Asia Pacific Rayon (APR – part of the RGE Group)

Riau, Sumatra, Indonesia

5
1
RP
shim
Risk to be addressed prior to audit

Completion of CanopyStyle Third Party Verification Audits

Undertaking Annual Audits

Audits Public and Results Acted On

n/a

Audit risk results

n/a

Contribution to Conservation Legacies

International Targets

n/a

Public Collaborative Leadership

n/a

Influences Decision Makers

Legislated protection

n/a

Extra Respon­sibilities

n/a

Innovation via New Alternative Fibers

Partnerships

R&D Investments

Scaling to commercial products

n/a

Targets & timelines

Contributing to Collective Goal

n/a

Aggressively Increasing Commercial Scale

n/a

Adoption of Robust Forest Sourcing Policy

Policy adoption

Policy meets all CanopyStyle criteria

Traceability, Transparency, and Sustainable Sourcing

Using the Dissolving Pulp Classification

Track & trace system in place

Public sharing of supplier list

Proactive sourcing decisions

n/a

Leaders in Supply Chain Shifts

Proactive Sourcing Decisions

FSC preference

n/a

Forest Mapper support

n/a

Associated with High Risk of Sourcing from Ancient & Endangered Forests and other Controversial Sources

Risk is known and no action is taken

Initial action taken to adress risk

n/a

Sourcing risk has been resolved

n/a

Total:

Buttons 5

Chemical Management

The producer is addressing the pollution originated by the chemical substances used during the MMCF production process. It has joined a credible initiative that advances solutions on chemical management. (worth 2 points)

The producer is implementing, for all of its sites, pollution control technologies to limit their impact, developing an approach for the recovery of substances used or generated during the production of MMCF.

ZDHC Responsible Fibre Production Guidelines ZDHC Wastewater Guidelines (evaluated in 2020, worth 3 points) ZDHC Air Emissions Guidelines

Total:

1 Point

Risk of sourcing from Ancient & Endangered forests

APR has confirmed sourcing from four suppliers. The vast majority of their dissolving pulp is sourced from two Indonesian suppliers, both of which are considered to be high risk and controversial. The first, Asia Pacific Resources International Ltd (APRIL) is owned by RGE and the second – Toba Pulp Lestari – is owned by Sukanto Tanoto, the owner of RGE.

APR’s primary suppliers operate in regions classified by the ForestMapper tool as Ancient and Endangered Forest, due to critical high-carbon landscapes, endangered species habitat, conversion of natural forests, and an ongoing legacy of social conflict.

As recently as October, 2020, an alliance of Indonesian civil society organizations and international NGOs released a report documenting deforestation and conversion of natural forest peatlands to industrial plantations by one of APRIL’s largest suppliers. In a separate report, also published in October by an international NGO, another RGE supplier was documented to be linked through palm oil operations to active deforestation  in the Leuser Ecosystem.

Canopy has engaged with both APRIL/RGE and Toba Pulp Lestari in an effort to develop a solutions pathway and reach agreement on specific actions to mitigate or resolve issues of concern and remedy past harm. While we recognize modest progress has been made in some areas, there are a number of major issues of ongoing concern that put RGE, APRIL, TPL and therefore APR at high risk of remaining in the controversial supplier category for the foreseeable future.

As a result, Canopy continues to recommend a considered approach by the marketplace at this stage. Customers should continue to liaise with Canopy to monitor the timely implementation of the expected key milestones by APR, APR’s parent company, TPL and APRIL, their main suppliers.

Key Improvements Required

As part of the RGE family of companies, APR needs to become a vocal internal advocate for meaningful, substantive change in the practices of its primary suppliers, APRIL and TPL.

Canopy encourages APR to provide evidence of concrete gains by APRIL, TPL and their suppliers in:

  • Securing conservation of peatlands and other high-conservation value areas (HCV) and high carbon stock forests (HCS) with the free, prior and informed consent of impacted communities;
  • Effectively resolving land claims and conflict with traditional and local communities including halting any activity on disputed lands and excising customary lands where consent has not been, or is not being, given; and
  • Implementing concrete and effective measures to remediate or provide restitution for the company’s legacy of adverse social and environmental impacts, including meeting restoration requirements dictated by science through increasing APRIL’s stated target of a 1:1 restoration ratio.

In addition to ensuring an end to deforestation, peatland degradation, and human rights violations in their supply chain, APR must accelerate the commercial production of Next Generation Fibre Solutions. APR should provide documentation of its efforts to ensure that if/as RGE scales up Next Gen inputs, there is a verified, corresponding and equal reduction in the use of peatland-sourced wood fibres. Next Gen should not become a niche product, but instead help reduce APR and their primary suppliers’ reliance on fibre sourced from drained tropical peatlands, HCV areas and HCS forests, and from community land areas.

Prioritize the integration and sourcing of Next Generation Solution technologies and feedstocks for future expansion and/or new suppliers. At a minimum, use ForestMapper and complementary guidance documents such as the advice note of Ancient and Endangered Forests and the Dissolving Pulp Classification to ensure no additional sourcing from Ancient and Endangered Forests as capacity expands.

Sateri, APR and APRIL continue to prioritize marketing, financially sponsoring, and participating in sustainability fora. Progress on sustainability by RGE companies should continue to be measured by concrete steps that lead to tangible outcomes which address core risks that affect climate, biodiversity, and communities on the ground.

Canopy will continue to seek solutions and report on actions that truly advance conservation, address the rights of impacted communities, mitigate the growing biodiversity and climate crises, and effectively address the legacy of adverse environmental and social impacts resulting from conversion of natural forests and peatlands to plantations after 1994.

Areas where the company is showing leadership

The company is proactively reaching out to Canopy, and attending Canopy events.

The company has shown strong interest in being audited, however, given the known risk in their supply chain, Canopy is recommending the audit not proceed until clear milestones addressing core issues of sourcing risk have been acted on to avoid diversion of the company’s financial resources and capacity from the actions required.

APR is continuously increasing fibre sourcing transparency, establishing a web-based fibre tracking system for its product. The tool traces bales from concession-holder and plantation region to mill then port – a step forward in transparency, however it is unfortunate that the origin of the fibre is controversial.

Last year, APR’s parent company, RGE, announced an investment over ten years to support solutions in closed-loop manufacturing, with 20-30 percent going to alternative cellulose. In 2020, the company announced the acquisition of a new automated viscose pilot plant that may be used to test recycled textiles and agricultural residues, and is designed to optimize new product development from standard raw materials. As Next Generation fibre is scaled-up, it will be important that it replaces controversial plantation fibre rather than being an add-on or new niche product line.

Canopy, APRIL, TPL and RGE have been in dialogue, exploring potential solution pathways and seeking common ground in addressing key issues and risks associated with the sourcing of fibre for dissolving pulp and viscose. Any progress of note will be communicated, if and when it emerges.

Number of viscose, lyocell and dissolving pulp mills + location and production volumes

Asia Pacific Rayon (APR), is a new viscose mill opened in 2019 with a current production target of 240,000 tonnes, now operational in Riau, Sumatra, Indonesia. The company is part of the Royal Golden Eagle Group (RGE), and closely connected with APRIL, the Indonesian pulp producer and plantation company.