Banks and funds put on notice on Sumatra pulp mill investment risk

(Image Credit to:http://understory.ran.org/)

Indonesia,Sumatra – banks and financial institutions were notified to avoid providing any financial support to the Asia Pulp and Paper (APP) with regards to their future project which leads to deforestation as what has been happening.

More than 50 environmental and social non-governmental organisations signed a letter which was addressed to financial institutions.  The content of the letter highlighted on APP’s breach of trust among investors and a series of commitments that was violating due to the exploration of the forest affecting the native forest housing as well as some endangered species such as the Sumatran Tiger & elephants.  In addition the letter also  includes the debt that APP has been drowned into due to their continuously losing major customers such as (Hasbro, Mattel) mainly because of their heinous activity, deforestation.

As stated in the website, “We believe that potential investors should be as concerned with APPs practices as the major companies no longer buying paper and packaging materials from the company,” said WWF International Forest Programme director Rod Taylor.  “If potential reputational risk is not enough, alarm bells should ring over the company’s default on nearly $US14 billion of debt in 2001 and the company’s current conduct in US courts over meeting obligations to some of its former investors.”

 With the recent mill acquired by the APP, it is able to produced between 1.5 and 2.0 million tonnes per year of bleached hardwood pulp, making it the largest single pulp line in the world.

According to a Sumatran Non Government Organisation coalition  Eyes on the Forest, APP has expected to gazette almost 2 million hectares of natural rainforest  in the Riau province Sumatra alone.

“Indonesia is a potentially promising place to conduct investment in pulp and paper, with its humid climate and year-long sunlight which enables pulp wood to mature much quicker compared to subtropical countries, unfortunately this is being brought into disrepute by the destructive practises of APP which continues to rely on natural forest clearing for its pulp supply,” said WWF Indonesia’s Conservation Director, Nazir Foead.

For more information, please click here.

To view the letter to banks and final institutions please click here.

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