Indonesian pulp and paper giant says is "victim" of forest haze

JAKARTA, March 24 Mon Mar 24, 2014 5:54am EDT

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JAKARTA, March 24 (Reuters) - Forest fires and haze have become so bad in northern Sumatra that a Indonesian pulp and paper company held partly responsible by green groups has declared itself as a casualty, saying the environmental catastrophe was costing it millions of dollars.

Criticism of palm oil plantation owners and companies like Asia Pacific Resources International Limited (APRIL), Asia's second-largest pulp and paper firm, intensified after Indonesia's Riau province declared a state of emergency in late February.

A study released earlier this month by World Resources Institute (WRI) found that 36 percent of fires in Sumatra from Feb. 20 to March 12, were in pulpwood plantation areas.

The think tank said the concessions with the highest share of fire alerts include many that are affiliated with APRIL and rival Asia Pulp & Paper Group (APP).

"We are the victim of this entire situation," APRIL's president Praveen Singhavi told Reuters, estimating the cost to the company was between $5-6 million.

Singhavi said the illegal burning was largely the fault of small-holders using slash and burn methods, and fires in APRIL's concessions were in areas overlapping or disputed with local communities. An unusually early start to the dry season had exacerbated the fire risk, he added.

The APRIL president advocated a combined effort from corporate, government and local communities to tackle the forest fires and haze.

In its report WRI said: "Under Indonesian law, the companies do bear responsibility for fires on their land, even if they did not start the fires. Fires are symptoms of longstanding poor forest and land management."

President Susilo Bambang Yudhoyono had to apologise to neighbours Singapore and Malaysia in mid-2013, when those countries were blanketed with thick smog from forest fires in Indonesia.

Both palm and pulp and paper companies have been criticised by green groups for not doing enough to stop the annual haze problem or the rampant deforestation and destruction of carbon-rich peatlands in Indonesia.

APRIL, an unlisted company, owns plantations covering around 460,000 hectares, and according to its president it operates a strict 'no-burn' policy.

Earlier this month, the firm suspended forestry operations on an island off Sumatra and transferred 130 staff to fire lines to protect its plantations. It has deployed its own 600-strong fire-fighting team, helicopters and pumping equipment to tackle the fires, and said on its website that it had lost 400 hectares since January to illegal burning.

Rival APP has said it would stop using timber from Indonesia's natural forests and only use trees from plantations.

In January, APRIL also launched new sustainability policies that will halt plantation expansion by the end of this year and only use supplies from its own plantations by 2019. (Editing by Simon Cameron-Moore)

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