FSC must terminate negotiations with paper giant APRIL over its continued links to deforestation

• A decade since it cut ties with Indonesian pulp and paper producer APRIL over rampant deforestation in its supply chains, the Forest Stewardship Council (FSC) is now in talks with the company to rejoin the certification scheme through a process supposed to remedy past harms
• This is despite appeals from NGOs to suspend the process in light of mounting evidence implicating APRIL’s parent company, Indonesian conglomerate Royal Golden Eagle (RGE), in major ongoing deforestation and conflict with communities
• Fresh reports in 2024 allege that RGE operates a network of ‘shadow companies’ that includes some of the top deforesters in Indonesia’s plantation wood sector, and that Apical, its oil palm subsidiary, has been sourcing palm oil fruits illegally grown on land deforested in a protected wildlife reserve
• FSC policy states that if a company within a corporate group engages in deforestation or rights abuses, any other company in that group is prevented from receiving FSC certification
• In June 2024, an NGO coalition wrote to FSC calling for a suspension to the remedy process with APRIL, but FSC’s website indicates that the process is still underway
• Earthsight and Auriga Nusantara once again call on FSC to immediately terminate the remedy process with APRIL, at least until the supply chains of all RGE-owned and linked companies are deforestation-free, recently destroyed forest restored, and conflicts with local communities resolved
  

Over a decade ago, the Forest Stewardship Council (FSC) banned Asia Pacific Resources International Holdings Ltd (APRIL), one of the world’s largest pulp and paper producers, from using its trademark logo after NGOs revealed it had destroyed vast areas of natural forest in Indonesia and violated the rights of indigenous and local communities. Now, FSC is engaging with APRIL through its ‘Remedy Framework’ process, which could end the certification body’s dissociation with the company and allow APRIL to market its paper products as sustainable. 

This is despite mounting evidence of environmental and human rights abuses perpetrated by APRIL’s parent company Royal Golden Eagle (RGE) via a system of ‘shadow companies’, which RGE denies it controls. RGE is an Indonesian conglomerate based in Singapore with businesses in the palm oil, construction and energy sectors. Two new reports published this year show that companies linked to RGE continue to clear vast areas of forest and profit from the resulting timber. As such, FSC must immediately terminate its remedy process with APRIL – anything less amounts to greenwashing on an industrial scale. 

APRIL is Indonesia’s second largest pulp and paper producer, with major export markets including the EU, UK, and US. When APRIL began commercial pulp production in Sumatra’s Riau province in 1995, much of its wood was sourced from the clearing of natural forests. By the early 2000s, APRIL claimed to have been granted concession rights over 330,000 hectares (ha) of land across Indonesia, and by mid-2004, more than 137,000ha of this had been cleared of natural vegetation and transformed into fast-growing monoculture timber plantations. In 2013, after complaints from NGOs over its rampant deforestation and human rights violations, FSC disassociated from APRIL.

APRIL adopted a ‘Sustainable Forest Management Policy’ in January 2014, but NGO field reports and independent audits over the following year revealed major breaches of the new policy, with deforestation continuing in APRIL’s supplier concessions and conflict with local communities going unresolved. Nevertheless, APRIL approached FSC with a request to end dissociation with the certification body, and in 2016 FSC initiated a formal dialogue with APRIL over regaining certification. In November 2023, APRIL and FSC signed a Remedy Framework Agreement, with the company committing to resolve conflicts with local communities and prohibit deforestation across its corporate group. 

FSC’s Policy for Association states that for a company to be FSC-certified, no companies in that corporate group (so in APRIL’s case, under the RGE umbrella) can engage in ‘unacceptable activities’ including deforestation or violation of traditional or workers’ rights.

Yet all the while, companies linked to RGE have continued to drive and profit from the very worst cases of deforestation in Indonesia. Leading this list is PT Mayawana Persada, which operates a 138,809ha concession in West Kalimantan. Since 2021, the company has cleared over 33,000ha of natural forest – an area nearly half the size of Singapore – to establish monoculture pulpwood plantations, driving conflict with local indigenous Dayak communities, creating immense carbon emissions and destroying the habitat of critically endangered species like the Bornean orangutan.

A March 2024 report by Auriga Nusantara, Environmental Paper Network, Greenpeace, Woods & Wayside and Rainforest Action Network detailed numerous operational, personnel and supply chain links between RGE and Mayawana Persada, as well as to a plywood mill called PT Asia Forestama Raya, which received 24,231 m³ of logs from forest clearance in Mayawana Persada in 2022-23 (representing the vast majority of its timber supply). Sukanto Tanoto, founder and chairman of RGE, maintained majority ownership of Asia Forestama Raya via a holding company until July 2023, when his shares were transferred to a company domiciled in secrecy jurisdiction the British Virgin Islands (which was in turn linked to RGE through the International Consortium of Investigative Journalists’ Offshore Leaks database).

RGE has publicly denied any affiliation with Mayawana Persada. In its response to the NGO report’s findings the company did not deny its relationship with Asia Forestama Raya or dispute any of the evidence behind the allegations. While a ‘stop work’ order issued to Mayawna Persada by the Indonesian government in April 2024 has halted deforestation in the concession, it only offers temporary respite. The indisputable links between RGE and the trade of timber from Mayawana Persada point to RGE’s complicity in driving the very environmental and social harms it has committed to resolve through the FSC’s remedy process.

In June 2024, a coalition of NGOs including Earthsight, Auriga Nusantara, Environmental Paper Network, Greenpeace, Woods & Wayside and Rainforest Action Network wrote to FSC demanding the immediate suspension of its remedy process with APRIL, referring to the wealth of published evidence connecting RGE with ongoing deforestation and social conflicts. In its response, FSC stated that it would conduct a review of RGE’s corporate structure as part of its standard remedy framework, but did not commit to any specific or immediate actions in response to the evidence presented. 

In the months since, as FSC has continued dialogue with APRIL, further allegations of RGE operating a network of ‘shadow companies’ through which it evades its own sustainability commitments have emerged. In an October 2024 investigation by The Gecko Project, insider testimonies allege that six pulp and paper companies forming the ‘shadow group’ PT Borneo Hijau Lestari are in fact controlled by RGE. The companies that make up the group have consistently ranked among the top deforesters in Indonesia’s plantation wood sector, including PT Industrial Forest Plantation, which cleared almost 22,000ha of forest between 2016-2022. RGE has denied that the companies are under its control.

Nor is RGE’s complicity in deforestation restricted to the paper industry. Just last month, a report by Rainforest Action Network revealed that a mill supplying Apical (RGE’s palm oil subsidiary) has been sourcing palm oil fruits illegally grown on land deforested in the protected Rawa Singkil Wildlife Reserve, a globally important biodiversity hotspot in Sumatra’s Leuser Ecosystem, home to the densest population of Sumatran orangutans on the planet. Apical has reportedly committed to investigating the allegations.

In light of mounting evidence, Earthsight and Auriga Nusantara once again call on FSC to terminate the remedy process with APRIL, at the very least until deforestation and rights abuses are halted and properly resolved across the entire RGE corporate group, including its network of shadow companies. Continuing talks with APRIL to rejoin the certification body would amount to FSC’s complicity in one of the most egregious cases of corporate greenwashing ever seen in Indonesia.