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July 2 2008: New paper consumption video released

May 31 2008: Strzelecki Rainforest Reserve to be gutted to supply Maryvale Pulp Mill with pulpwood for only two years

May 08: International based website highlights Strzelecki Rainforest Sham

Paper from Trees
Sourced from 1999 edition of the Good Wood and Papr Guide

Imports of paper and paperboard 2003/2004

Categories of paper types

Global sources of paper

Indonesian Rainforest Paper Imports

Questions asked by PaperlinX Ethical Shareholders Group

Buying Paper

 In 1997 the (FAO) Food and Agriculture Organisation of the United Nations claimed that global production of wood pulp was 168 million metric tonnes. Between 1991 and 1995 wood pulp output increased by 8.3%. In the same study the FAO found that world production of paper and paperboard in 1995 reached 286,351 million metric tonnes consisting of printing and writing paper 83,801 million metric tonnes, newsprint 35,940 million metric tonnes, household sanitary paper 16,904 million metric tonnes and wrapping and packaging paper 125,925 million metric tonnes.

Not one of these countries is self sufficient in the production of pulp to make paper products. All countries import pulp and paper products, meaning that an enourmous trade in pulp and paper products spans the globe. The major pulp importing countries are United States, Germany, Japan, Italy, United Kingdom, France, South Korea, China, Netherlands and Mexico. The major exporting countries are Canada, United States, Brazil, Australia, Chile and South Africa.

It is absolutely clear that countries that need to import pulp and paper products are operating unsustainably due to their need to drain the natural resources of other countries to meet their local demand for paper. Increasingly third world countries and their forests are being targeted by industrialised countries. The following section outlines some of the issues regarding global and national paper demand. It hopes to shed some light onto the forestry practices of the world’s major pulp and paper makers as well as give readers an idea about where the paper they use is imported from.Australia.

Australia is a relatively small player on the global scene in regard to consumption of pulp and paper products, coming in at about 20th. Nevertheless, Australians consumed 3.26 million tonnes of paper products in 1997-8 and the consumption rate is predicted to increase to 3.7 million tonnes by 2003-4, or an amazing 185 kg of paper consumed by every person in the country! This total includes imports of paper products worth almost $2 billion. Australian’s are clearly consuming far too much paper with very little consideration about where that paper is sourced from and how it is made. At the same time Australia exported a record amount of woodchips in 1997-98 worth around $600 million.


TOTAL: 3.26 million tonnes.
SOURCE: Australian Forest Products Statistics, December Quarter 1998.

As our paper consumption is such an important component of our overall forest product consumption, perhaps it would be helpful if we put our paper habits in a global perspective. During 1993-94 for instance, we consumed over 3 million tonnes of paper products in Australia. This is the equivalent of around 37 million trees, or approximately 172 kg of paper, per person, per year. The corresponding figure for Eastern Europe was only 20 kg of paper per person, for China 17 kg, and India 3 kg (Appita 1995). In the United States of America, however, the average person consumed a whopping 320 kg of paper in a year.

We could put this another way and say the average Australian uses the same amount of paper in a week as the average Indian uses in a year, and only half as much as the average American each year.

Imports of paper and paperboard 2003/2004

Latest data from ABARE. ------( kt=kilotonne )


Total 303.86kt (worth $261.4 million).

 
Total 1014.56kt (worth $1014.56 million).

Total 84.64 (worth $137.92)

Total 154.12kt (worth $283.77)

Total 1557.3kt (worth $2013.6 million)


The Main Categories of Paper and Paper Products

Packaging and Industrial:
During 1997-98 consumption in Australia rose to 1.38 million tonnes (74 kg per person). Imports reached 255 000 tonnes in 1997-98, mainly of cartonboard imported from the United States. Consumption is forecast to grow by 1.8% to reach 1.6 million tonnes in 2003/04 (81 kg per person).
Packaging and Industrial Papers include;

*Corrugating Materials (liner board and corrugating medium used in corrugated boxes - 65% of domestic production made in Australia).

*Cartonboards (folding boxboard and liquid packaging board - 15% of consumption made in Australia).

*Other packaging and industrial papers and boards (including sack kraft, wrapping papers and plasterboard - 20% of consumption made in Australia).
 
Printing and Writing:

Australian consumption during 1997-98 increased to 954 000 tonnes (51 kg per person). Australian production rose by 60 000 tonnes to 424 000 tonnes largely due to the new photocopy paper machine at Amcor’s Maryvale mill in Victoria coming on line. Imports fell by 48 000 tonnes to 577 000 tonnes.

Broadly speaking the paper industry classifies different printing and writing paper in the following way;

Woodfree* Uncoated: Largely used for business forms, computer listings, envelope stock, photocopy paper also reports, brochures, letterheads, stationery, advertising/direct mail. The largest single grade is the ‘cut reem’ market, through the increased use of photocopiers, cut sheet printers and plain paper faxes. Growth rates are increasing by over 10% a year.

*Woodfree paper does not mean that it is not sourced from trees. Woodfree is paper where the fibre source is chemical pulp only, ie all the lignen is removed. Pulp is made from wood by seperating its individual fibres either be mechanical means or chemically dissolving the material (largely lignin) which binds the fibre together, or by a combination of such treatments. Amcor, Australia’s only manufacturer of writing paper is largely an uncoated woodfree paper producer.

Woodfree Coated: Mainly supplied by overseas mills for annual reports, glossy brochures, quality direct mail/advertising literature. Imports mainly from Scandanavia.

Mechanical Uncoated: Used for newspapers.

Mechanical Coated: Used mainly in advertising and magazines

Carbonless Papers: Major demand in EFTPOS receipts, ticketing (airlines), delivery dockets/invoicing.

Self Adhesive Papers: Produced on both plastic and paper face stocks.

Fax Papers: Virtually all imported from Japan.

Consumption of printing and writing paper is expected to reach 1 million tonnes in 1998-99 and is increasing at 2% per year, reaching 1.1 million tonnes in 2003-04 (54 kilograms per person). Sheet copy paper from Indonesia is the main growth area at the present time and Indonesia has now become the major regional producer of pulp and paper, with total capacity in Sumatra reaching 2.5 million tonnes of pulp and 472 000 tonnes of paper in 1998.

According to Australian Forest Products Statistics Dec 98 Indonesia is; "anticipating a shortage of raw fibre. Pulpwood plantations have been established in the region, but none is yet ready to harvest"

If this statement is correct then a large amount of printing and writing paper exported from Indonesia is sourced from tropical rainforests. Including about 20 kt’s imported in Australia in 1997-8.

About 65% of Australia’s fine paper imports are sourced from Europe, with fibre from Scandanavia dominating.


 
Newsprint

In 1997-8, newsprint consumption in Australia increased to 718 000 tonnes (or 38 kg per person). Australian Newsprint Mills (ANM), dominate all Australian newsprint production. Australian mills are at full capacity, but still cannot keep up with demand, meaning that Australia also relied on 290 000 tonnes of imports costing almost $240 million to feed its need for newsprint. Countries dominating our newsprint imports are New Zealand (56.4%), Canada (3.49%) and Norway (3.67%).

Newsprint can also be called Mechanical Uncoated paper and is used in newspapers, magazines, inserts and telephone directories.

Fletcher Challenge relies to a large extent on recycled fibre for their newsprint in Australia, however it must be pointed out that Fletcher Challenge also log about 500 000 tonnes of native forest in the Florentine Valley in southern Tasmania to feed their newsprint mill at Boyer, as well as sourcing fibre from north west Tasmania. This means that each newspaper purchased in Australia, relies to a certain degree on the logging native forests.


It has been forecast that many magazines and newspapers will be tailored to electronic transmission (home computers) in the future, meaning that volumes of paper will increase in the cut sheet form (printing and writing paper), but reduce the volume being consumed by the traditional method. This development has been "negated" to a certain degree, due to the increase in newspapers pages, thereby increasing newspaper volumes. Newsprint has been expected to increase by 1% per year to 760 000 tonnes by the year 2003/04.
 
Household and Sanitary

Australians used 208 000 tonnes of household and sanitary paper in 1997-98 (11 kg per person). This figure is forecast to increase to 240 000 tonnes in 2003/04 (12 kg per person). Imports reached 32 000 tonnes ($52 million) in 1997/98 with the Chinese Taipei (7.82kt) and Sweden (0.90kt) being our main suppliers. Interestingly North Ltd will embark on exporting Tasmanian woodchips to Taiwan in late 1999.

According to Australian Forest Product Statistics Dec 98;
"In Australia, the larger manufacturers use virgin fibre mainly and focus on the top end of the tissue market. A larger number of smaller manufactuers base operations on waste paper, supplying the generic (mainly toilet tissue) end of the market"
 
 
SOURCES OF FINE PAPER IMPORTS
From work done by the World Wide Fund for Nature.

Finland

Finnish Companies in Indonesia

Brazilian Timber and Paper imports

Indonesia

France

Germany

Italy

Sweden

Japan

Korea

Canada and the United States

Finland

For updates on Finnish Forestry please go here

Finland is one of the most forested country in the world with approximately 3/4 of the land area (21.77 million ha) covered by forests. The forest land area has increased since 1950's to 1990's by approximately 1.1 million ha due to ditching of peat-land and afforestation of agricultural land. National Forest Inventories are currently being developed to give more adequate information on naturalness of forests.

Old-growth forest inventories have been carried out in the 1990's in preparing the Old Growth Forest Conservation Programs. In northern Finland inventories have been quite systematic and extensive. In southern Finland the inventories have been less systematic and some old growth forests have been excluded. According to Finnish TBFRA-2000 report 5.8 %, or 1.3 million ha, of forests can be classified as undisturbed by man in Finland. The forest has been placed in this class if it can be considered as old - more than 150 years old in southern Finland and more than 200 years in northern Finland - and there are no signs of management.
Plantation forests of exotic tree species cover only 0.1 % of the forest area in Finland. The figures for protected forest areas vary according to the source. For example, according to the Finnish TBFRA 2000 report (1998), the area of strictly protected forests is 5.3 % or 1.16 million ha; according to the report of the Follow-up Working Group on New Environmental Programme in Forestry (1998) the area is 6.6 % or 1.5 million ha.

In the northern boreal vegetation zone approximately 10 % of the forests are either protected or are in confirmed nature conservation programmes. In central Finland approximately 3% of the boreal forest area, in southern Finland approximately 0.5 % of the boreal forest area is protected or included in the protection programmes. The protection of boreal forests in southern and central Finland is widely recognised as insufficient. Especially the following types of forests: herb-rich forests, coastal forests, ridge forests, different types of wet forests, old-growth forests, deciduous forests, cladonia type forests, forests on rocky hills and primary forests on uplifted coastal area.

Pine is the dominating tree species in Finland (in 64.5 % of forests, pine is the dominant tree species), second is spruce (25.7 %), third downy birch (6.2 %) and fourth silver birch (1.3 %), alder (0.4 %), aspen (0.3 %) and other broad-leaved trees (0.1 %). Spruce and pine dominate in mature forests. The majority of young forests are also dominated by conifers, but the share of deciduous tree species in young forests is relatively higher.

The Sami people are among the most northern peoples in the world and they are the oldest known inhabitants of Finland. There are about 4000 Sami people living scattered in area about 30 000 km defined as the Sami region in the Constitution Act of Finland. The Forest and Park Service (FPS) manages over 90 per cent of this area and there are some 600 000 ha of productive forest land in the area and the proportion of protected forests is over 40 %. The rights of Sami to lands, waters and traditional livelihoods - reindeer herding, fishing and hunting - have not been recognised and have not put into effect in the Sami region. In this jurisdically unclear situation the material foundation of the Sami culture rests on an uncertain basis. Thus, Sami become estranged from their ancestor's lands and waters and from their use in the ways specific to Sami culture. Sami lands are under threat from Finnish logging companies such as UPM-Kymmene.

In Finland the State owns most of the unprotected old growth forest. These forests are under control of the Finish Forest and Park Service (FPS), responsible for the logging of old growth forests. In January 1998 the main Finnish environmental NGO’s gave the FPS complied maps of State-owned old growth forests located in eastern/northern parts of the country and demanded a logging moratorium and protection of 370 areas. Unfortunately, the FPS refused this demand and continues to log old growth forest, despite the requests of NGO’s and even Central European paper buyers. The forest industry has not stopped the purchase of old growth timber from the FPS, including timber from the Malahvia wilderness in eastern Finland which contains old growth forests, peatland, pond and streams, including many endangered species of flora and fauna.

According to the FPS, some of the timber from Malahvia goes to the mills of ENSO (which soon will become Swedish/Finnish STORAENSO, the second largest producer of paper and board in the world). At their mill in Oulo the company manufactuers fine coated magazine paper LUMIPAPER. The forest ginat UPM-Kymmene also buys the spruces from the area to supply its newsprint mills.

Source: Leonie van der Maesen - Friends of the Earth International, Friends of the Earth Australia, Native Forest Network, Southern Hemisphere. October 1999.

The Enocell pulp mill, in Uimaharju, only 60 kilometres from the Russian border, is one of the largest pulp mill's in Europe and is mainly dependent on Russian wood. A recent Greenpeace investigation documented that the Enocell mill is processing wood from one of the last remaining areas of old growth forest in Europe, Karelia in Russia.
 
Finnish Companies in Indonesia

The Finnish forestry sector, is one of the greatest players in global environmental and development politics. Since 1997, Finnish and environmental activists have been up in arms against UPM-Kymmene, one of the country's biggest forestry companies, over its activities in Indonesia. They are calling for UPM to withdraw from Indonesia, where they say its partnership with an Indonesian firm, Asia Pacific Resources International Holdings Ltd. (APRIL), is depleting rain forests and dispossessing local communities of their land.
Asia Pacific Resources (APRIL), is an Indonesian company and is one of the biggest paper mill companies in south-east Asia, operating in the province of Riau in Sumatra, Indonesia. Owned by Sukanto Tanoto, an ethnic Chinese who's other business interests includes mining, agribusiness, banking and insurance, APRIL signed two years ago a joint venture agreement with Finland's UPM-Kymmene to operate in Indonesia. Both companies jointly own a paper mill factory in China, where most of the pulp resulting from APRIL's logging in Sumatra goes to. APRIL's 280,000-hectare plantation in Riau - acquired through a government concession - contains rare and valuable forest trees, but they are being cut off and replaced with fast- growing tree species such as acacia and eucalyptus.

97 per cent of APRIL's paper is destined to foreign markets, but as regional sales have been dramatically shrunk by the Asian crisis, UPM provided its extensive networks in Europe and elsewhere to export the produce.The Finnish president has also been awarded high state honours by Indonesian Forestry minister Djamaludin Suryohadikusumo and APRIL's Sukanto Tanoto when they visited Finland in 1998. This caused outrage among Finnish environmentalists.
 
Brazilian Timber and Paper imports

Deforestation of the Amazon rainforest in Brazil increased by 30% in 1998. More than 6,500 square miles (16,800 square km’s) was cleared. This took deforestation in the Amazon since 1972 to 205,385 square miles (532,086 square kilometres), equivalent to 13.3% of the entire Amazon region or an area roughly equivalent to France. California-based Rainforest Action Network (RAN) claims that the ‘destruction of the Amazon will be the greatest natural catastrophe in the history of human civilisation’. Despite these figures the Brazilian Government is planning to effectively gut efforts to protect the Amazon. In response to the fiscal austerity measures imposed on Brazil by the International Monetary Fund’s $41 billion bailout package signed in November 1998, Brazil is planning to zero out between 60 and 90% of its $70 million budget for conservation and environmental programs in the Amazon.The Amazon isn’t the only area being targeted. The "Mata Atlantica," or Atlantic rain forest, is now one of the five most-threatened regions in the world, according to environmentalists. Only 7 percent of the original forest remains and that amount is shrinking as families continue to carve small farms out of the jungle, while highways, industry and beach developments take over other areas. But even after centuries of destruction, the forest that stretches from Brazil's chilly southern coast to the steamy northeast still hosts regions with the highest recorded tree diversity in the world. Between 1990 and 1995 a piece of the forest the size of a soccer field was destroyed every four minutes - two times the rate of devastation in the Amazon, which spans half the country and supports a fraction of the 165 million Brazilians.

In 1997-8, Australia imported 1,300 cubic metres of sawn timber, almost $1 million worth of hardboard and 2.58 kt of printing and writing paper from Brazil. These figures do not include imported furniture products. Paper imports were worth around $2.5 million and fibre is sourced not from the Amazon but from hardwood plantations on the Atlantic Coast.

More than 250 pulp and paper companies operate in Brazil, with a total planted area of about 3 million hectares of eucalyptus. According to estimates, the total area of tree plantations reaches 7 million hectares, 30% of which are for the pulp and paper production. Its main objective is the international market and 90% of the pulp exports are concentrated in 5 major companies, mostly integrated with foreign capital: Aracruz Cellulose in Espirito Santo, CENIBRA, Bahia Sul Cellulose, Riocell and Monte Dourado.

The area chosen by Aracruz to establish it plantations and pulp mill is part of the Tupinikim indigenous peoples' ancestral lands. A long struggle has existed between Aracruz and the Tupinikim since 1967 - the same year when Aracruz began its operations in the area. Due to the expansion of eucalyptus plantations following deforestation by Aracruz Cellulose, the indigenous peoples have been forced to abandon part of their ancestral territories. They claimed during four years for a further 13,579 hectares situated next to their present reserves. In March 1998 the Brazilian Ministry of Justice decided to demarcate only 2,571 additional hectares for the Tupinikim and Guarani, ignoring all the studies previously done by FUNAI, which supported the indigenous peoples' claims. "Coincidentally", this was the same proposal that Aracruz Cellulose had put forward in February 1998.
(World Rainforest Bulletin # 13 July 1998).
 
Indonesia

For further information on the destruction of Indonesia's rainforests by pulp and paper companies such as APP and APRIL please follow these recent links. (Please note that PaperlinX subsidiary, Spicers Paper is Australia's largest importer of rainforest paper);

APPwatch, APRILwatch, Eyes On the Forest, WWF UK

Indonesia’s forests occupy about 120 million hectares. Although at least 2-3 million families of indigenous people live in or around the forests and many of the 220 million inhabitants of the country depend directly or indirectly on forests for their livelihood, the governments approach has been to consider forests as "empty land". Logging and plantation companies are responsible for the high deforestation rates (1 million hectares a year according to the World Bank, but 2.4 million according to Indonesian NGO’s).


Forest Management in Indonesia came to the world’s attention in 1997 with the uncontrollable forest fires which swept over five million hectares of land, mostly consisting of forest and small scale plantations, mainly on the islands of Borneo and Sumatra. Environmentalists blamed the fires on bad forest management by large companies controlling the logging concessions.

Up to 1998, conglomerates held most of Indonesia’s 51.5 million hectares of forestry concessions. There were five congolmerates that each controlled more than one million hectares of forest land: Kapu Lapis Indonesia Group, Jayanti Group, Barito Pacific Group, Kalamantis Group and Korondo Group. A dozen or so conglomerates, through their 109 subsidiaries, controlled most of the 500 forest concessions in Indonesia. All had close ties with former President Suharto, who resigned in May 1998.

"The concentration of so much land in so few hands can be traced back to 1985. That year, the government began requiring forest concessions to own a wood-processing plant, which cost around $6 million each. Less-successful concessionaires were unable to afford a plant and were forced to sell their land to wealthy business-people interested in the plywood industry. Almost all the concessions were originally extended to retired senior government officials and military generals during the Suharto regime" The Nikkei Weekly (Japan) October 5, 1998.

In September 1998, the Habibie Government planned to issue regulations that would force these conglomerates to surrender most of their forest concessions. The new law would limit the size of forest concessions to a maximum of 100,000 hectares per person. However there are concerns that the corruption process is repeating itself in that family and friends of ex President Habibie may be the main benefactors of the new land laws.

Australia imported over $65 million worth of Indonesian tropical timber products in 1997-98. This consisted mainly of plywood, photocopy paper* and sawntimber. However, it is not our foreign demand alone that is putting Indonesia's genetic heritage at risk. Local demand for Indonesia's rainforest timbers is also spiralling out of control. The population of Indonesia is growing at about 3 per cent each year. By the end of the 1990's Indonesia's population is expected to exceed 230 million people. With such rapid increases in population, Indonesia's forest resources are coming under immense pressure.

With few controls, the timber tycoons have made vast fortunes by mining the natural environment at a ruthless rate. When we buy the tycoon's imported timber here in Australia, we are also implicating ourselves in this process of destruction.

Indonesia is an archipelago of over 17,000 islands and keeping the rich logging companies and corrupt officials honest has become an administrative nightmare - there are so many ways to avoid controls. However, the loss of Indonesia's rainforest through logging and corrupt development brings with it a high ecological cost, a cost imposed on Indonesia's indigenous tribal groups without their consent.

Devoid of forest cover, the tropical soils are soon eroded by high rainfalls which, in turn, silt the rivers, ports and dams. Ground temperatures rise, and droughts and fires occur as deforestation begins to influence the climate pattern. The natural environment of Indonesia is being radically transformed. Often after forest clearing, Alang-Alang (Imperata cylindrica) begins to dominate. This difficult to eradicate grass covers more than 24 million hectares of Indonesia and is useless as stock fodder (Asian Timber 1994a). Rather than tackle the grass problem, more forest is logged, making the problem worse. The spread of industrial tree plantations has also dramatically undermined Indonesia’s natural forests.

For the past 20 years logging and associated plantations for pulp, plywood and palm oil have been increasing in Sumatra, Kalimantan, Sulawesi, Moluccas and West Papua. "According to the Industrial Plantation Scheme (HTI) companies are supposed to establish plantations in degraded forest areas. But what really happens is that once they get the concession they clear forests, extract valuable timber, set fire to the rest and then plant introduced species, as acacia, eucalyptus and pines . . . The case in Indonesia shows clearly that the much publicized myth that plantations help to alleviate pressures on native forests and consequently helping to preserve them is totally false. On the contrary, they are a major factor for their destruction."

World Rainforest Bulletin #13.

Massive illegal logging in Indonesia's flagship National Parks is also threatening the survival of a host of endangered species including the orangutan. Tanjung Puting National Park is riddled with logging camps and an extensive network of wooden rails used for dragging the timber out. In the east of the park a logging road has been built and trucks are used to remove the illegal timber. Steel barges were observed loaded with illegal wood, and investigators tracked the timber to local sawmills and factories. In Gunung Leuser National Park EIA/Telapak witnessed loggers with chainsaws operating in the Suaq Balimbing research area, which provides prime orangutan habitat and is the only place where these apes have been observed using tools. Illegal logging is now greater than legal timber production in Indonesia. EIA/Telapak are campaigning for genuine reform of the forest sector and the involvement of local communities as the only long-term solution to stop illegal logging and preserve Indonesia's remaining forests and wildlife.

http://www.wrm.org.uy/bulletin/83/Indonesia.html

http://www.walhi.or.id/kampanye/hutan/strukturisasi/041001_app_pencilok/
 
France

The forest area distribution in France is15 156 000 ha (27.6%). Other wooded land represents 1 833 000 ha (3.3%). Wooded lands cover 30.9% of the French territory, 89.2% of which are considered to be forests. The northern part of France, as well as the western part have a lower rate of forest cover due to their very intensive agriculture.

There is no systematic nation wide inventories of undisturbed/old growth forests in France. Their total cover is estimated by the National Forest Inventory using the following criteria: the very ancient presence of natural high forest in the area, composed of local autochtone species, disturbed by human activities for the last time more than 50 years ago. Concerning their ecological value and their natural dynamism, several studies have been carried out (some of them are still going on) which cover most of the forests considered to be undisturbed or old growth forests in France.

The forest area considered to be undisturbed by man is covering 30 000 ha in France mainly situated in mountainous and hilly areas. That means only 0.2% of the total forest surface is considered to be ancient-undisturbed forests. Total plantations amount to 961 000 ha, which represents 6.3% of the total surface cover. But this is considered to be underestimated since the level of plantation given by this estimation doesn't take into account plantations of indigenous species which are intensively managed. It is clear that floodplain forests are under-represented within the existing network of protected areas.

The usual size of strictly protected forests is between 10 and 200 ha, with many lots being less than 10 ha. Protected areas having such a size do not have the potential to sustain the current biodiversity long-term because they do not even cover the size of a functional unit within a natural ecosystem. Moreover, such habitats do not allow the preservation of viable populations of undisturbed forest related mammals or birds which need larger territories (lynx or cappercaillie). Strictly protected forest areas covering more than 1000 ha of continuous massif are very rare in France.

Since 1993, 14,850 ha of forests received a status of protection in France, which correspond to a progress of 6 % within 5 years. With such a rate, it would take around 146 years to protect a minimum of 10% of the current forest surface. There are very few sustainable populations of lynx, wolves, or brown bears, and there are many threats to forest related insects and birds. This is particularly true for species related to very old forests since France does not have clear policy instrument to preserve old-growth forests. 6% of the forest related species are considered to be endangered species.

According the document called " indicators for French forests sustainable management ", the annual use of pesticides and herbicides in forest management concerns an average surface of 92 000 ha, which means that at least 0.6% of the total surface of Forests are annually treated. Annual forest harvesting level/potential harvesting level is quoted as 52 000 000 m3 / 77 000 000 m3.
 
Germany

Germany is divided into states, called "Bundeslander". Nature protection and forest management are under the jurisdiction of the states and are therefore different in every state. The area use distribution in Germany is: Agriculture: 54.7%, Forest: 29.2%, Urban/developed area: 12.6%, Water: 2.2%, Other: 1.3%
There are no systematic, co-ordinated forest inventories at the federal level. The states are responsible for such inventories. Almost all states have / are conducting inventories which usually also cover forests. It is expected that potential areas with undisturbed / old-growth forest areas will be detected by such inventories.

There is virtually no forest left in Germany that is or was not influenced by man at some point in time. Some of the older "Naturwaldreservate" qualify to a limited extent for that status. However, all "Naturwaldreservate" together only account for approximately 2.4% of the total forest area in Germany.

There is no data on the amount of plantations in Germany. 44% of German forests consist of pure coniferous stands. Throughout a considerable portion of the coniferous forests the effect of natural disturbance regimes is likely to be greater than in historic times. This is likely to be due to the artificial nature of plantation type forests and their high susceptibility to storms and insect infestations.There are currently no reliable data about the increment in German forests. This information will be available after the next federal forest inventory.

In Germany protected areas are under the jurisdiction of the states. There is no co-ordination at the federal level regarding criteria for the establishment of protected areas, monitoring, data exchange, etc. Some areas are assigned more than one protective status (e.g. national park and biosphere reserve). This makes it virtually impossible to assess the "true amount" of strictly protected areas. Furthermore, there is no data on the amount of forest areas within protected areas. Total forested area in Germany:=>10.7 mill. ha. Percent of protected areas relative to total forest area:=>7.9%. It was estimated that only 50% of the national parks considered were forested and that appr. 60% of the nature reserves were forested. This leads to about 4.7% of forests under strict protection. The German "National progress report in forestry" states that only 4% of all forests are strictly protected. However, the data base for this assessment is uncertain.

Especially in highly developed and densely populated countries like Germany, an adequate amount of protected areas is essential to halt the loss and sustain current levels of biodiversity. The absolute size needed to sustain biodiversity depends largely on species composition, expected biological dynamics within the system, connection to other protected areas and on the state (qualitative) of adjacent areas (e.g. is the surrounding area a sustainably managed natural forest, a species-rich cultural landscape, or all industrial area?). Most of the current "Naturschutzgebiete" are between 20 and 50 ha and are considered too small to sustain natural biological diversity over an extended period of time.

The situation is different not only for every state, but also for different protected areas within each state. Generally there is no special "protected area service" for protected areas. On average, each state would need 31 years to have 10% of their forests protected, given the rate of implementation of the past 5 years. This analysis could not take into account that not all protected areas used to calculate the implementation rate contain forests.

There are clear federal policy goals on the forest environment, but they do not imply that all naturally occurring forest-related species are to be sustained under natural conditions and in vigorous populations over their entire area of distribution.

Clear cuts are almost exclusively used for coniferous forests. Most states have adopted a forest management strategy for deciduous forests that tries to mimic the natural, internal forest dynamics ("naturnahe Waldwirtschaft"). Most deciduous forests are managed according to this strategy. The annual potential harvesting level between 1996 and 2000 was estimated to be 57,671 million m3 wood per year. On average, between 1990 and 1994, 39.8 million m3 wood were cut annually. Consequently, about 69% of the PHL was realised.). 480 000 ha forests in Germany are managed primarily for soil protection and 1.4 mil ha primarily for water protection.

Germany - An importing country.

Germany is the world's third largest consumer of Canadian pulp. Every year about 430,000 tonnes of pulp are exported to Germany from British Columbia. Some of the pulp comes from Doman/Western Forest Products (WFP), one of the largest logging companies in British Columbia. The last large temperate rainforests in the world still exist in this province on the Canadian west coast. At its heart is the Great Bear Forest which covers an area of around 20,000 square kilometres between the southern point of Alaska and Vancouver Island. The Great Bear Rainforest is one of the most diverse ecosystems in the world and covers only 0.2 percent of Canadian territory.
 
Italy

Recent estimates show a net increase in forest extension due to natural expansion on abandoned rural land. Current total forest area according to official statistics is 8.7 million hectares but this data refers to the 1985 inventory. Recent educated guesses estimate total forest cover at over 10 million hectares (30% of land area). This would leave room for just a 10-15% increase in forest area without radically changing current land use pattern and landscape. Further expansion of forest area may only happen converting intensive agriculture land. The new forest lands created by the natural succession of forest on crop and rangeland will probably become seminatural forests or other wooded lands in the future, the only disturbance being the extensive grazing for some areas.

It has been officially estimated that 6.000 hectares of State Forest Reserves has been undisturbed by man. But the data is uncertain as some of these forest may not be undisturbed and undisturbed forest may exist outside State Forest Reserves. Anyway it is unlikely that any significant extension of undisturbed forests exist in Italy except some strict reserve inside protected areas.

Over 40 % of forest are currently included within officially protected areas. Not all of these can be considered strictly protected (IUCN I-IV categories) because of lack of enforcement and because in some protected areas various forest uses, including wood cutting and collection and grazing, may be allowed to local communities, at least in some zones of the protected area.

Forest reserves range from few hectares to several hundred or even thousands, from local protected areas to National Parks. 20 NP, most of which include significant forest areas, have some potential for long term biodiversity conservation (but of course we do not know how much is actually required to guarantee conservation). The last five years have been somehow exceptional as 14 new NPs have been established, a trend which will not continue in the near future.

There is no coherent and systematic national policy on forest conservation, nor any assessable political commitment to produce one; however, there are a number of laws and regulations about forest management at national, regional and local level which collectively make a sort of forest policy.

Existing legal instruments could provide for a certain level of forest protection and maintenance of natural forest composition but enforcement is weak, systematic approach to conservation and management is lacking and forest species are not specifically targeted by policy instruments.

Current harvesting level estimated to be well below annual growth in biomass. No systematic data collection and analysis is available. Biomass extraction may be growing, particularly in coppices with no reference whatsoever to potential harvest.

With exceptions (North Eastern Alps) production of quality wood is scarcely viable due to bad state of forests. Often the only viable option is production of firewood with no investment in management and restoration. Most of mountain forests (that means the largest part of Italian forests) have high soil protection value.
 
Sweden

A substantial part of the former agricultural land has turned into forest during this century. A nation-wide inventory of virgin forests exists from the beginning of the eighties. The inventory used a very narrow definition that excluded many valuable old-growth forests.

A nation wide inventory of key habitats is currently being carried out and will be finished in the coming years. A part of the key habitats are not identified in the inventory and some large forest owners have not yet started the inventory on their holdings. A inventory of all wet forests is also due to be finalised. Nation wide inventories of broad-leaved forests do not exist in some regions.

The assessment has also only considered planted forests of tree species exotic to the country as plantations. Neither planted spruce forests in the nemoral zone nor planted monotonous forests on former agricultural land or degraded heathland has been considered as plantations, although a substantial part of that is likely to fulfil the definition of plantation.

The preliminary Swedish results shows that 5.2 millions hectares out of a total of 27.3 has been classified as "undisturbed by man" (19 %). The current area of strictly protected forests is 3.7 % of the productive forest land.

The majority of the protected forest area (80%) is situated in the mountain near region in the interior parts of northern Sweden. No reliable data exists on how large reserves with different forest types should be to sustain current biodiversity long-term. 46 600 hectares of productive forest land was protected in the years 1992-1996. This makes roughly a figure of 10 000 -12 000 hectares of new protected forest land every year which corresponds with 0.05 percent of the productive forest land.

Three major forest types in Sweden can be considered have absence of large-scale disturbances: nemoral broad-leaved forests with valuable hardwood species, swamp forests and mountain near coniferous forests. Data is mainly available on the performance of forestry operations in nemoral broad-leaved forests and swamp forest. It is however reasonable to assume that traditional final felling operations still dominate in the mountain near area. Forestry operations that in a true sense can be said to maintain a continuous forest cover are only minor parts of the forestry operations in these forest types. The use of normal shelterwood system, has in this context been classified as a modified concept of final felling.

The reindeer herding area of the Sami people covers approximately 40% of the Swedish land area. The majority of the landowners within this area can be said to respect the rights of the Sami people in forest management. However big problems have been created recently by mainly small landowners going to court in order to question the traditional reindeer herding rights of the Sami people. Consultation and consideration for Sami reindeer herding activities is a requirement in the Forestry Law for large and medium size forest owners in the core areas for reindeer herding. In the winter herding areas consultation is only a recommendation for mainly large forest owners. Regular consultations take place with most of the large forest-owners within the reindeer herding area, but there are large differences in the extent that Sami people can influence forest management. A large proportion of the forest land within the reindeer herding area is owned by small private owners and consultations are in general scarce concerning these holdings.
 
Japan

Japan is heavily forested, with forests covering around 65 percent of the total land area. There is considerable diversity in Japan's forests ranging across small areas of sub-tropical forests located south of Tokara Islands; warm temperate forests located from the western Pacific coast to Kyushu island; cool temperate forests from the middle to north-east; and sub-frigid forests on Hokkaido island. Japan has more than 10 million hectares of plantation forest. Major plantation species are cedar, cypress and pine in most parts of Japan. Japan has more than 2.5 million hectares of land in formally protected areas. Included in this total is a network of specific forest reserves.

Japan is a major consumer of wood and paper products. It has extensive domestic forest product processing industries, which utilise a large quantity of imported raw materials. Japan is one of the world's largest importers of forest products and by far the largest importer of tropical logs and wood products. Japan's forest industries are generally characterised by large, modern, technologically advanced mills. Nonetheless, a number of smaller, older sawmills still operate. Harvesting in Japan's own forests is well below sustainable levels of growth and production due to the very high costs of extraction. Important non-wood forest products in Japan include mushrooms and bamboo.

Since World War II Japan had to cope with an environmental and economic crisis due to overexploitation of forested hills. The result was to develop a tradition of public and private forestry based on replanting and logging controls to preserve the environment. However, since the 1960’s Japan has been the world’s major importer of tropical timber and woodchips (US$9 billion/year, 1994). Japan imports of wood products (logs, lumber, plywood, panels and woodchips), it has one of the highest per capita consumption rates in the world. Over consumption of wood and paper products in Japan (about 78% of total wood product demand is met by imports from abroad) is directly linked to destruction of old growth forests in Russia, Canada, the U.S., Australia, New Zealand, Chile and the tropics. The country imports more than 5 million m3 of timber, mostly raw logs, from primary forests in Siberia; making it the largest export market for Siberian timber.

In 1989 four Japanese companies; Nissho Iwai Corporation, C. Itoh & Co Ltd, Marubeni Corporation and Mitsubishi Corporation and their associates, were responsible for respectively 14%, 13%, 12% and 7% of total Japanese timber imports. All four trading companies are members of one of the six giant ‘keiretsu’. a typical Japanese form of industrial grouping. The core members within these keiretsu’s (Mitsubishi, Mitsui, Sumitomo, Dai-Ichi, Kangyo, Fuyo and Sanwa) are closely connected by means of cross-holding of shares, mutual directors, regular meetings, and intensive financial and trade relations. They therefore can influence each other’s activities and to a certain extent, can be held responsible for each other’s business policies. Small companies involved in buying timber concentrate on more frontier areas, such as Alaska and Papua New Guinea.

Other companies recently involved in the woodchips trade include: the Daio Paper Corporation, with concessions and mills in Chile; Daishowa with subsidiaries in Canada and Papua New Guinea; Jujo Paper Corporation; and C Itoh with joint ventures in Australia, Brazil and Thailand; Kanzki Paper Manufacturing, operating in the USA; Nissho Iwai with a 15% stake in a Brazilian joint venture in 250,000 ha of the Amazon: Oji Paper with joint ventures in Russia and subsidiaries in Brazil, Canada, Indonesia, New Zealand and Australia.
Source: Josh Newell, FoE Japan: Daily Yomiuri Newspaper, May 24 1996: Nippon Paper
 
Korea

The forests of the Republic of Korea cover around 65 percent of the total land area. Coniferous forests predominate, comprising almost half the forest area. The remaining forests are almost evenly divided between deciduous forest and mixed species forest. The predominant coniferous species are Japanese Larch (Larix leptolepis), Pitch pine (Pinus rigida) and Korean pine (Pinus koraiensis). A high proportion of the Republic of Korea's forests are the result of large-scale reforestation programmes. Korean forests were badly degraded through the first half of the 20th Century, due to: logging under Japanese occupation; intense demands for fuelwood; and war damage during the Korean conflict. Between 1961 and 1995, however, stocked forest land increased from 4 million hectares to 6.3 million hectares, as a result of a large-scale reforestation. Around 70 percent of Korea's forests are under private ownership. Korea has a network of more than 70 protected areas.
The vast majority of the Republic of Korea's industrial roundwood is imported, with significant quantities of wood pulp also imported. The Republic of Korea has an extensive wood processing industry based largely on imported wood. Paper production is particularly significant.

The main product from forests in Korea are non-wood forest products, such as chestnuts and mushrooms, which are major exports.
 
Canada and the United States

In early 1999, the International Institute of Applied Systems Analysis in Austria concluded that current logging practices in both the United States and Canada were unsustainable. The problem is that national data on wood supplies does not take into account government committments to maintain tree cover, protect against erosion and sustain biodiversity in forests. Forestry scientists simply work out how much timber is growing and assume it can all be harvested. The situation in Canada is described as being desperate with growth rates being overestimated by 40% in some provinces and that the rate of harvesting in Canada is now approaching twice the rate of replanting. Is it any wonder that forests around the world are being destroyed when Canada has been a driving force in funding model forests in a number of countries in order to illustrate how sustainable forest management should be carried out?

In August 1999 timber harvesting in the Pacific Northwest was thrown into doubt when U.S. District Judge William Dwyer ruled that the U.S. Forest Service has been violating a landmark 1994 plan to protect the spotted owl in the old growth forests of the Pacific Northwest, mainly by failing to conduct wildlife surveys on federal land before approving logging contracts. The decision, which also faulted the Bureau of Land Management, could halt logging on more than a half-million acres of federal land and is a slamming inditement of forest mis-management by the U.S. Forest Service.

In early October 1999, President Clinton announced steps to preserve 40 million acres of federally owned forest - an area the size of Virginia and West Virginia combined - as roadless areas protected from development. In addition to the 40 million acres, Clinton asked the Forest Service to determine whether 15 million pristine acres still being inventoried should be protected. Currently, about 18 percent of the 192 million acres of federal forest is protected as wilderness. About 60 million acres are without roads, or signs of logging, mining and other development.Clinton's plan would cover isolated forest areas of 5,000 acres or more and would affect road-building and other development in 35 states, most of them in the West.

The first flaw in his plan is that it appears to prohibit road-building but not logging. These days, helicopter logging is becoming increasingly common as a way of extracting the trees from the cut-over terrain to the nearest available road. Logging won't be banned, it seems. Nor will livestock grazing, mining or dirt bikes. The plan falls short of protecting all roadless areas.

There are around 60 million acres of unexploited forest under federal supervision, and Clinton's plan applies to only 40 million of them. More than half the area covered by the Clinton plan is composed of rocks and ice, with no trees. By contrast, the 20 million acres that have been excluded are mostly forested terrain." The Forest Service calculates that under the plan, timber harvests will decline by only 28 million board feet. The annual take from national forests is 4 billion board feet. Another huge defect in the plan is the apparent omission from its purview of the nation's largest and most ecologically intact national forest, the Tongass in Alaska.

Pacific Northwest US

The Pacific Northwest (PNW) was once covered with 2000 year old trees. Over 95% of the original Californian redwoods have been logged. Most unprotected ancient redwood groves, including Headwaters forest, reside on land controlled by the multinational MAXXAM Corporation, Louisiana-Pacific (LP) and Georgia Pacific (GL). They log second and third growth redwood areas. Only 5 to 8% of Oregon and Washington’s original forest remains yet 13 million board feet of wood is extracted each year. One quarter of the PNW cut is shipped overseas as unprocessed wood products, making Washington the world’s largest exporter of raw wood products.

Northeastern US

The majestic lands that were once the eastern forests have been cleared twice since colonisation. The tree-covered landscape is on the verge of reverting to an ecologically intact ecosystem. The maturation of these forests has attracted the timber industry. Industries in Maine and New Hampshire are beginning a log export business liquidating 24 million board feet annually. In Maine logging will proceed in tiny public forests comprising only 5% of the State. These lands belonged to the tribes e.g. the Abenaki who have inhabited the region for 10,000 years.

Central/Southeastern US

The Central Hardwood region is under threat. Scattered and sliced by urban sprawl, mixed deciduous and coniferous forests stretch the length of the Ohio River from the Atlantic to the Mississippi. The Tennessee River basin was initially dammed by the Tennessee Valley Authority (TVA) to produce energy. Now these same waterways are used to export woodchips back to Japan. The Southeastern United States is actually rolling hills of monoculture plantations, with pesticides, herbicides etc.

Southwest US/Mexico

The mixing zone of temperate and tropical species is threatened. Loss of over 90% of riparian forests threatens hundreds of sensitive species in Arizona and New Mexico. Illegal logging, road building, corruption, and drug trafficking are tied to violent political bosses (or caciques) and threaten the last remaining old growth and Chihuahuan biodiversity.
 
22 species of wildlife have disappeared in Canada and a further 285 animal and plant species are in danger, including the Atlantic cod, grizzly bear, five lined skink, and the swift fox. Environmental scientists believe habitat protection is critical and have calculated that 80 per cent of Canada's 285 endangered animal and plant species are at risk because of threats to the habitat. In Ontario, the logging of 92 per cent of the "Carolingian" forest, that once blanketed much of the south-western part of the province, has endangered many bird and animal species. Canada does not as yet have endangered species legislation.

British Columbia represents one of the last frontiers for the timber industry. It retains some of the largest intact temperate rainforest in the world as well as an incredible biological and social diversity. BC provides 50% of Canada’s forest products. The destructive forestry practices have earned it the reputation of "Brazil of the North". The destruction of BC’s forests is condemned internationally. In April (1993), the BC government opened 72% of Clayoquot Sound to BC’s largest logging company, Macmillan Bloedel. Massive protests followed seeing almost 1000 people arrested.

Through BC’s feudal system of long-term tenure leases, a handful of companies - especially MacMillan Bloedel, International Forests Products (Interfor) and Doman (Western Forest Products) have been able to reap huge returns from logging Public and First Nation lands. They control 25% of Canada’s total rainforest territory and 50% of the total timber removed. Every year 200,000 ha of forest is logged in B.C. a vast amount is clearcut. Today the province’s forest companies are licensed to cut more than 71 million m3 of timber of publicly owned forests. Half of that cut is controlled by 9 companies.

A 1996 report issued by the British Columbia Ministry of Environment indicated one in 10 plant and animal species in B.C. are endangered or threatened with extinction. The greatest threat to species survival is loss of habitat. British Columbia's ancient rainforests are home to 70 per cent of Canada's species diversity. Greenpeace is calling on the B.C. government to enact endangered species legislation to protect Canada's national heritage. The recent discovery of 300-500 new species of insects in the treetops of B.C.'s ancient rainforest by two University of Victoria entomologists has scientists worried that a lack of protection for these forests could result in a loss of species that could one day prove to be a cure for illness, among other things. The majority of the remaining intact rainforest valleys in British Columbia are scheduled to be logged or have roads built into them within the next 5 to 10 years, primarily by two logging companies, Western Forest Products and International Forest Products (Interfor).

Indonesian Rainforest Paper Imports
Ban Indonesian Rainforest Paper

Indonesia's forest ecosystems and species are disappearing fast. A World Bank study estimates that the deforestation rate in Indonesia is higher than it has ever been at 2 million ha/year, representing an annual loss of forest equivalent in area to the size of Belguim. (International Herald Tribune 25/1/00 - Indonesia¶s forests are Vanishing Faster than Ever - Thomas Walton & Derek Holmes).

Illegal logging in Indonesia is rife. A study by the UK Government funded Indonesia-UK Tropical Forest Management Programme concluded that 73 per cent of all logging in Indonesia is coming from undocumented, and presumably illegal, sources. (Roundwood Supply and Demand in the Forest Sector in Indonesia - UK Tropical Forest Management Programme, 8 December 1999).

The military relies on illegal activities, including logging, to raise at least half its operational costs and the same could be true of the police. (Indonesia: Natural Resources and Law Enforcement, International Crisis Group (ICG), December 2001). Indonesian pulp producers may have obtained as much as 40 per cent of the wood they consumed between 1994 and 1999 from illegal sources. (Christopher Barr, Political Economy of Fiber and Finance in Indonesia¶s Pulp and Paper Industries - Banking on Sustainability: Structural Adjustment and Forestry Reform in Post-Suharto Indonesia, CIFOR and WWF's Macroeconomics Program Office, Washington DC, 2001).

Of the 120 million m3 of wood estimated to have been consumed by the Indonesian pulp industry between 1988 and 2000, only 10% was harvested from plantations (Ibid). The rest has almost entirely been sourced by clear cutting natural forest, resulting in the destruction of over 900,000 hectares of highly biodiverse rainforest (Ibid). The Indonesian pulp and paper industry is running out of wood and facing a plantation based raw material short-fall for at least the next six years and possibly far longer (Ibid).

Which Companies Are Involved?

APRIL (Asia Pacific Resuorces International Holdings Ltd) APRIL is a Singapore held company, part of the Indonesian Raja Garuda Mas Group owned by the business magnate Sukanto Tanoto.

APRIL's main pulp subsidiary is Riau Andalan Pulp and Paper (RAPP), located in Riau Province on the Indonesian island of Sumatra. Australia's only fine paper maker PaperlinX have imported pulp from RAPP in the past

(http://www.australianpaper.forests.org.au/docs/ABOUTSITE.htm#forestissues).

It is very likely that PaperlinX continue to include Indonesian rainforest pulp in their Reflex Copy paper.

RAPP began operating in 1995 and has now developed a pulp mill with a capacity of 2.0 million tonnes per year, making it the largest pulp mill in the world (Ibid). The vast majority of fibre going to APRIL¶s RAPP mill has been mixed tropical hardwood obtained through the clearance of natural forest (Ibid). APRIL also sources pulp from Tesso Nilo one of the most biodiverse lowland forests in the world. (WWF-Logging Activities and Forest Conservation in the Tesso Nilo Forest Complex, Riau, Sumatra, Indonesia - AREAS Riau Project, December 2001).

A study by the independent auditors SGS, commissioned by APRIL in 1998, found that over 40,000 hectares of APRIL's concession area has been claimed by local communities (SGS audit - 1998). The area where the RAPP factory has been built is land claimed by the indigenous people of Delik, Sering and Kerinci villages. APRIL was until recently the manager of the Indorayon pulp and rayon plant, now known as Toba Pulp Lestari, in North Sumatra. Violent clashes between community members and security forces led President Habibie to announce the temporary closure of the mill in March 1999. An Australian Director of paper merchants Consolidated Paper Industries (CPI), Ian Dicker, has been a director of Indorayan. CPI are major distributors of APRIL paper in Australia.

The exponential growth of Indonesia's pulp and paper industry has been fuelled by a massive injection of capital investment of between US$12 billion and US$15 billion (Christopher Barr, Political Economy of Fiber and Finance in Indonesia's Pulp and Paper Industries - Banking on Sustainability: Structural Adjustment and Forestry Reform in Post-Suharto Indonesia, CIFOR and WWF's Macroeconomics Program Office, Washington DC, 2001). This investment was made without financial institutions ensuring that the pulp and paper companies receiving their investment had secured a legal and sustainable raw material supply. APRIL is now facing a serious financial crisis. It is renegotiating repayments on US$1.9 billion in debt while facing a possible raw material shortage in the future.

APP (Asia Pulp and Paper)

In the wake of the Asian financial crisis in 1997/8, one Indonesian company, APP appeared to emerge from the economic chaos relatively unscathed. Part of the Sinar Mas Group, APP has become the biggest pulp and paper producer in non-Japan Asia. Before and after the financial crisis, international financial institutions, including leading banks, investment groups and export credit agencies have queued up to finance and guarantee the rapid expansion of their operations. Three years later, APP is one of the largest corporate debtors in Asia, on the verge of bankruptcy and has been accused of rainforest destruction, pollution and conflict with local communities.

It is not only APP that has been involved in such destructive activity. All four of the major Indonesian pulp and paper groups have been implicated. They include, APP - Sinar Mas Group, APRIL - Raja Garuda Mas Group, PT Tanjung Enim Lestari (PT TEL) - Barito Pacific Group and Kiani Kertas - Bob Hassan¶s Kalimantis Group.

APP owns logging concessions of at least 1.5 million hectares in total in Indonesia. The Indah Kiat company is the engine that drives APP, accounting for 77% of its pulp production and 40% of Indonesia's overall pulp output. (Barr, Christopher (2000) "Profits on Paper: the Political - Economy of Fiber, Finance, and Debt in Indonesia's Pulp and Paper Industries," Centre for International Forestry Research (CIFOR) and WWF-International's Macroeconomics Program Office, [http://www.cifor.cgiar.org]). In 1999, its mills ran at full capacity, consuming 6.8 million m3 of wood - equivalent to one quarter of Indonesia¶s legal wood supply. APP report that they use 22,000 MT of wood/day, hauled on 1,000 trucks (APP presentation to ITTO/WWF - 2001).

In 1999, Indah Kiat was only able to supply 13.4% of its wood fibre needs from its plantations (Spek, M "Indah Kiat Company Update", GK Goh, 2000). Indah Kiat's operations have accounted for 287,000 hectares of deforestation, almost a third of the entire total attributable to all of Indonesia's pulp and paper companies (Barr 2000).

Indah Kiat has sourced the bulk of its raw materials from an affiliated company, Arara Abadi, which holds a 300,000 hectare eucalyptus plantation concession and conducts clearing operations of natural forest. It is estimated that Arara Abadi's legal supply of timber from their own and nearby natural forest concessions is likely to be exhausted by the end of 2001 (Barr 2000). Arara Abadi will then have to purchase timber from further afield, increasing costs and financial risk.

APP has also been engaged in a joint venture, Borneo Pulp and Paper, with Malaysia's state owned Sarawak Timber Industry Development Corporation to set up an acacia tree plantation and build a pulp and paper mill in Bintulu, Sarawak. The joint venture has been given access by the Malaysian Government to more than 600,000 ha of land. As a result more than 20,000 Iban indigenous people may be forced off their land.

APP's debt crisis

APP and its subsidiaries at this moment owe US$13.4 billion in various forms of debt. APP's total debt increased from US$2.4 billion in 1994 to US$9.1 billion in 1998, the bulk of which came in the form of bonds. Although the company was considered a safe bet by bond holders given its US$2 billion annual cash flow, rapidly declining paper prices have decimated its bottom line and placed it under enourmous pressure to service its debt. APP has estimated annual interest payments of US$800 million to US$1 billion, and an estimated US$1.5 billion of debt repayments due in 2001. But APP's income can barely meet the interest repayment, let alone pay down the principal (The Pulp and Printing & Writing Paper Sector in Post-Suharto Indonesia, Ausnewz Pulp and Paper Intelligence Service, North Hobart 1999; APP debt restructuring lifeline inevitable, Lily Kurniawati, Reuters, Jakarata, 2 Feb 2001S˙)

Source:  PaperlinX 2000 Annual General Meeting

Questions asked by PaperlinX Ethical Shareholders Group.

Question from John Poppins. Congratulations on a steady economic performance!

Regarding issues of globalisation and corporate standing, which are particularly relevant since September 11.

My first short case is: Our company has recently closed the pulp mill in Burnie, Tasmania. This resulted in the retrenchment of 300 of the 550 employees, a substantial issue for the people and economy of that community.

My second and longer issue is: Our company has sourced considerable tonnages of processed pulp from overseas, much of it from Indonesia.  A major supplier I believe was Asia Pulp & Paper.  Their Indah Kiat pulp mill is on the Siak River, which is polluted at levels which would not be tolerated in Australia. AP&P is a distressed seller, in financial difficulty, and also in difficulty trying to find sufficient timber for pulp making. I quote the following figures from the Center for International Forestry Research, Bogor, Indonesia.

Total timber demand in the Riau region is estimated at 16M cubic metres per year, of which 11 M are required by the pulp mills.  About 6 M cubic metres of timber are estimated to be legally available from the regional forests.  We have a short fall therefore of 10M cubic metres per year to be met from illegal logging or outside the province.  It is estimated that Indah Kiat may be able to produce about 1M cubic metres per year from its own plantations to fill a small part of that short fall. Illegal logging is rife to the extent that there is doubt as to whether national parks in the neighbourhood will survive.

Regeneration and plantation development are way behind plan. Basically the future of the region is being wrecked by over exploitation and inadequate replanting and control.

I could liken our situation to that of a man before a judge, accused of selling stolen TV sets. 'Your Honour', he pleads, 'one of the 10 TV sets was covered by ISO 14001, I have the documentation. 4 of the sets were quite legally obtained.  The man who sold the remaining 5 to the man I bought them from did not tell me they were illegally obtained.' We comfortable shareholders will not come before a judge because the problem lies outside our jurisdiction, in an impoverished third world country.

Could the Chairman please comment as to the thinking of the board and company on these 2 issues, which may have some relationship?

The Chairman, David Meiklejohn, replies:

I will ask Mr Wightwick to respond regarding the Indonesian pulp concern. As far as the closure at Burnie pulp mill.  Obviously there are serious social issues involved with downsizing, to use the jargon, and we are conscious of those.  The pulp mill was of course closed prior to the inception of PPX.  That's no excuse from our point of view but we recognize that we were handed a situation where our company didn't have sufficient pulp, so we had to import from a range of places including Indonesia.   I recall your excellent question last year about the level playing field and the difficulties we have in competing with dumped products.  We do urge the Government to ensure the playing field is level and preference not be given to manufactured products from countries such as those which compete with us and cause us to lose jobs in manufacturing plants in Australia. Turning now to wood sourcing. Mr Ian Wightwick, General Manager: ..we buy no pulp at all from AP&P.  Mr Poppins may well come back and say we do buy paper from AP&P.  I'll address that in a moment. Our pulp sourcing comes from Canada, 2 different types of pulp from NZ, eucalypt plantation pulp from Thailand, 2 major suppliers of eucalypt plantation from South America.  We buy from APRIL, Asia Pulp Resources Ltd.  I have visited that mill along with one of my senior colleagues who ran Maryvale mill.  One of the areas we looked at when we went there was the quality of their environmental equipment, and how they deal with environmental issues.  We require them to warrant to us as best we can determine - we are not there all the time - that they do follow practices that would stand up worldwide.

As far as paper is concerned.  Yes, we do buy paper from AP&P, which as you correctly say is financially distressed.  That paper comes from a mill called Tilli Kinya which in turn obtains pulp from other AP&P locations. We have been concerned by reports that we have received, such as the one you quoted, about their environmental credentials.  We have, as best we can, required of the suppliers, not only AP&P but indeed, Scandinavia, USA, Europe, to tell us the current standard of the environment, of their processes and sources, and also what they intend to do in the future. .We are doing our very best to ensure that we do not take pulp or paper from people who would not stand up under international scrutiny.

Question from Mr. Edwards  (not a PPX Green Shareholder) Mr Chairman, I'd like to say it's a welcome co-operative attitude between the green lady in the red blouse, rather than having a lot of strident chatter on both sides. Just for my information do you have any figures on the percentage of old growth, re-growth and plantation sources from Australia and overseas that goes into the product from whatever source?  Do you have breakdown for the 3 sources currently and for the foreseeable future? Reply from the Chairman, David Meiklejohn That is an extraordinary lot of information and I am not sure how relevant that might be.  Ian, can you comment on the old growth/re-growth?

Ian Wightwick In Australia there is nothing gone to waste understood by foresters, state parks and commonwealth.  There is nothing from old-growth forest. Re-growth forest is predominantly from the destruction in 1939. Re-growth forest is harvested in small coupes.  We are not allowed to harvest if there isn't any saw log harvesting in those regions.  We take the wood that is not satisfactory for saw logs and the off cuts and sawmill residues from saw millers. As to S.E.Asia . we are not harvesting anything from what could be classed as World Heritage type old growth forest.

Ban Imports Of Indonesian Paper And Pulp

Refuse To Use Any Paper Without Country Of Origin Listed On Package As Indonesian Paper Often Comes Unmarked.

For Ethical Sources Of Paper see the "what you can do" page, or, download a Good Paper Guide [157 KB] in PDF form . The Conservatree site in the US also has lots of valuable advice for consumers/purchasers.

For more info see: Hancock Watch

For full copies of information on APP and APRIL see FoE UK website: http://www.foe.co.uk/pubsinfo/pubscat/reports.html

Contact Foe Forest Network On: 9419 8700 Or Email: foe@melbourne.foe.org

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