Canada’s largest pulp-and-paper company should lose sustainability credentials because new information shows how deeply it’s linked to an Indonesian conglomerate with a record of rainforest destruction, Greenpeace Canada says.
In a complaint filed Tuesday afternoon, the environmentalist group says a “preponderance of evidence” shows that Paper Excellence is really part of the same business empire as Indonesian behemoth Asia Pulp & Paper, or APP, and that they’re both ultimately controlled by the same corporate parent, Jakarta-based Sinar Mas.
Greenpeace says Paper Excellence deserves to lose its association with the international Forest Stewardship Council (FSC) as a result, because of the council’s rules against being indirectly involved in destructive forestry practices. Paper Excellence disputes the allegations.
The FSC’s certification for forestry products is considered the most exacting of several systems companies can use to vouch that their practices are sustainable.
Shane Moffatt, head of Greenpeace Canada’s nature and food campaign, said the core of the complaint is that Paper Excellence is a sister company of APP and both are ultimately controlled by Sinar Mas. Greenpeace believes “there is very, very strong evidence” to back up its assertion, he added.
He noted that the FSC severed its relationship with APP in 2007 because it failed to meet the FSC’s standards for forestry practices.
“Therefore, in order to be consistent with the policy … and transparent with the Canadian public, we do believe that, that policy should equally apply to Paper Excellence,” he said in an interview.
The FSC’s rules state that within 30 days, it has to alert Paper Excellence about Greenpeace’s complaint and convene the parties to attempt to mediate an informal resolution. If that doesn’t work, a more formal investigative process kicks in.
The FSC’s Canadian branch told CBC on Tuesday that it has examined the shareholder ties between the companies “multiple times — most recently a few weeks ago — and has concluded each time that there is no majority ownership relationship between APP and Paper Excellence.”
And even if it did find a relationship, that doesn’t automatically mean Paper Excellence would be kicked out, because companies that commit to “immediately work with the FSC” to correct any wrongs can often hold on to their status, FSC Canada said in an email.
Complaint cites CBC reporting
Paper Excellence has more than 40 mills in Canada and the U.S. producing pulp, paper or lumber under the FSC’s imprimatur.
The international certification, often seen on reams of printer paper or sheets of plywood, enables forestry companies to command higher prices for their output and attract environmentally conscious brands as customers. Losing it would be a blow to a resource giant that currently manages 22 million hectares of Canadian forest — an area four times the size of Nova Scotia — though Paper Excellence also certifies under two other systems considered less exacting.
The Greenpeace complaint to the FSC cites recent reporting by CBC and its media partners in the International Consortium of Investigative Journalists as fresh evidence of the ties between Paper Excellence and APP.
CBC’s investigation gathered evidence from leaked internal company records and former employees showing that, until at least a few years ago, Paper Excellence appears to have been closely — and secretly — co-ordinating business and strategy decisions with APP, collaborating on activities such as hiring, regulatory submissions, and even supply and pricing.
The company has long acknowledged that its owner, Indonesian businessman Jackson Wijaya, is the son of the head of APP and received help from his wealthy family when launching his Canadian venture. Wijaya held executive positions in the large China wing of his family’s business empire until at least 2017.
But Paper Excellence has repeatedly denied that APP or Sinar Mas have any control over it.
“Paper Excellence is owned solely by Jackson Wijaya and is completely independent from Asia Pulp & Paper,” the company said Tuesday in a statement to CBC. “Paper Excellence remains in full compliance with FSC standards and policies, and successfully completed an annual independent, third-party audit of its certification recently.”
The company said that under both the FSC’s current framework and the previous one that applied until this year, Paper Excellence would not be “characterized as being part of the APP/Sinar Mas group or any other group of companies.”
APP has also denied it ever collaborated behind the scenes with Paper Excellence or shared confidential information with it.
Previous complaint dismissed
APP lost its FSC sustainability credentials in 2007 “because of substantial, publicly available information that [it] was involved in destructive forestry practices,” the FSC says on its website. It has never regained it.
This isn’t the first time environmental NGOs have filed complaints seeking to strip Paper Excellence of its certification on allegations that it was too tightly linked to APP. In 2019, an Indonesian environmental NGO wrote to the FSC with evidence purporting to show that Wijaya was still involved at a high level in running a parent company of APP’s Chinese pulp and paper mills.
The FSC responded that while that meant Wijaya was “one degree removed” from a business that had been kicked out, it wasn’t a close enough relationship to violate its policy and require it to decertify Paper Excellence.
Paper Excellence is also in the spotlight on Parliament Hill, after it acquired the Quebec-American company Domtar for $3 billion US in 2021 and earlier this year gobbled up Quebec-based Resolute Forest Products for $2.7 billion, making it the biggest producer of market pulp in Canada.
Opposition MPs on the Commons natural resources committee have questioned how thoroughly the federal government vetted the purchases and what assurances the company gave to protect Canadian jobs and adhere to environmental rules.
MPs have also delved into Paper Excellence’s past financing from the China Development Bank, an agency of the Chinese government.
The committee has heard from some top Paper Excellence officials but has not yet heard from two witnesses on its list: Industry Minister François-Philippe Champagne and Paper Excellence owner Wijaya.
On Oct. 4, a committee clerk told MPs the company had declined their invitation for Wijaya to appear.
New Democratic Party MP Charlie Angus said it’s important for Wijaya to show up and answer MPs’ questions.
“We don’t know how this company is structured,” Angus told the committee. “We don’t know the relationship with Asia Pulp & Paper. We don’t know the Sinar Mas group and whether it’s a family business, but it holds massive holdings of Canadian equity right now.”
Zach Dubinsky can be reached at zach.dubinsky@cbc.ca.