Archived press release

Rainforest paper floods UK market

26 June 2001

Friends of the Earth released a report today, Paper Tiger, Hidden Dragons, which finds that cheap Indonesian paper sourced by clear cutting wildlife rich Indonesian rainforest is flooding into the UK. It is estimated that this paper has now entered over half the UK stationary supply chain.

The source of the paper is Asia Pulp & Paper (APP), one of the world's biggest and most destructive paper companies. A lengthy investigation by Friends of the Earth reveals that many of the UK's biggest paper distributors, including Spicers, Kingsfield Heath and Robert Horne, which claims to be 'the UK's leading paper merchant', are buying paper from APP.

Detailed financial analysis of APP by Friends of the Earth also reveals that UK financial institutions have played a major part in funding APP's activities.See footnote 1.

They include Barclays and NatWest which have helped arrange loans of over a billion dollars to APP and its subsidiaries. Over 300 other international financial institutions are named and shamed by Friends of the Earth as funding APP's destructive operations.See footnote 2

Indonesia's rainforests are some of richest in the world and are home to countless species of endangered wildlife, including the Asian elephant, Sumatran tiger, Sumatran rhino and orangutan. Over 72% of Indonesia's forests have now been destroyed and according to a recent study by the World Bank, the Indonesian deforestation rate has reached 2 million hectares / year. This is equivalent to an area of forest the size of Belgium being lost each year.

The APP paper is mostly un-branded or re-branded by British paper companies. As a result, it is being passed on to millions of innocent UK consumers who are given no information about its destructive origin. It is not clear whether, or to what extent, the UK paper merchants are aware of APP's damaging operations.

APP's main subsidiary, Indah Kiat, has destroyed at least 287,000 hectares of rainforest and in 2000 sourced 75% of its logs by clear cutting forests. The Indonesian pulp and paper industry generally is also accused of sourcing 40% of its timber from illegal sources.

APP is also at the centre of a number of conflicts with indigenous communities. APP is reported to have cleared over 3000 hectares of forest belonging to the Sakai indigenous people in Sumatra. It is reported that on 3 February 2001, employees of APP's main logging company, were involved in serious clashes with Sakai villagers. According to those reports at least five villagers were injured, two seriously and 52 people were detained by the company before being temporarily handed over to the local police.

APP is involved in another highly damaging pulp and paper operation, Borneo Pulp &Paper, in Sarawak, Malaysia. The plantation project, which has been given access to more than 600,000 hectares of forest, may force up to 20,000 Iban indigenous people off their land.

Friends of the Earth is calling on the Government to make it illegal to import and sell any timber or paper products in the UK without an independent certificate showing that they do not come from a damaged forest. Friends of the Earth is also calling on international financial institutions, including Barclays and NatWest, not to fund any further pulp and paper operations in Indonesia or Malaysia and to take immediate action to ensure that APP's fibre supply is sustainable.

FOE Forestry Campaigner Ed Matthew said:

“APP's impacts on the Indonesian rainforests have been devastating and UK corporates have supported them with an open market and virtually a blank cheque.This is another shocking example of corporations putting profits before people and the planet. “The UK paper and timber merchants are clearly not capable of regulating themselves, “Legislative action which forces them to provide an independent chain of custody certificate is the only way to stop the UK from continuing to damage the world's forests.”

NOTES TO EDITORS:

1. UK financiers of APP & its subsidiaries include (in alphabetical order): AIB Govett Asset Management, Barclays Bank, Edinburgh Fund Managers, Foreign & Colonial Management Group, Framlington Investment Management, HSBC, Legal & General Investment Management, NatWest, Newton Investment Management,Samba Capital Management, Scottish Widows Investment Partnership. Barclays Bank has helped to arrange loans of over US$500 million dollars to APP companies and is also the 7th biggest shareholder in Indah Kiat,APP's biggest and most destructive subsidiary. National Westminster Bank helped arrange a US$400 million dollar loan to Indah Kiat in 1997 and helped arrange a further US$100 million dollar loan to APP in 1998.

2. Other significant international financiers of APP andits subsidiaries include : ABN Amro, Bank of America,Bank of China, Capital Group, CitiGroup, Credit Suisse First Boston, Deutsche Bank, Franklin Templeton,Goldman Sachs, Merill Lynch, Morgan Stanley Dean Witter.

To view PDF files you will need to download Adobe Acrobat Reader. Visually impaired users can get extra help with these documents from access.adobe.com.

If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust