, particularly those of companies associated with the Sinar Mas Group, notably APP".
Indonesian and trade press reports that APP is planning to build a new pulp mill in Sumatra have heightened concerns amongst NGOs including WWF and Greenpeace, the letter states.
The reports have claimed that the proposed mill will be one of the largest in the world, with an annual production capacity of up to 2m tonnes.
According to a Sumatran-based NGO coalition, Eyes on the Forest, APP has pulped an estimated 2m hectares of Sumatran tropical forest since it began production there in 1984. Additional deforestation in the region would threaten indigenous communities and endangered animals, the letter claims.
Jacek Siwek, APP's director of sustainability and stakeholder engagement in Europe, would not comment on upcoming investment plans. He said: "It is concerning to be confronted with allegations which do not take into account our commitments."
Yesterday, APP’s managing director Aida Greenbury wrote to stakeholders in response to the NGO letter to "set the record straight" on the company’s environmental strategy. She highlighted APP’s participation in the High Conservation Value Forest (HCVF) protection scheme and its commitment to be entirely reliant on sustainable pulpwood plantations by 2015.
However the NGO letter stated: "APP has put considerable resources into trumpeting its sustainability credentials, but this campaign has been undercut by the company’s failure to meet its own publicised commitments."
Siwek said that APP’s HCVF commitment had set a "benchmark" for other Indonesian companies and the wider pulp sector and was confident that potential investors would form their own opinions on the company.
He added: "I believe the financial institutions will look at the facts when making decisions and in our case the facts speak for themselves."
It is not the first time NGOs have raised a high profile complaint against the controversial pulp supplier. In May, Greenpeace reported finding endangered ramin logs in APP’s supply chain, although APP was cleared of any wrongdoing by the Indonesian Ministry of Forestry.