APRIL has responded to a series of questions received from Auriga Nusantara related to one of APRIL’s open market suppliers of plantation fiber, PT. Adindo Hutani Lestari (PT. AHL).
Auriga’s questions pertained to allegations of deforestation or loss of natural forest in PT AHL’s concession between 2015 and 2020 in breach of APRIL’s Sustainable Forest Management Policy 2.0 (SFMP 2.0), which applies to APRIL’s fiber supply chain. Auriga also raised questions of undeclared links in the shareholder structure of PT AHL and APRIL and APRIL’s parent company RGE.
In our response to Auriga, we shared comprehensive evidence to show no deforestation occurred in the areas Auriga made claims about and that there has been no breach of our SFMP 2.0 commitments. We also shared with Auriga a response from PT AHL to APRIL about claims of related ownership structure between APRIL or RGE and PT. AHL.
Deforestation and SFMP Violation Claims
As Auriga’s correspondence with APRIL notes, PT. AHL completed the requirements of a HCV assessment in February 2014 and an Executive Summary, including maps as shown below (Maps 1 – 4), is available on our Sustainability Dashboard (AHL HCV).
Map 1. AHL Sebakis HCV mapping (2014)
Map 2. AHL Sembakung HCV mapping (2014)
Map 3. AHL Sesayap HCV Mapping (2014)
Map 4. AHL Sesayap Bengara HCV Mapping (2014)
It is important to note that based on these HCV results, PT AHL now conserves 89,181 hectares or 47% of its total concession area. This is almost double the area developed into plantations which total 50,388 hectares or only 26% of the concession area. This translates to a very high conservation to plantation ratio of 1.8:1.
We take any claims of deforestation seriously, and after investigation, including ground-truthing, we can confirm that no deforestation or breach of our SFMP 2.0 policy commitment has occurred. The facts are:
- Between 3 June 2015 and 31 August 2020, 8,387 hectares of plantations were established in PT. AHL. None of these are located in identified HCV areas. This is proven by an analysis of the original HCV maps and a comparison of the maps showing the HCV and conservation areas in 2015 and in 2020 based on remote sensing analysis (see Map 5 Comparative Forest Cover 2015 – 2020).
- Land preparation activities for all of the 8,387 hectares of plantations were completed before 15 May 2015, as independently verified by PT. Hatfield Indonesia, an environmental consultant with expertise in remote sensing. Hatfield’s analysis confirmed these areas were non-HCV areas and harvested prior to the 15 May 2015 cut-off date per APRIL’s SFMP 2.0. Please refer to Pictures 1 – 4 below for reference.
- Of the 8,387 hectares 6,058 hectares are classified as peat and none of these are on a protected Peat Dome Peak Area (MOEF FEG Map SK.130/2017).
- As with all of our fiber suppliers, PT. AHL is subject to an annual internal due diligence process and independent assurance by KPMG as part of our SFMP commitments. The KPMG audit reports are publicly available (KPMG). PT AHL is also subject to APRIL’s Land Cover Change monitoring system which analyzes monthly Land Sat data for any changes in forest cover.
- As noted by Auriga in their letter to APRIL, the plantation establishment activities during the period from 3 June 2015 to 31 August 2020 are in compliance with Indonesian laws and regulations and in line with APRIL’s SFMP 2.0 commitments and HCV guidance.
Natural Forest Cover, June 2015
Natural Forest Cover, August 2020
Picture 1 – Aerial Survey AHL 30 September 2020
Picture 2 – Aerial Survey AHL 30 September 2020
Picture 3 – Aerial Survey AHL 30 September 2020
Ownership and Organisation Structure
AHL is a key supplier to APRIL (Supplier Maps), including in the period from 2015 to 2019.
APRIL has shared a correspondence from PT. AHL with Auriga in which it clarifies its ownership and categorically states that no shareholding in PT AHL has ever been held by the shareholders of APRIL or RGE. It has further rejected other claims of business ownership or management links between PT AHL and APRIL or RGE.
KPMG Assurance
Auriga also posed questions relating to KPMG’s assurance as it applies to open market suppliers and to PT. AHL in particular. These are the facts:
- KPMG undertakes an annual audit under the guidance of the Stakeholder Advisory Committee of APRIL’s implementation of our SFMP commitments. The audit is completed against agreed indicators developed with a range of stakeholders.
- KPMG visited PT. AHL as part of its assurance process between APRIL 9 and 12 2018, preceded by a comprehensive desktop review.
- KPMG’s report notes that “For Open Market Suppliers, no new development has been identified to date but not all information has yet been received from the suppliers.” This resulted in an Opportunity for Improvement (OFI#1).
- OFI#1 relates to APRIL’s Land Cover Change (LCC) monitoring procedure which is used to identify new development. KPMG noted that there were still 511 hectares of LCC from Open Market suppliers that had not been verified and that the majority (82%) related to one supplier (not PT. AHL).
- OFI#1 has since been closed with improvements to the procedure and better reporting from our suppliers.
- This assurance report is publicly available (2017 Report) with all the annual reports also available (All Reports).
In closing, we have invited Auriga to visit PT AHL’s operations and ground-truth the data we have provided and requested that our full response be included in its final report to stakeholders. We will also take the opportunity to update this response should further allegations be noted when Auriga’s report is published.
