Pulp giant allegedly tied to firms linked to fires
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