by Fred Pearce
One of the most notorious land grabbers was Mohamad “Bob” Hasan. Born The Kian Seng, the son of a Chinese tobacco trader who moved to Java, he rose through lucrative smuggling operations and the assistance of patrons in the military to become Suharto’s trusted lieutenant for expanding logging. He was there as, between 1967 and 1980, the government forest service allocated more than five hundred logging concessions to private investors, covering a staggering 130 million acres, an area twice the size of Britain.
Hasan used his regulatory position, as the spider in the center of Suharto’s web, to accumulate fabulous personal wealth. He became the legally required local partner when the U.S. corporation Georgia-Pacific started logging in Indonesia in 1970. When the company departed in 1983—reportedly unwilling to join Hasan’s push for investment in downstream activities like plywood and pulp production—Hasan took over the operation for himself.
During this time, Hasan became the undisputed “king of plywood,” not just for Indonesia but for the planet. His company, the Kalimanis Group, accumulated more than 2 million acres of logging concessions and set about becoming one of the world’s leading plywood suppliers—an ambition helped by Hasan’s position as chairman of the state-backed plywood association, APKINDO, which gave him advantageous rights to export Indonesian plywood.
I remember meeting Hasan in London during a high-level sales promotion in 1990, when he was at the height of his power. By then, he controlled a staggering 70 percent of the world trade in plywood. He claimed a patriotic purpose. He told environmentalists he would create a “sustainable” forest industry in Indonesia, based around acacia plantations. I still have the publicity literature from the time. But the plantations only emerged when the forests were all gone. He continued to oversee unprecedented forest destruction.
The wheels nearly came off the deforestation juggernaut after the 1998 Asian financial crisis. This followed huge forest fires in Sumatra and Borneo during the 1997 El Niño drought, which had alerted the world to the parlous state of the Indonesian forests. Both APP and APRIL effectively went bust as global pulp prices collapsed and their activities came under international scrutiny for the first time. They had borrowed huge sums to set up the two Riau mills, and invested heavily in the logging to feed them. APP owed $14 billion. It was the largest corporate debtor in Asia.
But, deemed too big to fail, the two companies were eventually bailed out by the Indonesian government. Where did the bailout money come from? On IMF advice, ministers in Jakarta auctioned off hundreds more logging concessions. The rate of deforestation across Indonesia doubled after 1998.
While the loggers were too big to fail, the same was no longer true of Suharto. In a post–cold war world, the bulwark against communism was no longer needed, and he was becoming an embarrassment. He reluctantly resigned in 1998 as Indonesia’s financial crisis escalated, the currency collapsed, thousands of people lost their lives, and riots filled the streets of Jakarta. Suharto retired to his fortified villa in Jakarta with a family fortune estimated at $15 billion. He died ten years later. With the departure of his mentor, Hasan’s star also fell. In 2001, he was convicted of fraud and misusing $250 million of state funds. He spent three years in jail. Fellow foresters report that since his release, he has retired to the country’s many golf courses—another legacy of the Suharto era—and “got religion.”
But thanks to the bailouts, Widjaja and Tanoto simply carried on. Land proved more durable than patronage. Their main change was to begin copying modern Western business practices. They hired foreign consultants and published “sustainability action plans.” Both promised that by 2007 they would finally be running their mills entirely from plantation timber. Wrecking the rain forests would be a thing of the past. They started applying for eco-labels for their paper and for certification of their mills by the Forest Stewardship Council.
APRIL began talking to environment groups in Sumatra about protecting the diminishing number of biodiversity hotspots where Sumatra’s tigers, elephants, and rhinos lived. It collaborated with WWF on a plan to conserve the besieged Tesso Nilo national park in southern Riau. According to WWF’s Michael Stuewe, the idea was to create a “ring” of acacia plantations around a central protected area. Under company control, the ring would protect the park. But when I visited in 2007, the park was being invaded by migrants looking for land to grow oil palm. Worse, they were arriving down a new road that had been built by APRIL to extract timber from the acacia ring.
I met three young men smoking at the roadside. They said they had come from northern Sumatra, where other “development” projects had taken their land. “We have no land in our village now. We want to cultivate land, so we came here.” One of them, twenty-year-old Nainggolan, had come with his parents and four brothers. He said that the chief in Bukit Kusuma, a nearby small town, had charged them $900 in return for 5 acres where they could plant oil palm.
A bit further on, three more men were living in a small hut. They were from the southern tip of Sumatra. They said they had been installed in the hut by the executive of a local oil-palm plantation company, and told to work on 50 acres of land he had bought as a private venture from the same chief in Bukit Kusuma. Meanwhile, deeper in the park, an entire village had been built, complete with a mosque, we were told.
All this was, of course, against the law. But Bukit Kusuma—a town right on the northern edge of the park with a couple of seedy bars and a lot of muddy four-by-fours—was evidently a local center of illegality. It had become a magnet for desperate, dispossessed people willing to do anything to make a living, and exploited at every turn by corrupt officials. My WWF guides would not stop there. Five months before, one of them had been beaten up by a gang near Bukit Kusuma. Not long before, two of APRIL’s staff had been murdered when they banned trucks carrying logs cut in the park from boarding a company chain ferry.
What could be done? Where was the government? I went to the capital of Riau, Pekanbaru, to see the provincial conservation officer. Mohammad Zanir was in charge of protecting one of the world’s great rain forests from destruction by two of the world’s most rapacious logging companies and the insalubrious types that their activities attracted. He didn’t, to put it mildly, seem up to the task.
I had spent two days with campaigners from WWF who had laptops carrying satellite images of the deforestation, and could pinpoint any activity that threatened the forests. But Zanir had no computer, only a pile of dusty files on a shelf and an old-fashioned bottle of ink on his desk. Outside his office, seemingly mocking his impotence, a large stuffed crocodile occupied most of the foyer and two tigers prowled the corridor.
He knew the problem. “We need more habitat for the Sumatran tigers,” he said. “But we have two giant pulp companies whose mill capacity is bigger than their plantations, so they are consuming our natural forests. If nothing is done there will be no forestland left outside the parks by 2015.” But he had no solution. After all, official planning maps zoned most of the remaining natural forests for clearance, plantations, and other commercial development by the end of the decade. Their destruction was government policy.
And corruption was endemic within parts of the administration that Zanir served. He did not mention it, but the new Riau police chief was, at the time of my visit, conducting a detailed investigation of illegal logging. He had identified for prosecution fourteen companies, seven providing logs for APP and seven serving APRIL. But the state prosecutor refused to take action—saying the companies had mostly been acting within the terms of their licenses—and the police chief was moved on. Several top officials were later convicted of corruption and jailed. They included Asral Rachman, who had, as head of the Riau forestry agency in 2004 and 2005, been in charge of handing out logging licenses. But the companies themselves remained untouchable.
There was one wild place left where the environmentalists believed they might stop the juggernaut. It was Riau’s hott
est biodiversity hotspot, and had so far been saved by its isolation. On the Kampar peninsula, jutting out into the Straits of Malacca, right across from Singapore, was one of Southeast Asia’s largest peat swamps. Until 2002, the 1,500-square-mile mass of peat, some of it 50 feet thick, was still largely covered by rich rain forest. The place could only be reached by boat. Some fifty Sumatran tigers lived there, along with clouded leopards, elephants, sun bears, tapirs, and other rare species.
But in the past decade, having cleared most of the thousands of square miles of easily accessible forests nearby, loggers had inched into the swamp—APP from the north and east, and APRIL from the south and west. They were digging networks of canals. I watched trains of barges, each carrying 200 tons of logs, being pulled along waterways on the western fringes of the swamp. At huge lumber stations, cranes lifted the logs onto trucks for the journey to the mill. The canals have a second function—to drain the swamp and make it fit for acacia plantations. As we cruised the waterways, APRIL’s peat scientist Jonathan Bathgate spoke candidly about the ecological catastrophe unfolding as the bog bled to death before us. As water levels fall and the peat begins to dry, the organic matter starts to oxidize and releases carbon dioxide into the air. Millions of tons of it. Emissions continue until any peat above the water table is gone. The thick Kampar peat contains anywhere from 1 to 2 billion tons of carbon—much more in fact than the forest above it. It is probably the biggest single carbon store in Southeast Asia. The Kampar bog has already collapsed in places by more than a yard.
According to a consultants’ study commissioned by APRIL, if clearance and draining continue, it could lose a further dozen feet within twenty-five years. But despite such advice, APRIL’s subsidiaries have continued to clear forest and drain swamps across Kampar through 2010 and into 2011.
That is a tragedy for the world, as well as Sumatra. But let’s not forget the people whose land this was before the logging invasions began—the people whose customary laws are being trashed and drained as fast as the swamp forest. They include indigenous Akit hunter-gatherers and the ten thousand or so inhabitants of eight villages around the swamp, who fish, hunt, plant rubber, and tend kitchen gardens there. Few are recent migrants. Even APRIL’s staff calls them “the founding fathers of Sumatra.” Yet a study by Friends of the Earth in 2009 found that the company’s land claims overlap those of at least three of the villages.
No prizes for guessing who wins when that happens. APRIL’s timber suppliers have been involved in a series of disputes with the villages. In May 2009, staff from one of the suppliers, Sumatera Sylva Lestari, armed themselves with spiked clubs and attacked people protesting the invasion of their land. Three villagers died in the battle, and dozens were injured. Two months later, the company bulldozed the disputed lands.
Wary of a growing international campaign to protect the Kampar swamp, APRIL has come up with a new ring plan, similar to the one that failed in Tesso Nilo. It has offered to conserve an inner core of the Kampar swamp. But in return it wants to be able to log the rest of the timber on the swamp and plant a ring of acacia round the swamp—a ring that it claims will keep out migrants. “The government should use us to protect conservation areas in return for being allowed to make productive use of the rest,” according to Jouko Virta, the Finnish president of APRIL’s fiber supply at the time of my visit.
But WWF is fed up with the company’s promises. “I don’t believe them,” says Stuewe. “They have failed in Tesso Nilo and they would fail again in Kampar. We worked for years to encourage and support APRIL to become a leader in the pulp and paper industry . . . However the company has failed to make fundamental changes to its practices.” APRIL, for all its rhetoric, remains part of the problem, rather than part of the solution. He thinks the only answer is to shut the roads, close the canals, and leave Kampar to “the founding fathers of Sumatra.”
APRIL’s boss, Tanoto, has tried to rebrand himself and his company as a responsible corporate citizen. But it is a hard sell when you have been responsible for some of the most rapacious rain forest destruction in history, and gained a $3 billion personal fortune in the process. Especially when the conflicts continue and the forests continue to be cleared.
But his rival is the more brazen. In 2010, APP began running promotional campaigns under the slogan “APP cares.” It commissioned a series of extremely partial “independent” studies into the company’s practices. Most bizarrely, in TV ads broadcast around the world it claimed to be preventing deforestation by giving jobs to poor Indonesian farmers who would otherwise chop down trees. But the PR failed to convince forest protectors. That year, the Forest Stewardship Council withdrew its certification of APP’s paper and publicly dissociated itself from the company; and one of APP’s subsidiaries, Pindo Deli, lost the right to use the European Union Eco-label for two paper brands, Golden Plus and Lucky Boss. The EU accepted what everyone in Sumatra knew—that much of the pulp in the paper came not from sustainable plantations but from virgin forest.
When I reported this example of greenwash in the Guardian, APP’s director of sustainability, Aida Greenbury, told me: “APP is playing a crucial role as a development agency.” Its environmental opponents were guilty of a “neo-colonial approach” and “immoral.” Around that time, APP’s international PR consultants, Britain’s Weber Shandwick, resigned over unspecified “strategic differences” in how the company portrayed itself.
The Indonesian government is trying to persuade the world that it is doing right by the rain forests and their inhabitants. In May 2011, it announced a ban on new logging and other concessions in primary forests and on peat. Unfortunately, it was only a two-year moratorium, and as Louis Verchot at the Indonesia-based Center for International Forestry Research pointed out, “many companies are sitting on several large concessions that they have not yet developed. This will not put much of a crimp on the industry.” Meanwhile, tests carried out in mid-2011 by a U.S. laboratory on an APRIL paper brand, Lazer IT, bought in Australia found that 80 percent of it was made of pulp from Indonesian rain forest. The lab identified twelve different species of tropical hardwoods.
The truth is that, while talking about sustainability, the companies are still destroying natural forest, and still taking forests from their inhabitants. The local NGO Scale Up calculated in 2010 that more than 850,000 acres of land in Riau was the subject of disputes between locals and outside corporations, mostly the subsidiaries of APP and APRIL.
The companies’ promises to sustain their mills from plantation timber remain unfulfilled. A 1990 promise became a deadline for 2007 and then 2009, before being postponed again—in APP’s case to 2015. In 2011, APRIL and APP still had logging rights to an estimated 2 million acres of Riau natural forests. And APP had just won permissions for 250,000 acres more.
Between them, APP and APRIL are on course to turn Sumatra from rain forest into the largest region of tree monoculture on the planet. One of the most complex ecosystems on earth is being clear-felled and replaced with horizon-to-horizon acacia plantations crossed by canals clogged with timber-laden barges and networks of company roads down which convoys of trucks feed the “gobbling monsters” that must be sustained.
APP and APRIL are the profit-making hearts of two giant Chinese dynasties that have gone into battle for supremacy in one of the world’s biggest and most environmentally destructive industries. While the war between them continues, the forests’ remaining tigers and elephants will search in vain for peace amid the whine of chainsaws and the fierce rumble of trucks carrying logs to the mills. Forest inhabitants will still wake up to find their land lost and their homes bulldozed.
Chapter 16. Papua New Guinea: “A Truly Wild Island”
Papua New Guinea is a poisoned paradise. The South Pacific state, one half of the island of New Guinea, is one of the least explored places on Earth. The jungles that still cover around half its surface are home to more than ten thousand autonomo
us tribes, many living in remote highland valleys, speaking eight hundred languages. But logging companies are penetrating ever further—up valleys far from the capital, Port Moresby, and inland from the mangrove-fringed coasts.
Timber is one of PNG’s biggest businesses. According to the Forest Authority, about a quarter of the country, including much of the highlands, is under logging concessions, mostly to Malaysian companies. From PNG’s shores, millions of tons of logs and crudely sawn timber are shipped out annually, mostly to China, where they are made into furniture and other timber products sold around the world. You probably have some at home. Villagers see little return for this harvest.
Around half of the logging is thought to be done by a complex network of companies ultimately owned by the self-made billionaire and septuagenarian Tiong Hiew King, with his family. The Malaysian, an ethnic Chinese, is the founder of Rimbunan Hijau, one of the world’s largest timber companies. The billionaire got rich as the second-biggest logger of the forests of Sarawak, the Malaysian province on the island of Borneo, where he still lives. There are not many trees left in Sarawak today. But he has moved on. Rimbunan Hijau is now the largest logging company in Asia, with operations in the Solomon Islands, the Russian Far East, New Zealand, and several countries in central Africa, where it now rivals the European timber conglomerates. But PNG is the jewel in Tiong’s corporate crown. His companies remove more than a million tons of logs a year from the country.
Besides his hold on PNG’s forests and their timber, Tiong also controls one of the country’s two major newspapers, and is big in fisheries, shipping, insurance, IT, and retailing. Not much happens there without his involvement. The British queen, Elizabeth Windsor, remains the head of state and Queen of PNG. She gave Tiong a knighthood in 2009 “for services to commerce, communities and charitable organisations” in PNG. But perhaps “Sir Tiong” is the true reigning monarch here.
