Plantations, poverty and power - Critical Information Collective

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Indah Kiat, Asia Pulp and Paper, Indonesia: Deforestation, debt and destruction of livelihoods
In the late 1980s, the province of Riau in central Sumatra was 80 per cent covered in forest. Today, only
30 per cent is left. “The main driver of deforestation and peat-bog draining here is the voracious appetite
for timber, and the big players are two giant pulp mill owners”, reports Fred Pearce in New Scientist
magazine. “One company is Asia Pacific Resources International (APRIL), part of RGM International, an
empire owned by Singapore-based magnate Sukanto Tanoto. APRIL’s rival is the Sinar Mas Group
dynasty founded by Eka Tjipta Widjaja, which owns Asia Paper and Pulp (APP).” 232
APP boasts on its website that it is the largest pulp and paper producer in Asia outside Japan. 233 APP’s
products include printing and writing papers, coated and uncoated sheets, photocopy paper, stationery,
carbonless paper and tissue paper products. 234 Although APP doesn’t say this on its website, the company
is also one of the most controversial and destructive pulp and paper companies on the planet.
Construction of APP’s Indah Kiat pulp mill started in 1994. At the time, it was the largest single-line pulp
mill in the world. In the previously small village of Kerinci, four thousand Indonesians worked day and
night to build the mill. The pulp mill was designed by the Finnish consulting firm Jaakko Pöyry. A soda
boiler was supplied by Finland’s Tampella. More machinery came from Finland’s Kone, Valmet,
Ahlstrom, Sunds Rauma and Outukumpu, Sweden’s Sunds Defibrator, Noss and Asea Brown Boveri
Flakt; Japan’s Mitsubishi Heavy Industries and Nippon Sanso; Canada’s Chemetics and Bailey; the
USA’s Cranston and Solarturbines; Germany’s Siemens and Voith; Britain’s ICI; Taiwan’s Teco; and
India’s Ion Exchange. 235
Today, APP’s Indah Kiat pulp mill has a capacity of 2 million tonnes a year. Indah Kiat also has a 1.5
million tonnes a year paper mill. Since starting operations in Sumatra in the 1980s, WWF estimates that
APP has pulped about one million hectares of natural forest in Riau province. 236
APP is ultimately owned by the Widjaja family, one of Indonesia’s largest business families, through a
complex series of shareholdings. 237 The man who established the Sinar Mas Group, Eka Tjipta Widjaja,
was the fifth richest business person in Indonesia in 2007, according to Forbes magazine. 238 Apart from
pulp and paper the Sinar Mas Group is involved in agribusiness (including palm oil – another massively
destructive plantation crop), property and finance. In 1990, Eka Tjipta Widjaja was reported as saying,
232 Fred Pearce (2007) “Bog barons: Indonesia’s carbon catastrophe”, New Scientist, 1 December 2007.
http://www.newscientist.com/channel/opinion/mg19626321.600-bog-barons-indonesias-carbon-catastrophe.html
233 APP website http://www.asiapulppaper.com/
234 Romain Pirard and Rofikoh Rokhim (2006) “Asia Pulp & Paper Indonesia: The business rationale that led to forest
degradation and financial collapse ”, CIFOR, Working Paper No. 33.
http://www.robinwood.de/german/trowa/sumatra/appcifor2006.pdf
235 Ricardo Carrere and Larry Lohmann (1996) Pulping the South: Industrial Tree Plantations in the World Paper
Economy, Zed Books, page 211.
236 “Asia Pulp & Paper (APP) Hiding Destruction Behind False Advertisements: APP continues to ignore calls for
conservation beyond ‘legal compliance’, and even fails on the latter”, WWF Monitoring Brief October 2006.
http://www.wwf.or.id/index.phpfuseaction=newsroom.detail&id=NWS1161151678&language=e
237 Romain Pirard and Rofikoh Rokhim (2006) “Asia Pulp & Paper Indonesia: The business rationale that led to forest
degradation and financial collapse ”, CIFOR, Working Paper No. 33, page 2.
http://www.robinwood.de/german/trowa/sumatra/appcifor2006.pdf
238 “#5 Eka Tjipta Widjaja & family”, Forbes, 13 December 2007.
http://www.forbes.com/lists/2007/80/07indonesia_Eka-Tjipta-Widjaja-family_EGES.html