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Warning to Financiers - Don't Fund Forest Destruction

Press Information From The European Environmental Paper Network (EEPN)

FOR IMMEDIATE RELEASE - Tuesday 6 November 2012

Warning to Financiers - Don't Fund Forest Destruction

Financial institutions have been warned today to avoid investments in pulp and paper mills associated with deforestation and human rights abuses in Indonesia. Sixty environmental and social non-governmental organisations, including a dozen Indonesian civil society groups, have sent letters to banks and other financial institutions around the world asking for assurances that they will not invest in increased pulp milling capacity by Asia Pulp and Paper (APP) or other companies associated with the Sinar Mas Group until reforms have been achieved.

Three representatives from Indonesian social and environmental NGOs that are signatories to the letter will travel to Europe this week to meet with investors, governments, NGOs and media in eight countries. They will present information on the social and environmental impacts of APP and other Indonesian pulp and paper manufacturers.

Aidil Fitri, who will travel to Europe to represent Yayasan Wahana Bumi Hijau, said, 'In South Sumatra APP is destroying natural peat lands forest, which is a living place for Sumatran tigers. In Jambi, Sumatra, APP has caused the loss of livelihood resources of thousands of local people. In Riau, Sumatra, APP is strongly indicated to have links with an illegal logging scandal and is currently being investigated by the Ministry of Environment.'

Asia Pulp and Paper (APP) is one of the world's most controversial pulp and paper companies. It is reported to be planning a new pulp mill in Sumatra, Indonesia where the company is estimated to have already pulped more than two million hectares of natural forests. This new mill would produce between 1.5 and 2.0 million tonnes per year of bleached hardwood pulp, making it the largest single pulp line in the world.

The letter highlights APP's past failures to honour its environmental covenants and to fulfil its financial obligations to investors. It also points to the loss of market confidence in APP, signaled by the loss of a number of high-profile customers (such as Staples, Office Depot, Hasbro, Mattel, Unilever, Nestle, Danone, Xerox and Mondi) as a result of concerns about its deforestation practices, community conflicts and the business and reputational risk to buyers.

Sergio Baffoni, Indonesian Forests Campaign Co-ordinator for EEPN, said, 'APP's hunger for fibre for cheap paper already leads them to unsustainable and legally questionable deforestation. Expansion of their pulp capacity will inevitably involve conversion of more and more rainforests into plantations, endangering species, violating local peoples’ rights and accelerating climate disaster.'

Bustar Maitar of Greenpeace International said, 'Asia Pulp & Paper's repeated promises to become sustainable have been proven greenwash time and time again. Financial institutions should not be involved in APPs' deforestation in Indonesia.'


Notes for editors

1. The European Environmental Paper Network (EEPN) is a coalition of 64 environmental and social NGOs in 24 countries that share a common vision for transforming the European paper industry to become ethical and sustainable.

2. The letter has been delivered to banks and investors in Indonesia, China, Japan, USA, South Africa, Switzerland, Germany, France, Austria, Taiwan, Australia and Sweden and published on the EEPN's website:

Forest Peoples Programme


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