From the weekly Innovation Forum Business Brief. Sign up for weekly updates at: http://innovation-forum.co.uk
Environmental groups seem to be reaping the rewards of more than a decade of campaigning against the destructive practices of major companies involved in deforestation in Indonesia.
One by one, the big names have fallen into line. In 2011, Indonesia’s largest palm oil producer, Golden Agri-Resources (GAR), after sustained pressure from Greenpeace, put forward a forest conservation policy in which it promised to stop clearing tropical forests.
In 2013, Asia Pulp & Paper (APP), previously seen as a major forest-clearance villain, took similar steps.
APRIL joins the party
Now another pulp giant, Asia Pacific Resources International Limited – better known as APRIL – has joined the ranks of the righteous. It has published a new sustainable forest management policy in June in which it pledges to no longer clear high-conservation value forest while also protecting peatland.
The conversions of the companies to more sustainable practices have elements in common – not least the prominent involvement of Greenpeace, and other activist groups. In each case, companies have caved in following pressure that led western brands to suspend dealings with them.
APRIL, for example, issued its new policy after a campaign had resulted in Santander pulling funding.
Second, the pledges adopted by the companies have resulted in partnerships with green groups that monitor the multinationals’ ongoing improvement efforts.
The new zero-deforestation policies have all been welcomed by Greenpeace, but with caveats about how judgement should be reserved until the effects can be seen.
So far, the results seem to be much as would be expected. Greenpeace rates the companies as moving in the right direction but warns that this is a long-term endeavour, not a quick fix.
In a December 2014 report on GAR, for example, Greenpeace noted that progress was good in some areas, but mixed or limited in others. GAR deserved some kudos, but “the amount of unfinished work leaves absolutely no grounds for complacency,” Greenpeace said.
Pressure pays off
Nevertheless, it is clear that the campaigners’ strategy of consumer pressure on western brands which has a knock-on impact on Asian companies is paying off.
Richard George, Greenpeace UK’s forest campaign team leader says that the Indonesian companies’ changes of heart should be seen as an evolution: they are moving from rapid expansion-based business models to a greater focus on sustainability.
And the achievements so far should not be underestimated. APP and APRIL, for example, account for about 80% of Indonesian pulp, and about 60% of the global palm oil trade is now covered by sustainability commitments.
However, although companies are changing their behaviour, forest governance in Indonesia still has systemic problems.
In May the Indonesian government renewed a moratorium on new commercial activity in the country’s primary forest and peatland. This was welcome, but this is widely considered to be full of loopholes, detached from decisions made at local level that can lead to deforestation and lacking basic elements such as decent maps.
The next step to plug these gaps could be for Indonesia’s companies to learn another trick from their western counterparts: how to lobby effectively. Companies such as APP and APRIL should protect their own sustainability gains by ensuring they are not undercut by competitors with lower standards.
Companies are starting to get organised in this respect, for example by signing the Indonesia Palm Oil Pledge to push for better governance and sustainability standards.
The next step is for such initiatives to help tackle the systemic governance failings that mean forests in Indonesia – and elsewhere – remain under threat.
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(We’re bringing together companies such as APRIL, with leading players in the business, NGO and governmental areas, to debate practical progress in Singapore on 28-29 September. Join us here.
Future sustainable business dates for your diary:
- How business can tackle deforestation A make or break issue for Asia’s corporate reputation?28th-29th September, Singapore. For full agenda, brand line up, and who is coming, go here.
- Ethical trade and human rights forum A joint venture between IF and the Ethical Trading Initiative. 19th-20th October, London. CEOs and big brand executives wanted. Contact Boris Petrovic
- How business can tackle deforestation Innovation in Sustainable Forestry: Technology, Risk and Collaboration. 2nd-3rd November, London. A follow up to our recent successful events in London and DC, contact Charlenne Ordonez to suggest speakers or get involved.
- Why current consumer engagement on sustainability fails – and how to fix It Two days of difficult debate about reality and solutions. 9th-10th November, London. Contact Natasha Bodnar to suggest speakers or get involved.
- Sustainable seafood: how business can source, manage and improve fish and marine resource sustainability A two-day business sustainability strategy conference. 25th-26th November, London. Contact Tobias Webb to suggest speakers or get involved.