SUSTAINABILITY ROADMAP VISION SRV2020 June 2013

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1 SUSTAINABILITY ROADMAP VISION SRV2020

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3 1 2 SRV2020 Foreword from Aida Greenbury, Managing Director of Sustainability and Stakeholder Engagement, APP We launched our Sustainability Roadmap Vision 2020 in June 2012, setting our company on an ambitious path to embed sustainability at the heart of everything we do. In February 2013, we announced a new Forest Conservation Policy (FCP), which included a commitment to an immediate cessation of all natural forest clearance throughout our entire supply chain. This third report brings you up to date with the latest developments, including an absolute deadline of 31 August 2013 for all natural forest wood felled prior to 1 February 2013 to have reached APP s pulp mills. After this date, no natural forest concessions in Indonesia. We are still in the early stages of delivering the FCP and our systems are not yet perfect. let me be clear - our commitment to stop natural forest clearance was absolute. There are no planned exceptions. If an oversight is made during the implementation of FCP, we will address and use it to strengthen and improve our systems. We have been engaging and consulting with stakeholders in Indonesia and beyond, responding to and investigating grievances, and continuing the hard work on the ground with The Forest Trust (TFT). This update is published simultaneously with the re-launch of our website, which contains details of our Sustainability Roadmap and Forest Conservation Policy. APP is also unveiling a pilot online progress monitoring system, developed with TFT. This prototype version will be the subject of extensive consultation in the coming months, to ensure it meets the information and transparency requirements of our many stakeholders. As ever, your comments are welcome, and you can send these to sustainability@app.co.id

4 3 4 SRV K [ ] August 31 st 2013 established as deadline to stop receiving any natural forest wood cut prior to implementation of the Forest Conservation Policy. Natural forest wood acceptance deadline The Forest Conservation Policy and associated moratorium on natural forest clearance that was implemented on February 1 st 2013 generated a respondents highlighted that there is a need to establish an absolute February 1 st into APP mills. In response to this feedback, APP has set an absolute deadline of August 31 st log yards. all APP land concessions in Indonesia. The assessments are set to be completed early next year, and are being undertaken by TFT and concessions contain natural forest, all of which will be protected.

5 5 6 SRV [ ] Progress of Forest Conservation Policy Commitment The FCP has four components: Best practice peatland management 3. Social and community engagement 4. Ensuring compliance from third party suppliers 1. APP and its suppliers will only develop areas that are not forested, [1.1. No Deforestation policy ] With the launch of APP s No Deforestation policy, APP suppliers implemented a moratorium on natural forest clearance effective February 1 st The moratorium remains in place. A grievance protocol has been implemented to open communication with stakeholders regarding FCP and to ensure problems can be dealt with effectively. The procedure has been successfully deployed on six occasions raised by investigated and resolved, one requires a longer-term investigation, and we are currently examining a sixth. Fibre Procurement & Processing Policy and the Forest Conservation Policy using a score card system. Action has been taken in one case, where a tier two supplier was delisted for operating in breach of APP s Forest Conservation Policy commitments. 27 concessions, due for completion in Q This data was fully processed in March - April 2013, and the team is conducting The remaining 20 will be completed in early the end of the Q

6 7 8 SRV2020 Figure 1. Figure 3. Figure 2. [ 1.3 Transparency ] The new Forest Conservation Policy has been shared with local stakeholder groups in Indonesia through a series of Focus Group Discussions (FGDs) in February and March The aim of the FGDs and sharing sessions was to explain the content of the new FCP, to seek feedback on the draft FCP implementation protocols and to invite the active participation of Indonesian civil society in the implementation and monitoring process. The inputs received from those discussions have been used to enhance APP s FCP implementation protocols.

7 9 10 SRV2020 Figure 4. Focus Group Discussions Chronology in February and March They were attended by over 50 participants from civil society and the academic community. APP has also unveiled a pilot online monitoring dashboard, which gives access to up-to-date technical information relating to the implementation of the FCP. to review current progress on the ground and to see moratorium boundary APP will be consulting with its stakeholders on the format and content of the As a result of learnings from grievances received, APP has introduced a risk assessment project team responsible for identifying, reporting and addressing any potential future issues in the FCP implementation process. The team will Case study on issues submitted through grievance: Report on potential breach of moratorium by two APP suppliers in West Kalimantan. Issue: were actively clearing forest in breach of the FCP moratorium. Action: to check the situation on the ground. Findings: not by APP or either of its two suppliers. Rather, companies with concessions overlapping the APP suppliers concessions were carrying out the forest clearance. Improvement actions: APP has raised this issue with the respective companies and with the local and national government. process. In addition, TFT and APP are currently mapping all possible license or other government authorities. Report on potential breach of moratorium by APP supplier in Riau. Issue: undertaken by an APP supplier in Riau, PT RIA, after February 1 st, in breach of the moratorium. Action: took place on May 29. Findings: in 2011, been allocated for community livelihoods an obligation of concession owners. Improvement actions: as the investigation is completed. APP has introduced a risk assesment project team responsible for identifying, reporting and addressing any potential future issues

8 11 12 SRV2020 [ 1.4. Natural Forest Wood Monitoring ] accepting natural forest wood felled prior to February 1 st. In response, APP has now issued an absolute cut-off date of 31 st August 2013 for accepting natural forest wood. To ensure compliance, APP and TFT have developed an inventory monitoring system enables the movement of natural forest wood cut prior to February 1 st APP has inventoried and mapped the location of all stocks of natural forest logs within its supply chain cut before the moratorium. mill, is no longer accepting natural forest wood. As of May 19 th 2013, approximately 27% of this stock had arrived at APP s IKP mill in Riau. Figure 5. Natural Forest Wood Monitoring

9 13 14 SRV2020 [ 1.5. Third-Party Monitoring ] To support supplier adherence and third party observer monitoring, APP and TFT have developed a draft detailed set of protocols: - Moratorium on Natural Forest Clearance - Monitoring Implementation of FCP - Grievance Protocol - New Area Development The protocols are designed to be living documents, and are open to constant improvement through discussion with all stakeholders. Input on these protocols has been sought from regional, national and international civil society groups through the FCP sharing sessions, Focus Group Discussions and direct discussions. the last Focus Group Discussion held in Jakarta on March 27 th. entering the mill. APP has established a team to ensure the grievance protocol is properly implemented. The protocol has proved effective and it has handled Riau, and Kalimantan.

10 15 16 SRV APP will support the Government of Indonesia s low emission development goal and its target to reduce greenhouse gas emissions. This will be achieved by ensuring that forested peatland is protected the peatland landscape. and a Peat Management Plan. Together these Plans will form part of APP s Sustainable Forest Management Plan (SFMP). The Peat Management Plan landscape. APP will establish its own peat management team, to include external experts in peat soil science and hydrology. No further canal or other infrastructure activities will take place within undeveloped suppliers concessions on non-forested peatland until

11 17 18 SRV APP will actively seek and incorporate input and feedback from a wide range of stakeholders and civil society on a number of social policies and procedures. [3.1. Policies and procedures ] APP has developed a number of procedures and protocols to handle social lessons are learnt from on-the-ground implementation.they include: Free Prior and Informed Consent (FPIC) - Implementation procedure - APP Grievance Protocol APP and TFT have sought detailed feedback and input on these social procedures through the Focus Group Discussions detailed earlier in this report. resolution processes and Free, Prior and Informed Consent (FPIC) implementation. [3.2. Training ] completed in the regions of South Sumatra, Jambi, Riau, West Kalimantan and East Kalimantan teams at APP headquarters. [3.3 Implementation ] mapping and will use it as a test case for making adjustments to the training. The FPIC Implementation procedure is currently being tested through pilot projects in Jambi, Riau and South Sumatra provinces. Further FPIC pilot projects are being considered for other regions. Jambi, Riau and South Sumatra using the new social protocols and procedures. APP and TFT will continue to seek active engagement from all stakeholders in the resolution process and each case will be used as a learning and capacity building opportunity. 4. to ensure that this sourcing supports responsible forest management. In March 2013 APP informed its global suppliers that they must comply with the FCP. supplied supports responsible forest management.

12 19 20 SRV [ ] APP continues to make progress rolling out the new Forest Conservation Policy in China. An internal Action Plan to guide that rollout has been developed by TFT based on scoping visits to APP China Forestry (ACF) operations. ACF is currently scorecard performance system developed by TFT. The scorecard performance system allows APP to measure the performance of suppliers against international chain of custody best-practices and it is currently in use throughout APP s Indonesian supply chain. Restoration proposal has been drafted and is now being reviewed by relevant stakeholders. TFT is currently preparing the general policy structure for APP China Forestry. This will allow for the integration of the new Forest Conservation Policy, the Responsible Fibre Procurement and Processing Policy (RFPPP) and all other policies related to the environmental, social and economic aspects of sustainable development. A full gap assessment report of APP China Forestry pulp and paper mills has by APP China Forestry.

13 Appendix A [ Forest Conservation Policy ] APP s Forest Conservation Policy applies to: 1. APP and all its suppliers in Indonesia All future expansion. Policy commitment 1: APP and its suppliers will only develop areas that are not forested, From 1st February 2013 all natural forest clearance has been suspended APP has conducted an initial assessment of all of its supply chain. protected as well as low carbon areas that can be developed as plantations. small trees, scrub, or grass remaining. It separates vegetation into 6 different the category referred to as old scrub (BT) SRV2020 Any existing natural forest logs within APP s supply chain cut before 1st February land which is not forest, such as scrub land, will also be utilised by its pulp mills. APP will withdraw from all purchase and other agreements with any supplier who is found not to be in compliance with these commitments. These commitments are being monitored by The Forest Trust. APP will welcome independent 3rd party observers to verify the implementation. Peatland management Policy commitment 2: APP will support the Government of Indonesia s low emission development goal Ensuring that forested peatland is protected as part of its commitment the peatland landscape. As part of achieving this, no further canal or other infrastructure activities will take place within undeveloped suppliers concessions on non-forested peatland until independent Social and community engagement Policy commitment 3: seek and incorporate input and feedback from a wide range of stakeholders, including civil society, as it implements the following set of principles: Free, Prior and Informed Consent of indigenous people and local communities Responsible handling of complaints Empowering community development programs Respecting human rights Recognising and respecting the rights of its workers principles and criteria Where new plantations are proposed, APP will respect the rights of indigenous peoples and local communities, including recognition of customary land rights. will, in consultation with stakeholders, develop further measures to implement FPIC. international best practice. Third party suppliers Policy commitment 4: that this sourcing supports responsible forest management.

14 23 24 SRV2020 Appendix B [ Protocols and Procedures ] APP, with the support of TFT, has developed the following protocols and procedures. These protocols are available on the APP website: For more information on these protocols, please contact APP on sustainability@app.co.id or visit APP s website Appendix C [ Grievance and monitoring information ] APP encourages independent observers and stakeholders to participate in the APP Grievance and Monitoring via the contact information below: Fax: sustainability@app.co.id