Get out of deforestation to protect your brand!

22 February 2013
ITC News

Deforestation is bad news for many reasons including destroying local livelihoods and removing habitats for wildlife. Forests also absorb and store carbon in trees and soil and when cleared or disturbed, this carbon is released as greenhouse gases. Around 17% of global emissions come from deforestation.
In an otherwise bleak landscape of news on this subject, an announcement was made this month that the world’s largest tropical timber company Asian Pulp and Paper (APP) agreed to a zero deforestation policy.
The deal was brokered by Geneva-based NGO Tropical Forest Trust (TFT). This week, I interviewed TFT’s Chief Executive Scott Poynton about how APP reached this decision, if the deal would hold and what implications it would have for the protection of forests in the future.
Thanks Scott for taking the time to join ITC Environment Blog for this interview. Can you describe the background on your engagement with Asian Pulp and Paper (APP)?
It started through our work with Nestle. Following attacks from Greenpeace over palm oil, Nestle hired us to develop responsible sourcing in their supply chain. Through this work we came into contact with APP – they asked us for help to go down their own path to make their sourcing sustainable.

Scott Poynton, CEO, Tropical Forest Trust

What has APP done that is different in terms of implementing sustainable practices?
Unlike other companies APP does not source just from its own plantations but also has 30 independent suppliers – as a result it has less leverage over supply. They are also dealing with “chunky” issues. They are setting aside (i.e. not deforesting) land with different environmental qualities: land with high conservation value, land that contains peat and land with high above-ground carbon stocks.

Deforesting peat forest & releasing a lot of carbon – soon to be palm oil, Sarawak
Image: macx, flickr

How does APP decide whether the land fits into their environmentally sensitive categories?

In the past it has just come down to opinion – what was degraded land and what was not was completely subjective. Now we can help the company to audit land for its conservation value.

We help them carry out assessments of the carbon richness of the tree stock using a combination of satellite imagery and measuring the diameter of trees converting this data into an estimate of carbon content. From this you can tell how much carbon is in the trees.

It must be more difficult to measure how much carbon is under ground. Do you end up telling the company to avoid clearing land with peat altogether?

Yes, peat is more complex to measure as you have to look at hydrology, drainage methods and peat depth. Digging into peat releases millions of tonnes of CO2 so we advise APP to just not touch it and to manage the land well around it.

Wild orangutan populations in Southeast Asia have decreased by 92% in the last 100 years due to illegal timber harvest, human encroachment and mining.
Image: cocoabiscuit, flickr
What are remaining challenges for APP to implement its no-deforestation policy?

The next challenge is the social conflict in the plantations and forests. Local people are burning plantations with grievances over land rights.

How can you address this issue?

We enter the villages with social experts to learn about the issues and then hold dialogues with the people.

Is this policy going to cost APP a lot of money?

Yes, it is going to cost them a lot particularly to compensate machine operators. But remember that for the last 20 years, APP has been the poster child of deforestation . This reputation has cost them over 100 customers. The reputation had no prospect of going away unless they made these changes. They lost many customers in US and EU markets and they saw the same thing coming in Japan. We told them that “you have to get out of deforestation to protect your brand. You can always be associated with deforestation or jump now and take a short term hit. You can have a deforestation free future or spend the rest of the company’s life (which may not have been for long) in conflict.”

What was the key factor determining their change in policy?

APP made a good business decision. They had a vision statement to be the best quality paper company in the future. They could not reach their vision without stopping deforestation.

APP deserves credit. They didn’t know a way out of the problem but recognized that there was a problem – they were following a conventional business model, but it goes beyond dollars. Remember that many US companies follow the same business model of clearing forests. If things don’t change we won’t have any forests left in 20 years.

According to media reports, APP has failed to abide by prior pledges to phase out conversion of wildlife-rich forests – how confident are you of success this time?

I am very confident that they will stick to their word. In the past announcements like this have had vague dates in the future for when to stop deforesting. When they made the announcement on 5th February, they had already turned the machines off.

Also, for the first time they will be monitoring the process with civil society and TFT involved for first time. They had already drafted their policy in consultation with shareholders. The policy also has teeth. Suppliers will be delisted if they don’t adhere to the policy.

If APP can do this then anyone can.

What are the key factors apart from the vision about their company that resulted in this outcome?

The Greenpeace campaigns were important. There needs to be the pressure on big companies for them to change. We also need buyers to make policies that send clear signals to suppliers – we don’t want deforestation in our products. Apart from Nestle, the big corporations like Unilever and Walmart under the Consumer Goods Forum have extremely weak commitments.

In what way are the commitments of the corporations extremely weak on forests?

For two reasons. Firstly they have a goal of no more “net” deforestation. That means they can cut down natural, primary forest and replace it with plantations and describe it as no “net loss” of forest.

Secondly, committing to a goal in 2020 is not good enough. We need to stop deforestation now.

How else can we bring about positive change?

We also need governments to make policies to force companies to stop cutting down forests.

Thank you very much Scott for your time.

My pleasure!

Scott Poynton was interviewed by Alex Kasterine, Head of Trade and Environment Unit, ITC, Geneva.

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