APKI Supports 100% Adherence to Indonesian National StandardsIndonesian National Standards
Legality and Free Trade Critical to Realizing Indonesia’s Pulp and Paper Opportunity
Aida Greenbury, Managing Director
Asia Pulp & Paper Group (APP)
10 March 2011
Achieving SFM in Indonesia
National Standardsfor Legality
Reciprocal Free and Fair Trade
Sustainable ForestSustainable Forest
Social and Economic Potential
Sustainable Forest Management
(SFM) and REDD
Sustainable Forest Management
(SFM) and REDD
2
Pulp & Paper Essential to Indonesia Economy
• Forestry and related industries contribute estimated $18 billion (3.3%) of Indonesia’s GDP, more than triple the average across Asian countries
• Pulp and paper industry responsible for nearly 250 000 of• Pulp and paper industry responsible for nearly 250,000 of 600,000 forestry‐related jobs in Indonesia
• In 2009 the forestry sector in Indonesia contributed about US$7 billion a year to the state income, with pulp industries contributing approximately 50 percent of that total
3
Market Advantages Inherent to Indonesia
15
20
25
M3 per Hectare each Yr
0
5
10
15
Brazil ‐ Hardwood 10 yr cycle
Indonesia ‐Hardwood 10 yr
cycle
China ‐ Hardwood 30 yr cycle
Chile ‐ Hardwood 35 yr cycle
North American ‐Softwood 65 yr
cycle
Europe ‐ Softwood 65 yr cycle
4
Growth in Asia Paper Demand
Asia‐Pacific Paper Manufacturing Countries Millions of Tons 2008/9
020406080
6
Key Matrix: Indonesian Paper & Board Sector
8.0
10.0
12.0
14.0
Capacity
Million Ton / Year
0.0
2.0
4.0
6.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (e)
Production
Import
Export
Consumption
Key Matrix: Indonesia Pulp Sector
5.0
6.0
7.0
8.0
9.0
Capacity
Million Ton / Year
0.0
1.0
2.0
3.0
4.0
5.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (e)
Production
Import
Export
Consumption
Indonesia Pulp & Paper Industry 2008/9
60
70
80
90
100
Indonesia
0
10
20
30
40
50
Production volume Tons of Paper
CO2 Tons from Paper Production
Total National Forestry Millions of Hectares
Pulp and Paper Plantation forestry Millions of Hectares
9
Asia‐Pacific Recycled Waste Paper Imports 2008/9
20
25
30
From Own Market
0
5
10
15
To China To Japan To The Republic Korea
To Indonesia
From Other Asia
From Europe
From North America
10
National Standards Eliminate Need for Restrictive Legislation
• Historical concerns with illegal timber has led to restrictive trade legislation that hampers the growth of Indonesia’s economy
• We need to avoid confusing trade restrictions• We need to avoid confusing trade restrictions that open the door to misleading attacks on Indonesian products
• Adherence to SVLK instills confidence and eliminates need for foreign import laws
Case Study: APP’s Path to Certification Beyond Compliance
APP Pulpwood Consumption
60
70
80
90
100
0‐10% standard threshold for waste material consumption
0
10
20
30
40
50
2005 2006 2007 2008 2009 2010 2015
Mixed Wood Residues (%)
Sustainable Plantation Wood (%)
Source: APP Quality Assurance Division
Chronology of CoC Commitment
National Law & International Regulations
Procurement Policy
CoC/LoV LEI Audit 2003
CoC/LoV LEI Audit by SGS 2005/06
Annual CoC/LoVLEI Audit & TLTV Audit by
SGS
CoC/LoV LEI Audit & TLTV‐VLO/VLC SGS Audit 2010
Continual Improvement
Result:
• Spatial Planning
Result:
CoC System
Major Improvement:
• Security Capacity
Major Improvement:
• Radar Mapping &
Major Improvement:
• First Certified TLTV‐VLC in the region:
Result:
• GAPs and
Legality Voluntary & Beyond Compliance
14
Policy
• Supplier Compliance
• Legality Documentation
• Environmental
• Human Rights
• Social
Implementation Building
• Community Awareness
• Multi‐stakeholder Participation
• Radar Mapping & Planning
• Digital Camera ID
• On Line Tracking System
• GPL System
Planning: Data/Procedure Incorporation & Implementation
• Digital Camera ID: Replication
• On Line Tracking System: Expansion
• GPL System: Manual & Implementation Improvement
• Wet Land Operation: Weigh Bridge / Weigh Scale
• Plantation planning, man power, health & safety compliance
• Set aside area monitoring
• Concession inventory methodology
• Stakeholder consultation
the region: 556,318 hectares.
• In total 1,786,365 hectares of independently verified forest areas.
CARs closing
• Scope expansion
• Logo use is being planned.
Pulpwood Supplier Certification Progress
1.5
2
2.5
3
LEI SFM Certification
MHa
0
0.5
1
1.5
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
LEI SFM Certification
TLTV
LEI CoC Audit
PHPL MoF
Year
15
APP Sustainability Roadmap: Vision 2020
71% of APP's pulpwood supplies are voluntarily audited to meet Chain of Custody (CoC) and verification of legal origin of fiber (LoV)
Today
100% of APP's pulpwood supplies are legal under Indonesian law
Tomorrow
100% of APP's pulpwood supplies will remain legal by law
100% of APP's pulpwood supplies will
2015verification of legal origin of fiber (LoV) standards set by SGS TLTV‐VLO/VLC & the Indonesian Ecolabelling Institute (LEI)
Source: APP
23% of APP's pulpwood supplies have passed voluntary audits or been certified as SFM forests by LEI
52% of APP's pulpwood supplies meet mandatory Sustainable Forest Management (SFM) standards set by Indonesian government with multi‐ stakeholder consultations
be CoC and LoV compliant by 2015
100% of APP's pulpwood supplies will
be SFM compliant by 2015
100% of APP's pulpwood supplies will
be LEI‐SFM compliant by 2020
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Rio +20: Act now to Save The Forests
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