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Company Response

11 Oct 2019

Asia Pulp & Paper

Response of Asia Pulp & Paper Sinar Mas

1. In Indonesia all land administratively under villages and there is a land use plan decided by the Government. When the companies received License to operate mostly some communities under the villages have been there inside the concession. To respect the Human Rights, APP suppliers had been acknowledged their existence while waiting the formal demarcation of boundaries. These villages with the communities where APP has admitted as Land Dispute on Category 1 ( Not conflict in terms of a company grabbing the land but acknowledgement in terms of overlapping with the Operational area).  

2. When APP's Forest Conservation Policy was introduced in 2013, the system of obtaining Free Prior and Informed Consent, prior to development or land use changes, was uniformly implemented across all supplier concessions, regardless of ownership. APP also undertook a comprehensive survey of all existing disputes on its supplier concessions, so that these disputes can be catalogued and addressed, even we differentiate the disputes through 6 categories and prioritize the resolution base on our guideline included prioritizing. As of February 2019, 49% of all disputes have been resolved. This means that an agreement has been reached between the relevant concession holders and the local community.

3. Disputes can be complex, and many cannot be resolved by the company working alone. To help improve the resolution process, we implemented Regional Social Working Groups, which are comprised of NGOs, Local Government and professional mediators. These RSWGs work together with APP and affected communities to arrive at equitable resolutions. Aside from the RSWGs, APP conducts regular Stakeholder Advisory Forums (SAF), where we report on the progress of our environmental and social commitments. These SAFs allow interested parties, including NGOs, academics, partners and government representatives, to evaluate and ask questions about our progress. It is also an opportunity for APP to solicit advice and feedback from stakeholders. In the SAF held in February 2019, we focused on ideating approaches and solutions to land disputes.
4. The EPNs primary allegation is that APP has not been "transparent" with its dispute resolution, and that anything short of full public disclosure is unacceptable. To sensationalise their point, they claim 107 active conflicts, even though they admit that they don't know how many of these have since been resolved. They also claim an additional 544 potential disputes; basically alleging that APP is potentially in conflict with every community in its supplier concessions. These claims demonstrate a poor understanding of land disputes in Indonesia, and of their resolution.
5. One of those guidelines is that FPIC processes must be documented so all involved parties are on the same page. As part of APP's approach to FPIC in dispute resolution, communities are informed that they are permitted to engage third parties to represent their interests or to assist with mediation. APP also pursues multi-stakeholder approaches to dispute resolution, even prior the formal establishment of the RSWGs. This ensures that there are credible third parties involved in all negotiations, who are committed to achieving equitable resolutions for the parties. Interested parties are always welcome to participate in disputes mediation through the RSWGs or to monitor the progress at our SAFs.
6. The FAO guidelines also require that the right to privacy of communities are respected. Communities in dispute are free to seek advice or assistance from any parties they desire. They are not bound by non-disclosure agreements during or after disputes are resolved. APP does disclose details of disputes - including number, locations, progress and resolutions - through closed door mechanisms such as the RSWGs, and in reports to the Government of Indonesia. However, to make this information public, as demanded by some parties, would be a violation of the community's rights, and does not represent FPIC.
7. APP has other reasons for limiting publicly available information regarding conflicts. In Indonesia, there are "speculators" who will take the opportunity provided by land disputes to make illegal side-deals with affected communities. For example, an illegal logger might lease land from communities in dispute to clear cut natural forest, or to establish an illegal plantation on disputed land. These actions may unduly influence communities to intentionally refuse or derail mediation or negotiation. There are also unscrupulous mediators who might incite a community to reject previously agreed upon resolutions on the expectation of a more generous resolution, usually financial, of which these mediators will take a cut. These resolutions may not be in the best interests of the affected communities, who might actually want other forms of resolution, such as protection of customary land, economic or infrastructure improvements, or agricultural assistance. At any point, if a third-party is of opinion that the resolution was resolved fairly, they could always lodge a report through the Grievance Mechanism APP has in place (http://www.fcpmonitoring.com/Pages/general_content.aspx?M=7
8. APP has previously responded publicly to the EPN through the following statement, dated 2 Oct, at https://asiapulppaper.com/news-media/press-releases/response-epn-report-social-disputes-supplier-concessions. We strongly believe that looking at the situation holistically, you will find that the allegations put forth by EPN represents only a very narrow interpretation of facts, and does not illustrate the whole and complex problem of land disputes in Indonesia.
9. With regards to the allegation that many of these companies appear to be controlled by APP and/or Sinar Mas, APP engaged an independent auditor from one of the Big Four accounting firms to perform the assessment, with oversight from Earthworm Foundation (formerly known as The Forest Trust). Through this assessment process, it was concluded that;

a) The companies identified as APP Partners are consistent with the ones that we have declared in APP FCP Monitoring Dashboard (www.fcpmonitoring.com)
b) The companies that were identified as being involved in deforestation practices are no longer supplying to APP
c) Other companies that were alleged to have relationship to APP have been identified as having no relationship to APP supply chain

For a detailed summary report, please refer to http://www.fcpmonitoring.com/Pages/updatecontent_details.aspx?nid=200103

10) A final point, by the name of brand, we are known as Asia Pulp & Paper Sinar Mas, however we are not a subsidiary of neither is Sinar Mas our parent company...