Two environmental groups have submitted an official complaint to the world’s premier forestry credentials body calling on it to revoke sustainability certificates from Paper Excellence — Canada’s largest forestry company.
The complaint to the Forest Stewardship Council (FSC), filed Nov. 8 by Greenpeace Canada and Indonesian group Auriga Nusantara, cites “strong evidence” that Paper Excellence is a “sister company” of Asia Pulp and Paper (APP), a forestry Sino-Indonesian forestry conglomerate that lost its green FSC credentials in 2007.
If FSC finds Paper Excellence and APP are part of the same corporate group, its own policy requires it to revoke all of the B.C.-based company’s green forestry certificates. That could potentially cost the company millions of dollars in lucrative contracts in both the U.S. but also Europe, where new regulations restricting the import of products linked to deforestation and forest degradation will soon take effect, said Grant Rosoman, a senior analyst for Greenpeace International.
“It’s sort of like a foot in the door to the European markets,” said Rosoman. “It's a huge significance for Paper Excellence if they lose the FSC certificates.”
APP lost its FSC green credentials in 2007 when the body chose to disassociate itself from the company after it was found to be involved in environmental destruction and conflicts with Indigenous groups.
By 2012, several big companies like Nestle, Unilever and Mattel boycotted APP, leading to the cancellation of over a billion dollars worth of contracts for everything from tissue paper to packaging.
At the time, Paper Excellence was still a relatively small player in Canada, buying up mills in the Prairies, B.C. and Nova Scotia. But in recent years, Paper Excellence has massively expanded its footprint, acquiring the forestry giants Domtar Corporation for US$3 billion in 2021 and Resolute Forest Products for US$2.7 billion in 2023. It now controls 42 pulp, paper and saw mills with FSC certifications in Canada, the U.S. and France.
It has also expanded its control over Canadian forests, and now manages 22 million hectares of forest land, of which Greenpeace and Auriga say at least 7.3 million hectares are certified by the FSC.
The complaint to FSC alleges new evidence brought to light by the International Consortium of Investigative Journalists (ICIJ) — and its media partners the CBC, Glacier Media, the Halifax Examiner, Le Monde and Radio France — warrants a re-examination of Paper Excellence’s status within FSC, a group that calls its label “the world’s most trusted mark for sustainable forestry.”
Among other things, they cite insider accounts reported by ICIJ members suggesting APP Chairman Teguh Wijaya made high-level decisions for Paper Excellence, and that “APP staff directed Paper Excellence’s behaviour in significant ways” that could affect its returns.
Documents uncovered by the consortium show Paper Excellence mills took out US$1.25 billion in credit from the China Development Bank, an investment arm of the Chinese government. The reporting by ICIJ members also appeared to show Paper Excellence pulp shipments sent from B.C. to Shanghai through an APP-linked logistics company.
“They want to keep the perception that Paper Excellence is an asset of Canada for Canada and by Canada, but in reality, it's a feeder for the Chinese machine,” one former manager at APP’s Shanghai offices, told Glacier Media on condition of anonymity.
The complaint also points to research presented in a report published last fall, that Auriga and Greenpeace say shows “strong indications that Sinar Mas has 'significant power' over Paper Excellence.”
The 2022 report, Papering Over Corporate Control, suggests a nexus of connections linking the two companies. Among them, Jackson Wijaya, Teguh’s son, was found to have held key management positions in APP China while maintaining his position as owner of Paper Excellence.
The complaint to FSC points to comments made by Mary Ng, Minister of Export Promotion, International Trade and Economic Development. In 2021, she appears to tell Canada’s Standing Committee on Natural Resources that the trade commissioner service facilitated forest-related investment projects in Quebec, Ontario, Alberta, New Brunswick and British Columbia.
“Take for example, Sinar Mas from Indonesia. It has invested hundreds of millions of dollars to modernize paper mills in British Columbia, Saskatchewan and Nova Scotia, employing 3,000 Canadians…” said Ng, referring to APP’s parent company.
Officially, the Sinar Mas Group has no paper mills in Canada. The only company that fits the company profile described by the minister is Paper Excellence. A spokesperson with Global Affairs Canada did not answer questions regarding the minister's comments.
At the provincial level, the complaint cites a 2019 briefing note from the Nova Scotia Department of Finance and Treasury Board to the premier of Nova Scotia, in which Paper Excellence is described as “ultimately controlled by Asia Pulp and Paper.” And in B.C., it points to Paper Excellence’s lobbyist, Moe Sihota, who registered Sinar Mas as an interested party in his registration.
ICIJ’s initial series of stories, published in March, prompted Canada’s Standing Committee on Natural Resources to launch an investigation into Paper Excellence.
Wijaya has so far refused multiple requests to appear before the parliamentary committee. NDP MP and natural resources critic Charlie Angus filed a notice of motion to pass a legal summons for Wijaya, though it’s not clear when that vote will go ahead or if it will compel him to speak before the committee..
“This is a man who's in control of a large swath of Canadian forest. This is a man who was given control of major Canadian companies. He has an obligation to testify,” Angus recently told Glacier Media.
Paper Excellence denies connections to other corporate groups
Timer Manurung, chairman of the environmental group Auriga Nusantara, said APP has used Paper Excellence to expand its reach into North America without any consequences from the FSC.
“Canadians, who like us Indonesians are already dealing with uncontrollable forest fires and dangerous air quality, deserve to know that Paper Excellence’s sister company APP has in Indonesia one of the worst corporate track records not only on deforestation but for forest fires as well,” Manurung said in a statement.
But Paper Excellence says any links with APP in the early years of operation were small and did not last. Today, both Paper Excellence and APP maintain they are independent of one another.
Paper Excellence spokesperson Brenda Martin said the company is not part of APP or any other group of companies under FSC’s policies. She said the company will work with FSC to ensure it accesses the information required to “reaffirm” Paper Excellence’s certification.
“Paper Excellence is owned solely by Jackson Wijaya and is completely independent from Asia Pulp and Paper,” wrote Martin in an email to ICIJ media partners.
“Numerous stakeholders and regulatory authorities — including global financing institutions, government agencies, and regulatory and certifying bodies, among others — have satisfactorily reviewed this question.”
FSC’s Canadian operations have recently come to similar conclusions. A spokesperson for FSC Canada said the body has never disassociated itself from an entire corporate group in Canada. But that path can at times be “the best solution,” such as when a company “is not willing or able to immediately work with FSC to correct the wrongs,” said FSC Canada spokesperson Monika Patel said in an email.
“Regarding Paper Excellence, FSC has evaluated the shareholder interests between the APP group and Paper Excellence multiple times — most recently a few weeks ago — and has concluded each time that there is no majority ownership relationship between APP and Paper Excellence,” Patel said.
“This is the reason Paper Excellence is able to hold FSC certification.”
FSC International did not respond to questions by the time of publication.
APP failed to live up to conservation promises, report claims
Three years after APP was dissociated from the FSC, a report from a coalition of environmental watchdogs, known as Eyes on the Forest, estimated the company was responsible for deforestation of an area greater than two million hectares — roughly the size of Israel — including Sumatran tiger and orangutan habitat.
In 2013, APP replaced some key high-level staff and launched a new Forest Conservation Policy that committed to end deforestation on its concessions and stop working with suppliers who cut high-conservation value forests. Rosoman said Greenpeace worked with APP for several years and that it made some good progress.
APP says its supply chain has been “deforestation free” since 2013. The company told ICIJ media partners earlier this year it has also made significant progress on human rights and environmental destruction in recent years. According to a recent sustainability report, APP said it resolved more than 60 per cent of conflicts it had with local communities in 2021.
But in 2017, the company’s relationship with several NGOs fell apart after environmental groups, including Greenpeace, said they saw the company’s promises slip.
“We've seen a fairly rapid decline really, and a whole lot of breaches,” Rosoman said.
Two weeks ago, a decade-long report card looking into the company’s environmental and human rights record criticized APP for originally committing to end deforestation by 2013, and then later moving the cutoff date to the end of 2020. Between 2013 and 2022, that meant up to 75,000 hectares of deforestation had occurred on APP’s supplier forest concessions or with companies connected to the pulp and paper conglomerate, the Greenpeace report said.
APP is currently working to regain its green credentials under the FSC certification scheme.
Rosoman said if FSC International were to allow APP to re-certify its operations as green or ignore the links between APP and Paper Excellence, it would have a massive greenwashing effect, undermining the legitimacy of the organization at a global level.
“If FSC fails on this one, it basically opens the floodgates for other companies… that have done bad things,” he said.
“They would lose a lot of credibility.”
