UPDATED – APRIL Response to NGO Coalition (Auriga) Report Regarding Supply

Sustainable Forest Management Policy 2.0 (SFMP 2.0) which was launched in June 2015. This policy embeds APRIL’s commitments to no deforestation, responsible peatland management, conservation and restoration, community empowerment and engagement, and verification and transparency.

These commitments remain steadfast and progress on implementation – including our challenges – continues to be independently verified and publicly reported.

All fiber supply to our mill is bound by APRIL’s SFMP 2.0, including Open Market supply from PT. Fajar Surya Swadaya (PT FSS). The policy is enforced through socialization, internal due diligence processes, compliance monitoring including internal land cover change monitoring through satellite data, and independent verification by KPMG PRI Canada under the auspices of APRIL’s Stakeholder Advisory Committee (SAC). KPMG’s audit framework incorporates inputs from two rounds of stakeholder forums and public consultation, as well as from the NGO published Criteria and Indicators.

The recently published 2017 audit report from KPMG PRI – Report on APRIL Group’s Implementation of Sustainable Forest Management Policy 2.0 – confirms that APRIL’s zero deforestation and no mixed hardwood use commitments have been upheld. The report also noted significant improvements in enhancing transparency across APRIL’s supply chain and its ability to access supplier data during the year. This includes data from Open Market suppliers and is a focus area for the company and the SAC.

PT FSS Wood Supply

In response to the Report released by the NGO Coalition (Auriga), APRIL Group confirms that PT. Fajar Surya Swadaya (PT FSS) is an Open Market Supplier of plantation wood to the company, starting in June 2017, and following completion of the internal due diligence process.

We confirm that APRIL did not purchase and use natural forest wood from this Open Market supplier or from any other supplier.

Our due diligence noted that PT FSS had commissioned Tropenbos International to conduct a High Conservation Value assessment of their concessions in April 2015. This was the basis for plantation development carried out in non-HCV areas in 2016-2017.

The due diligence process also required a confirmation that APRIL’s commitment to ensuring community rights are fulfilled. This includes confirmation that appropriate standard operating procedures (SOPs) for resolving land conflicts are in place; the existence of an appropriate external grievance mechanism; adequate fire prevention programs; and community development programs.

Production Capacity

The claim that APRIL/RGE has undertaken “a major expansion in Indonesia” is incorrect. The establishment of the viscose rayon plant by Asia Pacific Rayon is a downstream diversification strategy led by RGE, following the shift in growth strategy from volume to value. This has been confirmed with the NGO-authors of the report in two comprehensive emails responding to their queries sent on 13 June and 16 July, 2018. In these exchanges, we have categorically confirmed that there has been no expansion in production capacity (see excerpt from our 16 July response):

Production Capacity

The total pulp production capacity remains at 2.8 million tonnes. There was no additional pulp line or pulp capacity installed at the Kerinci mill complex.  Pulp production across product types is periodically determined based on market requirements.

Referring to latest assured data, APRIL’s total plantation fiber consumption was 10,182,550 tonnes in 2016 and 10,413,540 tonnes in 2017.  Fibre is sourced from PT RAPP owned concessions (33%), Supply Partners (38%) and Open Market Suppliers (29%). The list of suppliers is available on APRIL’s Sustainability Dashboard, including their concession maps.

Beyond this list, there is currently no other involvement in/with any other HTI concession in Indonesia.

As noted earlier, Asia Pacific Rayon (APR), an integrated viscose rayon factory, is a separate Business Group under RGE and is co-located in APRIL’s Kerinci complex.  With a production capacity of 250,000 tonnes of viscose rayon per year, APR’s dissolving pulp requirement will be mainly supplied by APRIL. APR’s production will begin around the end of 2018.  We also note that there is no tax holiday that’s been granted to APR.”

Commitment to FSC Process

APRIL has been in dialog with the Forest Stewardship Council since early 2016 on APRIL’s process to end its disassociation. In December 2017, the FSC performed a re-evaluation of APRIL’s readiness, which was presented to and confirmed by the FSC Board of Directors. In 2018, FSC has continued its constructive dialogue with APRIL and interested stakeholders in view of developing a roadmap towards ending its disassociation. Part of this process is a baseline assessment to inform the roadmap, which will be carried out by an independent team of experts appointed by FSC. In the meantime, APRIL continues to focus on the delivery of its SFMP 2.0 commitments and on internal readiness initiatives towards strengthening compliance with relevant FSC standards.

APRIL remains open to feedback from stakeholders on actions we can take to clarify and strengthen the implementation of our sustainability policy. As has been consistently offered in our email responses to requests for information from the NGO Coalition (Auriga), we reiterate our encouragement of a constructive dialog with them and other interested stakeholders.

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