Plantations, poverty and power - Critical Information Collective

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those studies and sales contracts in Indonesia in the 80s gave me a great insight into the industry, the
region and the country. I’ve learned the language. It has been a very fruitful time.” 400
Once the Widjaya (Sinar Mas Group, including APP) and Tanoto (RGM International Group, including
APRIL) families started investing in the pulp and paper industry, the boom arrived and Pöyry was well
placed to benefit. Having recommended the construction of several massive pulp projects, Pöyry won
contracts to design and build these pulp mills. Pöyry won contracts to work on the Indorayan, Indah Kiat,
Riau Andalan and PT-TEL pulp mills in Sumatra. “Pöyry has provided consulting and engineering
services for the [RGM International] Group since 1983, including complete development of their pulp
operations in Sumatra,” boasts Pöyry. 401
As described above (see section on APP), the impact on the forests of Sumatra of these massive pulp and
paper projects has been devastating. WWF estimates that APP, which runs the Indah Kiat pulp and paper
mill, is responsible for 80,000 hectares of deforestation every year. Pollution from the pulp mills has
caused serious skin diseases for villagers living downstream of the mills. Villagers rely on the water from
the river for washing and previously for drinking.
Pöyry won at least 10 contracts from Indah Kiat in the ten years after 1987 when Pöyry carried out a
contract to produce a preliminary study for a pulp mill in Sumatra. Pöyry’s involvement continued with a
plan for establishing fast growing tree plantations, technical assistance for the pulp mill, assistance with
the nursery and plantation establishment and technical studies on the machinery used at the mill. 402
Indah Kiat has missed several targets for running the mill entirely on plantation wood. According to a
1993 article in Pulp and Paper International, Indah Kiat was to run on plantation wood by 1998. 403 In
fact, Indah Kiat still uses timber from rainforests to keep its pulp mills running. In March 2007, APP
announced plans to expand production in Sumatra by 800,000 tons a year by the end of 2007, meaning
that the destruction of the rainforests will continue.
Jouko Virta set up Jaakko Pöyry’s Jakarta office in 1983. He was project leader on a contract that Pöyry
won from the World Bank in the early 1980s, aimed at “strengthening the structure of the Indonesian pulp
and paper industry.” I interviewed Virta in 1996. He was then based in England and was the chairman of
Jaakko Pöyry Consulting. I asked him how he felt about the way the rate of deforestation in Sumatra had
increased dramatically since the pulp mills started up. He laughed and told me not to worry about
deforestation when the forests would be replaced by acacia plantations. To Virta, there is no difference
between Sumatra’s massively biodiverse lowland rainforests that provided habitat for hundreds of species
and livelihoods for local communities and an acacia monoculture that does neither. 404
Pöyry’s New Zealand subsidiary, Groome Pöyry, won another contract with the Asian Development
400 Floyd Cowan (no date) “Pekka Hemmi’s Nordic Adventures in Asia Pacific”, Asia Paper Markets.
http://203.81.45.43:8080/apm/apm/common/interviews_arch12.jsp
401 “A glance at Asia”, Know-How Wire, Pöyry Magazine, 1/2007.
402 Pöyry (no date) “Experience in Asia Pacific”, Jaakko Pöyry International, 2-7(10).
403 R.A. Pappens (1993) “Sinar Mas: Growth won’t stop at home”, Pulp and Paper International, Vol. 35, No. 8, August
1993, page 21.
404 The interview was carried out as part of the research for my MSc thesis: see Chris Lang (1996) “Reforestation in
Vietnam in the context of the globalization of the pulp and paper industry”, MSc thesis, Oxford Forestry Institute, Oxford
University, September 1996. http://chrislang.org/1996/09/09/the-globalization-of-the-pulp-and-paper-industry-introduction/