by Paul Brown, Environment Correspondent The Guardian - London
The Indonesian pulp and paper industry is destroying rainforest at such an astonishing rate that it will run out of wood in five years, according to a report being published today.
Environmental groups are concerned that rare wildlife, such as Sumatran tigers and a sub-species of elephant, in some of the most biodiverse rainforests in the world is threatened with extinction. They also warn western investors that they may lose hundreds of millions of pounds as pulping companies run out of trees to fell.
The report, by Friends of the Earth, focuses on Asia Pacific Resource Holdings Ltd (known as April), whose pulp mill in the Sumatran province of Riau is the biggest in the world. The British construction company Amec built the mill. April, which is based in Singapore, has borrowed heavily from western banks to finance its operations.
Wood and paper companies in Indonesia are given concessions to clear timber and are supposed to replace them with plantations of fast-growing acacia trees, so that the industry will eventually be self-sustaining. Between 1988 and 2000, however, only 10% of the wood used in Indonesia was from plantations.
According to the report, trees are still not being planted fast enough to save the forests, although April says it is on track to become 90% self-sufficient by 2008.
The World Bank estimates that 2m hectares of forest a year, an area the size of Belgium, is being wiped out - the same rate of deforestation as the Amazon rainforest in Brazil. Somewhere between 50% and 70% of Indonesia's rainforests have now been destroyed, experts estimate.
The WWF (formerly the World Wide Fund for Nature) has just completed an investigation of April's activities in the Tesso Nilo area in Sumatra, where logging is banned and which is the most biodiverse area of lowland forest in the world, containing tigers, elephants, gibbons, tapirs and a huge variety of flowering plants. A WWF investigation has tracked 110 logging trucks from this area to the April pulp mill in the past two months.
"This company is renegotiating 1.2bn in debts with US, European and Asian banks while facing a crisis at home of running out of wood supplies," said Ed Matthew, joint author of the Friends of the Earth report into April. "This report is a warning to banks not to invest in industries like this unless they check first that they are sustainable.
"The company claims it will eventually get its wood from plantations but the numbers do not stack up. The company will run out of timber in 2005, a full three years before it claims it will be sustainable."
The report is the second by Friends of the Earth into the destruction of forests by illegal logging in Indonesia. The first, published last year, investigated another company, Asian Pulp and Paper, and the environmental group persuaded some UK paper dealers to stop buying its products.
This time Mr. Matthew is asking consumers to boycott PaperOne, the main brand of April, and the report names eight British merchants that stock it. Tony Vermot, the exclusive representative for April's products in the UK, said he could not comment. However, Roland Offrell, a Swede appointed two months ago as April's first environment director, conceded that large areas of forest were still being cut down. They would, he said, be replaced with plantations.
The company had 300,000 hectares of forest concessions from which it drew wood, he said. Some wood also came from clearing forest for agricultural land.
Mr. Offrell could not guarantee, however, that wood did not come from illegal sources, but if it was detected, loggers were reported to the police. The company refused to take any more wood from the culprits, he said, and was planning an external audit of the source of its logs to prove it was not using illegal supplies.