Section 1: Overview of key activities in the reporting period

Transcription

1 TFT Progress Report on Asia Pulp & Paper Group (APP) Forest Conservation Policy Commitments Reporting period: January, February, March 2014 Date: 27 May 2014 This is the sixth update report by TFT on APP s progress toward meeting its Forest Conservation Policy (FCP) commitments made on 5 February 2013, as part of its Sustainability Roadmap Vision This report covers activities undertaken throughout January, February and March Earlier progress reports can be viewed here (fifth report), here (fourth report), here (third report), here (second report), and here (first report). Section 1: Overview of key activities in the reporting period Moratorium on natural forest clearance TFT verification reports were published following allegations of a moratorium breach at PT Daya Tani Kalbar (DTK) in Kalimantan, and following grievances raised at APP supplier PT Wirakarya Sakti (WKS) in Jambi province. At DTK, a joint TFT and APP investigation found that a breach of the moratorium did not occur and that the alleged forest clearing of 1,400 hectares took place prior to the 1 February 2013 moratorium. At WKS, an investigation found that WKS had not continued to supply an APP mill at Tebing Tinggi with natural forest wood (NFW) under a different name, nor had any NFW entered this APP mill after 31 January Full verification reports for DTK and WKS can be accessed via APP s FCP monitoring dashboard. Moratorium / Natural Forest Wood (NFW) monitoring APP s moratorium boundaries and all pre-moratorium NFW usage is monitored quarterly as part of APP s Independent Observer (IO) monitoring programme. Monitoring was conducted with independent observers in Riau, Jambi, South Sumatra, West Kalimantan and East Kalimantan provinces in the second half of January. Field checking identified a number of ongoing threats to APP s moratorium area, but confirmed the moratorium remains intact in those concession areas. IO verified NFW processing figures were compiled and uploaded to APP s FCP monitoring dashboard. The next phase of IO monitoring will start in June. Rainforest Alliance (RA) In January, APP announced it had engaged international environmental organisation The Rainforest Alliance to conduct an independent evaluation of its progress in implementing its FCP. The evaluation will begin with APP suppliers concessions in Indonesia and later include an evaluation of progress in China. Indicators to evaluate APP s FCP implementation were developed by RA over January - March following consultation with stakeholders. More details of the evaluation can be accessed via The Rainforest Alliance website or via APP s FCP monitoring dashboard. 1

2 One-year FCP anniversary 5 February 2014 marked the one-year anniversary of APP s FCP. A panel event was held in Jakarta to discuss twelve months of progress and challenges. The panel comprised TFT, Rainforest Action Network, WWF-Indonesia, Greenpeace-Indonesia, Ekologika (APP s HCV assessor) and APP. The event was recorded and can be accessed via the APP website here. Peat expert team APP finalised the formation of its peat expert team in January. The team comprises a consortium of organisations including Euroconsult Mott MacDonald, Deltares and Wageningen University and Research Centre. It is being led by Wageningen University and Research Centre. The team began its work in February with a three-month inception phase. Dashboard v2.0 Dashboard version 2.0 went live on TFT s SURE Technology platform in February following stakeholder consultation and input in Q4 of The dashboard has been designed to allow users to track APP s implementation of its FCP. Version 2.0 includes additional progress data and information, including further details of APP s approach to FCP implementation in China. Section 2: Moratorium status The natural forest clearance moratorium is in place across all of APP suppliers concessions in Indonesia. In this reporting period, two moratorium breach allegations were investigated and reported. The investigations concluded that no breaches in the moratorium had occurred. PT Daya Tani Kalbar (DTK) On 17 December 2013, the NGO consortium RPHK (Kalimantan Forest Monitoring Volunteers) published a report claiming that a moratorium breach had taken place at APP supplier DTK in Kalimantan 1. The report alleged that DTK carried out natural forest clearance in an area of 1,400 hectares after 31 January 2013, new natural forest wood stacks had not been recorded in a September wood stock inventory (SO) and that DTK and APP had failed to prevent neighbouring palm oil concession, PT Gerbang Benua Raya (GBR) with whom DTK shares an overlapping concession boundary from further illegal land clearing in the overlapping concession area. A subsequent joint TFT and APP investigation found that: A breach of the moratorium did not occur and that the alleged forest clearing of 1,400 hectares took place prior to the 1 February 2013 moratorium. The area in question had been cleared prior to 1 February and had, accordingly, been established as a non-moratorium area. This conclusion was substantiated through boundary mapping, moratorium/non-moratorium demarcation and photographic documentation. 1 DTK was the focus of an earlier moratorium breach allegation in April A subsequent TFT verification report published in May found that APP had not violated its moratorium and that land clearing had been conducted by neighbouring palm oil supplier, PT Gerbang Benua Raya (GBR), the result of an overlapping concession licence between DTK and GBR. 2

3 Clearing activities shown in the satellite images presented by RPHK illustrated the clearing of shrubs and bushes following removal of the natural forest logs felled prior to 1 February As to concerns on the natural forest wood stacks, the investigation confirmed that: These consisted of wood felled prior to the moratorium. Although DTK did report these final wood volumes to the Ministry of Forestry in September-November 2013 (in accordance with government regulation) they failed to report them to APP s FCP implementation team for stock inventory. Thus DTK failed to properly follow stock inventory procedures. The FCP implementation team also failed to record estimated volumes of these wood stacks sent by DTK in July before the aforementioned final volumes were reported to the government. With regard to land clearing activities by PT. Gerbang Benua Raya a palm oil plantation company, the TFT verification team concluded that DTK had taken meaningful actions to compel PT. Gerbang Benua Raya to stop its oil palm operations in the overlapping concession area. Despite these actions, PT. Gerbang Benua Raya continued its operations because it claims to be legally compliant with Indonesian law. A full TFT verification report for DTK is accessible via APP s FCP monitoring dashboard. PT Wirakarya Sakti (WKS) On 27 November 2013, APP received a grievance letter from a community representative in Lubuk Mandarsah village, setting out a number of grievances concerning WKS in Tebo province. Among those grievances were claims that WKS continued to sell natural forest wood to APP s mill at Tebing Tinggi and that WKS had cleared land in a riparian zone 2 after 1 February Issues concerning the resolution of conflict in the village, including TFT s role in mediating that conflict (concerning independence and speed of resolution), were also raised. A TFT verification team comprising APP, Sinar Mas Forestry, TFT, Greenpeace and local community members, investigated the grievances. The investigation found that: WKS had not continued to supply an APP mill at Tebing Tinggi with natural forest wood (NFW) under a different name, nor had any NFW entered this APP mill after 31 January The riparian zone in question turned out not to be a riparian zone, based on spatial planning results from APP s 2006 Micro Delineation 3 and General Work Plan (RKU). 4 Acacia planting and harvesting was therefore permissible and did not violate the moratorium. 2 Riparian zones are the areas of interface between a river and the land. They provide habitat to aquatic and territorial plants and animals as well as carrying out an important role in the regulation of river bank stability and river contamination. Agricultural activities are not permitted in riparian zones. 3 Micro delineation documents are mandatory under Government law. They are used to visualise the situation on the ground and as a tool for micro planning. 3

4 Investigations concerning claims around local conflict resolution in Lubuk Mandarsah village concluded that: The resolution process in the village is ongoing and TFT s role in the resolution is as a facilitator and not a mediator. Lubuk Mandarsah village appointed the Jambi Farmers Union (PPJ) as its representative and PPJ has since confirmed that it will continue negotiations according to the conflict resolution process and the conflict may take more time to settle. A full TFT verification report for WKS is accessible via APP s FCP monitoring dashboard. PT. Suntara Gajapati (SGP) TFT has been working with APP to resolve a land conflict at pulpwood supplier PT. Suntara Gajapati (SGP), in Dumai, Riau. In a land conflict dating back several years, the local leader (Khalifah), Hasan Basri, has claimed traditional ancestral lands over an area of 1,600 hectares inside the concession area which was granted by SGP. As part of the agreement between SGP and Khalifah, 900 hectares of this land had been cleared and is to be established into rubber plantation by the local community with the help of SGP prior to 5 February The Khalifah now wishes to continue to clear the remaining 700 hectares, all of which lies on forested peatland. Clearance of this land would breach APP s forest moratorium. TFT and APP have held meetings with the Khalifah to explore alternative solutions, including the offer of non-forested land in place of the forested 700 hectares. This offer has been rejected. TFT and a number of NGOs, including Greenpeace, Jikalahari, Scale Up, WBH and WWF, recently visited the SGP area to seek clarity on the legitimacy of the land claims being put forward by the Khalifah. This issue is ongoing and APP is seeking a solution. For more background, this issue was recently covered in a mongabay.com article. Moratorium / Natural Forest Wood (NFW) monitoring APP and TFT conduct moratorium boundary checking in order to identify potential breaches in the moratorium area (field monitoring), and to monitor the processing of natural forest wood cut prior to the 1 February 2013 moratorium (mill monitoring). The monitoring is conducted quarterly and involves Independent Observers (IO) from NGOs and local universities. During the reporting period, field monitoring was undertaken in Riau, Jambi, South Sumatra, West Kalimantan and East Kalimantan provinces. All monitoring was conducted between January and included participants from APP, TFT, Sinar Mas Forestry, and IOs. At the same time, monthly monitoring of NFW that reached APP s mills log yards at IKPP (Riau), LPPPI (Jambi) and SBSA (East Kalimantan) mills before 31 August 2013 continued. Monthly monitoring will carry on until all NFW stocks have been processed. The following conclusions and recommendations were made by the FCP implementation team: 4 RKU document is mandatory under Government law, to describe long-term planning. 4

5 There were no breaches of the natural forest clearance moratorium commitment by APP s suppliers. The boundary markings and warning boards identifying the moratorium area were still well secured. A number of threats to the moratorium boundary areas exist in the concession areas monitored. These threats have been documented and this data will be used/compared in future boundary monitoring activities Suppliers should proactively socialise the existence of the moratorium area, the boundaries, the purpose and objective of the moratorium to all stakeholders. Suppliers should be proactive in resolving overlapping concession boundaries where these exist and pose a threat to the moratorium. Suppliers should work with relevant authorities to resolve the illegal logging issues in their respective concessions. Updated NFW processing figures were also compiled and uploaded to APP s FCP monitoring dashboard. Section 3: HCV and HCS commitment progress Policy commitment 1 High Conservation Value (HCV) and High Carbon Stock (HCS) APP and its suppliers will only develop areas that are not forested, as identified through independent HCV and HCS assessments. High Conservation Value (HCV) assessments HCV assessments for all 38 plantation suppliers (HTI) concessions are being undertaken by Asia Pacific Consulting Solutions (APCS) and Ekologika Consulting. APCS assessments on 11 suppliers concessions: o Draft HCV reports were submitted to peer review following an initial review and comment from APP. o Draft reports for TMA, WKS and RHM in Jambi province were shared with a number of NGOs in February for input and feedback. These reports are now final. o The remainder of APCS HCV reports have been peer reviewed and final drafts sent to APP. Ekologika assessments on 27 suppliers concessions: o Riau: Riau cluster I (RIA, MSK, BDL, RUJ, SGP, BKM): post-assessment public consultation scheduled for mid-may Target for final report to be finished is end of June Riau cluster II (PSPI, BDB, RML, MHJ, SPM, BBHA): pre-assessment public consultation 15 April 2014, field assessment end April mid May Target for final report to be finished is August

6 o o o South Sumatra: Full assessment completed. Stakeholder feedback from postassessment consultation being incorporated into report. Target date for final report to be finished is June East Kalimantan: Stakeholder feedback from post assessment consultation being incorporated into report. Target date for final report to be finished is May West Kalimantan: Peer review completed. Target date for final report to be finished is May High Carbon Stock (HCS) assessments Following revisions to the HCS assessment schedule (communicated in the fifth TFT progress update), solid progress was made during the reporting period. The final HCS completion date was adjusted to July (from June) due to a minor delay in the commencement of the revised schedule. Progress was as follows: Stage 01: South Sumatra (OKI and Muba) and Jambi province o Field inventory and land cover stratification final checks were all completed for South Sumatra (OKI and Muba) and Jambi regions o Draft report preparation has now commenced for both regions Stage 02: Riau province o Field inventory in Riau commenced in March and is 50% completed o Aerial survey in Riau was delayed due to smoke/haze and postponed until haze clears (estimated 3-4 weeks) Stage 03: East Kalimantan province (Kaltim) o Stratification in Kaltim commenced in April o Field inventory is planned for May 2014 Stage 04: West Kalimantan province (Kalbar) o Stratification of Kalbar to commence in May 2014 o Field inventory is planned for June 2014 Plantation growth & yield TFT met with Sinar Mas Forestry and APP to communicate the results of its growth & yield assessments and to receive feedback. These inputs are being used to finalise the report. The results and recommendations from the growth & yield study will also provide additional information for the development of the Integrated Sustainable Forest Management Plan (ISFMP) of APP s pulpwood suppliers plantation forest concessions. Integrated Sustainable Forest Management Plans (ISFMPs) APP s HCV assessor, Ekologika, held a meeting with PT Wirakarya Sakti (WKS) and PT Tebo Multi Agro (TMA) (APP suppliers in Jambi province), to begin preparations for ISFMP development in Jambi. WKS and TMA will be the first APP concessions to pilot the forest management planning process. 6

7 A meeting between Ekologika and forestry consultant group, Ata Marie, has also been scheduled to clarify outputs from the HCS study and to determine how these outputs will be integrated into the ISFMP development process. ISFMP development will begin in Jambi once all the feeder studies - HCV, HCS and peat - are completed for this area. ISFMPs for other regions will follow once the studies become available. Section 4: Peatland commitment progress Policy commitment 2 Peatland management APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. In January 2014, APP formalised a team of independent peatland experts, who will work to provide implementation strategy and recommendations of best practices for APP s Peat Management and Monitoring Plan. The team of experts is being led by Wageningen University and Research Centre, Alterra, in collaboration with Euroconsult Mott MacDonald and Deltares. The team will carry out an independent peat land assessment. The first phase of the team s work is a three-month inception phase that began in February In this phase, the team is collecting data, establishing a preliminary database and maps as well as analysing current peat management issues and opportunities in APP supplier concessions. The output from the inception phase will establish the work plan for the second phase. The aim of the second phase is to fill any data gaps and define best management practices on peatlands. Recommendations from this team, along with the results of the HCV and HCS assessments, will be used to develop APP s Integrated Sustainable Forest Management Plans (ISFMP). The team is scheduled to complete the inception phase by May Section 5: Social commitment progress Policy commitment 3 Social and community engagement In order to avoid and resolve social conflicts across its supply chain, APP will actively seek and incorporate the input and feedback of a wide range of stakeholders, including civil society, as well as implementing principles including Free, Prior and Informed Consent (FPIC) of indigenous people and local communities and respecting human rights. Conflict resolution Indonesia TFT continues to support APP in resolving a number of ongoing conflicts with local communities within APP s Forest Management Units. We can report the following updates since our last progress update was published in January

8 Senyerang village, Jambi TFT has been working with SMF to monitor implementation of the MoU work plan as agreed and developed by all parties. Land compensation between the parties was agreed in January and a co-op has been established and handed over as the means by which the terms of the settlement will be delivered. TFT is monitoring the delivery of the terms of the settlement. Sorek district, Riau Through mapping and discussions with the local community, TFT identified two villages for participation in pilot conflict resolution. TFT has begun facilitation proceedings. In the initial stage of facilitation, TFT collected and verified relevant documents, began field interviews and undertook data collection/verification with relevant parties including community and government authorities at village, sub district and regency level. As a next step, TFT will conduct dialogues with the relevant parties. Progress was delayed in March due to forest fires in Riau. PT PSPI, Riau - TFT and the mediator (DKN the National Forestry Council) have completed mapping and delineating the conflict areas between the two land claimants PT PSPI and Datuk Rajo Melayu. TFT began facilitating conflict mediation with a meeting in February, but due to the absence of three Datuk leaders, agreement on the land boundaries could not be reached. Further mediation progress has not been made due to the absence of the Datuk leaders and additional time has been requested. Free, Prior and Informed Consent (FPIC) FPIC implementation OKI, South Sumatra: Eight villages were identified as being within the scope of the AMDAL (Environmental Impact Assessment Regulations). After socialisation of the mill development plan and field verification of the land tenure system and rights in the eight villages, the TFT and APP team found that only two villages (Jadi Mulya and Bukit Batu) have land rights in the designated area for mill development. FPIC is currently being implemented in these two villages. o During the socialisation and mill consultation process for the other six villages, community expectations from the mill development were captured. These included: 1. Local employment 2. Community development programme 3. Good waste treatment to prevent water pollution in the river 4. Support in education and public health 5. Communication access to the company, especially in handling any problems or community grievances FPIC Implementation PT Bumi Mekar Hijau (BMH): FPIC socialisation was completed in five villages in BMH further to the development of HTI in the district. The team will continue with field verification of the land tenure system and rights in these villages. 8

9 Conflict mapping Indonesia Following the completion of conflict mapping across all 38 suppliers concessions (see fourth TFT progress update), TFT has organised and rolled out a capacity-building workshop designed to train SMF staff and managers on how to develop action plans for resolving social conflicts, as identified through the mapping process. Workshops were held in Riau, Jambi, South Sumatra, East Kalimantan and West Kalimantan. SMF managers responsible for managing social conflicts in their respective concessions are now developing draft action plans for the resolution of such conflicts. All concessions have completed draft action plans to address the conflicts that they identified. Conflict mapping China RRI social performance study: Findings of the social performance study (with key focus around land acquisition) undertaken by land rights NGO Landesa at APP plantations in Guangxi and Yunnan provinces, were shared with APP at the end of February for APP s review and comments. Social conflict management: APP-China is developing new guidelines and standard operating procedures (SOPs) for conflict management and land acquisition. TFT has reviewed and provided input into the documents and APP-China has integrated that feedback accordingly. APP-China and TFT have discussed the possibility of using pilot forest farms to implement the guidelines and SOPs. Pilot community projects: TFT and APP-China have undertaken further field feasibility studies for the deployment of trial community relationship improvement projects. The initial study was carried out on two trial farms in Hainan province. TFT and APP-China will use the findings to develop an implementation plan for the trial projects. Social conflict database: TFT and APP-China agreed and finalised the database template for social conflict mapping. Data collection will begin in Lancang, Yunnan province, and Hainan province, and later be rolled out to other business units. Once complete, the mapping database will allow APP-China and TFT to understand the full scope of social issues across its circa 13,000 compartments and to provide the foundation for further social engagement and conflict management activities. Section 6: Third-party suppliers commitment progress Policy Commitment 4 Third-party suppliers APP sources fibre from all around the world and is developing measures to ensure that this sourcing supports responsible forest management Global suppliers 9

10 Indonesia mills rollout of APP s Supplier Evaluation and Risk Assessment (SERA) procedure began in January. TFT and APP socialised SERA with APP s procurement teams and with Sinar Mas Forestry. The SERA questionnaire was then distributed to imported pulp wood suppliers by APP procurement. Responses were used to prepare a supplier evaluation report which is now being socialised with APP s IKPP mill procurement team. China Mills TFT s work has focussed on Responsible Fibre Procurement and Purchasing Policy (RFPPP) risk assessing APP-China s third-party wood chip/ and pulpwood log suppliers for APP China s Jinhai and Jingui pulp and paper mills: Jinhai pulp & paper mill RFPPP assessment findings were discussed with Jinhai following the first round of on-site assessment for domestic third-party wood chip and pulpwood log suppliers. TFT and APP have also discussed and set targets for the subsequent improvement activities for 2014 and introduced a number of key documents to assist implementation, including: o A technical report containing key assessment findings, short-term corrective actions and a long-term improvement plan for individual domestic third-party wood chip suppliers. o An action plan for Jinhai mill on supplier training, inspection and monitoring mechanisms, with timetable. o A toolkit including tools to help individual wood chip suppliers improve their raw material traceability systems and strengthen legality inspection over input, and tools for Jinhai to inspect, monitor and record the implementation status of individual wood chip suppliers corrective action plans. Jinhai mill will be used as a pilot for establishing a mechanism for future RFPPP implementation. Experiences gained during the process can later be cascaded to Jingui and Gold East mills. Jingui pulp & paper mill TFT and Jingui mill carried out on-site RFPPP assessment of sampled domestic third-party wood chip suppliers and are updating the assessment finding report. In the meantime, TFT is working with the mill to review the current supplier management system and identify gaps following increases in third-party fibre sourcing. TFT will work with Jingui mill to address these gaps through improved third-party supplier management and recording systems. Vietnam supply to APP-China mills In February 2014, TFT Vietnam produced a RFPPP findings report which was based on the visits undertaken in The report assessed a number of the main chip mills against the RFPPP, made recommendations to improve compliance with the RFPPP and highlighted areas of high risk to APP policies. This report has been presented and accepted by APP and has been used as the basis for current and future activities. 10

11 In response to the findings report, TFT Vietnam has drafted a new approach for achieving traceability within the Vietnam supply chain. This is required to ensure APP can achieve the required traceability outcomes. In February 2014, the findings and recommendations from visits in 2012 and 2013 in Vietnam were formally presented to APP. The global policy approaches taken by APP have been analysed with respect to their relevance, limitations and application within the Vietnamese context. Based on the findings report, TFT Vietnam is in the process of developing a training package to be delivered to APP s three main supplier chip mill companies in APP China forestry scorecard TFT and APP-China agreed to use Guangdong province as the pilot business unit for the development and implementation of the forestry scorecard. TFT, APP-China and the Guangdong business unit held several rounds of discussions to review and finalise the forestry scorecard framework. TFT refined the structure, elements, checkpoints and verifiers of the forestry scorecard and shared the updated version with APP-China Forestry for final review and revision. Meanwhile, the action plan and timetable for trial assessment of the Guangdong business unit, using the scorecard, has been finalised and agreed with APP HQ and APP-China Forestry. Association Procedure APP s draft Association Procedure aims to ensure that any new suppliers or concessions to APP are aligned with APP s FCP commitments. APP socialised the draft procedure in a focus group discussion with the Solutions Working Group, which consists of several key national and global NGOs, and incorporated their feedback. Section 7: China, forest restoration Hainan Ecological Exploration Programme (HEEP) Stakeholder engagement: TFT held a meeting with WWF-China to discuss the activities and commitments of APP-China with regards to the Hainan project. WWF emphasised that it would like to maintain an independent position in the process, and requested that TFT and APP share more details around next steps and upcoming stakeholder consultation. APP-China and TFT are planning the first round of key stakeholder workshops to gather ideas on an ecological exploration strategy and on resolution mechanisms for the restoration of APP s plantation land by the government. 11

12 Continuous dialogue is being held around the HEEP. This includes internal discussions between TFT and APP-China on next steps and stakeholder consultations e.g. a meeting in February with Wuzhishan and Yinggeling natural reserves in Hainan. The restoration of APP s plantation land by government for natural reserve remains a critical issue. Based on initial data collection and GIS mapping, and taking into consideration their high ecological values, these areas are identified as potential sites for kicking off the HEEP pilot. TFT has proposed to APP that a project-planning proposal for HEEP should be developed and submitted to the Hainan Government for inclusion as a project trial site under the new Hainan ecological compensation regulation ( 海 南 生 态 补 偿 条 例 ) and 2014 Hainan key reform work plan (2014 海 南 重 点 改 革 工 作 方 案 ). The regulation is under development. If selected by the government, learnings from HEEP implementation could be used during the drafting of the new regulation. APP-China is working on the proposals and these will be discussed with the Hainan Forestry Bureau in April. --ENDS-- 12

13 TFT Progress Report on Asia Pulp & Paper Group (APP) Forest Conservation Policy Commitments Reporting period: October, November and December 2013 Date: 20 th December 2013 This is the fifth update report by TFT on APP s progress toward meeting its Forest Conservation Policy (FCP) commitments made on February 5 th 2013, as part of its Sustainability Roadmap Vision This report covers activities undertaken throughout October, November and December Earlier progress reports can be viewed here (4 th report), here (3 rd report), here (2 nd report), and here (1 st report). Section 1: Overview of key activities in the reporting period Peat Expert Team APP has completed consultations with its partners and stakeholders to identify a team of independent peat experts. Once formalised, the team will work to provide implementation strategy and recommendations of best practices for the Peat Management and Monitoring Plan. Focus Group Discussion A Focus Group Discussion (FGD) was held by APP in Jakarta on 31 st October The FGD was intended to update stakeholders on the progress and challenges in FCP implementation since February. Three challenges were discussed in the FGD: 1) the utilization of natural forest wood stockpiles that did not enter APP s mills by the 31 st August 2013 deadline and non-hcv non-hcs wood residue from future land preparation activities; 2) the governance issue of overlapping licenses issued by government authorities, and; 3) issues around conflicts between natural forest protection versus requirements by local communities to develop land. More than sixty participants from more than twenty different organizations and government authorities attended the FGD. A full summary of the discussions will be made available on APP s FCP monitoring dashboard. FCP Online Monitoring During October, APP, with the support of its partner organisations, sought stakeholder feedback on APP s pilot online monitoring dashboard documenting the implementation and monitoring of the FCP. The consultation process provided an opportunity to socialise the dashboard with key stakeholder groups and to seek their input on its content and its future development. A number of areas were discussed with stakeholders including; 1) APP supplier level concession and landscape-level mapping, 2) an independent third-party audit of FCP implementation, 3) FCP implementation in APP s China operations, 4) plantation fibre availability and forecasts and APP s new pulp mill development in South Sumatra. Input will be used to inform the development of a version 2.0 of the dashboard targeted for launch in early Section 2: HCV and HCS Commitment Progress 1

14 Policy Commitment 1 High Conservation Value (HCV) and High Carbon Stock (HCS) APP and its suppliers will only develop areas that are not forested, as identified through independent HCV and HCS assessments. High Conservation Value (HCV) assessments HCV assessments for all 38 HTI suppliers concessions are being undertaken by Asia Pacific Consulting Solutions (APCS) and Ekologika Consulting. APCS assessments on 11 suppliers concessions: o APP has now received, reviewed and commented on draft reports from APCS for the first 11 suppliers concessions. o APCS will now submit the draft reports for peer review in accordance with the HCV Toolkit assessment protocol. Draft reports will also be circulated to NGOs for input. o HCV assessment reports will be finalised, subject to both the peer review and NGO input processes. Once finalised, APP will publish summary findings of the final HCV reports via the FCP monitoring dashboard. Ekologika assessments on 27 suppliers concessions: o Full assessments in East Kalimantan and West Kalimantan are completed. o Field assessments are ongoing in South Sumatra, and the draft reports are targeted to be completed by January o Field assessments are ongoing in Riau, and the draft reports are targeted to be completed by March o Following the HCV assessment protocol, Ekologika will proceed with public consultations on the draft reports. Schedules of these consultations will be updated through the monitoring dashboard. High Carbon Stock (HCS) assessments In January 2013 the HCS team commenced deployment of an action plan to roll out the HCS methodology across 38 concessions over a 1 year period. By July 2013, the initial vegetation stratification (the process of using satellite and aerial images to identify high carbon stock forest and other types of vegetation) of 38 suppliers concessions and field verification of 23 priority suppliers concessions was completed and the team commenced a process of refining; adjusting and improving the original stratification using data and observations collected during the field visits. The ongoing process of HCS stratification refining has revealed a low-level of correlation between the original desktop HCS stratification and actual strata sampled during the fieldwork. Imprecisions in the desktop stratification were greater than anticipated due to issues with satellite image quality, significant variability in forest strata, and a not enough GIS staff time for manually delineating the strata. 2

15 In view of these issues, Ata Marie Group Ltd (AMG) has now been commissioned to support the HCS team to complete all work by the end of June 2014 in all 38 suppliers concessions. This will include ongoing stratification refining, flyovers, and additional field work that will be deployed over 4 stages: Stage 01: OKI (South Sumatra), Jambi province and Muba (South Sumatra) Stage 02: Riau province Stage 03: East Kalimantan province (Kaltim) Stage 04: West Kalimantan province (Kalbar) Plantation fibre availability (Growth & Yield studies) In the 3 rd TFT Progress Update, we provided detail on a comprehensive plantation fibre Growth and Yield assessment being undertaken by TFT across all 38 of APP suppliers concessions. The assessment was designed to follow up on earlier yield projection work undertaken by APP, TFT and Ata Marie Group in early 2013 (as detailed on the FCP monitoring dashboard). The objective of the TFT assessments has been to evaluate the long-term availability of plantation fibre to supply APP s pulp mills in Indonesia including the demand of its new pulp mill at OKI, South Sumatra as well as to provide recommendations to APP on how to improve plantation productivity, how to minimise wood losses (from harvesting through wood chipping at the pulp mills) and how to move toward a more integrated Plantation Yield Regulation System (PYRS). As part of the assessment, TFT has reviewed baseline data on tree species/site type/age class and this has been used to verify current data on standing plantation stocks, harvesting yields and wood conversion rates from harvesting through to the production process at APP mills. TFT has now completed the assessment work and draft reports are being prepared for final sign-off by APP. Recommendations made by TFT will be used to inform the development of Integrated Sustainable Forest Management Plans (ISFMPs) for each individual Forest Management Units (FMU). APP will publish methodology of the assessment via its FCP monitoring dashboard. Integrated Sustainable Forest Management Plans (ISFMPs) APP s FCP commitments will be delivered through the implementation of sustainable forest management practices in each of the 38 suppliers concessions. This will require the development and implementation of ISFMPs for each FMU. ISFMPs will combine the results and recommendations from all ongoing assessment work (HCV/HCS/Peatland/Social Conflict mapping/growth and Yield) into longterm, tailored, action plans for each FMU. During the last reporting period, TFT supported APP through the provision of ISFMP capacity-building workshops. These workshops were designed to train Sinar Mas Forestry (SMF) managers and executives on how to develop ISFMPs using a systematised approach and guidance process developed by TFT. SMF managers can use the approach when developing the ISFMPs (subject to the completion of all assessment work). The first FMUs to create ISFMPs will be PT. TMA and PT. WKS in Jambi, followed by the South Sumatra FMUs. 3

16 Section 3: Peatland Commitment Progress Policy Commitment 2 Peatland Management APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. Peat experts were engaged by both APCS and Ekologika as part of their HCV assessment process. Additionally, APP has completed consultations with its partners and stakeholders to identify a team of independent peat experts. Once formalised, the team will work to provide implementation strategy and recommendations of best practices for the Peat Management and Monitoring Plan (PMMP). Section 4: Social Commitment Progress Policy Commitment 3 Social and Community Engagement In order to avoid and resolve social conflicts across its supply chain, APP will actively seek and incorporate the input and feedback of a wide range of stakeholders, including civil society, as well as implementing principles including Free, Prior and Informed Consent (FPIC) of indigenous people and local communities and respecting human rights. Conflict resolution Indonesia TFT continues to support APP in resolving a number of ongoing conflicts with local communities within APP s Forest Management Units. We can report the following updates since our last Progress Update was published in October. Senyerang village, Jambi a Memorandum of Understanding (MOU) was signed by SMF and stakeholders from the Senyerang village community in July. TFT has since been working with SMF and local stakeholders to support the implementation of key points within the MOU agreement. This has included supporting the development and socialisation of an MOU implementation workplan. Riding village, South Sumatra TFT has been supporting conflict resolution between Riding village and PT. Bumi Mekar Hijau (BMH) in South Sumatra. Since TFT s last Progress Update, a local NGO mediation partner has been agreed and a second phase of conflict mediation is now in progress. Riau TFT has been supporting conflict resolution proceedings in the province of Riau between PT Perawang Sukses Perkasa Industri (PSPI) and Datuk Rajo Melayu, facilitated by the National Forestry Council (DKN). Since TFT s last Progress Update, a Community Head (Datuk) representing the local community was confirmed and preparations for a third phase of mediation have begun. As part of the third-phase preparatory work, in November TFT worked with the DKN to undertake a field study designed to provide clarity on key elements within the dispute (e.g. the actors / land owners and land boundaries). 4

17 Free, Prior and Informed Consent (FPIC) FPIC training: follow-up FPIC implementation training has been conducted in South Sumatra with participants from PT. BMH, PT. SBA, PT. BAP and at OKI, the site of APP s new mill. The training was designed to refresh SMF managers on the FPIC implementation process before those managers then develop action plans to implement FPIC in selected districts. FPIC implementation OKI, South Sumatra: following results from the initial data mapping, the implementation of FPIC at the OKI mill development will be held in 11 villages, beginning in January FPIC implementation - forestry pilot in South Sumatra: FPIC implementation began in November at 7 villages in two new districts of forest plantations in South Sumatra province. Conflict mapping Indonesia Following the completion of conflict mapping across all 38 suppliers concession (see 4 th TFT Progress Update), TFT has organised and rolled-out a capacity-building workshop designed to train SMF staff and managers on how to develop action plans for resolving social conflicts, as identified through the mapping process. Workshops were held in Riau, Jambi, South Sumatra, East Kalimantan and West Kalimantan. SMF managers responsible for managing social conflicts in their respective concessions are now developing draft action plans for the resolution of such conflicts. Conflict mapping China Major findings of the social performance study (with key focus around land acquisition) undertaken by land rights NGO, Landesa (in collaboration with the Rights and Resources Initiative) at APP plantations in Guangxi and Yunnan provinces were expected to be presented to APP China, to consider whether modifications to the current social engagement and conflict management approach were needed. In one region, Lancang of Yunnan province, the focus of TFT s work has been around social and community engagement. TFT held a workshop in November with APP-China foresters and managers to introduce the principles of FPIC. TFT and APP-China are currently mapping communities in Hainan, Yunnan and Guangxi provinces to determine 3 pilot areas/villages to deploy community relationship improvement projects. Database building for social conflicts of APP China s plantation operations is in progress. The database has 2 major attributes: one is the existing data on compartments and land lease contracts; while the other one is data on communities neighbouring APP s plantation operations, with special focus on the status of social conflicts. The database will allow ACF and TFT to understand the full scope of social issues and to provide the foundation for further social engagement and conflict management activities. 5

18 Section 5: Third Party Suppliers Commitment Progress Policy Commitment 4 Third party suppliers APP sources fibre from all around the world and is developing measures to ensure that this sourcing supports responsible forest management Global suppliers Indonesia mills since our last Progress Update, TFT has been supporting APP to align its Supplier Evaluation and Risk Assessment tool (SERA) with both the FCP and the Responsible Fibre Procurement and Processing Policy (RFPPP). This is to ensure that all global suppliers to APP s paper mills in Indonesia are in compliance with its FCP and RFPPP. As a result of this process, TFT and APP have prepared a number of revisions and additional tracking systems to SERA. The revised SERA process will be rolled-out to APP mills in early 2014 with TFT providing additional training support where necessary. The end goal is to evaluate all global suppliers using the new SERA tool in order to identify levels of supply chain risk and to develop action plans as/if necessary. China Mills TFT s work has focussed on risk assessments of APP China s 3 rd party wood chip/ and pulpwood log suppliers: Jinhai pulp & paper mill TFT and Jinhai completed the first round of RFPPP assessment for domestic 3 rd party wood chip and pulpwood log suppliers based on a sampling approach. The assessment was completed in two phases, 1) assessment of 4 major suppliers whose total supply accounts for over 63% of Jinhai s overall domestic third party wood chip and pulpwood log input; 2) assessment of 4 selected suppliers in Hainan and Guangdong provinces. The two assessment reports are under preparation and are expected to be provided to APP China for further review and improvement program design. Jingui pulp & paper mill TFT and Jingui completed RFPPP assessment for 2 major 3 rd party domestic wood chip suppliers during th Nov The assessment report is under preparation and will be shared with Jingui by 30 th Dec Gold East paper mill - TFT and APP China HQ have scheduled a mill visit to Gold East in early Jan 2014, to set up detailed action plan and timeline for domestic 3 rd party wood chip supplier RFPPP assessments. Association Procedure APP s draft Association Procedure aims to ensure that any new suppliers or concessions to APP are aligned with APP s FCP commitments. APP is now seeking NGO feedback on the draft procedure via a focused group consisting of several key national and global NGOs. 6

19 APP China Forestry Scorecard TFT and APP-China agreed to set Guangdong province as the pilot business unit for implementation of the agreed scorecard. TFT organized a meeting with APP-China and the Guangdong business unit to discuss detailed scorecard development on the 14 th -15 th November. TFT-China is now coordinating with TFT-Indonesia on specific control points of the scorecard (points in the operation where checks of compliance against standards are made) while APP-China and the Guangdong business unit are ensuring those control points and their verifiers align with APP s operations in China and meet regional requirements. Section 6: China Forest Restoration Hainan Exploration Project APP China has integrated plantation-pulp-paper projects approved by central government dated back to July, In recent years, Hainan is granted with changed zoning approvals to become an international tourist and resort destination. As a result of this Government expansion of protected areas in Hainan, APP has plantations that are now located within the newly re-classified protected area boundaries. APP-China and TFT have held meetings with the Hainan Provincial Department of Forestry to resolve the issue of APP-China s plantation areas being located in protected areas (or water catchment reserves) in Hainan province. The meeting enabled both APP and TFT to understand the Department s position on the issue, to gain their support on a multi-stakeholder approach and to explore a solution for all affected stakeholders including the government, APP-China and local communities. Following the Government meeting, APP-China and TFT have agreed that the first step is to identify and analyze the scale of the issue and to build up a database of geographical information on affected areas for future discussion and activities. TFT have proposed that APP-China creates two new job positions (a qualified Forester and GIS expert) in order to drive this work forward. APP-China, APP- Headquarters and TFT held a follow up meeting on 14 th October to discuss the Hainan plantation issues. APP-China and TFT have since compiled a list of stakeholders and identified two stakeholder engagement phases, A: priority stakeholders; B: all other stakeholders. APP-China and TFT have completed the first phase of stakeholder engagement respectively and face-to-face discussions were being scheduled to take place in Hainan in December APP-China, TFT and Greenpeace-China met on 26 th November 2013 in Beijing to review the Hainan exploration project. Greenpeace expressed their willingness to remain an important stakeholder to the project and would, where possible, offer technical support and perspectives from an international NGO s position. --END-- 7

20 TFT Progress Report on Asia Pulp & Paper Group (APP) Forest Conservation Policy Commitments Reporting period: July, August and September 2013 Date: 18 October 2013 This is the fourth update report by TFT on APP s progress toward meeting its Forest Conservation Policy (FCP) commitments made on February 5 th 2013 as part of its Sustainability Roadmap Vision This report covers activities undertaken throughout July, August and September Earlier progress reports can be viewed here (3 rd report), here (2 nd report), and here (1 st report). Section 1: Overview of key activities in the reporting period Moratorium on natural forest clearance Following a moratorium breach within PT. Riau Indo Agropalma (RIA), an urgent review (and subsequent TFT investigation) identified a potential moratorium breach within PT. Bina Duta Laksana (BDL) in Riau. Both the PT. RIA and BDL cases involved agreements with the local communities to develop the areas that pre-dated the moratorium. A breach of APP s no new peatland development policy was confirmed in the BDL concession. Ongoing FCP monitoring by TFT and APP identified a further moratorium breach in South Sumatra with the concession of PT. Bumi Andalas Permai (BAP), PT. Sebangun Bumi Andalas (SBA), and PT. Bumi Mekar Hijau (BMH). APP self-reported this moratorium breach on September 2013, and the full report is available via APP s FCP Monitoring Dashboard here. Focus Group Discussion PT RIA moratorium breach On July 18th, TFT facilitated an APP Focus Group Discussion (FGD) to enable relevant stakeholders to provide input on the recommendations and action points put forward in the TFT RIA Verification Report. APP s FCP and natural forest clearance moratorium were discussed, including the future of the RIA land allocated to community-use. Participants included APP, SMF, TFT, RIA, NGOs, local community representatives, the Village Head and District and Provincial Forestry Officers. The participants agreed to meet again once the HCV/peat and HCS assessment are completed. Natural Forest Wood (NFW) also known as Mixed Tropical Hardwood (MTH) monitoring: As of 1 st September 2013, APP s pulp mills were no longer accepting NFW cut prior the February 1 st moratorium. NFW processing and stock inventory figures show the following; - The final volume of pre-february 1 st NFW was 1,606, m3 after all NFW from the field had been extracted, stacked and measured, as well as estimate variations used in the February Stock Inventory (SO) analysis were assessed. - Of a total 1,606, m3 of NFW verified through the SO, 899, m3 had been received by APP s pulp mill mills by the August 31st 2013 deadline. - Of the remaining NFW, APP suppliers have sold 46, m3 to 3rd parties, 56, m3 has been allocated for internal use (e.g. infrastructure used with concession areas), 1

21 handling losses within the concession areas account for 60, m3 (e.g. losses due to log breakage, decomposition); and - 543, m3 of NFW still remains stockpiled at APP s supplier concessions and did not meet the August 31st deadline to be received by APP s pulp mills. APP has asked NGOs and stakeholders for their input on alternative uses for the 543, m3 of NFW stockpiled at APP s supplier concessions (i.e uses that don t involve APP pulping this NFW at its pulp mills). Updates on the final resolution of this remaining NFW will be provided via the dashboard. NFW that is already in APP pulp mills log yards will be processed, and the details of it will also be provided via the dashboard. FCP online monitoring An updated version of APP s online FCP dashboard monitoring tool was developed and went live in the first week of September. It is now the subject of stakeholder input and feedback until late-october Input and feedback will inform the development of a version 2, to be launched in early The monitoring tool allows stakeholders to monitor APP s progress in implementing the FCP commitments. It was developed with the support of TFT as part of TFT s SURE Technology platform. Third-party monitoring and stakeholder engagement APP s Independent Observer (IO) programme continued in the second half of September with a monitoring check of APP s natural forest moratorium boundaries. The check confirmed that the moratorium is holding, with the exception of the minor contraventions already publicly reported (above and below). During the monitoring, Observers provided input on how APP can better ensure the moratorium remains intact; most notably through improved APP communication with local communities. Policy integration China In previous TFT reports, we drew attention to the preparation of the general policy structure at APP-China. This involved integrating the FCP and the Responsible Fibre Procurement and Purchasing Policy (RFPPP) into other APP-China social and environmental policies. TFT and APP-China have now finalised the policy structure and APP-China has distributed all policies to its business units and forest concessions for integration into their daily operations. Section 2: Moratorium Status APP pulpwood suppliers concession area covers more than 2.6 million hectares across Indonesia. The natural forest clearance moratorium is in place across all of APP suppliers concessions. In this reporting period, there were 2 moratorium breaches found, both of which were self-reported by APP/TFT in September

22 Moratorium areas PT BDL and PT SPM Following the confirmation of a moratorium breach at PT Riau Indo Agropalma (RIA) reported in TFT s 3 rd Progress Update APP s Joint Steering Committee (JSC) ordered an urgent review to determine whether other similar cases related to previous agreements with tlocal communities that could threaten APP s moratorium or implementation of its FCP. As a result of that review process, two pulpwood suppliers of APP PT. Sekato Pratama Makmur (SPM) and PT. Bina Duta Laksana (BDL) in Riau were identified as having agreements with local communities. A subsequent TFT and APP investigation confirmed that no breach of the moratorium had taken place at PT SPM. At PT BDL, an area of 27.8 hectares had been cleared after the February 1 st moratorium however the investigation was not able to determine whether the area was previously HCS forest due to the fact that HCS (and HCV) assessments were ongoing in this area. 1 The area cleared was however on peatland thereby making it a breach of APP s FCP policy on new peatland development. The 27.8 hectares of peatland was developed because, like in the RIA case, the FCP Implementation Team has wrongly approved the continuation of development for community use under the government s community livelihood area programme (TK) without prior consultation with the JSC. As in the RIA case, the FCP Implementation Team mistakenly assumed that if all the criteria for TK development were met, including the legal obligation to develop the area, it could therefore be cleared. Moratorium areas South Sumatra region In addition to the specific audit resulting from the RIA case, ongoing monitoring of FCP implementation by TFT and APP identified a moratorium breach in one of its supply regions in South Sumatra: PT. Bumi Andalas Permai (BAP), PT. Sebangun Bumi Andalas (SBA), and PT. Bumi Mekar Hijau (BMH). A total area of hectares of High Carbon Stock (HCS) forest was wrongly cleared in BMH, BAP and SBA after 1 st February 2013, a result of land clearance in an area marked as a No Go zone during a pre-assessment phase of activity. APP requested that this pre-assessment be done in South Sumatra to identify low risk areas for ongoing plantation development in order to meet future pulpwood demand. Areas identified as No Go were awaiting full HCV, HCS and peatland assessments. A total land clearance of 431 hectares (of which hectares was HCS) occurred due to inadequate sign off and company supervision processes. None of the area was peatland. The detailed report is available on APP s website. The TFT/APP investigation indicated that this breach could have been avoided if operational teams had: a) been provided with a robust checklist of actions and documents for formal signoff; b) implemented more stringent supervision and monitoring process before any land 1 Given that m3 of wood was produced from a total area of 27.8 Ha, it can be assumed that the average yield per Ha would level out at only 7m3/ Ha. It is therefore unlikely that this area was HCS. 3

23 development had occurred. No other land development operations across APP s supply base were subjected to any pre-assessments. As a result of both the BDL/SPM and South Sumatra cases, new procedures have been introduced by APP/TFT to prevent any such issues from occurring again. Section 3: HCV and HCS Commitment Progress Policy Commitment 1 High Conservation Value (HCV) and High Carbon Stock (HCS) APP and its suppliers will only develop areas that are not forested, as identified through independent HCV and HCS assessments. High Conservation Value (HCV) assessments HCV assessments for all 38 HTI suppliers are being undertaken by Asia Pacific Consulting Solutions (APCS) and Ekologika Consulting. APCS assessments on 11 supplier concessions: o Full assessments have been completed. APCS is now finalising its draft report before delivery to APP. Ekologika assessments on 27 supplier concessions: o Field assessments are ongoing in Riau, East Kalimantan, West Kalimantan, and South Sumatra. Ekologika aims to submit all reports to APP by end of March High Carbon Stock (HCS) assessments The first wave of vegetation stratification and field assessments for the priority 20 HTI concessions is now complete. Following a team review and additional analysis and backstopping from external consultants, Ata Marie, a stage of refinement and supplementary fieldwork is now required to improve the correlation between the GIS overlays (forest strata) and plot data. The HCS team will initially test this process of refinement in a small pilot area before deploying across all other concessions areas. Section 4: Peatland Commitment Progress Policy Commitment 2 Peatland Management APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. Peat experts are currently identifying the distribution, depth and quality of peatland across all of APP suppliers concessions in Indonesia, as part of the HCV assessments. Results will be submitted to APP management as part of the HCV reporting process. Findings will inform the development of APP s long-term peatland management plans which will be created in consultation with an independent team of peat experts. APP is identifying options for the peat expert team in consultation with its partners and stakeholders. 4

24 Section 5: Social Commitment Progress Policy Commitment 3 Social and Community Engagement In order to avoid and resolve social conflicts across its supply chain, APP will actively seek and incorporate the input and feedback of a wide range of stakeholders, including civil society, as well as implementing principles including Free, Prior and Informed Consent (FPIC) of indigenous people and local communities and respecting human rights. Conflict resolution In the last TFT Progress Update, we reported on TFT s role in supporting APP to resolve a number of ongoing conflicts between APP s Forest Management Units and local communities. These pilot projects are being used to test APP s conflict resolution approaches and methods and they will be used as learning and capacity building opportunities for APP teams as well as to build up engagement with local communities and civil society representatives. Senyerang village, Jambi TFT was requested to provide support and mediation in a land tenure conflict between Sinar Mas Forestry (SMF) and stakeholders from the Senyerang village community. TFT facilitated a meeting in June in which both parties reached important points of agreement as a solution to the conflict. A follow-up meeting was then held in July and a Memorandum of Understand (MOU) was signed. Both parties will now implement the points of agreement agreed in the MOU. Riding village, South Sumatra TFT is supporting a conflict resolution between Riding village and PT. Bumi Mekar Hijau (BMH). Preparations are being made for negotiations. TFT is currently in discussion with a potential local NGO partner who can provide mediation and facilitation support once negotiations are underway. Riau TFT is supporting conflict resolution proceedings in the province of Riau between PT Perawang Sukses Perkasa Industri (PSPI) and Datuk Rajo Melayu facilitated by the National Forestry Council (DKN). The DKN is now in the process of determining a legitimate Datuk (or Community Head) to represent the local community. Conflict mapping, Indonesia As a first step, TFT has completed conflict mapping training for 245 and 144 SMF staff and managers in all five regions to familiarise them with APP s new conflict mapping approach and methodology and to strengthen their ability to carry out the mapping. Those trained were then requested to carry out conflict mapping using the new approach and methodology. Mapping was completed across all 38 APP suppliers. TFT has reviewed the mapping results. Results indicated that the quality of the mapping varies depending on the region. TFT provided direct technical support to those regions to align the quality of the conflict mapping and SMF staff understanding of the methodology and approach. 5

25 TFT and APP are now in the process of developing action plans for all APP suppliers, which will determine whether any follow-up staff training is needed. The aim is for a process of continual improvement as SMF staff become more familiar with the methodology and approach for conflict resolution. TFT will support SMF to implement the action plans. In parallel with the conflict mapping training, TFT invited selected APP staff from Indonesia and China to attend FPIC training between the 9 th and 13 th of September The training was supported by the Rights Resources Initiative (RRI) and the objective was to train APP staff on FPIC concept and its implementation and land tenure issues in various regions of APP operations. Conflict mapping, China TFT and APP-China have now reviewed APP-China s social conflict management system and conducted interviews and site-visits to a number of villages in North East Hainan selected from existing social conflict mapping documentation prepared by APP-China. TFT has prepared and presented to APP-China a draft action plan for social engagement and conflict management across APP-China operations. Following TFT s recommendation, APP-China added an additional staff member to the team to focus specifically on social engagement issues. This marked the first step in strengthening APP- China social engagement team. APP-China and TFT will now provide capacity development and on-site training to all team members. APP-China staff also joined the FPIC training in Indonesia. APP-China, APP-HQ and TFT also held discussions with Landesa, who in collaboration with The Rights and Resources Initiative (RRI) conducted a study of APP s social performance in its plantation operations in China. Landesa presented their preliminary findings to APP-China, APP and TFT and these were incorporated into the aforementioned draft social engagement action plan for APP-China operations. The official report will be provided to APP-China for review and comment before the end of the year. Free, Prior and Informed Consent (FPIC) TFT has been supporting APP in the application of FPIC at its new mill development in Ogan Komiring llir in Palembang, South Sumatra. In the last two months, TFT has completed an initial data analysis to map all communities likely to be impacted by the new mill development. FPIC training for the new mill managers is now underway. Section 6: Third Party Suppliers Commitment Progress Policy Commitment 4 Third party suppliers APP sources fibre from all around the world and is developing measures to ensure that this sourcing supports responsible forest management 6

26 Global suppliers Indonesia mills - APP s FCP applies to all global suppliers. All tier 1 2 global suppliers have been mapped and are being updated over time. TFT is now in the process of reviewing and improving APP s supplier evaluation and risk assessment tool (SERA). SERA is the assessment tool that APP uses to evaluate the level of risk presented by new global pulp and pulpwood suppliers and it was not originally designed with the FCP and Responsible Fibre Procurement and Processing Policy (RFPPP) in mind. TFT is helping APP to align SERA with both the FCP and RFPPP to ensure that existing global suppliers are aligned with the FCP. Once the review process is complete, TFT will evaluate all global suppliers to identify levels of supply chain risk. If required, action plans will be developed to ensure compliance with the FCP. China mills - in China, TFT continues the risk assessments of APP s 3 rd party suppliers. This is being done through interviews and meetings with APP pulp and paper mills as well as through a series of on-site visits. o Jinhai pulp mill - a supply chain map has been presented to APP-China s Jinhai mill and a detailed activity plan designed to improve 3 rd party chip/log supplier management, control and assessment has been prepared by TFT and agreed by Jinhai mill. Following the activity plan, TFT and Jinhai mill have carried out 3 rd party supplier training on the introduction of APP s RFPPP in China, and both are now collecting 3 rd party supplier data through supplier questionnaires that have been distributed to all 3 rd party suppliers of the mill. o Jingui pulp mill - TFT has held further meetings with APP-China s Jingui mill to discuss and agree on a detailed activity plan. Similar to APP Jinhai mill, a 3rd party log/chip supplier questionnaire has now been distributed to all 3 rd party suppliers of Jingui mill. o Gold East paper mill at Gold East mill, an APP-China paper mill, TFT is still in the process of supply chain mapping. Once completed, Gold East and TFT will begin preparing activity plans similar to those developed for Jinhai and Jingui. TFT undertook internal training for Jinhai, Jingui and Gold East mills to present the RFPPP and FCP concepts to a much broader group, including all key personnel from the procurement and quality control teams of all three mills (approximately 30 people). By going through the key steps of the 3 rd party chip/log supplier detailed activity plan, TFT aims to better prepare APP for RFPPP implementation. Association procedure Following stakeholder consultations earlier in the year, TFT has been working with APP to develop a Association Procedure, which aims to ensure that all new global suppliers or 2 Supplier that directly supplies fibre materials to APP mill. Tier 2 suppliers are suppliers of tier 1 suppliers and so forth. The last tier is the forest. 7

27 concessions acquired by APP are aligned with APP s FCP commitments. APP will shortly be seeking stakeholder feedback on the draft association procedure before it is then aligned with APP s SERA and operationalised for all new global suppliers and concessions. RFPPP and supplier scorecard As reported in TFT s 3 rd Progress Update, scorecard assessments for all Indonesian suppliers were completed in 2012 as part of a phase 1 of Responsible Fibre Procurement and Purchasing Policy (RFPPP) activity. A phase 2 of activity began in Q and involves the development of action plans for each supplier based on the findings of the initial scorecard assessments. This will continue until December 2013 at which point action plans will be implemented as part of a phase 3. It is important to note that the assessment of APP s Indonesian suppliers against the RFPPP is an ongoing process using the Sustainable Forest Management supplier scorecard developed by TFT and APP earlier in the year. The objective is to ensure that all APP s Indonesian fibre suppliers support responsible forest management and to ensure they operate in alignment with international forest management best-practices. In China, TFT has been working with APP on the development of a scorecard system; a tool for monitoring both APP-China operations and 3 rd party log/chip suppliers against APP s RFPPP. The scorecard places special focus on the assessment of management practices of mills and their associated wood origins. A first draft of the scorecard on chip mill and wood origin for 3 rd party chip/log supplier is being developed. A second version of the scorecard for APP-China operations has been developed and is now under discussion with APP-China. 8

28 TFT Progress Report on Asia Pulp & Paper Group (APP) Forest Conservation Policy Commitments Reporting period: Mid April to end June 2013 Date: 26 July 2013 This is the third update report by TFT on APP s progress towards meeting its Forest Conservation Policy (FCP) commitments, made on 5 February 2013 as part of its Sustainability Roadmap: Vision This report covers activities undertaken between mid April and the end of June Earlier progress reports can be viewed here (2 nd report) and here (1 st report). Section 1: Overview of key activities (see Section 2 for more details on each activity) Moratorium on natural forest clearance A breach of the moratorium was confirmed in PT Riau Indo Agropalma's (RIA) natural forest concession following a decision made in the field to honour an agreement, pre dating the moratorium, with the local community. Sign off procedures are now being strengthened to ensure no other such incidents taken place. APP s Joint Steering Committee (JSC), consisting of Sinarmas Forestry s CEO, APP s Sustainability MD and TFT s Executive Director, has been established to directly address any such issues. Tracking progress online In order to transparently report on the activities being undertaken, APP appointed TFT to develop an online monitoring dashboard as part of TFT s SURE Technology platform. The dashboard provides social and environmental performance data, enabling key stakeholders to monitor APP s progress towards meeting its FCP commitments. The monitoring tool was launched as a pilot version on 4 June 2013 and it will now be subject to an internal and external review process. A formal external consultation will allow NGOs and other stakeholders to provide their feedback on the tool and its content. Protection of High Conservation Value (HCV) and High Carbon Stock (HCS) forests Initial HCV and HCS pre assessments are complete across all of APP s 38 suppliers. Independent HCV ground studies are being conducted by Asia Pacific Consulting Solutions (APCS) and Ekologika. These are taking place in phased stages across all suppliers, with the first eleven HCV assessments due to be completed by the end of September. HCV Stakeholder Consultation is being be conducted as part of this process by both APCS and Ekologika at provincial and national level. HCS field verifications, conducted by TFT in consultation with external experts, are ongoing. Three forest management units (FMUs) in East Kalimantan and three FMUs in South Sumatra were completed at the end of June. Eighteen first priority suppliers will be complete by October. Conflict resolution TFT continues to support APP in a number of ongoing conflicts with local communities, with good progress being made. 1

29 Section 2: Policy commitment progress Policy Commitment 1: High Conservation Value (HCV) and High Carbon Stock (HCS) Forests APP and its suppliers will only develop areas that are not forested, as identified through independent HCVF and HCS assessments. In order to implement Policy Commitment 1, forested areas that are to be protected must be identified. This is being done by HCV and HCS assessments to identify areas which have a high carbon storage and/or a conservation value that must be protected. The amount of above ground carbon stored is directly related to the biomass of an area, i.e. the number and density of trees. The conservation value of an area does not necessarily relate to the amount of carbon storage, but rather the biodiversity and cultural significance of an area. Ground based HCV field studies are being conducted across all 38 suppliers. This work is being undertaken by two independent HCV assessors, APCS and Ekologika. APCS is conducting the first eleven supplier assessments, which will be complete by the end of September. Ekologika is conducting 27 HCV assessments, 16 of which will be complete in February HCS assessments conducted by TFT continue to progress. Eighteen first priority suppliers will be complete in October. Field verifications in three forest management units (FMUs) in East Kalimantan and three FMUs in South Sumatra were completed at the end of June The field verification of an additional six FMUs in Riau, two in South Sumatra, three in West Kalimantan and one in Jambi are still ongoing. The carbon stock data generated by the field verification will then be analysed by APP and TFT in consultation with experts to strengthen the management of areas containing HCS. The results will be collated, together with the outcomes from the HCV assessments, to create management recommendations. Moratorium areas The moratorium on natural forest clearance, implemented with effect from 31 January 2013, has been found to have been breached in one concession. On 16 May 2013, Eyes on the Forest (EoF) reported the felling of natural forest in PT Riau Indo Agropalma's (RIA) concession. The report was discussed during a meeting between APP, TFT, Sinar Mas Forestry (SMF) and a group of NGOs. One of the NGOs involved confirmed that its representatives would join the field verification team, and a full technical study was conducted on May. Field verification revealed that natural forest clearance of 70 hectares took place between February and mid April 2013 on land allocated for community use as regulated by the Indonesian government. This clearance was halted in mid April. The 70 hectares was cleared because on 28 February 2013, the APP and TFT FCP Implementation Team met in the field with RIA and approved the continued development of the community livelihood area. The FCP Implementation Team made this decision based on a prior agreement to develop the area that was signed between RIA and the communities on 13 January

30 The FCP Implementation Team took this decision in the field and did not seek approval from APP and TFT Senior Management. This approval should not have been granted because all natural forest areas, even those under community livelihood licenses, are covered by APP s moratorium and its FCP. The FCP Implementation Team, APP and TFT Senior Management are now reviewing sign off procedures to ensure that all decisions relating to FCP implementation are taken only by APP Senior Management. APP s Joint Steering Committee (JSC), consisting of SMF s CEO, APP s Sustainability MD and TFT s Executive Director, has been established to directly address high level issues, such as the case in RIA. TFT has produced a verification report which explains the findings and what actions are being taken. During the period from April until May 2013, twelve NGOs who joined the Independent Observer program accompanied APP and TFT field teams to monitor compliance with the moratorium across seven suppliers in Riau, two suppliers in South Sumatra, three in West Kalimantan and three in East Kalimantan. Results from the joint monitoring indicate that, to date, the moratorium remains intact in these areas. Wood flow projections plantation Growth and Yield Assessment TFT and APP are currently implementing a Growth and Yield Assessment to follow up on yield projection work undertaken earlier this year. The initial evaluation covering seven forests, one pulp mill and one paper mill was completed at the end of June. The study will be extended to all 38 concession areas. So far, over 3,500 sample plots have been measured to verify species type (Acacia crassicarpa, Eucalyptus sp, Acacia mangium), site type (wet land peat, dry land), and age class (1 6 years). Data will be used to verify current data sets on stocks, yields and conversion rates. Once completed, stock projections can be re run and system wide improvements can be carried out. The work includes reviewing baseline data and verification of data via field visits. This data will then be used to run updated system wide projections on fibre supply and demand analysis. Data will include growth and yield studies as well as wood conversion rates from harvesting through to the production process at the mills. This assessment is intended improve companywide data collection, data management and silviculture and forest planning. A key component of this is to strengthen APP s existing forest architecture planning to allow for an upgrade to a more integrated Plantation Yield Regulation System (PYRS). TFT is continuing to work on a report that will describe the methodologies used to review APP s wood flow projections from its plantation pulpwood suppliers. The report will cover APP s plantation growth and yield forecasts, from existing standing volumes of its suppliers concessions through to improvements in growth rates, harvesting efficiencies and pulp yields. 3

31 Policy Commitment 2: Peatland Management APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. The HCV team of peat experts is now in place. They are currently providing inputs for the HCV draft report and recommendations to management. Policy Commitment 3: Social and Community engagement In order to avoid and resolve social conflicts across its supply chain, APP will actively seek and incorporate input and feedback from a wide range of stakeholders, including civil society, and implement principles including Free, Prior and Informed Consent (FPIC) of indigenous people and local communities, respecting human rights. Policies and protocols APP has socialised and consulted on its protocols/procedures related to the moratorium, new planting areas, grievances, FPIC and conflict resolution in Jakarta, Riau, Jambi, South Sumatra, West Kalimantan and East Kalimantan. To help make the process transparent, the protocols are now available on TFT s SURE monitoring dashboard. SMF has signed off APP s Social Community Engagement Policy, which addresses compliance with all relevant laws and internationally accepted certification principles and criteria. In the last update report (7 May 2013), TFT reported that it was preparing a general policy structure for APP China that integrated the FCP, Responsible Fibre Procurement and Processing Policy (RFPPP) and other policies related to environmental, social and economic aspects of sustainable development. APP China, with the support of TFT, has been working to ensure this policy structure is aligned across APP China and APP mill operations. APP has sought input from key stakeholders on the documents developed and will continue doing so as part of a review of all key policies. Free, prior and informed consent (FPIC) refers to the principle that a community has the right to give or withhold its consent to proposed projects that may affect the lands they customarily own, occupy or otherwise use. To implement the principles of FPIC, APP has sought input from a coalition of NGOs and revised the FPIC protocols accordingly. To help make the process transparent, the protocols are now available on the SURE monitoring dashboard. Staff training on the principles of FPIC has been completed in the regions of South Sumatra, Jambi, West Kalimantan and Riau. TFT reviewed APP China s social and community related policies, identified gaps and provided feedback. A draft Social and Human Resources Policy, which incorporates FPIC values, was prepared and distributed to APP China for comment. Conflict resolution TFT is supporting APP in resolving a number of ongoing conflicts. The aim is to use each as a learning and capacity building opportunity for APP teams and to build up engagement with local communities and local civil society representatives. 4

32 TFT continues to communicate with conflicting parties and other relevant stakeholders in the village of Seinyerang, Jambi Province. In mid May, there was a request from a representative from Seinyerang and Perkumpulan Petani Jambi (PPJ), a local farmers association, for TFT to support directly, with a view to speeding up the conflict resolution process. Shortly thereafter, TFT visited Seinyerang to meet with the community and observe the village conditions. TFT has also worked closely with the SMF team in order to accelerate the conflict resolution process. In the third week of June, TFT facilitated a meeting between SMF and representatives of Seinyerang community. At the end of the meeting both parties reached major points of agreement as solution to the conflict. A follow up meeting will be conducted in July in order to detail and formulate a Memorandum of Understanding. There are other ongoing land tenure conflicts between PPJ members and PT Wira Karya Sakti (PT WKS) (APP) across five local administrative districts in Jambi. TFT is continuously communicating with PPJ, PT WKS and Dinas Kehutanan Jambi, a provincial forestry department assisting with conflict resolution. TFT facilitated a meeting with Dinas Kehutanan Jambi, PPJ and WKS, the outcome of which was a schedule for field verification visits and a team consisting of representatives from PPJ, PT WKS, Dinas Kehutanan Jambi (Provincial and District level) and TFT, being agreed upon. TFT was tasked with developing the Terms of Reference for the field verification and APP/ PT WKS agreed to provide financial support. The field team began work on 1 July. Conflict resolution proceedings are continuing in the province of Riau between PT Perawang Sukses Perkasa Iindustri (PSPI)and Datuk Rajo Melayu. As detailed in the last report, the National Forestry Council (DKN) has been appointed as the facilitator for mediation between the parties. Since this time, TFT has supported APP (Arara Abadi and PSPI) with communication with DKN. The Terms of Reference for Mediation has now been agreed by all parties. The first meeting took place in mid June and went positively. The second meeting will take place in mid July. In South Sumatra, conflict resolution between Riding village and PT Bumi Mekar Hijau (BMH) is ongoing. The aim is to use this conflict resolution process as a pilot for learning and the use of new procedures. As such, preparations for negotiation at Riding village are ongoing, and this includes providing training to the villagers and their representatives. The first meeting between BMH and Riding community will be conducted in the first week of July Conflict mapping In Indonesia, all regions have been working continuously on conflict mapping within their respective concessions. Progress on conflict mapping is ongoing across all APP s supply chain, with the mapping phase now completed in Jambi. An improved conflict mapping methodology has been introduced to strengthen the data collection and recording process. This was delivered through training sessions for managers and operational staff and has been completed in Jambi, Riau, West Kalimantan and East Kalimantan. In addition to this, 19 managers and 27 operational staff in South Sumatra (from PT Bumi Mekar Hijau, PT Bumi Andalas Permai, and PT Sebangun Bumi Andalas) participated in conflict mapping training delivered by TFT. 5

33 In China, TFT is also reviewing existing areas of social conflict based on data provided by APP China. The social conflict data collection system and monitoring system to track the progress of any conflict resolution measures across APP China s managed plantations has been reviewed. APP China is in the process of recruiting a qualified social specialist to work on the ground with TFT to drive operational changes. Policy Commitment 4: Third Party Suppliers APP sources fibre from all around the world and is developing measures to ensure that this sourcing supports responsible forest management. Supply chain mapping APP s supply chain for tier 1 pulpwood suppliers has been mapped for Indonesia. TFT China is working on supply chain mapping for APP China s third party fibre supply. An Initial set of data has been provided by APP China, and the TFT team is working with APP to increase supply chain visibility, with a focus on supply chain nodes prior to purchase. TFT has also identified areas of high risk within APP China's supply chain where a supplier's policy could be in contradiction to APP's FCP and Responsible Fibre Procurement and Processing Policy (RFPPP). To date, this has been predominately desk based research focusing on chip suppliers in Vietnam. This has included reviewing satellite imagery of forest land cover change in Vietnam, Laos, Cambodia, as well as reviewing scientific and government reports. TFT has conducted several supply chain visits, including two forest field visits, and further visits are planned from mid July. RFPPP Assessment There continues to be good progress towards APP s RFPPP, a set of social and environmental principles relating to the way in which raw materials are procured and processed at each stage of the paper making process, from the growing of trees to finished products leaving paper mills. Suppliers are assessed using a scorecard whereby a supplier s adherence and progress towards RFPPP (including HCV and HCS) are measured. Following the completion of stage 1 scorecard assessments for APP Indonesia (completed in Q4 of 2012), which focused on legality, chain of custody, traceability and the exclusion of MTH in each supplier, TFT and APP Indonesia have been working to identify any gaps in the performance of suppliers and have begun stage 2 of the process, developing a tiered action plan tailored to each supplier. Monitoring of suppliers will be continual, and actions plans based on this will be an ongoing and iterative process. TFT s previous report gave details of a situation whereby a second tier supplier of plantation fibre to Chipdeco (first tier) was found to be clearing natural forest, and that Chipdeco ended its relationship with the supplier at APP s request. Since the last report was published, an activity plan for Chipdeco is being finalised by APP and TFT. This includes a supplier validation process to ensure that all suppliers to Chipdeco comply with APP s No Deforestation commitments. 6

34 Since the last update report, TFT is now reviewing the rapid assessment tool developed by APP China for assessing legality requirements of the RFPPP, and is preparing recommendations and revisions. TFT and APP China will develop this tool into a scorecard for full RFPPP compliance assessment. In conjunction with this, TFT is currently reviewing APP China s third party supplier standard operating procedures and purchase contracts to identify areas that need to be aligned with the RFPPP. TFT has met with APP China s procurement team to discuss current progress. Discussions have also been held with two of APP China s pulp mills, Jinhai and Jingui, on existing activities and further plans. During these meeting and discussions, TFT introduced a set of tools to help improve supply chain management, including a legality checklist, chain of custody guidance and a third party supplier questionnaire. These tools will be used to guide suppliers to understand supply chain related legality requirements and collect relevant data and documentation. The third party supplier questionnaire will be distributed to all third party log and chip suppliers and collected for data analysis by the end of August. TFT and APP China are planning further visits to Jinhai and Jingui mills to present the initial supply chain map, discuss key next steps and formulate an action plan. The same activities will also be carried out for Gold East, the paper mill of APP China that began its pulp production after Jinhai and Jingui. Initial scoping to Gold East took place in Q4 of 2012 and focused on its paper production. TFT is now conducting initial supply chain mapping for its pulp production to prepare the roll out of further activities. TFT will assess a set of applicable tools and activities to be used for Gold East, following Jinhai and Jingui. Please note that progress reports will be published every two months from now on. 7

35 TFT Progress Report on APP Forest Conservation Policy Commitments Reporting period: mid March to mid April 2013 Introduction Date: 7 May 2013 This is the second in a series of regular updates from TFT on APP s progress towards meeting its No Deforestation commitment, made on February 5 th as part of its Sustainability Roadmap: Vision 2020 update report. The company announced an immediate end to all natural forest clearing in its supply chains in Indonesia, effective 1 February TFT is working on the ground with APP to implement this commitment and monitor progress. The first update reported activities from Feb 5 th to mid March This update covers the period from mid March to mid April Overview of key activities Ensuring suppliers comply with the FCP: The moratorium on natural forest clearance implemented with effect on January 31 st is holding. TFT has to date found no breaches of the moratorium in any direct APP supplier operation. However, during this reporting period, APP delisted a tier two supplier to one of its tier one suppliers. This company was found to be operating in breach of APP s Forest Conservation Policy (FCP) commitments. APP s FCP (Policy Commitment 1) requires that APP and its suppliers only develop areas that are not forested as identified through HCVF and HCS assessments. The FCP states that APP will withdraw from all purchase and other agreements with any supplier found to be in breach with this commitment. The tier two supplier, an Indonesian based company, was a supplier of HTI plantation fibre to tier one supplier Chipdeco, which in turn supplies APP mills in Indonesia and China with chipwood. Chipdeco stopped sourcing mixed tropical hardwood fibre in 2012, but continued to source plantation fibre from this company. Our assessment found that this company continues to clear natural forest to develop pulpwood plantations and refused APP s request to immediately stop the practice. As such, APP asked Chipdeco to stop sourcing HTI plantation fibre from the company and Chipdeco has now disengaged from all supply agreements with the company. Transparency and engagement: During March, TFT and APP organized five FCP sharing sessions and two Focus Group Discussions (FGDs). The sessions were attended by over 50 participants from civil society, the academic community and NGOs. The FGDs were the first meetings with local civil society since the Feb 5 th FCP announcement and the aim was to hear feedback from stakeholders, to explain the thinking behind the FCP, to seek active involvement from the participants in FCP implementation and monitoring, to discuss data sharing and to secure feedback on APP s DRAFT FCP implementation protocols. There was concern raised after the initial meetings 1

36 around inadequate data sharing. Local civil society representatives felt that more information should have been shared. For APP, TFT and the civil society representatives, this was a new process, the first open dialogue between APP and civil society around these critical issues. There was also concern raised around TFT s role in the meetings while others felt that the meetings needed stronger facilitation. TFT and APP sought to address these issues in subsequent meetings and feedback from the later meetings suggested that the improved approach and data sharing was appreciated. From TFT s perspective, the meetings were constructive and we will continue to work to find the right balance. There was active and vivid discussion and much learning on all sides. A framework has been established for enhanced dialogue and involvement going forward and TFT and APP have agreed to continue this open dialogue process. There will be a continued focus on ensuring that data and information sharing is enhanced. Feedback on the implementation draft protocols in Bahasa Indonesia versions have been included in the documents and these have now been as released to FGD participants as Version 1. Input from FGD participants and other international NGOs are being incorporated into the draft protocols, which will then be available on the APP website. The protocols are designed to be living documents, so they are by no means final versions. They are open to constant improvement through discussion with all stakeholders. Grievance procedure: During March a detailed grievance was raised by the Kalimantan Forest Monitoring Volunteers (RPHK), a consortium of local NGOs in West Kalimantan. This alleged that two APP suppliers (ATP and DTK) were actively clearing forest in breach of the FCP moratorium. In response, TFT conducted a field verification study (Click here to read the field verification report) to check the situation on the ground. The verification study showed the allegations to be incorrect; forests were being cleared but not by APP or either of its two suppliers. TFT and APP continue to encourage broad NGO and civil society engagement in the grievance procedure and broader FCP monitoring. It is noted that wider NGOs engagement and their active participation as an Independent Observer to monitor and improve SO process could avoid such a case in the future. Rather, companies with concessions overlapping the APP suppliers concessions were carrying out the forest clearance. APP has raised this issue with the respective companies and with the local and national government. TFT and APP are currently mapping all possible license or other landuse overlaps across APP s supply chain to define a strategy to discuss with relevant government authorities. Protection of natural forest: Also during March, analysis from Eyes on the Forest raised questions as to how much natural forest would be protected in Sumatra as a result of the APP FCP. TFT and APP technical teams are analysing up to date satellite data as part of the High Carbon Stock (HCS) study. This data was fully processed in March April and we are conducting ground truthing exercises to match the data with forest types in the field. Once the ground truthing is complete, we will have a clear picture of the actual amount of forest that has been set aside and will report our findings. The HCS study is planned to be completed by Q

37 Tracking progress online: TFT, APP and its sustainability advisor, the Robertsbridge Group, are currently developing TFT s SURE Technology system to present an online dashboard. TFT has been developing its SURE Technology system since 2010 to enhance transparency. The system, which was launched in January 2013, allows TFT partners to respond to the EU Timber Regulation Due Diligence requirements, to enhance supply chain transparency and to help communicate product stories. Four major retailers have already adopted the sytem. The SURE Technology system can also provide user dashboards to enable interested parties to review and monitor progress on specific projects. TFT is developing a SURE dashboard for APP s Sustainability Roadmap and FCP implementation so that stakeholders can quickly track issues and challenges that have arisen and to see how they are being dealt with. APP s aim is to launch a pilot version of this SURE Technology dashboard on its website ( in June Policy commitment progress: Indonesia Policy Commitment 1: High Conservation Value Forests (HCVF) and High Carbon Stock (HCS) Forests APP and its suppliers will only develop areas that are not forested, as identified through independent HCVF and HCS assessments. 1. Moratorium on forest clearance: The monitoring undertaken to date confirms that the moratorium continues to be upheld by all parties, with TFT field teams, APP and its suppliers staff working to support this. 2. To support the identification of High Carbon Stock (HCS) forest that must be protected, TFT and APP have completed satellite data stratification for all suppliers. TFT and APP formed a ground truthing field verification team to verify the findings in the field. As a priority, the ground team will first cover three Forest Management Units (FMUs) in East Kalimantan due to the sensity of the natural forest in the areas, as highlighted by several NGOs. 3. APP s newly improved wood tracking system had a successful trial. The system will ensure that only wood from log yards, recorded as having been harvested prior to February 1st, 2013, enters the supply chain. Stock Opname (SO/stock inventory) data is complete and the full SO report is now finalised. A flyover is set for early May and further ground checks will take place then as part of the periodic monitoring. APP invited Independent Observers to be part of the monitoring team along with APP and TFT. 4. Scorecard assessments and SO studies were conducted at SBSA and Chipdeco chip mills in East Kalimantan, as they supply APP mills in Indonesia and China. APP purchases chipwood from Chipdeco on a spot purchase basis. Chipdeco, which previously sourced both HTI fibre and mixed hardwood (MHW), stopped sourcing MHW in early HTI fibre mainly came from two suppliers, one of which is still converting natural forest, while the other is no longer supplying Chipdeco. APP has sent a letter about its FCP Moratorium commitments and its implications to Chipdeco, and at APP and TFT s request Chipdeco has disengaged with the supplier which does not wish to cease natural 3

38 forest conversion. Communications with Chipdeco are on going to monitor its improvement on its wood traceability system and alternative HTI suppliers. No such issues have been found so far at SBSA. Wood flow projections Plantation growth and yield assessments TFT is in the process of writing up a public document that will describe the methodologies used to review APP s wood flow projections from its plantation pulpwood suppliers. This report will cover APP s plantation growth and yield forecasts, from existing standing volumes of its suppliers concession through to improvements in growth rates, harvesting efficiencies and pulp yields. Implementation of Grievance Protocol on Moratorium The grievance team was established to implement APP s grievance procedure. During March it handled complaints/reports from three NGOs based in Kalimantan, South Sumatra and in Riau. The South Sumatra based NGO received information from the local community that suggested natural forest clearance was taking place in land owned by Tripupa Jaya, an APP supplier in South Sumatra. TFT/APP carried out a spot check and found that the supplier was working in accordance with moratorium protocol by using wood felled before 1 February The Riau based NGO requested clarification about the number of APP suppliers in Riau. The NGO counted 33, but TFT/APP advised there are 17 suppliers currently supplying wood to APP, whilst the remaining 16 are a mix of a) those who are no longer suppliers of wood to APP, b) those who have never supplied wood to APP, c) those who work with APP on environmental projects. In April, the Grievance team received two further requests for clarifications from a UK based NGO and an NGO coalition. TFT and APP are investigating these requests. MTH Monitoring TFT and APP have developed an inventory monitoring system called Stock Inventory (Stock Opname/SO) to ensure the moratorium remains intact. The SO process requires the ground teams to identify and catalogue in the blocks where cutting took place prior to the moratorium, the machinery that was there at the time, and the quantity of MTH logs on site. The same information is then also gathered at the main stages of transport along the supply chain at log handling points, then the log yards, and finally at the mill gate. This data is recorded along with GPS co ordinates. The SO monitors MTH movement through the chain, as well as ensuring that boundaries where clearance last took place remain intact. No MTH logs can be received by any of the mills unless they have been through the SO process. APP has set the target for all MTH to have entered the mills by August SO system monitoring indicates that by mid April, 20% of MTH logs in the field have been transported to mills. The process is slower than anticipated due to variable ground conditions (access), weather, which has been a major factor due to rain, and logistics (lack of sufficient infrastructure). 4

39 Policy Commitment 2: Peatland management APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. 1. To complete the formation of the HCV peat expert team as agreed by APP and its NGO partners, APP s HCVF assessors Asia Pacific Certification Solutions (APCS) and Ekologika have engaged two peat experts and three field members. At this time APCS has 77 HCV practitioners in the field in the provinces of Riau, Jambi and West Kalimantan, and all work is continuing according to the schedule set out at the start of this process. Ekologika, which started work after APCS, has completed the first stage of satellite data analysis. Eklogika is now increasing its activities in preparation for putting people on the ground to start the fieldwork phase of the HCV assessments of APP s pulpwood suppliers, which followed the moratorium deadline of February 1st Ekologika has organised HCV training, to be provided through April and May, related to the methodologies and protocols for the teams that will conduct the field data collection. Policy Commitment 3: Social and community engagement In order to avoid and resolve social conflicts across its supply chain, APP will actively seek and incorporate input and feedback from a wide range of stakeholders, including civil society, and implement principles including Free, Prior and Informed Consent (FPIC) of indigenous people and local communities, respecting human rights. 1. Relevant feedback from the FGDs mentioned in the introduction have been incorporated into social procedures, particularly conflict resolution processes and Free, Prior and Informed Consent (FPIC) implementation. As noted above, there is an on going process to continue dialogue with local civil society through further meetings, grievance protocols and FGDs. TFT and APP recognise that there will be continued learning as these procedures are implemented and so remain firmly committed to continued dialogue and engagement with all stakeholders. We are also seeking active involvement of local civil society in conflict resolution, on going stakeholder engagement and FPIC processes. 2. TFT has completed the first round of training on conflict mapping for managers and operational staff in Jambi, Riau, West Kalimantan and East Kalimantan. As a follow up to conflict mapping training, conflict mapping has taken place in Jambi, Riau, and West and East Kalimantan. 3. To support FPIC among indigenous people and local communities, initial FPIC training for APP suppliers staff has been completed in the regions of South Sumatra, Jambi, Riau, West Kalimantan and East Kalimantan. 4. TFT is supporting APP to resolve a number of on going conflicts. The aim is to use each as a learning/capacity building opportunity for APP teams and to build up engagement with local communities and local civil society representatives. 5

40 o o o o In Seinyerang (Jambi Province), TFT is continuously communicating with conflicting parties and other relevant stakeholders including government authorities and local NGOs to help move the conflict resolution process forward. In PSPI (Riau Province), TFT is supporting PSPI and APP teams in communicating with the National Forestry Council (DKN) which comprises many organisations including government institutions, academic bodies and local civil society. DKN has proposed itself as the facilitator for conflict resolution between Datuk Rajo Melayu and PSPI. There has been a series of meetings between Arara Abadi, PSPI and DKN, as well as with local governments and Datuk Rajo Melayu. In Riding village (South Sumatra Province), the plan is to use the conflict resolution process as a pilot for learning and to use new procedures. In these on going and all future conflict situations, TFT and APP will continue to seek active engagement from all stakeholders in the resolution process. 5. TFT has prepared conflict resolution training materials for senior managers and teams at APP/SMF headquarters. Policy Commitment 4: Third party suppliers APP sources fibre from all around the world and is developing measures to ensure that this sourcing supports responsible forest management. TFT and APP reviewed all global suppliers that received the FCP notification last month and we are in the process of identifying programs and visit schedules to ensure this fibre supports responsible forest management. We have drafted a Policy of Association to ensure procured fibre is not linked to deforestation undertaken by other parts of suppliers operations. We are continuing to review third party suppliers and are making solid progress in Vietnam. TFT is recruiting three new team members to support the APP work in relation to APP s global supply chain: a social specialist, a forester and a wood control specialist will join us shortly. 6

41 Progress in China TFT is reviewing various standards, laws and regulations applicable to APP China Forestry (ACF) operations with a strong focus on Hainan, which will be the first province to trial the TFT scorecard system. TFT and ACF met with Greenpeace China to discuss their concerns in relation to plantation development in Hainan. A Hainan Plantation Restoration Proposal has been drafted and is now being reviewed by stakeholders. TFT is currently preparing the general policy structure for ACF; integrating the FCP, RFPPP and other policies related to environmental, social and economical aspects of sustainable development. The GAP assessment report (English version) has been completed, following the ACF Yunnan scoping visit. As per the request from ACF, a Mandarin version of the report is being prepared. As TFT finalised the scoping phase for ACF, TFT reviewed findings from all the scoping visits conducted, revised the detailed activity plan for ACF and distributed them to ACF for comment. We are also reviewing the scorecard (quick supplier assessment against RFPPP) developed by ACF, based on RFPPP. We will provide ACF with recommendations and revisions. The existing program and group policies that relate to community and social engagement have been reviewed and we have drafted a Social and Human Resource Policy and distributed it to ACF for comment. Finally, we are providing assistance and guidance to ACF regarding the preliminary SOP review and data collection, which is currently in progress. 7

42 Introduction TFT/APP Progress Report for February 2013 Date: 20 March 2013 This is the first in a series of what will become regular updates from TFT on APP s progress towards meeting its No Deforestation commitment, made on February 5 th as part of its Sustainability Roadmap: Vision 2020 update report. The company announced an immediate end to all natural forest clearing in its supply chains in Indonesia, effective 1 February TFT is working on the ground with APP to implement and monitor the work. TFT understands that there is huge interest in APP s progress implementing its new Forest Conservation Policy (FCP) and so rather than wait for quarterly updates, we have decided to report more regularly on the work being done in the field. Overall It has, inevitably, been a very intensive month but the encouraging headline news is that the moratorium on forest clearance, agreed by all suppliers, is holding. Additionally the grievance process designed to allow communities and civil society to report any breach in the policy - has been tested with positive feedback received from the claimant. In advance of the FCP announcement on Feb 5 th, APP and TFT had developed a series of protocols to guide implementation. Early engagement with local civil society in Indonesia was seen as critical to developing a strong multi-stakeholder implementation approach. To that end, APP and TFT teams have participated in a series of Focus Group Discussions (FGDs) across Indonesia, meeting with local civil society representatives. The FGDs have focused on the overall intent and detail behind the policy; the monitoring process and details of what data will be shared. Such meetings will form an on-going part of the work program. The final FGD for the first round of stakeholder consultation will be held on 27 March 2013, where APP and TFT will address all input provided during the regional meetings. Policy commitment progress Policy Commitment 1: High Conservation Value Forests (HCVF) and High Carbon Stock (HCS) Forests APP and its suppliers will only develop areas that are not forested, as identified through independent HCVF and HCS assessments. 1. Moratorium on forest clearance: TFT, APP and its suppliers staff have been very active in the field implementing protocols to ensure the moratorium on forest clearance holds. Our teams have: a. marked and recorded clearance boundaries with GPS data for all concessions which were supplying APP with timber from natural forests cleared up to 31 January 2013; 1

43 b. inventoried and mapped the location of all stocks of natural forest logs within APP s supply chain cut before Over one million cubic meters of fibre wood, located in various log yards, has been recorded. Over the coming months, these stocks will be transported to APP s mills. The target date to have all of this wood in the APP mills is end-august 2013 but this will depend on weather, contractor availability and adequate road infrastructure. Progress against this target will be reported; c. inventoried over 570 wood extraction machines; and d. developed a wood tracking system and trained relevant staff in using the system to ensure that only wood from log yards, recorded as having been harvested prior to Jan 31 st, 2013, enters the supply chain. 2. HCVF assessments are currently underway for 38 APP suppliers (ranging from open land to remnant natural forest and fully established pulpwood plantations), with completion due in phases between September 2013 and March Because APP will now preserve areas that have previously supplied the company with natural forest fibre, work has also begun on alternative low carbon Industrial Forest Plantation (HTI) development: a. Ground assessments and flyovers have taken place at three concessions in South Sumatra (Sebangun Bumi Andalas, Bumi Mekar Hijau and Bumi Andalas Permai). b. The assessments in these concessions are to identify potential high conservation and carbon stock values on the old scrub/regenerating forest and cleared/open land. c. Focus group discussions at sub-district and village levels were carried out to strengthen data collection processes. Another stakeholder consultation at the district and provincial levels is scheduled to garner input and feedback from relevant stakeholders on the assessment results. 4. To support the identification of High Carbon Stock (HCS) forest that must be protected, the team has procured up to date SPOT 5 satellite data. Analysis is underway to classify land across APP s supply base. At this point, data covering 70% of APP s supply base has been processed.the remaining 30% will be processedby the end of May 2013.Where HCS forest has been identified, the team is carrying out a two-tiered process of on-theground studies and inventory sampling. 5. To support supplier adherence and third party observer monitoring, TFT and APP have developed a set of protocols: Monitoring of Moratoria Implementation, Role of Independent Observers, Grievance, and New Area Development. APP and TFT have sought input on these protocols from Indonesian civil society in Jakarta, Riau, Jambi, West Kalimantan and East Kalimantan regions. Monitoring visits are underway as part of the process to map forest boundaries (see point 1 above) and we anticipate that civil society participation in the monitoring process will commence in April A Moratorium Committee has been created to determine the action points and/or the level of disciplinary action for any non-compliance found. 2

44 Policy Commitment 2: Peatland management APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. 1. The leaders of HCVF assessors are forming a team of internationally and nationally recognized peat experts to support the HCVF assessment process. The team will set a protocol, methodology and oversee all work and provide clarity on the recommendations and corrective actions to implement a forest conservation and peatland management plan. The team is due to be in place by April Policy Commitment 3: Social and community engagement In order to avoid and resolve social conflicts across its supply chain, APP will actively seek and incorporate input and feedback from a wide range of stakeholders, including civil society, and implement principles including Free, Prior and Informed Consent (FPIC) of indigenous people and local communities, respecting human rights. 1. To support FPIC among indigenous people and local communities, initial FPIC training for APP suppliers staff has been completed in the regions of South Sumatra, Jambi and Riau. The West Kalimantan and East Kalimantan regions are scheduled for the third week of March. 2. To aid the responsible handling of complaints, APP has developed procedures for grievances, and these have been socialized in Jakarta and the Riau, West Kalimantan, East Kalimantan, Jambi and South Sumatra regions.the national level will follow on 27 of March. A South Sumatra and Riau-based NGOs have actively participated in the implementation of APP s Grievance Procedure to resolve a case reported in February March TFT and APP have developed a draft procedure for the responsible resolution of conflicts. Relevant modules for conflict mapping training have been developed, and training is completed in the Jambi and Riau regions. A draft has also been shared for further input from stakeholders for socialization in the regions 4. TFT continues to work with APP, Ministry of Forestry teams and local communities and their representatives to resolve conflicts in the Jambi Region. This has included discussions with stakeholders PPJ and the Head of Dinas Kehutanan Jambi. TFT has also begun to support the conflict resolution process in PT. PSPI. TFT has communicated with PT. Arara Abadi, local NGO Scale up and the Indonesia National Forestry Council (DKN). 5. The January 2013 conflict of Pulau Muda in PT. Arara Abadi, an APP-owned concession in Riau, has been resolved, with all parties signing an agreement. 6. APP has reviewed its CSR policy through a social footprint study. Results and recommendations from the study will be used to improve the policy. 3

45 Policy Commitment 4: Third party suppliers APP sources fibre from all around the world and is developing measures to ensure that this sourcing supports responsible forest management. 1. Majority of the work has so far been focused on implementing the FCP for pulpwood suppliers in Indonesia. 2. Initial supply chain risk analysis has started for APP China. 3. APP has issued letters to inform all its global pulp suppliers to comply with its FCP. 4. APP has conducted a one-day training program for its global suppliers outside pulp regarding its FCP. Progress in China APP China and TFT China teams have met with the Greenpeace China team to discuss plans and priorities to roll out the FCP in China. An initial Action Plan has been developed as a result of the discussions and is awaiting final sign off.. Details and progress against the China Action Plan targets will be reported more fully in subsequent reports. 4