Based on the recent allegation from Jikalahari, the management of APP Group (APP) has conducted an internal investigation regarding the allegations of APP and its supplier accommodating and harvesting forest products originating from illegal sources.
The investigation has confirmed that no illegally sourced supply entered the supply chain of PT. Indah Kiat Pulp & Paper – Perawang Mill or any other mills of APP since February 2013.
There is, however, a standing Memorandum of Understanding (MoU) between PT. Arara Abadi and Tani Sejahtera Mandiri Cooperative (KTSM) Belantaraya Village under the Areal Penggunaan Lain (Other Land Use) (APL) to explore potential cooperation, However, to date, there have been no operational activities by either parties at this location since the signing of the MOU. The objective of this MOU was to find a potential partnership which in line with APP's commitment before proceeding to a formal agreement.
Any new supplier of APP, including community forests, must undergo the stringent Supplier Evaluation Risk Assessment (SERA) process which aims to review the compliance and sustainability commitment of prospective supply partners towards APP’s ESG policies & commitment.
On the second matter in our initial investigations, we did discover violations committed by one of our supplier partners, PT. Riau Indo Agropalma (RIA) for not reporting to APP the conversion of the concession boundary of 57 hectares that could impact the High Conservation Value HCV) Area due to amendments to the Tata Batas Luar (Outer Boundary Arrangement) and developing this new area.
We also discovered that APP Supplier, PT. RIA has an ongoing collaboration with Mutiara Mandiri Cooperative and Makmur Jaya Farmers Group involving a total area of 313 hectares. APP was also not notified of this collaboration.
Based on the findings of these violations, APP has issued a firm warning and demanded that PT. RIA commits to undertake corrective actions to restore areas with HCV within no more than two weeks from the date this statement is made. APP will monitor the corrective actions in the affected areas and non-compliance in the implementation of the corrective measures could result in the suspension of the wood supply from PT. RIA.
APP is currently conserving and protecting more than half a million protected areas within APP and the concessions of its supplier partners. These forest covers are published in a dashboard using the Radarsat-2 satellite. Additionally, for third-party verification, the dashboard is also audited by trusted auditors and the results are published to the general public.
APP’s stance is very clear, and we want to reiterate that APP adheres to the 2013 Forest Conservation Policy (FCP) which outlines the commitment to a Deforestation-Free Supply Chain and only uses materials from sustainable sources, as stated in the Sustainability Roadmap Vision 2030. APP also periodically carries out a continuous improvement process, reviewing systems and procedures to strengthen implementation at the operational level.
For further clarifications or enquiries, please contact [email protected] / +6012 392 5343
