Category: Investment

Red Lines for Pulp Mill Finance

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The Environmental Paper Network* (EPN), and BankTrack** today published a short document, Green Paper, Red Lines,  setting out minimum requirements for the pulp and paper industry to avoid harming people and the environment. This document urges banks and investors who consider financially supporting pulp and paper companies to thoroughly check whether these companies are on the right side of these ‘red lines’.

The ‘red lines’, listed in the document, are the absolute minimum requirements for pulp and paper mills, and cover regulatory, social, environmental and corporate issues. Unless pulp and paper mills fulfil these requirements, they are likely to cause unacceptable social and environmental harm.

The standards are absolute minimum requirements. Companies that achieve these standards are not automatically deemed to be operating in a sustainable manner. However, if companies, and financiers providing support to them, cross these red lines, they are highly likely to be the target of campaigns by civil society organisations.

EPN and BankTrack therefore expect financiers to stay clear if their client pulp and paper companies are unable to meet the minimum requirements.

Mandy Haggith, co-ordinator of the Environmental Paper Network’s pulp finance working group, said: “We want banks and other investors to be our allies in helping to transform the pulp and paper industry towards our Global Paper Vision, by focusing finance only where the industry is sustainable. We hope these red lines will be used by banks to avoid projects and companies with a high level of reputational risk due to their negative environmental and social impacts.”

Karen Vermeer, forest and Equator Principles campaigner at BankTrack, said: “We will use the red lines of this document to check the forest policies of private sector banks, and push for more sustainable policies where necessary.”

* EPN is a network of more than 140 non-governmental organisations globally, focussing on pulp and paper sustainability issues across the global supply chain and paper’s life cycle.

** BankTrack is the international tracking, campaigning and NGO support organisation focused on private sector commercial banks and the activities they finance.

Link(s)

Contact

  • Mandy Haggith | | +44 7734235704
  • Karen Vermeer | | +31 24 3249220
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mapping

New EEPN report on pulp mill expansion launched at the World Forestry Congress

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On the Civil Society Alternative Programme (CSAP) of the 14th FAO World Forestry Congress (WFC), held 7-11th Septemberin Durban, South Africa, the European Environmental Paper Network(EEPN) introduced its new report Mapping Pulp Mill Expansion – Risks and Recommendations to the civil society and representatives of the FAO and WFC.

Global paper consumption and production has been growing at a steady rate for decades. It has quadrupled since 1960 and is expected to keep growing. EEPN analyzed the upcoming virgin wood fibre pulp mills and their possible impacts on surrounding forests and land-use, by overlapping with maps of intact forests, of ongoing and upcoming deforestation and of sensitive habitats.

The report:

  • reflects a rising global demand for pulp and paper in the future, points out the inequitable access to paper and the need for reducing paper consumption in industrialized countries.
  • provides a general overview of each region of the world where new pulp mills are expected or under construction, and includes maps visualizing their general proximity to identified deforestation fronts and intact forest landscapes.
  • shows that current pulp and paper production is concentrated in Asia, North America and North and Western Europe, while most of the future pulp production capacity increase is expected to take place in Asia, Russia and South America.
  • points out possible impacts and potential risks of increased demand for forest resources in the vicinity of new pulp and paper projects on endangered habitats, environment and local communities.
  • provides recommendations for producers, investors, policy makers and large volume paper buyers or retailers who are concerned about climate and deforestation risks.

The recommendations are an application of an international conservation community consensus for social and environmental transformation in the pulp and paper industry detailed in EPN’s Global Paper Vision. With these recommendations the international coalition of NGOs of EPN intends to provide measures and steps for implementing responsible and sustainable paper production, investment and purchasing.

As the 14th World Forestry Congress aims to build a new vision with a new way of thinking and acting for the future of forests and forestry in sustainable development at all levels, EPN’s hope is that this new report is a contribution to meet these goals, and it calls FAO to adopt a set of goals as ambitious as the recommendations presented by the civil society’s organizations.

EPN is also calling financial institutions to adopt investment policies which ensure that their lending and investments do not cause further deforestation or lead to disputes with indigenous peoples and local communities, adopting effective environmental and social due diligence procedures and covenants included in contracts, binding the client to comply with the bank’s sustainability requirements.

 

Download Full Report     Download Summary

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deforestation indonesia

Financing APRIL in Indonesia is not acceptable

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As we have highlighted in recent posts, Asia Pacific Resources International Limited (APRIL) is responsible for substantial deforestation in Indonesia, causing social conflict and greenhouse gas emissions. In partnership with BankTrack, our pulp finance working group has researched the main banks involved with APRIL and then systematically contacted them asking them to divest. You can read our research results on BankTrack’s blog here: http://blog.banktrack.org/?p=522. 

April-Banks(Note: values for ABN Amro, China Development, CITC, Santander and West LB are estimated based on the assumption that banks took an equal share in one loan, for which individual bank contributions are not known. Also, note that West LB has been succeeded by Portigon Financial Services AG as of June 2012.)

This work has recently achieved good coverage by the media, see for example, here: http://news.mongabay.com/2015/0218-banks-financing-april-indonesia.html

Some of the banks have assured us that they will have nothing to do with APRIL, and today we are very pleased by the announcement by Santander (see http://news.mongabay.com/2015/0224-banco-santander-april.html)  that they will make a withdrawal from their association with APRIL unless the company stops deforesting. Santander has recently been the target of a Greenpeace campaign. This video shows why.

We will continue to support our member organisations in their campaigning to ensure that banks have policies to avoid financing forest destruction, and to divest from the worst perpetrators, such as APRIL. Watch this space.

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Joint letter to banks about APRIL

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APRIL is the second largest Indonesian pulp and paper company and its impacts on forests and local communities is devastating. The negative impacts of their logging to source fibre for paper include social conflicts, destruction of the habitat of rare species like Sumatran rhinos, elephants, tigers and orangutans, and damage to peatlands which causes huge emissions of greenhouse gases. We have therefore asked banks around the world to give an assurance that they have no financial involvement with APRIL, or any of its sister companies within the Royal Golden Eagle group.

A letter has been sent jointly by the BankTrack network and the Environmental Paper Network, pointing out that APRIL is logging high conservation forest in Sumatra, Indonesia, in breach even of its own weak policies, and that it has a bad record on a range of issues, including human rights and respect for local communities. It asks banks known to finance the company to divest, and warns banks in general that they should avoid involvement with the whole associated group of companies or face significant reputational risks.

The letter, which was modified for specific recipients, is here.

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Civil Society Meets to Discuss Pulp Mill Financing Concerns

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    Civil Society Meets to Discuss Pulp Mill Financing Concerns
    MEDIA RELEASE
    For immediate release Tuesday 28 January 2014

    Representatives of twenty-eight civil society organisations from Europe, North America, Asia, Latin America and Australia have gathered in the Netherlands to discuss concerns about financial investment in pulp and paper developments. The meeting is organised by the European Environmental Paper Network, in partnership with BankTrack, and it includes participants from non-governmental organisations as well as some banks. It is the first meeting to take a fully global perspective on the financing of pulp and paper mills.

    The meeting is discussing lessons learned from past campaigns to stop irresponsible investment in pulp mills, including the campaign to stop a pulp in Tasmania, Australia, which is being re-triggered by new Tasmanian government legislation today.

    The meeting participants have agreed to issue a statement to the Government of Tasmania regarding the former Gunns pulp mill proposal, noting their dismay at the revival of the project and advising potential investors to be aware of the potential of environmental and social risks connected to the Gunns pulp mill project.

    Mandy Haggith, EEPN co-ordinator, said: ‘Participants in the meeting have had the chance to learn from experts in pulp mill investment and experienced campaigners about the opportunities for influencing financing decisions. We have also had discussions about how to identify mills that may threaten forests and agree joint strategies for future campaigns.’

    The European Environmental Paper Network has many member organisations who are engaging with investors and others in the financial world to ask them to make a positive influence in reducing the relevant impacts of paper industry developments, including their fibre sources and their human rights implications. Working together in a more co-ordinated manner, these organisations aim to stop irresponsible investment into unsustainable pulp and paper mill developments and to encourage investors to support only environmentally sound, socially beneficial and sustainable projects.

    The participants also considered pulp and paper mill developments around the world including Indonesia, Russia, China, Latin America and Africa, and the need to ensure future investors give backing only to developments that are not linked to social conflicts, forest degradation and deforestation.

    Notes for editors
    1. The European Environmental Paper Network (EEPN) is a coalition of 72 environmental and social NGOs in 25 countries that share a common vision for transforming the European paper industry to become ethical and sustainable. The Environmental Paper Network (EPN) is its sister network in North America, and the Chinese Environmental Paper Network its sister network in China.

    For more information, contact Mandy Haggith, EEPN co-ordinator, mobile: +44(0)7734 235704
    email: [email protected] of the aims of the European Environmental Paper Network is to stop irresponsible investment into unsustainable pulp and paper mill developments. We are keen to co-ordinate the work of our member organisations who are engaging with investors and others in the financial world to ensure that their decisions are well-informed and take into account all the relevant likely impacts of paper industry developments, from their fibre sources to their human rights implications. Our priority areas will include scrutinising investment into Indonesian pulp developments, and engaging with the Chinese financial sector.

    We are holding a meeting in the Netherlands in late January 2014 to discuss pulp finance campaign strategies. Around thirty activists, from Europe, America, Russia, China, Indonesia, Australia and Latin America will gather to share information on their campaigns. We will also have the chance to learn from experts in pulp mill investment about the opportunities for influencing decisions, which will help us to identify targets and agree joint strategies for future work.

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Welcome to Global Witness
and Look East Wild Earth

A big welcome to our two latest members.

We are delighted to be joined by Global Witness, whose campaigning against natural resource-related conflict and corruption and associated environmental and human rights abuses is an inspiration. Their membership reinforces the breadth of our network, and supports our strong commitment to social responsibility as well as environmental issues. Without addressing human rights, we will never resolve the threats to the world’s forests.

We are equally delighted to welcome Look East Wild Earth, a small UK-based charity that forges links and shares environmental information with activists in Russia, Eastern Europe and Central Asia. One of the priorities set by the EEPN at our most recent gathering was to address the impacts of the paper industry in the boreal region, and we are particularly worried about the rumours we are hearing about new pulp mill developments in the Russian Far East and Siberia. We hope that the expertise of Look East Wild Earth will help us to reach out across the Ural Mountains.

We look forward to working with both of these new organisations.

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Europe Must Stop Funding Forest Destruction

Europe’s Export Credit Agencies have been asked by more than 30 NGOs not to fund a new pulp mill planned by Asia Pulp and Paper in South Sumatra, Indonesia. See our press release below, and in Spanish here.
European Environmental Paper Network MEDIA RELEASE
For immediate release Monday 11 June 2012
.
More than 30 European non governmental organisations (NGOs) today delivered this letter calling on
governments not to fund a new pulp mill proposed by Asia Pulp and Paper (APP), one of the
world’s most controversial pulp and paper companies. The plant is planned to be build in Sumatra,
Indonesia where APP is estimated to have already pulped more than two million hectares of natural
rainforests. This new mill would produce between 1.5 and 2.0 million tonnes per year of bleached
hardwood pulp, making it the largest single pulp line in the world.

Sergio Baffoni, Indonesian Forests Campaign Co-ordinator for the European Environmental Paper
Network (EEPN), said, “unsustainable and legally questionable deforestation enables APP to
continue to expand production of cheap paper. Their hunger for fibre leads them to convert more
and more rainforests into plantations, endangering species and violating local peoples’ rights. This
is particularly concerning where Indonesian peat-forests are involved as the conversion of this
unique ecosystem into plantations releases CO2 into the atmosphere(1). As well as violating rights and
endangering species, this new pulp mill will accelerate climate disaster.”

APP has historically been supported by European Export Credit Agencies (ECAs) (2) and the letter
requests that they end support for all business developments linked to deforestation in Indonesia
and elsewhere.

Deborah Lambert-Perez of the NGO coalition ECA-Watch, said, “ECAs represent one of the
world’s largest sources of public financing for private-sector projects, using taxpayers’ money to
help companies invest in risky overseas projects that would otherwise stall. A new EU regulation(3)
states that ECAs are not exempt from EU objectives on human rights, climate and environment. It is
not possible for ECAs to support the new pulp mill and still comply with this regulation.”

In 2001, APP was involved in what was then Asia’s biggest corporate debt default – US$13.9
billion. As part of a restructuring debt agreement it reached with its creditors, APP had the legally
binding obligation to develop sustainable forestry operations and pulp and paper production. A
recent report(4) revealed that APP began clearing the forest just three years after signing this
agreement, swallowing one-third of the forest that APP committed to protect. Expanding APP’s
production capacity further will inevitably lead to further deforestation, and to increased violations
of the terms of its environmental covenants with ECAs.

1 Carbon dioxide emissions from an Acacia plantation on peatland in Sumatra, Indonesia
http://www.biogeosciences.net/9/617/2012/bg-9-617-2012.pdf
2 http://www.fern.org/exportingdestruction
3 www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2011-0363&language=EN&ring=A7-2010-0364
4 http://www.eyesontheforest.or.id/attach/EoF%20%28Mar12%29%20APP%20default%20on%20environmental
%20covenant%20report%20FINALS.pdf

Notes for Editors
The letter is signed by more than 30 environmental non-governmental organisations (NGOs),
including all members of ECA-Watch, Greenpeace and WWF. It has been delivered to ECAs from
Finland, Denmark, Sweden, Austria, Germany, Italy, Spain and France.
The European Environmental Paper Network is a coalition of environmental and social NGOs that
share a common vision for transforming the European paper industry to become ethical and
sustainable.

For more information, or a copy of the letter, contact Mandy Haggith, EEPN co-ordinator.
phone: +44-(0)1571 844020
mobile: +44-(0)7734 235704
email:
http://environmentalpaper.eu

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