A European campaign
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The rapid expansion market of paper products linked to deforestation in Indonesia into the European is supporting the further expansion of pulp plantations into Indonesia’s last tropical forests and peatlands. EEPN is promoting a European-wide campaign to stop the expansion of such products into the European market and to protect Indonesia’s rainforests and forest communities rights. Read more... |
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Unaccountability
In the early 2000s, APP defaulted on $13.9 billion in loans and was delisted from the New York and Singapore stock exchanges.[1] Although APP was technically bankrupt, the Widjaja family succeeded, with support from theIndonesian Government,[2] in restructuring approximately USD 6.5 billion of the original debt.[3] This was the largest ever restructuring in Southeast Asia.[4]
More recently, APP lost a related major federal court case against the U.S. Export-Import Bank in New York and was ordered to pay back more than $100 million.[5]
The final restructuring agreement meant that the Widjajas managed to keep control of APP[6] and would only have to start paying the bulk of the debt between 2015 and 2025.[7] Under the agreement, APP promised to be fully sustainable by 2007, something it defined as producing all pulp exclusively from plantation wood. The company described the agreements as a “legally binding contractual obligation", but an investigation by Eyes on the Forest shows that 2007 was the year APP’s wood suppliers began clearing the very areas of high conservation value forest in central Sumatra’s Pulau Muda, where 34,000 hectares has now been drained and cleared. [8]
At the end of 2009, APP's Indonesian mills still owed at least USD 4.2 billion of the restructured debt. [9] In October 2007, APP China owed approximately USD 1 billion to overseas private banks as well as government export credit agencies. [10]
[1] B. Setiono, Debt settlement of Indonesian forestry companies: assessing the role of banking and financial policies for promoting sustainable forest management in Indonesia. Bogor, Indonesia: Center for International Forestry Research (CIFOR), 2007, http:// www.cifor.cgiar.org/publications/pdf_files/Books/BSetiono0701.pdf
R. Davis, Restructuring in Weak Legal and Regulatory Jurisdictions: The Case of Indonesian Restructurings, 2004, http://info. worldbank.org/etools/docs/library/83884/davis_restruct.doc
Ex-Im Bank, Ex-IM Bank files lawsuit against Asia Pulp & Paper, 29 October 2003, www.exim.gov/pressrelease. cfm/8D1E661E-A307-DFA9-AE7282999A4B618F
Forbes, Indonesia’s richest, 12 February 2009, www. forbes.com/lists/2009/80/indonesia-billionaires-09_Eka- Tjipta-Widjaja_EGES.html
[3] White & Case, White & Case advises on landmark restructuring of Asia Pulp and Paper, Press Release, 17 June 2003, www.whitecase.com/news/detail.aspx?news=233
[4] Shearman and Sterling, Asia Pulp & Paper Completes Largest Ever Restructuring in Southeast Asia, 5 May 2005. Shearman and Sterling website, www.shearman.com/ NewsEvents/News/Detail.aspx?news=1f490c97-0e07-4e41- 940c-249b40238d10
[5] BusinessWeek, Export-Import Bank of the United States Wins Sum- mary Judgment Against Asia Pulp & Paper Co. Ltd.’s Subsidiaries in Suit to Recover More Than $104 Million, 11 February 2008, http://investing.businessweek.com/research/stocks/ private/snapshot.asp?privcapId=34575
[7] Indah Kiat, Consolidated financial statements for the year ended December 31, 2009 and 2008’, PT Indah Kiat Pulp & Paper Tbk, 2009, http://202.155.2.84/Financial/2009/12/ INKP_200912.zip
Tjiwi Kimia, Consolidated financial statements for the year ended December 31, 2009 and 2008’, Pabrik Kertas Tjiwi Kimia Pulp & Paper Tbk, 2010, http://202.155.2.84/Financial/2009/12/ TKIM_200912.zip
Tools & Solutions
 What's in your paper? Learn about solutions |
 Shrink paper: addressing the over-consumption |
 The paper calculator, to quantify the benefits of better paper choices. |
 The European Environmental Paper Network (EEPN) |