Paper, Pulp, and Resistance

“Indonesia’s pulp and paper industry has rapidly expanded since the late 1980s to become one of the world’s top ten producers. But the industry has accumulated debts of more than U.S.$20 billion, and expanding demand consumes wide swathes of Sumatra’s lowland tropical forests. This land is claimed by indigenous communities, who depend on them for rice farming and rubber tapping. The loss of access to forests, together with companies, hiring from outside the province, has been devastating to local livelihoods, leading to violent conflicts.

Asia Pulp & Paper (APP) is Indonesia’s leading paper producer, and owner of one of the largest stand-alone pulp mills in the world, the Indah Kiat mill in Riau, Sumatra. The mill’s primary fiber supplier, Arara Abadi, established its pulpwood plantation in the 1980s-90s, under then President Soeharto. Arara Abadi, backed by state security forces, routinely seized land for the plantations from indigenous communities without due process and with little or no compensation.

Since the fall of Soeharto in May 1998, local residents have attempted to press their claims, but have met with unresponsive law enforcement. With no remedy for their grievances, communities have increasingly turned to vigilantism. Arara Abadi has responded with violence and arrests.

[In 2001] local villagers in Mandiangin, Betung, and Angkasa/Belam Merah... set up blockades or began logging plantation trees. Hundreds of club-wielding company militia attacked residents, seriously injuring nine and detaining sixty-three. Indonesian police, who trained the civilian militias and also were present during the attacks, were complicit....

The majority of police and military spending (70 percent) comes from off-budget business ventures, many of which are in the forestry sector. These business ties set up an economic conflict of interest in law enforcement. In addition, Arara Abadi’s security personnel have no guidelines for the use of force and are not held accountable for violations of the rights of local people.”

See Without Remedy: Human Rights Abuse and Indonesia’s Pulp and Paper Industry.

Though Human Rights Watch implicates funding by multilateral financial institutions like the World Bank and International Monetary Fund and places the paper industry in the context of foreign dept, they do not address the fact that APP’s assets (valued at US$ 17.5 billion) are largely financed by is shareholders (25%), bondholders (38%) and banks (20%). Many of the biggest investment banks and export credit agencies in the U.S., Europe, and Asia have provided loans and guaranteed this finance over the last ten years. Friends of the Earth names the names and lists UK distributors of APP Paper.