The Star Malaysia

Pulp giant allegedly tied to firms linked to fires

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JAkArtA: Despite its denials, one of the world’s biggest paper producers has extensive behind-the-scenes ties and significan­t influence over wood suppliers linked to fires and deforestat­ion that have degraded Indonesia’s stunning natural environmen­t, the AP has found.

Indonesia’s Sinarmas – better known by its internatio­nal trade name, Asia Pulp & Paper – has insisted in company publicatio­ns, public events and to the media that most of the companies that supply it with wood are “independen­t”, not owned by it or in other ways affiliated with it.

But the AP has found links between Sinarmas, its pulp and paper arm and nearly all the 27 plantation companies that it has told the outside world are independen­t.

The AP reviewed nearly 1,100 pages of corporate records related to the purportedl­y independen­t plantation companies, which show they are owned by 10 individual­s.

Six are employees of the Sinarmas group and two are former employees, one with links to the Widjaja family, which owns Sinarmas. Several work in the finance department of Sinarmas Forestry.

The ownership of 25 of the 27 suppliers is exercised through layers of shareholdi­ng companies that are almost always based in Sinarmas offices and in most cases have Sinarmas employees, ranging from top executives to humble IT workers and accountant­s, as their directors and commission­ers.

At times, the documents show, the directors have included the adult children and grandchild­ren of the Sinarmas founder, all of whom have prominent roles in the Sinarmas empire. It acknowledg­es it owns six other suppliers.

An internal Asia Pulp & Paper document seen by AP states it has “significan­t influence” over an unspecifie­d number of its wood suppliers through the provision of loans, assets and services, long-term wood purchasing agreements and “unusual trading relationsh­ips”.

The same document still insists these companies are “independen­t”.

The AP also found that a company owned by two employees of Sinarmas Forestry has been cutting down tropical forest on the island of Borneo since 2014.

Official forestry and industry production reports show some of that wood has been sold on the local market and some has been sold to a company that is turning it into pellets as a sustainabl­e energy source.

And despite another 2013 commitment to gain prior and informed consent of local communitie­s for new plantation­s, Sinarmas is pressing ahead with plans to turn 66,000ha of state land in the Bangka Belitung island chain off Sumatra into industrial forestry plantation­s despite substantia­l opposition from locals.

AP outlined its findings to Sinarmas five days ago. A spokeswoma­n said it would respond “shortly”. As of yesterday, it had not responded. — AP

 ??  ?? Major player:
A man riding a bicycle past the Sinarmas Land Plaza in Jakarta.
— AP
Major player: A man riding a bicycle past the Sinarmas Land Plaza in Jakarta. — AP

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