UPM-Kymmene and APRIL in Indonesia

DESTRUCTION OF RAINFORESTS AND CONFLICTS OVER LAND

In September 1997 UPM-Kymmene, the third largest paper company in the world, announced an alliance with the Indonesian pulp manufacturer APRIL with the aim of integrating the fine paper operations of the two companies.

The decision of UPM-Kymmene was immediately criticised by environmental citizens' organisations through the world because APRIL's pulp operations in Sumatra had caused irreversible environmental damage, violated basic human rights of the local communities and upheld the oppressive regime of Suharto. Despite the protests, UPM-Kymmene has gone ahead with the co-operation.

Although UPM-Kymmene has introduced some minor improvements in the field operations of the APRIL's Riau mill in Sumatra, the problems are far from being solved. The companies are planning to double pulp production which will accelerate the land conflicts and increase the loss of valuable rainforest habitats. Moreover, by being the first western paper company that is directly involved in clear-cutting natural rainforests, UPM-Kymmene has set an alarming precedent that will most likely increase unsustainable pulp and paper investment in the South.

WHAT IS WRONG WITH APRIL'S RIAU MILLS?

The clear-cutting of at least 100.000 ha of natural rainforests destroys numerous valuable habitats of endangered plant and animal species.

Tropical rainforests host most of the species on earth. As rainforests are destroyed at an alarming rate, they have also become the fragile hosts of most of earth's endangered species. Indonesia is one of the most important tropical countries - the most important in Asia - still having large tracts of original rainforest left. However, Indonesia is losing its forest cover at an unprecedented rate. The deforestation is most rapid on the island of Sumatra, main causes being the expansion of agriculture and industrial exploitation aggressively promoted by the Indonesian government. Lowland rainforests in Sumatra are seen as one of the most endangered habitats in South-East Asia.

APRIL's concessions are mostly lowland and swamp rainforests, the most species-rich ecosystems on earth. The majority of APRIL's forests have been previously selectively logged, i.e. largest trees have been cut for timber. Although some of the species are lost already then, these logged-over forests are nevertheless an important habitat for many endangered species. Because of APRIL's clear-cutting thousands of plants and animals - including endangered timber trees, Sumatran tiger and elephant - loose an important part of their habitat and are driven closer to extinction. They can not survive in the remaining fragments. Part of APRIL's concessions were listed by the World Resources Institute as one of Sumatra's three remaining frontier forest areas, a large, unfragmented forest area capable of preserving ecological functions of forest if left standing intact.

The companies violate the rights of the local communities living by the mill and in the concession areas

In Indonesia local communities have had very weak rights to their customary land and livelihood, although there are legal provisions for this. In the case of APRIL's pulp mill in Riau there have been numerous conflicts where local communities have demanded their land rights in areas assigned as APRIL's concessions. In the estate where the mill was built in 1993 three villages have been severely affected: Sering, Kerinchi and Delik. Their determined protests have lead to some compensations, but the conflict of interest has not been settled.

Also in the forest concession areas there are continuous and escalating conflicts because village land is being logged and planted with acacia. There are over 50 000 ha of land where local communities have laid claims to RAPP. In reality this area may be greater because not all cases are noticed until the logging operations start.

In many cases the villages have lost trust in the formal process and staged demonstrations to advance their rightful demands. These have been met with oppression by the Indonesian state and by APRIL's personnel. For example in July 1998 Mr. Rasyid of Lubuk Jambi village was stabbed to death by a member of APRIL staff in the course of a demonstration. In October 1997 the road block of Delik villagers was violently broken up by special mobile police unit called by APRIL and the legal advisor of the villagers, Mr. Marganti Manalu was arrested. Later he was convicted under a clause typically used for political activists.

The question in Riau is not just right to land but right to culture and livelihood. The dramatic changes in the material and symbolic world of the communities are forced upon them by the mill very rapidly. After having lost a central part of their culture, the forest, many of the traditionally living communities in Riau find it hard to seek their material living or preserve their culture.

 

THE ROLE OF UPM-KYMMENE

By being the first Western paper company that is directly involved in clear-cutting natural rainforests UPM-Kymmene has dramatically lowered international environmental standards

The announcement of UPM-Kymmene's investment in Indonesia was a shock to the global environmental community because until then no international paper company had engaged in the destruction of rainforests for pulp and paper. For example in the mid '90s German paper companies and main publishers had agreed with environmental organisations that they would not use rainforest wood in their productions. Earlier in 1989 Scott Paper withdrew from a pulp project in Indonesia due to vocal protests. By co-operating with APRIL UPM-Kymmene has contravened the western practice of not pulping rainforests. It is leading a way for the increasing exploitation of threatened tropical forests and forest dependent communities.

In Indonesia, as well as in many other countries with tropical forests, there are numerous plans for pulp and paper development. So far they have been pending for the want of finance and know-how. With UPM-Kymmene now proclaiming that there is nothing wrong in pulping rainforests, which are invaluable to local communities, there is a great risk that others will follow suit. This would lead fast to increased logging and alienation of land for pulp and paper by international forests corporations.

Similarly, UPM-Kymmene created a new situation by marketing the paper of APRIL in Europe. In 1998 APRIL and UPM-Kymmene agreed that UPM-Kymmene would take care of the sales of APRIL's fine paper in Europe. The brand name for the photo-copy standard is PaperOne and it is made, as said before, from clear-cut natural rainforests harvested from lands that, according to customary law, may belong to local communities. In October 1999 the companies announced that UPM-Kymmene will discontinue the sales of APRIL's paper.

The improvements in the practices of APRIL induced by UPM-Kymmene are insignificant

One of the main arguments of UPM-Kymmene in favour of joining APRIL in rainforest-based pulp and paper production is that it will help APRIL to improve its environmental and social practices. This appears to be a reasonable statement but does not stand up to critical examination. The concept of APRIL is based on clear-cutting natural rainforests which in Riau means serious and irreversible loss of valuable habitats. The only way to prevent the loss would be to reduce the capacity of the mill and to establish the plantations to some already cleared areas. However, the companies are determined to double the output of the pulp mill and open new areas for clear-cutting thus accelerating the environmental destruction. Furthermore the companies have failed to demonstrate commitment to the rights of the local communities. After the announcement of the alliance the conflicts with villagers have continued and even intensified.

 

KEY ISSUES

Will APRIL and UPM-K expand the capacity of Riaupulp and increase destruction?

One way for UPM-Kymmene and APRIL to demonstrate some commitment to their environmental and social policies would be to halt the expansion of pulp capacity in Riau until the land claims of local communities have been sorted out and the ways to protect the valuable habitats have been established. However, in August 1999 APRIL reported that "APRIL remains committed to increasing Riaupulp's capacity to 2 million tonnes". The scheme shows total neglect of the environmental and social policies of the companies. Moreover, according to an audit made by SGS the current concession will be sufficient to produce not more than 1.215.000 tonnes.

Will the land rights of the people be recognised?

There are numerous genuine claims by the local people to the lands APRIL is clear-cutting or using for infrastructure. So far many of the local demands have been met with disregard or outright oppression. As long as APRIL and UPM-Kymmene refuse to recognise the customary land rights of the local communities there will be both local and international resistance towards the operations.

How deeply UPM-Kymmene gets involved in APRIL's operations in Sumatra?

In September 1999 UPM-Kymmene and APRIL announced that the alliance will not be formed as planned, because APRIL could not construct the third paper mill agreed for the swap of shares. However, during the two years UPM-Kymmene had invested 49 % share in the Suzhou paper mill jointly owned with APRIL and using pulp from the Riau mill. Moreover, to rescue APRIL from ever deepening financial problems UPM-Kymmene has provided the company with USD 121 million loan to Riaupulp which UPM-Kymmene can transfer to an equity stake of the mill.

DEMANDS BY CITIZENS' ORGANISATIONS

In December 1997 more than thirty environmental citizens' organisations around the world demanded that UPM-Kymmene cancel the alliance with APRIL unless and until it stops clear-cutting natural forests, recognises the rights of the local communities and allows organising of its workers. The signatories of the letter included SKEPHI from Indonesia, national associations of Friends of the Earth and Greenpeace and World Rainforest Movement.

In 1999 the demands were formulated again and more organisations have joined to support them: UPM-Kymmene should withdraw from its alliance and abstain from any co-operation with APRIL until it

• stops clear-cutting of natural forests
• gets a permit from local communities, including hunters and gatherers that are hard to reach, for planting open areas or already destroyed areas
• compensates losses from past logging and construction of infrastructure to local communities

MORE INFORMATION AND CONTACTS

Web sites:
FoE Finland's site on UPM/APRIL at http://www.maanystavat.fi/april
World Rainforest Movement at http://www.wrm.org.uy
Down to Earth at http://www.gn.apc.org/dte

Newsletter:
Down to Earth by the International Campaign for Ecological Justice in Indonesia. It can be ordered from Down to Earth, dte@gn.apc.org, tel/fax +44 171 732 7984.

Book:
A good compilation of environmental as well as social problems related to paper industry in the south is a book by Ricardo Carrere and Larry Lohmann: Pulping the South. Industrial Tree Plantations and the World Paper Economy. London: Zed Books 1996.

Note:
The information in this brochure is as of October 1999, do visit the web site above for updated information.