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Forest Trends

Report: 30% of Indonesian Wood from Illegal Sources

Forest TrendsMore than 30 percent of wood used by Indonesia’s industrial forest sector, which provides the US, Europe and beyond with paper products, stems from the unreported clear-cutting of natural forests and other illegal sources, according to a study.

The report, by the Anti Forest-Mafia Coalition and Forest Trends, also finds that if the country’s pulp and paper mills were to operate at full capacity, and if companies were to go forward with plans for a multi-billion dollar investment in new mills, the industry would need to double its legal supply of wood to meet demand.

The study, Indonesia’s Legal Timber Supply Gap and Implications for Expansion of Milling Capacity, compared the supply of wood, as reported by the Indonesian Ministry of Forestry, with the volume of production reported by the industrial forestry sector. It found that the raw material used by these mills exceeded the legal supply by the equivalent of 20 million cubic meters.

The new report comes as companies such as Asia Pulp and Paper move forward with plans to build new pulp mills. APP plans to build a $2.6-billion mill in South Sumatra by 2016. It will be the largest mill in Indonesia.

In 2013, APP issued a forest conservation policy that contained a zero-deforestation pledge. The report authors say this commitment would be impossible for all of Indonesia’s pulp mills to meet.

According to the study, even if no new pulp and paper mills were to be built, the pulp and paper sector would face steep challenges in meetings its environmental sustainability targets. The report says at present, the sector is operating at less than 80 percent of capacity. If it were to operate at full capacity, the gap in legal supply would grow by at least 10 million cubic meters of wood.

And then, if the new pulp mills were to be built, this gap would jump to over 44 million. Unless legal supplies are increased, more than half (over 59 percent) of all wood used would be illegal, it says.

Only six major companies — Danone, Kao Corp., Nestle, Procter & Gamble, Reckitt Benckiser Group, Unilever and HSBC — and one investor, banking and financial services giant HSBC, have comprehensive policies in place to protect tropical forests, according to a Global Canopy Programme report published last week.


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