11.09.2013
APP statement regarding TFT verification reports into FCP implementation in Riau and South Sumatra

2013, September 11, JAKARTA – In February 2013, APP launched its Forest Conservation Policy (FCP), in which the company committed to an immediate halt to all natural forest clearance. This moratorium is in place while a series of assessments are carried out to determine which areas of APP’s suppliers’ concessions are of High Carbon Stock (HCS) and/or High Conservation Value (HCV), all of which will be protected.

APP supplier concessions cover over 2.6 million hectares in Indonesia. Ensuring the various FCP commitments are properly implemented across such a vast area is a very complex task and when we embarked on this zero deforestation policy, we expected to face many challenges and issues along the way. We believe that it is important to be transparent about such issues as they arise, so we can invite stakeholders to help us address them.

Following a grievance raised by Eyes on the Forest in May, TFT and APP released a report regarding 70 hectares of natural forest cleared by PT. Riau Indo Agropalma (RIA) in Riau, in breach of APP’s moratorium. This clearance took place because RIA had, two years previously, entered into an agreement with a local community to develop the area – an obligation of concession owners. The FCP Implementation Team incorrectly concluded that the area could be cleared.

As a result of this incident, TFT and APP carried out an audit of all concessions to determine whether there were any further cases like the one in RIA, where previous commitments with communities had been made. The audit brought the following to our attention:

PT. Sekato Pratama Makmur (SPM) and PT. Bina Duta Laksana (BDL), Riau 

Two areas were identified as having similar ‘community forest’ cases to the one in PT RIA:

Within SPM, an investigation showed that no clearance had yet taken place and therefore the moratorium had not been breached.

Within BDL, an area of 27.8 hectares had been cleared after 1 February 2013. It was not possible to determine whether the area was HCS. The area cleared was on peatland, making it a breach of APP’s FCP policy on new peatland development.

As with the RIA case, the decision to approve this clearance was taken by the FCP Implementation Team in the field and was not sent to the Senior Management Team within APP and TFT for approval.

In addition to this specific audit resulting from the RIA case, the FCP committed APP and TFT to conduct continuous monitoring of FCP implementation, particularly the natural forest clearance monitoring. This monitoring has revealed a moratorium breach in South Sumatra:

PT. Bumi Andalas Permai (BAP), PT. Sebangun Bumi Andalas (SBA), and PT. Bumi Mekar Hijau (BMH), South Sumatra

An investigation showed that a total area of 69.45 hectares of HCS was wrongly cleared in BMH, BAP and SBA after 1 February 2013 (the majority of the HCS was cleared in BMH). This took place in an area established as a “No Go” zone, pending full HCS, HCV and peatland assessments. This is an unacceptable breach of APP’s natural forest clearance moratorium and its FCP, and is the result of an inadequate sign off and company supervision process.

Further, the 69.45 hectares of HCS was part of a 431 hectare area developed since 1 February 2013 within the “No Go” zone, which was established as part of a pre-assessment process. The company requested that this pre-assessment be done in South Sumatra to identify ‘low risk’ areas for ongoing plantation development in order to meet forecasts. There are no other land development operations across APP’s supply base.

The investigation shows that this issue could have been avoided if the operational teams had:

  • Been provided with robust checklist of actions and documents requiring formal sign-off,
  • Implemented more stringent supervision and monitoring process before any land development had occurred.


As a result of these cases, new procedures have now been introduced by APP/TFT to prevent any such issues from occurring again. Not only are we now addressing these issues, but we are also using the findings to improve the way we implement the FCP.

We remain committed to our ‘zero deforestation’ policy and continue to implement it across our entire supply base. Working together with our partners, we will ensure we continue towards our common goal of overcoming the complex issues involved in protecting  natural forests, while respecting the rights of the local communities.

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