We welcome your thoughts on the report:

Please send your feedback to [email protected]

@asiapulppaper asiapulppaper @asiapulppaper Asia Pulp & Paper

External frameworks
The content and quality Standards of this report is guided by the Global Reporting Initiative (GRI) Standards.
The report had been externally assured to the internationally recognised AA1000(AS) and meets the requirements of Core Level. Our intention is to continue
to seek external assurance for future sustainability reports and respond as appropriate to any areas of improvement identified in the assurance statements.

The assurance statement covering this report is presented on page 142.

1
Content
About Us 6
About Us 6
Our History 6
Financial Performance 7
Our Products 7
Map and Operations 8
Our Mills 10
Mill and Product Certifications 12
Awards & Achievement in 2019 14

Senior Statements 16
Chairman’s Statement 18
Chief Sustainability Officer’s Statement 19

Strategy 22
Vision 2020 Sustainability Roadmap 24
Sustainability Roadmap Vision 2030 27
Sustainable Development Goals 31
Forest Conservation Policy 32
Stakeholder Engagement 33
Materiality 37
Governance 38
Business Ethics and Risk Management 40

Production 42
Energy and Carbon Emissions 45
Air Emissions 48
Waste and Materials 48
Water 50
Product Innovation 52

Forests 54
Our Forestry Value Chain 56
Forest Conservation Policy 58
Sustainability Dashboard 60
Certification 61

2
Avoiding Carbon Emissions 62
RADARSAT-2 case study 63
Land Dispute Management 65
Reporting Concerns 67
SERA Tool 68
Innovation in Forestry 69
Growth and Yield 69
Precision Forestry Concept 70
Integrated Sustainable Forest Management Plan 70
Restoration & Rehabilitation 71
Peatland Management 72
High Carbon Stock and High Conservation Value assessments 73
Conservation and Biodiversity 74
Integrated Fire Management 84
Desa Makmur Peduli Api (DMPA) 87
Multistakeholder Collaboration Program 93

People 98
Our CSR Programmes 100
Group level CSR Projects 106
Case Study: Community Based Total Sanitation (STBM) 106
Promoting Water Security and Clean Water for Indonesia 107
Our People 108
Our Employees 109
Training 111
Human Rights 111
Scholarship and Talent Retention Programmes 112
Health and Safety 112

About this Report 116

Data tables 120
GRI Index 126
UNGC Index 134
SDG's Indicator Mapping 137
APP Assurance Statement 2020 141

3
Asia Pulp & Paper Section 1 Section 2

SECTION 1
Sustainability Report 2019 About Us Senior Statements

About Us

Vision & Values

As a leading global pulp-and-paper
company, we believe in delivering
innovation, sustainably and responsibly,
working together to secure a better
future of our customers, communities,
employees, shareholders and you.

We Value

01 Our employees, who are integral

to Asia Pulp & Paper (APP) Sinar
Mas’ success

02 The environment, as our business,

depends on sustainable operations

03 Our customers and suppliers, who

sustain our business

04 Our shareholders, and the

community to whom we are
accountable

05 The principles of good governance

as we continue to build a
sustainable business

4
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

INTEGRATED
PLANTATION-PULP-PAPER

1. R&D and seedling production

Annual output of
2 main 200 million
Seedling nurseries
seedlings

2. Forestry
38 forestry
concessions
Managed by 33
pulpwood supplier
companies

3. Fiber sources for paper production

4. Pulp & paper production

57%
of our energy
is generated from renewable fuels

We reused, recycled or recovered

36% of waste
in 2019

5. Customers & consumers

150 Countries 17 Million
APP brands are marketed in tonnes total capacity (APP Indonesia)

5
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

About Us
GRI: 102-2, 102-6

Asia Pulp & Paper (APP) Sinar Mas is a trade name of

pulp and paper manufacturing company which delivers
quality products to meet the growing global demand
for paper, tissue, and packaging. Beginning as a caustic
soda producer in 1972, we have grown into a global
business with operations across Indonesia and China
with an annual combined pulp, paper, packaging
product and converting capacity of over 20 million tons
per annum. Today, Asia Pulp & Paper (APP) Sinar Mas
markets its products in more than 150 countries across
six continents.
Perawang village prior to the development of Indah Kiat Mill, now Perawang
has became a big industrial district in Riau Province
This growth is guided by our vision of a better future.
It is what keeps us moving forward, creating new
ways of living and innovating. Over the years, we have
Our History
expanded our operations through the acquisition
and expansion of our pulp and paper mills. It is our
Asia Pulp & Paper Sinar Mas’s founder, Eka Tjipta
commitment to customer satisfaction that enables us to
Widjaya, migrated from Fujian, China to Makassar,
grow our share in paper sales worldwide and broaden
Indonesia in 1930. In 1938, when he was just 15 years
our presence through offices in many countries.
old, he worked tirelessly selling biscuits and candles
from door to door to help his parents financially. By
As part of our vision for a better future, the integrity
1960 his hard work paid off when he eventually could
of our supply chain and our commitments to our
afford to establish a small trading company, which
Sustainability Roadmap Vision 2030 are crucial to
focussed on importing textiles and exporting natural
our operations. Every day, we do our best to achieve
resources. Then in 1972, he ventured into a caustic
sustainable forest and peatland management, market-
soda manufacturing business by establishing PT. Tjiwi
leading product environmental footprints, and people-
Kimia, which later became PT. Pabrik Kertas Tjiwi Kimia
first sustainable operations. This vision extends beyond
Tbk., in Mojokerto, Surabaya.
the countries where we operate.

Even as we have grown our business over the decades,

we recognise that growing a better, more sustainable
future requires a collective effort. Working closely
together with partners and communities, Asia Pulp &
We believe that the Paper Sinar Mas has transformed millions of lives in

growth of our business is Jambi, Riau, Serang, Karawang and Mojokerto through
employment opportunities, community development
dependent on the support programmes, including support for education,
developing specialised skills, conservation of our
of the people around us: natural forests and much more.

partners, employees,
communities, and you.
Together, we are growing
our tomorrow.

6
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Financial Performance⁽¹⁾
GRI: 102-7, 201-1

USD (1,000) 2019 2018 2017

Revenue 8,005,870 7,858,388 6,897,092

Operating costs[2] 5,397,009 4,920,453 4,780,779

Community investments 13,437 8,795 6,205

Payments to providers of capital 562,422 534,43 398,675

Employee compensation 322,403 332,8428 343,044

Retained earnings 4,842,830 3,616,224 2,002,825

Payment to goverments 11,036 26,815 21,053

Note :
{1} Consolidated financial performance for the mills listed on page 39
{2} Operating cost calculated as Cost of Goods Sold (COGS)

Our Products

Our fibre technology and manufacturing innovation

allow us to produce every exceptional product for
every need, from bleached hardwood paper pulp to a
full range of paper, tissue, packaging, and stationery.
Sustainability is intrinsically linked to the products we
sell.

Based on responsibly sourced recyclable and

renewable fibre, applying innovative design and
manufactured in well managed mills we directly
support our customers’ sustainability goals. Precision
technology for commodity grades of paper and
packaging is helping to reduce product variation,
tighten specifications and create less waste.

To view our latest products categories and brands, see

the Our Products section of our website. To read about
innovations in our product range see the Production
Paper machine converting
Innovations section on page 52.

7
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

APP Map of
Operations
GRI: 102-3, 102-4

Pindo Deli
Perawang
Employees Indah Kiat
1.758
Perawang
Production lines
22 tissue machines Employees
23 tissue converting 6.121
machines

Key products: Production lines

tissue and converted 4 pulp lines
tissue products 9 paper machines
2 tissue machines

Key products:
LBKP (pulp), wood free
printing, writing, copier
and coated papers OKI Mill,
Palembang
Univenus
Perawang Employees
1.825

Employees Production lines

43 2 Pulp lines
6 tissue machines
Production lines Key products:
1 tissue machine LBKP (pulp) and
tissue
Key products:
tissue Lontar Papyrus
Jambi
Employees
1.654

Production lines
2 Pulp lines
8 tissue machines

Key products:
LBKP (pulp) and
tissue

8
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Indah Kiat
Serang
Employees
4.044

Production lines
6 paper machines

Key products: Tjiwi Kimia,

coated boxboards,
test lineboards, Sidoarjo
corrugated medium,
corrugated cartons
Employees
6.575

Production lines
13 paper machines
Jakarta
Key products:
Employees printing, writing, copier,
1.587 carbon-less, excercise books,
writing pads, envelopes,
computer forms, carton box
and gift wrapping paper

Indah Kiat
Tangerang
Employees
849 Pindo Deli
Karawang
Production lines
3 paper machines
Employees
4.507
Key products:
coloured printing,
Ekamas Fortuna
writing and copier
computer and
Production lines
12 paper machines
Malang
duplicator paper 3 tissue machines
Employees
Key products: 913
writing, printing, copier
pre-print and other
premium wood-free
papers, cast-coated Production lines
paper, paperboards, 2 paper machines
carbon-less, thermal
and art paper and
tissue Key products:
corrugated medium,
wrapping papers, chipboard,
core board, kraft liner,
paper core, paper tube,
paper sheet and heavy board

9
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Our Mills
1. Indah Kiat Perawang 5. Indah Kiat Serang

Indah Kiat Pulp & Paper Perawang Mill is strategically Indah Kiat Serang is one of the biggest paper
located in Perawang, on the island of Sumatra. With packaging companies located in Serang, Banten
the Siak River as a major transportation link, the mill Province, Indonesia. The 550-hectare facility is
also benefits from local pulpwood plantations for raw strategically located near a port and is unique amongst
materials. The mill uses renewable biofuel for 64% of APP’s mills, sourcing 86% of its raw material from post-
its energy needs. The mill focuses CSR activities on consumer waste, which is supplemented by virgin fibre
economic empowerment through entrepreneurship, to improve the strength of the paper products.
stimulating economic development and improving Working together with the local community, 100,000
the livelihoods of the local community. The mill offers mangrove trees have been planted since 2010, with
business management and marketing training and the aim of reducing coastal erosion and the need to
coaching to several small and medium enterprises excavate sand for protection. In 2019 the mill helped
based in communities around the mill. build 11 wells and related infrastructure such as water
tanks and pumps. The clean water is used to supply the
latrines to improve the sanitation in the area, reducing
2. Pindo Deli Perawang risks of various sanitation-related illnesses such as
diarrhoea and typhoid for more than 1,000 households.
Located in Riau Province, Pindo Deli Perawang focuses
on the production of tissue for the converting market.
The mill supports a local SME, responsible for utilising 6. Indah Kiat Tangerang
wood container waste for the production of furniture
and handicraft. The project reduced mill waste to Indah Kiat Tangerang specialises in the production
landfill and provided local economic empowerment. of coloured paper grades and is now one of the
world’s largest in this product segment. Its raw
material sourcing is purchased pulp and it exports the
3. Univenus Perawang majority of its products to a global client base. The mill
promotes economic empowerment through a range of
Univenus Perawang is a small tissue mill. It is located programmes that support, mentor and train the local
adjacent to Indah Kiat Perawang and Pindo Deli community in aquaculture techniques, with products
Perawang, importing energy and water from the former. being sold to local cooperatives, restaurants and mill
employees.

4. Lontar Papyrus
7. Pindo Deli Karawang
One of the world’s largest vertically integrated pulp
and tissues mills, Lontar Papyrus exports its products Comprised of three mills, Pindo Deli Karawang
globally. The mill was established in 1992, starting produces paper from purchased pulp. Products
production of pulp in 1994 and tissue in 1998. As an produced include paper, tissue and packaging products
integrated mill, Lontar Papyrus can use waste products largely for export. The mill supports an Hutan Kertas,
from the pulping process as an energy source, or ‘Paper Forest’, which today is a well-established
providing 69% of the mill’s requirements in 2019, up eco-tourism hotspot. Managed by a local youth group,
from 64% in 2018. In support of the local government the site hosts live music and camping events as well
commitment to improve the agriculture sector is as hosting school visits. To promote the circular bio-
the area, the mill has established several farmer economy approach, waste wood and plastic provided
empowerments programmes. by the mill was used to set up the location.

10
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

8. Tjiwi Kimia 9. Ekamas Fortuna

Tjiwi Kimia is located in Sidoarjo, near Surabaya in Ekamas Fortuna is situated in Malang, East Java,
East Java. The mill which started as a caustic soda producing base and converted paper that utilises post-
plant, now boasts many state-of-the-art paper and consumer waste as a raw material. Products are largely
converting machines, making it one of the world’s sold to the Indonesian domestic market. A zero waste
largest stationery manufacturers. The mill commenced to landfill site, the mill recycles and reuses all waste
production in 1978 with an annual paper production streams either on site or via licensed third parties.
capacity of 12,000 tons. Today the mill produces value- The mill supports a local ‘Green Village’ programme,
added products such as specialty paper, carbonless bringing together a range of stakeholders to cooperate
paper and huge range of school and office stationery. in establishing a waste bank, community biogas project,
Exercise books, pads, spirals, hardback books, catfish farming and creating green spaces within the
drawing books, shopping bags, stationery, envelopes, community.
continuous forms, file folders and others make up the
range of converted stationery products. Tjiwi Kimia
collaborate with the farming department in local 10. OKI
government in the Bogem Pinggir village to empower
farmer groups. The mill provides water pumps for OKI is located near Palembang, South Sumatra, is
farming irrigation with technical assistance to set up the equipped with the most advanced environmental
equipment, in addition to fertilizer. technology currently available. The mill generates
80% of its power requirements from renewable waste
products from the pulping process. In a collaborative
partnership between OKI mill, local government and
the Simpang Heran village, educational facilities were
improved for the local community. The mill supported
the development of the community center (Rumah
Pintar), establishing IT resources and a library, the
facility also includes a play area forchildren and a
meeting room.

One of our facilities, OKI Mill

11
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Mill and Product Certifications

GRI: Disclosure of Management Approach (Marketing and labelling), 417-1

To provide our customers with assurance of our products sustainability credentials, we offer a range of third-party
certified labels or certifications. These predominantly cover fibre source, product content, quality and environmental
credentials.

12
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Note :
[1] Subject to special environmental assessment
[2] Scope included in Indah Kiat Perawang’s assessment
[3] PROPER with the scope of West Java Province (PROPERDA)
[4] OKI put in place corrective actions which were approved by the Ministry of Environment and Forestry .

13
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Awards &
Achievement
in 2019

Award Award Award

Indonesia Green Awards Sustainability Business Asia Sustainability

(IGA) 2019 Awards Reporting Rating,
Silver Rating
Institution
PWC, Kadin Indonesia, and IBCSD Institution
(Indonesia Business Council for National Center for
Sustainable Development) Sustainability Reporting

Awarded for: Awarded for:

Special Recognition Water Management Consistently implementing the Global
and Best Stakeholder Engagement & Reporting Initiative (GRI) standards for
Materiality categories (APP Sinar Mas) sustainability reporting (APP Sinar Mas)

Award Award Award

Green Supply Chain Halal Top Brand Climate Festival 2019

Award
Institution Institution Institution
Supply & Demand Chain Executive Indonesian Ulema Council (MUI) Ministry of Environment and Forestry
Awarded for: Awarded for: Awarded for:
The Green Supply Chain Award recognizes "Halal Top Brand 2019" award in the Program Kampung Iklim Utama 2019, or
companies making sustainability a core part paper and paper material category (APP Climate Village Program awarded for
of their supply chain strategy, and working Sinar Mas) Dataran Kempas Village, Jambi (APP
to achieve measurable goals within their Forestry supplier, PT. Wira Karya Sakti)
own operations and supply chains (APP
Sinar Mas)

14
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Award Award Award

Zero-Accident Indonesia Business & Social Business

Award Human Rights Ranking Innovation Awards
Institution Institution Institution
Banten Provincial Government Foundation for International Human Warta Ekonomi
Rights Reporting Standards (FIHRRST)
Awarded for: Awarded for:
Zero-Accident and the Health and Safety Awarded for: Top Social Business Inovation Company
Committee awards (PT. Indah Kiat Pulp & Best 10 Human Rights Performance (Pulp & Paper) (PT. Indah Kiat Pulp &
Paper Tbk, Tangerang Mill) Company (PT. Indah Kiat Pulp & Paper Paper Tbk, PT. Lontar Papyrus Pulp &
Tbk) Paper Industry)

Award Achievement Achievement

Green Industry Awards CDP Forest Score : B

CDP Climate Change Score : B
CDP Water Score : B
Institution Institution Institution
Ministry of Industry CDP (formerly the Carbon Disclosure Project) ZSL (Zoological Society of London)

Awarded for: Awarded for: Awarded for:

Implementation of green industry APP Sinar Mas received a score of B which is Environmental, social and governance
principles is one of APP Sinar Mas' within the “Management” level in demonstrating policy transparency assessments of
commitments in achieving sustainable of forest, environmental and water stewardship, Timber and Pulp (APP Sinar Mas)
business practices(Indah Kiat Pulp and and our actions and approaches in managing
Paper, Ekamas Fortuna) deforestation, climate change and water

15
Asia Pulp & Paper Section 1 Section 2

SECTION 2
Sustainability Report 2019 About Us Senior Statements

Senior
Statements

16
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

17
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Chairman’s
Statement
GRI: 102-14

At APP we consider that sustainability is core to the benefits in using the global nature of our organisation
success of our business. We take a broader view across to provide opportunities to work in different regions and
many different issues, and work to align our position countries. We recognise the need to always improve
with the expectations of our global customers. Whilst the way we protect the safety of our workforce, and this
the present situation is dominated by the COVID-19 is an area that I take personal interest in. Over the last
crisis, we have spent recent years developing our year we have made a range of improvements to our
supply chain to ensure we have a constant supply of safety processes, and we have taken actions to protect
the right quality of raw materials for our mills, and this is employees during the current health crisis which we will
paying dividends now in times of global disruption. report on fully next year.

Pulpwood is our most important raw material, and we Our goal is to work alongside our customers to meet
have developed a sustainable pulpwood supply for our shared sustainability goals. With the evolution of
future, through innovations in forestry management our Sustainability Roadmap Vision, we see many
to increase yields. Throughout this work we have built opportunities to collaborate and work towards
on our commitment, first introduced in 2013, to zero sustainability targets together. Quality, price and
deforestation. With this approach comes a need to delivery are areas APP have always excelled in meeting
constantly improve the way we monitor and enforce customer expectations. It is encouraging to see many
this commitment. We are seeing the returns on this global brands now taking a collaborative approach
investment every day, through strong relationships with alongside APP to challenges that require landscape
customers, and increasing recognition for our work on level action, across geographical and land ownership
forest protection, conservation and restoration. boundaries.

We have continued to develop partnerships with As a company that places sustainability as being central
local communities; and we will continue to look for to core business success, we are driving ourselves
opportunities for communities to play an active role in forward into the future. I am proud to see the value
our supply chain, not only for forestry but also for other of sustainability being shared today with everyone
types of goods and services needed by our operations. connected to our business.
We continue in our efforts to reduce loss of forest areas
due to fire. 2019 brought unusually dry conditions
across specific areas of our forest concessions, and
our fire management teams rose to this challenge with
speed and determination. Extreme climatic events
are becoming more frequent and will require that we
continue to adapt and develop our programmes in the
future.

As an employer of around 29,000 people, the

development of talents within our company is of vital
importance to our future. We also promote diversity
as a way of ensuring employees are recruited and
developed, particularly at senior levels, without bias Teguh Ganda Wijaya,
towards gender or ethnicity. In fact we see great Chairman

18
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Chief
Sustainability
Officer’s
Statement

2019 saw a number of important developments in We have also continued our efforts to increase
our approach to sustainability at APP. Over the last the uptake of our Desa Makmur Peduli Api (DMPA)
decade we have work hard to enhance the integrity of program, which is based on the Integrated Forestry and
our supply chain including intensive efforts for natural Farming System concept. During 2019 we focussed
forest, protection and restoration. on improving the penetration of the programme within
villages that are already participating. The programme
APP is now one of the few companies that are able includes a range of opportunities to facilitate the
to demonstrate that we are meeting our commitment creation of women-owned enterprises, and to improve
to zero deforestation of natural forest as a result of the access to market and sale of goods that are
our commitment. We are working to increase the produced. Through our work with Martha Tilaar Group,
transparency of data available in our Dashboard, we have increased the number of women from remote
particularly over forest cover changes. We are also villages who have received training in the use of local
continuing to reduce the rate of illegal logging and plants to create herbal drinks and to learn therapy
other forms of encroachment which threaten our techniques, many of whom have gone on to create
protected forests. successful community enterprises.

Since we first introduced our zero-deforestation With our employees, we have introduced a new
commitment in 2013, we have come a long way, and talent retention programme, whilst at the same time
have worked hard to address any issues as they arose. adjusting to the increasing use of automation across
We have continued to implement our Collaborative our operations. On safety, during 2019 we introduced
Conservation Management programme as a key way to a new roadmap approach to assess each Mill and
reduce deforestation risk by actively involving villagers determine actions for improvement. We also made
in conservation and protection activities. further progress on process safety management which
has been reflected in the reduction in our LTI rate,
2019 was also a landmark year in our work towards although must still make further progress towards our
sustainable forestry certification. We believe that to goal of eliminating fatalities.
be internationally credible, forest certification needs
to be rigorous, and needs to be tailored to local We have also worked closely with the Government of
conditions. 100% of our wood supply is aligned with the Indonesia in its work towards Indonesia’s Nationally
requirements of the PEFC standard, as implemented Determined Contribution (NDC) towards carbon
locally through the Indonesian Forestry Certification emissions reduction. We have identified ways in which
Cooperation (IFCC). APP can contribute towards this target, not only through
our forest protection and conservation activities, but
During 2019 we worked alongside the Government of also through the development of low carbon products.
Indonesia to finalise the restoration plan for specific
peatland areas within our supplier’s concessions. We continue to identify opportunities to improve the
For our supplier’s plantations, our forestry team have efficiency of our pulp and paper mills, through targeted
developed a plan for the next 5 years to increase the investments and technical innovation. In 2019 we
efficiency and yield from existing forest plantation reduced both carbon emissions and water intensity
areas. by 23% and 31%, against a 2012 and 2013 baseline
respectively. Solid waste to landfill reduced 37%, based
on a 2010 baseline, as a result of our continued efforts

19
Section
Asia Pulp
3 & Paper Section 1 Section 2
Strategy
Sustainability Report 2019 About Us Senior Statements

to reduce waste and identify opportunities to recycle

and reuse materials across our processes.

2019 marked the beginning of our transition from the

Sustainability Roadmap Vision 2020, to our Vision
2030 commitments and goals. As our Sustainability
Report 2019 shows, the challenges we face are
constantly evolving, and we are committed to achieving
best practice of responsibility and transparency as we
move forwards into the coming decade.

Elim Sritaba,
Chief Sustainability Officer, APP Sinar Mas

20
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

21
Asia Pulp & Paper Section 1 Section 2

SECTION 3
Sustainability Report 2019 About Us Senior Statements

Strategy

Launched in 2012, Vision 2020 has

become our comprehensive strategy
for sustainability.

It sets out ten key impact areas relevant

to our stakeholders across our business
and wider supply chain, with ambitious
targets for each. Furthermore, it sets out
our approach to continue supporting
the UN’s Sustainable Development
Goals (SDGs). We closely manage our
stakeholder engagement activities
to gather feedback and respond
to expectations, while overarching
governance mechanisms ensure we
monitor and hold ourselves to account
for our performance.

22
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

APP Sustainability
Roadmap Vision 2020

Fibre Sourcing Reforestation

Conservation Human rights &

& Biodiversity Indigenous People

Community Climate Change

Empowerment

Water
Emissions Management

Solid Waste Employee Welfare

23
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Vision 2020
GRI: 102-16

Sustainability has always been at the core of our business. At APP, we create products and deliver services with
care through responsible and sustainable innovations for every product life stage. For us ‘Growing’ is not only about
business but also the purpose of improving the livelihoods of people around us.

Launched in 2012, Vision 2020 is APP’s comprehensive sustainability strategy. It sets out ten key impact areas relevant
to our stakeholders across our business and wider supply chain, with ambitious targets for each.

Vision 2020 is supported by a wider set of companywide polices. Full copies are available on our website.

• Corporate Social Responsibility Policy

• Environmental Stewardship Policy
• Forest Conservation Policy
• Responsible Fibre Procurement & Processing Policy
• Procurement Policy on Chemical Substances and Articles
• Employee Welfare Policy

24
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Vision 2020 element Target Progress in 2019

Accelerated progress and achieved by
end 2012

100% sustainable plantation wood for All conversion of natural forest was halted
pulp by 2015 in 2013

FIBRE
SOURCING

Develop and implement Integrated ISFMPs are now completed for all 38
Sustainable Forest Management pulpwood suppliers' concessions and has
Plans (ISFMP's) been implemented since 2017

Vision 2020 element Target Progress in 2019

Support the national target to APP continued our commitment through

preserve designated protected and supporting the protection and restoration
conservation areas of natural forest inside AAP pulpwood
suppliers’ concession and outside
REFORESTATION concession through landscape approach

Vision 2020 element Target Progress in 2019

Zero Fibre from High Conservation All conversion of natural forest was
Value Forest halted in 2013
Supplier Evaluation & Risk Assessment
(SERA) tool implemented in 2018.

Dedicated conservation programmes

CONSERVATION focussed on 'umbrella species' of
& BIODIVERSITY Orangutan, Elephant and Tiger
conservation continue, with the support
of NGOs and conservation specialists

Vision 2020 element Target Progress in 2019

Adopt international guidelines for the Implementation of Free Prior Informed

protection of indigenous people's Consent (FPIC)
customary rights in the forest

HUMAN RIGHTS &

INDIGENOUS PEOPLE

Vision 2020 element Target Progress in 2019

Increase welfare of indigenous &

local communities and maintain
good relations

COMMUNITY
EMPOWERMENT

25
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

26
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Sustainability
Roadmap Vision 2030
While the vast majority of our targets in Vision 2020 Sustainability Roadmap have been achieved, we realised that
we need to expand the scope of our commitments to sustainability, as we continue to challenge ourselves as we
look past 2020. With that in mind, we created Sustainability Roadmap Vision 2030 following extensive engagement
with internal and external stakeholders. Compared to Sustainability Roadmap Vision 2020, this evolution covers
an increased range of issues and tighter alignment with both the UN Sustainable Development Goals and the Paris
Agreement on Climate Change.

Vision 2030 focuses on three main areas related to our industry: production, forest and people. We explain how our
production process will produce less carbon intensive products, using materials that are sourced from responsibly
managed plantations that contribute to the welfare of local communities.

27
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Production Contributes to UN SDG :

Production
30% reduction in About
carbon footprint Achieve competitive product environmental footprints and contribute to the circular economy.

Doing more with less, so that our products

Goals
go further, with minimal waste.
1. Increase the share of renewables in the energy mix.
2. Reduce energy consumption.
3. Reduce water consumption.
4. Zero waste to landfill.
To reduce our environmental footprint and
contribute towards a circular global
economy, we commit to producing paper
goods responsibly and sustainably.

Lower Carbon Footprint

Innovative Products

We are taking action on the

UN Sustainable Development Goals

Contributes to UN SDG :

Production
30% reduction in About
carbon footprint Achieve competitive product environmental footprints and contribute to the circular economy.

Doing more with less, so that our products

Goals
go further, with minimal waste.
1. Increase recycled fiber composition.
2.

To reduce our environmental footprint and

contribute towards a circular global
economy, we commit to producing paper
goods responsibly and sustainably.

Lower Carbon Footprint

Innovative Products

We are taking action on the

UN Sustainable Development Goals

28
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Forest Contributes to UN SDG :

Forest

Over half a million About

hectares of natural Achieve landscape-scale sustainable forest management, protection and restoration across APP
forests conserved and its supplier concessions.

Protecting and conserving the forests, Goals

peatlands and biodiversity which sustain
our business. 1. Source only from certified Sustainable Forests and increase fiber productivity.

As a business that relies on sustainable

plantations, we are continuing research
and improvement in sustainable forestry
while protecting and restoring natural
forests in and around our supplier
concessions.

Fiber Sourcing

Forest Protection

Integrated Fire Management

We are taking action on the

UN Sustainable Development Goals

Contributes to UN SDG :

Forest

Over half a million About

hectares of natural Achieve landscape-scale sustainable forest management, protection and restoration across APP
forests conserved and its supplier concessions.

Protecting and conserving the forests, Goals

peatlands and biodiversity which sustain
our business. 1. Conserve High Carbon Stock (HCS) forest and High Conservation Value (HCV) area and

2. Conserve critical peatland ecosystems.

As a business that relies on sustainable 3. Protect Indonesia's flora and fauna, focusing on the three priority wildlife and ten species of
plantations, we are continuing research rare trees.
and improvement in sustainable forestry
while protecting and restoring natural
forests in and around our supplier
concessions.

Fiber Sourcing

Forest Protection

Integrated Fire Management

We are taking action on the

UN Sustainable Development Goals

Contributes to UN SDG :

Forest

Over half a million About

hectares of natural Achieve landscape-scale sustainable forest management, protection and restoration across APP
forests conserved and its supplier concessions.

Protecting and conserving the forests, Goals

peatlands and biodiversity which sustain
our business. 1. Maintaining area impacted by fires at under 2%.

As a business that relies on sustainable

plantations, we are continuing research
and improvement in sustainable forestry
while protecting and restoring natural
forests in and around our supplier
concessions.

Fiber Sourcing

Forest Protection

Integrated Fire Management

We are taking action on the

UN Sustainable Development Goals

29
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

People Contributes to UN SDG :

People
Improving the lives
of millions
About
People are at the heart of what we do,
from uplifting communities, empowering Empower and involve communities as part of sustainable operation, and invest in world-class
employees and partnering with allies in human capital management.
sustainable development.
Goals
To create and sustain lasting change, we
have to work together, across our 1. Reduction of land conversion for agricultural purposes through the use of fire.
employees, forest communities and allies 2. Improve the welfare of local communities through capacity building and enhance
in sustainable development. community access to markets.
3. Respect the rights of local communities and indigeneous people through increased multi-
stakeholder engagement.

Sustainable Livelihood

Workforce Management

Business Ethics & Conduct

We are taking action on the

UN Sustainable Development Goals

Contributes to UN SDG :

People
Improving the lives
of millions
About
People are at the heart of what we do,
from uplifting communities, empowering Empower and involve communities as part of sustainable operation, and invest in world-class
employees and partnering with allies in human capital management.
sustainable development.
Goals
To create and sustain lasting change, we
have to work together, across our 1. Increase the number of women in management positions.
employees, forest communities and allies 2. Strengthen organizational agility.
in sustainable development.

Sustainable Livelihood

Workforce Management

Business Ethics & Conduct

We are taking action on the

UN Sustainable Development Goals

Contributes to UN SDG :

People
Improving the lives
of millions
About
People are at the heart of what we do,
from uplifting communities, empowering Empower and involve communities as part of sustainable operation, and invest in world-class
employees and partnering with allies in human capital management.
sustainable development.
Goals
To create and sustain lasting change, we
have to work together, across our 1. Best practices for fraud reporting and whistleblower management.
employees, forest communities and allies 2. Best practices for ensuring adherence to our Code of Conduct.
in sustainable development.

Sustainable Livelihood

Workforce Management

Business Ethics & Conduct

We are taking action on the

UN Sustainable Development Goals

30
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Sustainable
Development
Goals

In 2017 the United Nations launched seventeen

Sustainable Development Goals (SDGs), addressing
social and economic development issues that all
sectors of society are encouraged to work to address.
Under each goal sits a set of related targets to be
addressed by 2030.

APP is fully committed to supporting the SDGs. We

applied the UN’s SDG Compass tool to create a
detailed map of how our activities and our wider supply
chain directly impact a range of the Global Goals.
We have provided a detailed breakdown of each Goal,
indicator and sub-indicator that we are addressing
through our activities in the Appendix of this Report.

Step 01
Understanding
the SDGs

Step 03
Setting
goals

Step 05 Step 04
Reporting & Integrating
ommunicating

https://sdgcompass.org

31
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Forest
Conservation Policy
A cornerstone of this roadmap is our Forest Conservation Policy (FCP). Initially, Vision 2020 set out a plan for APP
and its pulpwood suppliers to implement High Conservation Value (HCV) principles by 2015 and end natural forest
clearance by 2015. However, on February 5, 2013, we announced the FCP to be in immediate effect, accelerating
the objective by almost two years. You can learn about the details of the policy in the Forest [page 58] section of this
Report.

32
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Stakeholder
Engagement
GRI: 102-13, 102-42, 102-43, 102-44
To identify and respond to stakeholder concerns and We publish the notes and material for each forum
expectations, monitor global trends and play our role online on our Sustainability Dashboard (www.
in the debates that relate to the key issues that impact sustainability-dashboard.com). We communicate how
our business, we conduct a diverse and far reaching we address the issues raised by our stakeholders on
approach to stakeholder engagement. We identify our our Vision 2020 Sustainability Roadmap and in the
stakeholders as any group who expresses an interest in development of Vision 2030 (see page 27), our annual
APP’s operations and/or our impacts. Sustainability Reports and our website.

APP encourages open dialogue, which is best We are a member of and take active participation in
demonstrated by our annual Stakeholder Advisory various associations, including the Indonesia Pulp
Forum. This event provides the opportunity for any & Paper Association (APKI), the Indonesia Forest
stakeholder with an interest in attending to engage Concessionaires Association (APHI), IBCSD (Indonesia
directly with us in an open and interactive forum, hear Business Council for Sustainable Development), CGF
our latest updates and voice their opinion. (Consumer Goods Forum), TFA2020 (Tropical Forest
Alliance 2020) and the UN Global Compact / IGCN
(Indonesian Global Compact Network).

The 8 Stakeholder Advisory Forum was held on March 14, 2019. We presented and facilitated
stakeholder discussions covering a range of topics, including;
• Update on our progress against of FCP commitments
• APP’s response to an assessment on its link with industrial forest plantations in Indonesia
• Update on our strategy towards land dispute resolutions
• Presented the results of an independent study on the carbon impacts of our FCP
• All presentation material and notes from the forum are available to download from our Sustainability
Dashboard (www.sustainability-dashboard.com).

33
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

In some cases, the concerns and discussions raised by our stakeholders are too specific to respond to through
broader engagement mechanism and a more direct approach is required. In these cases, we issue specific briefings
or press releases to address issues raised. Regional Social Working Group (RSWG) (see page 66) are used in specific
regions where our supplier’s concessions are located, providing stakeholder engagement mechanisms to deal with
issues related to land use rights.

Stakeholder engagement highlights in 2019:

• Providing feedback for national governments on key issues, for example sustainable forest management
certification and procurement policies
• Attending COP25 in Madrid, using the opportunity to raise awareness and share our experiences of our
community empowerment projects, demonstrate our support for the Government of Indonesia in achieving NDC
targets through the implementation of our FCP and showcase how sustainable packaging contributes to the global
circular bio economy
• Participated in a diverse range of interviews for media publications including Edie, Innovation Forum, Packaging
Europe, Print Monthly, Office Products International, Forestopic, La Papeterie, Les Cahiers de l’Environnement &
Radio 24 Italy
• Hosted a workshop to educate stakeholders on PEFC certification, in support of the Responsible Wood-PEFC
partnership
• Attended New York Climate Week as part of UNGC Indonesia delegation, showcasing women empowerment and
water initiatives
• Hosted mill visits for various media, NGOs and customers
• Participated in over 25 industry stakeholder events, including PaperWorld, RISI PPI Awards, Indonesian Business
Forum, and Sustainability in Packaging 2019

Activities in forestry nursery facility

34
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Our Stakeholders
GRI: 102-40

35
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

36
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Materiality
GRI: 102-47

To define and prioritise our Sustainability Report This year we update several issues in our materiality
content we have aligned our materiality process with matrix. We added ‘contribution to SDGs’ as a specific
the development of our sustainability strategy, Vision high priority issue and removed ‘indirect economic
2030 (see page 27). This process was conducted impacts’, as these are covered within the SDGs
through 2018 and 2019 and identified a range of long- indicators. We broadened ‘community engagement’
term key issues for APP. In conducting our analysis, we to ‘community engagement, welfare and livelihood’
considered stakeholder feedback from our Stakeholder to better reflect the broader range of the issue that
Advisory Forums (see page 33), conducted focussed sit within this term. We also broadened ‘financial
interviews with internal and external stakeholders, performance’ to include ‘tax disclosure’. ‘Transport’,
reviewed peers and other related industry sectors ‘local recruitment’ and ‘talent retention’ were removed
materiality assessments and researched media as lower priority issues.
coverage. We also carefully considered the prominent
global frameworks, such as the SDGs and both global Our approach to materiality is guided by the Global
and national legislative drivers and emerging trends. Reporting Initiative (GRI) and updated annually. How
the issues in our materiality matrix correspond to GRI
We acknowledge that our stakeholders have a wide topics, including the aspect boundaries for each topic,
range of interests, some of which will not be captured in can be found in the About this Report section on page
our materiality assessment. For such specific issues we 116.
engage in direct dialogue with stakeholders to respond
to questions and discuss their concerns.

APP’S impact on the environment, economy and wider society

37
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Governance
GRI: Disclosure of Management Approach (Anti-corruption), 102-18, 102-19, 102-20, 102-21, 102-22, 102-23, 102-24, 102-
25, 102-26, 102-27, 102-28, 102-29, 102-30, 102-31, 102-32, 102-33, 102-34

Shareholder

Management
Board

Indonesia Indonesia HQ
Business Functions

38
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

The Management Board consists of senior members organisation, all employees at a management level and
of our management teams from across our business, above receive 360 degree feedback.
each with their own specific responsibilities. Authority
is delegated from the Management Board to several We apply the same approach to employee diversity
specialist sub committees who deal with specific areas to the Management Board as we do the rest of
relevant for each individual committee, review policies the organisation; we appoint based on individual
and procedures and appraise performance. All sub competencies and do not discriminate based on
committees report back to the Management Board on a gender or social group. The Business Code of Conduct
regular basis and communicate key issues to the wider sets out our approach to maintain APP’s integrity and
organisation as appropriate. reputation, the code applies to the Management Board
as it does for the rest of the organisation.
The License, Government Relation and Sustainability
Committee Board is headed by APP’s CEO, members In terms of how our individual mills are managed, each
include APP’s Deputy CEO, Managing Director, mill reports to the COO through the respective COO for
Business Unit heads and the CSO. The committee pulp, paper and tissue divisions. Our mill KPI scorecard
meets monthly, reviewing sustainability performance, (see page 44) helps to track performance against Vision
overall direction and strategy, as well as any issues 2020 targets and we encourage a culture of sharing
raised from stakeholders. The Ethics Call Centre is the good practice and working collaboratively where
main source for stakeholders to raise critical concerns, further improvement is required.
the management board maintain oversight of all issues
raised, however most concerns are dealt with by the Three companies; Indah Kiat, Lontar Papyrus and
relevant committee and do not require escalation. For a Tjiwi Kimia are publicly listed and publish their own
breakdown of the concerns reported in 2019 see page governance structure each year in their Annual Reports,
41. available at our website⁽3⁾.

The Management Board meet every week. Once a The governance arrangement for each mills include
quarter, economic, environmental, and social topics a Nomination and Remuneration Committee who
will get raised with the Board for a detailed review. The support the Board of Commissioners in conducting
team were involved in the development and approach performance evaluation of the Board of Commissioners
of the Vision 2020 Sustainability Roadmap have been and Directors, making recommendations for additional
involved and signed off our Vision 2030 Sustainability training as required and recommend nominations to
Roadmap. Members of the highest governing body the boards. Individual salaries are not reported, as per
take part in interviews which feed into the Sustainability Indonesian capital market regulations. The Independent
Report development process. The management team Audit Committee (IAC), with an independent chair,
delegate the responsibility of the Sustainability Report oversees internal auditing, establish action plans
review to the sustainability committee. based on the results of audits and progress monitoring.
The committee holds monthly meetings and reports
Sustainability performance of the Management Board quarterly directly to the Board of Commissioners. The
is measured through a balanced scorecard approach, Internal Audit team are responsible for conducting
covering four focus areas; financial, customer, process the audits, overseen by the IAC. Their focus areas
and organisational. All Board members have a common are adopted in response to the business needs,
scorecard, which is reviewed at least annually, however these included preventing misconduct and ensuring
weighting of individual targets vary by role. The our comprehensive Group-wide Standard Operating
results of the balanced scorecard assessments help Procedures are followed correctly.
to guide the training needs of the Board. Across the

{3]

Indah Kiat :
https://asiapulppaper.com/documents/20123/0/INKP+Annual+Report+2019+web.pdf/ca68787b-1e84-1d48-8f99-
45f1dfa02bcd?t=1595579998944

Tjiwi Kimia:
https://asiapulppaper.com/documents/20123/0/TKIM+Annual+Report+2019+web.pdf/51ba475e-1625-9d1a-3dd7-
1e4de5209d1a?t=1595580030784

Lontar Papyrus :
https://asiapulppaper.com/documents/20123/150293/LPPI-+Annual+Report+2019.pdf/72044fe5-43ce-4a78-8c90-
e2cc8d97bf86?t=1593367395351

39
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Business Ethics
and Risk Management
GRI: 102-17, 205-1, 205-2, 205-3

At APP we believe in holding ourselves to the highest The results of 2018’s Ethics Survey identified the need
ethical standards. We are committed to doing the right for Ethics and Compliance to enhance APP employees’
things in all that we do. This means acting honestly knowledge of the BCoC and Speak Up culture. In
and treating each other and our customers, suppliers, response, mandatory BCoC training was introduced
partners, and communities fairly and with dignity. and delivered through online and class room sessions.
Our Business Code of Conduct (“BCoC”) has been More than 24,000 APP employees attended these
developed to guide us with a set of standards of ethical sessions. The BCoC program was extended to APP
conduct expected in operating our business. business partners (pulpwood suppliers) and other
contractors in Indonesia. An “Ethics Week” campaign
APP’s Corporate Risk and Integrity Division (CRI) was held in late 2019 at key office locations and at the
continued to focus on our four-pillar approach to Perawang Mill to increase awareness of the BCoC.
oversee ethics and risk management within the
business; asset protection, integrity management, fraud In 2019 our Asset Protection programme focused on
prevention and business ethics. Our priority during implementing the APP Minimum Security Standards
2019 was to operationalise this programme. in Tjiwi Kimia and OKI mill. ISO based standards has
strengthened APP’s security governance framework. In
In our journey to enhance governance, an Ethics 2020 there will be a continued focus on the continued
Committee was established in early 2019 to provide implementation of this minimum standard and
oversight to Senior Management. The Ethics Committee technologies to support APP’s path to Industry 4.0.
is comprised of key Senior Management members who
convene to review compliance performance in APP and
provide oversight for sensitive investigations.

Employees in APP mills

40
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

During 2019, following a risk assessment that covered

all mills, we started to develop a Bribery and Corruption
programme, including a training course based on ISO
37001 standard for anti-bribery management system
In January 2020 we intend to host this training for
our Procurement, Legal, Supply Chain, Audit, and
CRI teams. Integrity Management team developed
an Integrated Due Diligence Services Portal that
automates APP’s due diligence process for our
suppliers and customers. This system is a collaboration
with APP ‘s Internal Audit Division (IAD) and provides
an additional boost to APP’s second and third line of
defence in effective risk management and control.

Throughout 2019 Profit Protection focused on

implementing fraud risk frameworks to more effectively
prevent, monitor and investigate fraud related matters.
Fraud risk assessments were conducted on identified
critical areas and our case management systems were
optimized to predict trends in fraudulent activities.
Follow up investigations continued to focus on reducing
fraud within our operations.

The Integrated Call Center (ICC) provides a platform for

employees and external stakeholders to raise concerns,
ask questions, make product enquiries, emergency
handling and raise grievances. During 2019 there were
71 concerns raised; 29 of these were reported via the
ICC and two were raised through our internal audit
function. Forty concerns were reported directly to CRI.
Of these reports, 30 required further investigations.
During 2019, 16 employees were given formal warnings
and 30 employees had their employment terminated as
Paper jumbo roll as output of the paper machine
a result of the follow up investigation. 

41
Asia Pulp & Paper Section 1 Section 2

SECTION 4
Sustainability Report 2019 About Us Senior Statements

Production
To maintain sustainability in our operation, we are committed to carefully and
responsibly manage these resources, applying the precautionary principle in our
approach to identifying and managing adverse impacts on the environment.
By appliying innovative design and ensuring the highest manufacturing efficiency
in our mills, we directly support outr customers' sustainability goals.

Waste Supplier Compliance

Management Mechanism

Emissions Water Reuse

Monitoring and Recycling

42
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

1. Wood Preparation 2. Cooking

A. Recausticizing B. Evaporation
Lime kiln

3. Bleaching
C. Recovery Boiler
57%
Renewable fuels

4. Pulp, Paper &

Tissue Product

D. Power Generation
Energy Intensity Carbon Intensity
decreased decreased
11 % 23 %
in 2019 compared in 2019 compared
baseline (2012) baseline (2012)

E. Chemical Plant

F. Water Treatment G. Waste Water Treatment

We are used & recycled Reused, recycled or recovered over
14% 450,581 tonnes
of our water in processes in 2019
of waste in 2019

43
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

How We Work
GRI: Disclosure of Management Approach (Materials,
Energy, Water, Emissions, Effluents and waste,
Environmental compliance), 102-11

APP’s production processes involve the use of various Our APP Responsible & Sustainable Business
natural resources such as wood fibre, fuel, and water. Declaration and our Environment Stewardship Policy
To maintain sustainability in our operation, we are set out our commitment to sustainability and good
committed to carefully and responsibly manage these governance in all our operations, and the responsible
resources, applying the precautionary principle in management of natural resources such as wood
our approach to identifying and managing adverse fibre, fuel, and water. Non-timber procurement, such
impacts on the environment. We adhere to local and as the purchase of chemicals for pulp and paper
national government guidelines, as well as maintaining production is guided by our Chemical Substance and
third party certifications to global standards such as Articles Procurement Policy, and other appropriate
ISO 14001 (environmental management system) and environmental quality standards.
ISO 50001 (energy management system). Our mills
participate in PROPER (a government environmental Regular audits ensure policies and procedures
evaluation programme), overseen by the Ministry of are adhered to. We are keen to create a climate of
Environment and Forestry. For specific details of the collaboration between mills, sharing best practice and
various standards and certifications applicable to each benchmarking data across all production units, which
mill, see page 12. forms an integral mechanism to monitor performance
against our Vision Sustainability Roadmap.
We use APP’s mill scorecard and sustainability KPIs to
monitor performance and track progress towards the In this section of the Report we provide examples of the
Sustainability Roadmap Vision 2020. We have also ways in which we are driving efficiency improvements
aligned these scorecards with our new Vision 2030 as across our business through long term capital
we transition to a new set of targets and commitment. investments in the latest technology and utilising our
In 2019 we made significant investments in our data skilled technical workforce in identifying and delivering
collection systems, moving towards collecting online incremental improvements.
measurements in real time from one central operational
data system. This provides us with a more granular
level of detail and oversight across all of our production
units.

Dry pulp sheets. APP produces both wet and dry pulp.

44
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Energy and
Carbon Emissions
GRI: 301-1, 302-1, 302-3, 302-4

Energy efficiency is a key focus for all our mills, driven At Lontar Papyrus a similar audit took place during
from both a sustainability and cost perspective. Our 2019, identifying opportunities for improvement to the
ability to generate electricity onsite has the most impact compressed air system and boiler & turbine equipment.
on our direct fossil CO2 emissions, which also improves We envisage these changes will improve air circulation,
our cost efficiency. Where technically and commercially allow better control of pressure settings and overall
feasible we use renewable fuels. For our integrated improve efficiencies and lower energy demands.
pulp and paper mills we are able to utilise biofuel
waste streams to significantly reduce fossil fuel use, At Indah Kiat Serang, the team identified that the most
while for paper mills the majority use a combination significant opportunity to reduce carbon emissions
of renewable fuels supplemented with predominantly was to increase the use of steam generated using
coal or natural gas. 7% of our emissions are related to renewable fuels (from biofuel). The technical challenge
purchased energy (scope 2 emission). of these improvements related to the quality of steam
produced, which was too saturated and ultimately
Our energy intensity decreased 11% by the end of 2019 created additional waste. Once these challenges were
compared to a 2012 baseline, achieve our target of 10% addressed the mill increased the amount of steam
we committed to in Vision 2020 (GRI 302-4). However generated from biomass.
we achieved a carbon intensity reduction of 23% by
the end of 2019 compared to a 2012 baseline, against A significant investment programme at Ekamas Fortuna
a target of 10%, achieved predominantly by replacing during 2019 focused on reducing fuel use and steam
fossil fuels with renewable fuels for energy generation consumption. Rotary syphons were replaced with
(GRI 305-5). Today, we generate 57% of our energy stationary syphons in the paper machine dryer section.
needs from renewable fuels, compared to 49% in our The technology is a step change, reducing torque
2012 baseline year. This represents an increase of over and therefore energy requirements, making steam
52 million GJ of energy generated from renewable use more efficient and allowing a greater degree of
sources, which met 84% of our increased energy process control. By the end of 2019 we had installed
demand over the same period. some of the improved dryer rolls, with the project set to
complete in 2020.
Because the majority of our energy demands are met
by internal generation, we have a tight focus on how We are considering how to increase our solar power
our mills manage operations and carefully plan capex installations for less demanding applications across our
investments to derive the greatest improvements sites. Our Ekamas Fortuna mill, for example, uses solar
and benefits. For example at our OKI mill, we have panels to power LEDs and we plan to increase solar
conducted regular energy audits to identify potential power generation capacity in the coming years.
loss & opportunities for improvement in steam
distribution. Several recommendations will now be You can read about other climate mitigation activities in
considered, including optimising boiler and turbine relation to forestry activities on page 62.
loads, conducting additional preventive maintenance
to reduce losses and improve efficiency, and modifying
equipment to increase heat and steam recovery.

45
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

APP Carbon Emissions Intensity

GRI: 305-1, 305-2, 305-3, 305-4, 305-5

Note:
- GHG or carbon emission assessment is based on Intergovernmental Panel on Climate Change (IPCC) and World Resources
Institute (WRI)/World Business Council for Sustainable Development (WBCSD) - Greenhouse Gas (GHG) Protocol methodology
- Fuel oil conversion factor is based on Pertamina specification
- GHG emission from waste water treatment assume zero due to well managed category of waste water treatment
- Scope 3 Emissions include Purchased goods and services, fuel and energy-related activities not included in scope 1 or scope 2,
upstream transportation and distribution, waste generated in operations, downstream transportation and distribution, processing
of sold products, end-of-life treatment of sold products

46
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

APP Energy Intensity

GRI: 302-1, 302-2, 302-3

47
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Air Emissions
GRI: 305-7

By applying the latest processes technologies and Continuous Emissions Monitoring Systems (CEMS), we closely
monitor and seek to minimise our emissions to air. Our main emissions are carbon dioxide (CO2), sulphur dioxide
(SO2), nitrogen oxides (NOx), and also fine particles, which originate from the combustion of fuels used to generate
energy. The main influence we can have on reducing these emissions is through types of fuel used; by using a higher
proportion of renewable fuels, and switching to cleaner types of non-renewable fuels such as our Tjiwi Kimia mill
moving to a low sulphur coal. In 2019 all mill emissions met our regulatory requirements for air emissions, with the level
of emissions at least 10% below these regulatory limits, in line with our Vision 2020 targets. For a full breakdown of
emissions by mill, please see the data tables on page 121.

Waste and Materials

GRI: 306-2, GRI 301-1, 301-2, 307-1

As a part of our commitments to the concept of the waste from their wastewater treatment and mix it with
bio-circular economy, we are committed to minimising waste bark from the wood preparation area and bio ash
waste and maximising the opportunities to reuse waste to form soil conditioner. The calcium, magnesium and
materials through 3R-Reduce, Reuse and Recycle, with other micronutrients neutralise acidity on the top layer
the ultimate goal of maximising the value of resources of soil and enhance forestry growth, so is spread in new
at each life cycle stage. growth areas of forest to boost growth rates.

We strive to maximize the use of all raw materials, so Calcium carbonate is used in a recausticsizing
that nothing is wasted, and our processes maximise process at our Lontar Papyrus mill. We began trials
efficiency. Our main raw material is wood fibre - losses using Calcium Oxide (quicklime) as a substitute to
can occur through water and other waste streams, so reduce the amount of calcium carbonate we were
we aim to minimise such losses, or develop processes using, consequently reducing the amount of solid
that capture fibre before it is lost from our processes. waste generated, such as dregs, grits and lime mud,
in the process. As a result of this project and many
We generate most of our waste through our onsite other similar waste reduction programmes the mill
power production and the pulp and paper making has achieved a 10% reduction in solid waste in 2019
process. We turn by-products such as black liquor, bark, compare to 2018.
and other residues from forestry and pulping activities
into energy sources that directly replace fossil fuels at An incident of non-compliance to Government
our integrated pulp and paper mills. Besides diverting regulations with regards to waste to landfill permits
waste from landfill, these waste streams can be utilised was reported in 2019 by our OKI mill. We acted upon
in the energy generation process, helping to reduce the written warning and took the relevant corrective
the carbon intensity of our mills significantly. actions.

As a clear commitment towards establishing our

position within the bio-circular economy, we work
closely with local governments to identify and secure
licensing for innovative waste processing. Our Indah
Kiat Perawang and Lontar Papyrus mills collect sludge

48
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Waste to Landfill Intensity

49
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Water
GRI: 306-3

Water is a vital resource in our operations, we use it Ekamas Fortuna focussed on driving down water use
in various stages of the pulp and paper manufacturing through process efficiencies, driven by a vigorous
process. Applying the latest production technologies, approach to water management, awareness and
we are constantly working to reduce our water equipment repair. Recycling effluent and converting it
consumption, reusing and recycling this vital resource into water for production helped drive down demand
at every opportunity. We achieved a water intensity for fresh water. The mill saw a 8% increase in water
reduction of 31% by the end of 2019 compared to 2013 recycle and reuse from 2018 to 2019.
baseline, against a Vision 2020 target of 10%. In 2019
we reused & recycled 14% of our water in processes, We also recognize that our responsibility to protect
reducing our demand for fresh water. local water sources at all of our mill sites. Therefore, we
control our water intake and ensure that our water-
Water plays a key role in our production processes, discharge meets the highest environmental standards
predominantly for generating steam, heating, cooling before it is returned to source. At each mill location,
and cleaning. In most of our mill locations, water is minimum water standards are set by the relevant
relatively abundant. However, water scarcity can impact authorities, with regular testing conducted to ensure
our operations, particularly during the dry season. We compliance. In 2019, all discharges met, as a minimum,
must also closely monitor water quality, for example the government limits for wastewater quality.
measuring salt content at our OKI mill whose river water
source can suffer from sea water ingress. Our Pindo Deli 3 mill received a written warning for
wastewater discharge quality into the Citarum River on
At Indah Kiat Serang, we minimised the use of fresh 7th May 2019. The mill contained the spillage within
water by increasing wastewater reuse and are two hours of detecting the issue, which was caused by
conducting a feasibility study for installing a reverse bad weather. We identified that the mill’s wastewater
osmosis system to reuse effluent water for areas treatment plant could be improved to prevent a
of production where this quality of water would reoccurrence, so we ceased operations for one month
be acceptable and fit for purpose. Water balance to investigate and rectify the situation. The local
improvements, particularly when producing cup stock authorities granted us permission to restart production
on Paper Machine 6 further reduced our consumption. following the modifications we made. We plan to make
Clean and flushing equipment and working practices long term improvements to the wastewater plant during
were modified, as well as efficiency improvements 2020.
in our de-inking process. A number of additional
investments saw the upgrade of our bio sludge plant
too, which will reduce COD (a measure of water quality)
effluent.

50
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Mill waste water treatment facility

51
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Product Innovation
At APP, we understand that our products provide the identify opportunities for innovation and understand
opportunity to support our customers in achieving their how the markets and expectations for our products are
sustainability goals and play a role in the global circular changing.
economy. Using only responsibly sourced fibre, we aim
to utilise increasing amounts of renewable energy and A number of drivers are at play today; the move to
to minimise energy, water and waste intensities. light-weighting products, where we use less fibre to
We also aim to increase the range of products where achieve the physical properties, the ability to form and
we can demonstrate their low environmental footprint shape paper products, and the move towards replacing
and can offer alternatives to plastic based products. plastic-based products with fibre based solutions.
Biodegradability is also a key issue for our customers,
As part of the global industry, pulp and paper making which means we must ensure any coatings we apply to
process presents opportunities to create positive our products are designed with this in mind.
environmental impact. APP aims to produce innovative
products with competitive environmental footprints that In response to the changing market requirements we
contribute to the circular economy, while also serving have switched a number of our paper machines to
the purpose for our customers. To do that, we focus producing cup stock, as consumers move away from
our long-term investment and R&D efforts to come plastic based equivalents. We’ve also responded to the
up with new types of products that are manufactured increase demand for paper straws, as plastic straws
through improved processes in order to minimise were banned across many markets. Paper grades
impacts. The landscape for consumer paper-based based on recycled content has also grown, again in
products has changed rapidly in recent years. At response to consumer demand, as has the paper for
APP we closely follow technological innovations and digital applications segment.
the relevant consumer and governmental drivers to

Quality control activity at paper converting

52
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Foopak Bio Natura, Our Solution to Safer and Better Food Packaging

Foopak Bio Natura is our food packaging solution that uses 100% virgin pulp, a natural pulp produced
directly from highly selected woods. It is made of high-quality ingredients with rigorous production
standards, making it sterile from harmful compounds. 

We do not use recycled paper in the production process for Foopak Bio Natura, as recycled paper might
contain lead, a heavy metal that will potentially endanger people who consume the food it contained.
Foopak Bio Natura is certified to international level safety standards (FDA, ISEGA, ISO).

There is no chemical migration from the paper packaging to the food product it contains, unlike, for
example, polystyrene foam. Widely known as styrofoam, this material is not only non-biodegradable but
also dangerous for health. Styrofoam contains Benzene and Styrene, oil-based substances the World
Health Organization has classified as a possible cause of cancer. These toxic agents can quickly leach
when in contact with hot, oily, or acidic food and beverage. 

Bio Natura Cup has a 12-week composability making it easy to be recycled and also safe for the
environment if recycling infrastructure is not available to the consumer.
You can read more on our official website or our product page.

53
Asia Pulp & Paper Section 1 Section 2

SECTION 5
Sustainability Report 2019 About Us Senior Statements

Forest

Asia Pulp & Paper (APP) Sinar Mas is committed to achieving sustainable forest
management, balancing conservation with production aspects through a landscape
approach. We work to protect and restore natural forest in concession areas as well
as improving forest management to ensure sufficient supply of raw material from our
suppliers pulpwood plantations to supply our pulp mills. The challenges inherent in the
effort to protect natural forest cannot be overstated. Threats in the form of activities
such as illegal logging, encroachment as well as forest fire remain, so our approach is
to continuously monitor and address these threats directly, while providing alternative
livelihoods and supporting community empowerment activities that reduce the risk to
forest protection.

As a responsible business, APP aim to support the Government of Indonesia in

achieving its Nationally Determined Contribution (NDC) target, of which forestry
protection plays a significant role through the way that areas of forestry and peatland
can store carbon dioxide.

54
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

FCP Achievement in 2019

ZERO 100%
Natural forest Pulpwood
conversion by supply
APP Pulpwood from plantation
supplier since 2013

51% 324 0.35%

Land disputes villages involved forest cover change
resolved into the in protected area in
DMPA programme APP suppliers’
concessions

100%
coverage of
Sustainable
Forest Management

PHPL-VLK
SVLK. Timber Legality
Assurance System

Coverage Coverage
2018 2019 2018 2019

91% 92% 100% 100%

55
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

How We Work
GRI: Disclosure of Management Approach (Biodiversity)

To ensure that our supply chain is free from deforestation, APP requires all pulpwood suppliers - current and potential,
to comply with our Forest Conservation Policy (FCP) as well as our Responsible Fibre Procurement and Purchasing
Policy (RFPPP), which provides an overarching framework for the specific processes and criteria that we use in
evaluating their compliance with our FCP.

To achieve the commitments of our FCP we use various tools to support and guide us, such as Sustainable Forest
Management certification and HCV/HCS assessments. Our Supplier Evaluation and Risk Assessment (SERA) tool
provides a screening for suppliers, assessing them based on the FCP commitment as well as global standards for
Sustainable Forest Management.

Our Forestry Value Chain

GRI: 102-8, 304-1, 304-2

Imported Power Generator

Facilities
Converting
Facilities

Local Pulp Mill Pulp Paper Mill

APP’s
Pulpwood
Supplier

Finished
Associated Chemical Product
Recycled Production

Forest Impact Boundary

The majority of our wood fibre is sourced from pulpwood plantations in Indonesia, through APP’s pulpwood suppliers.
This provides the raw material to our three integrated pulp and paper mills; Indah Kiat Perawang, Lontar Papyrus and
OKI mill. The mills produce pulp for their own consumption, as well as supplying our paper mills. We supplement this
supply with a small amount of imported pulp. Our Ekamas Fortuna, Indah Kiat Serang, Pindo Deli Karawang and Tjiwi
Kimia mills also use recycled fibre.

56
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

2019 Fibre Source

36%
56%

8%

All our wood fibre suppliers, both continuous and one-time, must first be approved through our Supplier Evaluation
and Risk Assessment (SERA) process. We only accept wood fibre sourced from area that was not converted from
forest area identified as High Conservation Value (HCV) and/or High Carbon Stock (HCS) after of February 2013 (see
page 73). Our continuous pulpwood suppliers currently comprise 33 pulpwood supplier companies who manage 38
concessions (forest management units based on government forest concession licenses). APP has shared ownership in
nine of these 38 pulpwood supplier concessions. In addition, there are three Community Forest suppliers, and a small
number of one-time suppliers, also supported by our forestry management team.

We also purchase wood from outside of our concession areas in Indonesia and import wood from overseas. All of our
externally sourced wood is compliant under Sustainable Forest Management scheme either to PEFC, PEFC Controlled
Sources, FSC, the FSC Controlled Wood standard or PHPL-VLK (SVLK) (see page 61). Despite not being under APP’s
direct ownership, we have a responsibility to manage and monitor their activities. The FCP applies to all pulpwood
suppliers, irrespective of ownership.

The complete list of APP pulpwood suppliers is available in our sustainability dashboard. We also disclose a summary
of the risk assessment report of all potential suppliers.

57
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Forest
Conservation Policy

Launched in 2013, APP’s Forest Conservation Policy (FCP) forms the central strategy for managing and monitoring our
pulpwood suppliers.

Since the inauguration of the FCP in 2013, APP has:

• Held its pulpwood suppliers to the highest standards of conservation and carbon stock distribution.

• Set a side around 600,000 ha (approximately 21% of our pulpwood suppliers’ total concessions area) as protected
forest within the concession.

• Retired 7,000 hectares of pulpwood plantation located on critical peatland for conservation purpose.

• Introduced the Desa Makmur Peduli Api (DMPA) program, based on the Integrated Forestry and Farming System
(IFFS) concept. This initiative has contributed to improved community welfare through constructive engagement
and the responsible empowerment of local communities in 324 villages.

• Developed and launched an Integrated Fire Management program to prevent and mitigate land and forest fires.

• Joined the Mangrove Ecosystem Restoration Alliance (MERA) to protect and rehabilitate mangrove ecosystem in
northern coast of Jakarta, and partnered with the Martha Tilaar Group in a women empowerment program in rural
areas around APP suppliers and mills operation.

58
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

FCP Achievements in 2019

ZERO 0.35% 324

Natural forest forest cover change villages involved
conversion by in protected area into the
APP Pulpwood in APP supplier DMPA programme
supplier since 2013 concessions

100%
coverage of
Sustainable
Forest Management

Kelulut honey at Mengkiang Village, one of our DMPA programs

59
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Sustainability Dashboard

APP’s sustainability dashboard provides access to up-to-date reporting of our Pulpwood Suppliers activities, relevant
polices, tools and stakeholder dialogue. We plan to improve the dashboard in 2020, making information about our FCP
more accessible and disclosing more details on the progress against our Sustainability Roadmap Vision 2030.
https://sustainability-dashboard.com/

60
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Certification
When we launched the first Sustainability Roadmap in
2012, we set a goal to achieve 100% of our pulpwood
suppliers to be certified by independent, third-party PHPL-VLK
forest certification schemes. We have achieved the
Coverage
goal; 100% of our pulpwood suppliers are certified 2018 2019
under various third-party sustainable forest
management certification schemes available and we
100% 100%
plan to maintain this in the years to come.

Third party certification is a vital tool in demonstrating

that our fibre is sourced sustainably. Certification covers
two key aspects of our supply chain – the forestry Coverage
practices and the traceability from forest to our mills, 2018 2019
commonly referred to as ‘chain of custody’. As well as 91% 92%
providing APP with assurances, these certifications also
allow us to meet the requirements of our customers,
many of whom require that we provide certification as
part of their responsible sourcing commitments.

At the end of 2019, 100% of our suppliers’ concession Coverage

2018 2019
areas are compliant to PEFC scheme. 92% are PEFC
Sustainable Forest Management certified while the 100% 100%
remaining 8% are categorised as PEFC Controlled
Source. We will continue to expand the scope of
Note:
our certification program in 2020, increasing the
(4) PEFC Scheme: Sustainable Forest
percentage of PEFC certified area.
Management certified and controlled sources

PEFC is an umbrella organisation and mutual recognition scheme of national standards – e.g. IFCC in Indonesia.
PEFC was set up as an endorsement process, to assess independent national forestry management standards against
internationally recognised criteria for sustainable forest management. PEFC bases its sustainability benchmarks on
globally recognised principles, guidelines and criteria developed by international and inter-governmental bodies
with broad consensus from a broad range of stakeholders. Any national certification system seeking to obtain PEFC
endorsement must submit to a comprehensive and rigorous assessment process, including independent evaluation
and public consultation. A full final report of this process is then made publicly available, and national systems are
required to revise their schemes every five years. PEFC uses internationally recognised requirements for certification
and accreditation defined by the International Standardisation Organisation (ISO) and the International Accreditation
Forum (IAF).

PHPL-VLK is a mandatory certification which helps to assure timber legality and removes the need for our customers to
carry out due diligence for fibre traceability themselves.

61
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Avoiding Carbon
Emissions
APP is fully committed to supporting the Government of Indonesia Low Emissions Development Goal relevant to The
Paris Agreement, which sets out a target to reduce emissions by 29% by 2030. Our Forest Conservation Policy (FCP)
helps avoid carbon emissions compared to ‘business as usual’, through sustainable forest management, preventing
forest fires and protecting peatlands.

In 2018, we engaged independent consultant Ata Marie to analyze carbon emissions avoided through implementation
our FCP since 2013, and a projection of long-term carbon emission avoidance in the future. In the study, two scenarios
of land use change (area and rate) are modelled, Business as Usual (BAU) and FCP. The study found that for the period
2013-2016 the avoidance of emissions is primarily due to the implementation of our FCP since 2013.

The assessment also showed that our integrated fire management programme and peatland management from 2017
and 2019 respectively are the most significant activities that led to specific carbon avoidance. We can forecast that the
major potential for long-term emissions avoidance are from peatland rewetting and reduction of fire in peatland areas.
There are initially significant emissions avoidance from no deforestation, but potential savings from these will reduce
over time.

Annual Emissions for BAU vs FCP (t CO2E/year)

80,000,000

70,000,000

60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

0
2013 - 2016 2017 - 2020 2021 - 2030 2031 - 2040

Year

BAU FCP

Implementing our FCP has achieved :

64%
avoidance in annual carbon emissions
compared to Business as Usual

62
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

RADARSAT-2 Case Study

Monitoring almost 3.6 million hectares comprising 38 APP suppliers’

concessions, Giam Siak Kecil biosphere reserve and the PT. Karawang Ekawana
Nugraha ecosystem restoration concession near APP’s OKI pulp and paper mill.

Automated process from data acquisition, data processing and forest change
alerts, as georeferenced polygons, delivered directly to APP’s enterprise servers.

This system enables the detection of encroachment, illegal logging, forest

damage due to natural causes, or infrastructure changes .

RADARSAT-2 can identify a single tree that has been removed from the forest
canopy.

63
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

In 2019 we continued to apply the latest satellite technology to monitor and respond to forest cover change.
We monitor 3.6m hectares of production forest and conservation area, including the Giam Siak Kecil – Bukit Batu
biosphere reserve (GSK-BB). The fine resolution allow us to detect event the subtlest change in forest cover. We use
the data to map forest cover change, which can be caused by encroachment, illegal logging, or natural changes.
As well as providing a vital tool to respond to land use change, we are also able to monitor the impact of our FCP over
the long term and understand how our actions are reducing the risk of land use change. The technology provides
vital data for remote areas of forest that are difficult and time consuming to monitor manually. The data feeds into our
Collaborative Conservation Management and SMART Patrol too (see page 82 and 83). In 2020 we will shift our focus
towards protected areas as defined by our HCV and HCS assessments (see page 73), allowing us to concentrate on
the area’s most at risk of forest disturbance.

Process flow for monitoring forest cover change

In 2020 we plan to make image data available to stakeholders through our sustainability dashboard. As well as
providing image data, we will also report the number of incoming alerts and estimate forest cover change. We will also
continue to improve our manipulation of image data. As the quantity of data grows, we will be able to gain a better
understanding of overall forest health and biodiversity values remotely.

64
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Land Dispute Management

GRI: Disclosure of Management Approach (Rights of indigenous peoples), 410-1

The majority of the land disputes we experience APP has developed a range of measures to identify and
relate to villages within concessions, but in some effectively resolve land disputes. These include:
cases they concern villages that become established • Land dispute mapping
after a license to manage concession is granted. The • Work plans to address each land dispute and
issues are often complex and multi-faceted, involving implement the plan
customary land rights, access for livelihoods, illegal land • Acceleration of land dispute resolution as part of
trade and speculation, land use without permission, Key Performance Indicators (KPI)
or concession overlaps. Not managed correctly, land • Establish Social and Security Division (from HQ
disputes can create social tensions and negative until district level) to handle land dispute resolution
environmental impacts through forest clearance. • Develop SOP for land dispute resolution
• Establish Social Working Group Regional (SWGR)
Our Forest Conservation Policy commits to Free, Prior
and Informed Consent (FPIC) of local communities on Together with the Earthworm Foundation (formerly
any proposed development or forest management TFT, or The Forest Trust), in 2013 APP conducted
activities in existing plantation areas. It also commits land dispute mapping across its pulpwood suppliers’
us to resolve land disputes effectively and handle concessions area in Indonesia. We have since trained
complaints responsibly. all managers on how to undertake land dispute
mapping and practical methods for developing
There are several intrinsic challenges in managing land action plans to resolve land disputes. As part of this,
disputes that we identify and constantly look for ways we have developed a methodology for classifying
to improve. Community politics could be complex, and different levels of land disputes which helps to inform
trust takes time to be built. External parties can add our decisions on how best to allocate resources for
additional complexity, with conflicting interests which effective resolution.  
we must consider, too.  

APP classifies land disputes into the following typologies :

1. Villages inside concession

2. Customary land
3. Livelihood
4. Land speculators
5. Non-procedural land use (by other parties, public/private actor)
6. Overlapping licenses.

Land disputes resolution stages

PHASE ONE: PHASE TWO: PHASE THREE: PHASE FOUR:

Completion of land Engagement, exploring MOU/ MOU implementation
dispute mapping, options, negotiation agreement signed
analysis and action process, achievement
plans of initial agreement

65
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

APP considers the land dispute has reached its resolution when it already in phase III & IV, where the agreement has
been reached and/or points of agreement has been implemented. At the end of 2019, 51% of recorded disputes were
classified as resolved.

In 2019 we improved our dispute reporting system, reducing the number of dispute classifications to simplify reporting.
There were no identified incidents of human rights violations involving the rights of indigenous peoples during the
reporting period.

To further enhance the land dispute management process APP formed and conducted Regional Social Working
Groups (RSWG) in Jambi, South Sumatra and Riau Provinces. The engagement mechanism acts as a platform to
accelerate the land dispute resolution process by involving key stakeholders, including community representatives,
CSOs, government representatives and academics, to discuss land disputes in the region.

The RSWG will continue to host routine meetings to discuss progress and challenges of land dispute resolution
processes and find solutions key cases put forward for discussion. At the end of 2019 , the RSWG consisted of 18 core
member institutions (typically represented by 2-3 stakeholders) and 3 observer institutions.

As we reported in our 2018 Sustainability Report, a land dispute case within our Pulpwood Supplier, PT. Wira Karya
Sakti (WKS) saw an ongoing dispute continue in Jambi. In the most recent case, the Serikat Tani Mandiri Batanghari
farmer group laid claim to more than 8,000 hectares of PT. WKS land.

This group continues to ask for compensation relating to past and ongoing allegations. The RSWG platform is being
used as the primary mechanism to understand the activities and opinions of all stakeholders involved, and these
discussions continue.

APP has been working with EcoNusantara Lestari on land dispute management resolution. In 2018 we
worked together on a pilot project in two villages in Riau: Mak Teduh and Tanjung Air Hitam. The aim of
the pilot project was to improve dispute resolution procedures, especially with respect to contested village
borders inside concessions. In 2019 we continued our partnership, working together to develop a platform
for mapping in South Sumatera. Two pilot villages were selected for the initial programme. Before a visit
is conducted, social mapping is conducted. At this point any current land dispute or potential land dispute
are put forward for discussion. We hope to report that a Memorandum of Understanding will be signed
during 2020 in the Riau cases. In the South Sumatra pilot programme we are at the stage of organising
the stakeholder presentation meeting, which has taken longer than expected due to the unique nature
of the village, which includes minority migrants that have come from outside the village and settled in the
concession area.

66
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Based on the lessons learned from our work with EcoNusantara, we will develop a practical guide that sets out a step
by step process to map areas used by the community within APP suppliers concession and the characteristic and
history of the land uses. The end result of implementing these steps are agreed functional boundaries and schemes of
resolutions between APP suppliers and the relevant communities.

We set clear guidelines for how we expect security contractors to conduct themselves, recognising that they play an
important role in maintaining relationships with forest communities. Since 2017 we introduced new forest protection
procedures and training in all APP’s supplier concessions to accompany the Security Vendor Monitoring & Evaluation
process, which we implemented in 2016.

Please see the sustainability dashboard for more on our Responsible Conflict Resolution Procedure, a Collaborative
Conflict Management Approach, a Free Prior and Informed Consent (FPIC) implementation procedure and a Grievance
Protocol.

Reporting concerns

To ensure transparency in the implementation of our FCP, APP believes that interested stakeholders can
be a constructive partner to help us improve the implementation of a sustainable FCP. Their inputs and
concerns are very important to us. Therefore, we developed a procedure to address any grievance that
our stakeholders have identified related to the implementation of our FCP. Our Grievance Procedure and
channel to report concerns are available from our sustainability dashboard.

Local forest community near forestry operations

67
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

SERA tool
We have developed a robust tool to facilitate the implementation of the RFPPP across our fibre supply chain, called the
Supplier Evaluation and Risk Assessment (SERA). All new suppliers are obliged to complete and pass the assessment.
The summary of the risk assessment report of all potential suppliers is uploaded to the sustainability dashboard (see
page 60) for public notification for a period of 14 calendar days before they are included into APP's Approved Suppliers
list.

SERA Process

Developed based on global standards for Sustainable Forest Management, SERA evaluates suppliers against 12
indicators:
• Has the company, or any of its associated companies in the pulpwood industry, converted natural forest after
February 1, 2013
• Country/region of supply
• Tree species
• Third-party certification/verification
• Chain of Custody system
• Legality Compliance
• Protection of High Conservation Values/High Carbon Stock
• Species protection as listed on the IUCN Red List of Critical Endangered Species and CITES
• Company’s respect for traditional civil and human rights
• Compliance with ILO Core Conventions 
• Company’s respect for health and safety of forest workers
• No introduction of genetically modified organisms (GMOs)

In 2019 three new suppliers were assessed through the SERA process and became active suppliers during the year.
All of these new suppliers were one-time suppliers, not continuous. In addition, several other suppliers were assessed,
and corrective action requests were issued which need to be resolved before they can be approved as suppliers.
Updates and the outcome of this process will be made available on out sustainability dashboard.

68
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Innovation in Forestry

Balangeran nursery in our supplier concession Surya Hutani Jaya

Our Forestry Research and Development Team We aim to implement 100% automation in our nursery
supports the forestry operations of APP and its operation as well as in the planting process in order
pulpwood suppliers. The function is involved in to address the challenge of inconsistency that is often
research and development activities to find superior found in the manual planting process. By automating
tree species that boost production efficiency, as some parts of the process, we are able to achieve
well investigating improved silviculture management consistent and uniformed tree growth and health, so
techniques, weed management, and controlling pest that the plantation can achieve optimum yield.
and disease.

Growth and yield

APP focuses on growth and yield improvement to maximise the efficiency of our fibre supply chain. Essentially, we
seek to maximise the use of resource from forest to the final product. Our strategy includes classifying the plantation
areas based on soil types, soil textures and flooding risks in order to determine which tree species and relevant
silviculture management practices are required in specific planting sites. This approach ensures optimum growth of the
tree and contributes to higher fibre yield.

69
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Precision Forestry Concept

In monitoring the growth rate and overall health of a plantation, APP implement the Precision Forestry
concept. We acquire monitoring images captured using UAVs (Unmanned Aerial Vehicles) which are then
processed and analysed using artificial intelligence (AI) algorithm. The AI is able to identify and analyse
blank spots between the trees, estimate age, tree health, highlight poorly-growing trees, flooded areas,
and overall trees count, all of which are available through a dashboard accessible through mobile devices
of our expert forestry teams. This remote data capture enables us to respond to issues promptly and
effectively, and optimise the yield of the plantation.

Integrated Sustainable
Forest Management Plan
To ensure that our suppliers manage their concession areas in accordance with the FCP commitments, we have
developed and continue to implement the Integrated Sustainable Forest Management Plan (ISFMP). The ISFMP
was developed through a long collaborative process that involved compiling and consolidating data as well as
recommendations gathered through various assessments as well as input from all relevant stakeholders including local
communities, government, academia, and civil societies. The document detailed pulpwood suppliers action plans for
improving sustainability and management practices, to ensure that our FCP commitments have been considered and
adhered to.

The spatial plans for all 38 suppliers’ concessions were completed in 2016. As a result of the ISFMP process, we
identified over 600,000 hectares – or more than 21% of the total concession areas – of HCS and HCV areas that
we committed to protecting. This protected area is twice from the minimum amount required by the Government of
Indonesia.

What is the ISFMP process? There are three key steps :

ENABLING INTEGRATED MEASUREMENT

ACTIVITIES SUSTAINABLE & VERIFICATION
FOREST MANAGEMENT
PLANS (ISFMP)
IFFS/FMP/HCV/HCS/ This is how sustainability is GRG emissions modelling/
Peatland research implemented MRV/ Sustainability
reporting

70
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Restoration &
Rehabilitation
In the protected areas of APP Sinar Mas’ pulpwood classifying land cover. Progress in restoration is made if
suppliers’ concession areas, there are forest areas there is an improvement of vegetation class achieved,
that have been degraded, whether due to fire or illegal such as from open land to young scrubs or from young
activities. As part of our Sustainability Roadmap, we are scrubs to young regenerating forest.
working on forest restoration activities in these areas.
Limited availability of local species seedlings to be
In 2015 we worked to map out areas across our used for restoration remains one of the key obstacles in
suppliers’ concession to be targeted for restoration. our restoration work. To address that, we are building
As the first step to restoration, we engaged with experts more nurseries of local tree species as well as investing
to develop restoration strategies for the different soil in the development of seed stands for key local species
types: mineral soil, marine clay and peat, which was to ensure continued availability, as well as undertaking
completed in 2018. Progress in restoration work is work with technical forestry institutions to improve
monitored through assessing vegetation class based on seedling propagation techniques.
the HCS Approach (see page 73) stratification, a way of

Restoration Commitment

In 2019 we set out a target to restore 30,000 ha of forestry. We achieved 21,000 ha of this commitment
during the year, applying the HCS classification of carbon stock value. In 2020 we aim to restore an
additional 25,000 hectares, currently classified as open land and scrub.

Giam Siak Kecil - Bukit Batu biosphere reserve in Riau

71
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Peatland Management
Parts of APP pulpwood suppliers are on peatland. These are delicate ecosystems that must be carefully managed
to protect the forest area and minimise carbon dioxide emissions, supporting the Government of Indonesia’s low
emissions development goals.

Since the FCP was established, we have been working with global experts in peatland forestry, hydrology and remote
imaging techniques to develop and implement best practice peatland management.

Peatland Management Strategy

Develop and
implement peatland
best management
practices

1. 2. 3.
Mapping and analysis Improving Peatland rehabilitation
of peatland water management and alternative species
research

In 2019 we made changes to our Peatland Management Strategy in line the with the Government of Indonesia
redefining peat dome areas in February 2019. The main impact was on zoning, with APP’s Pulpwood Suppliers
required to place a larger forest area under conservation. APP are in full support of the changes and will retire
areas from plantation area to conservation in stages, which will be based on a phased work plan approved by the
Government of Indonesia.

Back in 2015, we began conducting peat mapping using LiDAR (Light Detection and Ranging) to understand the peat
distribution and typology in the landscapes where our suppliers operate. Based on the captured data, we retired 7,000
hectares of productive plantations on critical peat for conservation purpose.

LiDAR data also fed into our understanding of impact zones for plantation drainage into peat swamp forest, allowing
targeted measures for improved forest conservation in plantation areas. The data we gathered has also been made
available to the Government of Indonesia, feeding into their zoning changes in 2019.
Over recent years we built more than 5,000 perimeter canal blocks to maintain near-natural water level in the
protected areas bordering to our suppliers’ concession areas, as well as undertaking research to identify alternative
tree species that thrives in peat with high water level for both conservation and production purposes.

Canal water level monitoring continues on the ground. Field measurements are fed into our overall plans to
compliment and improve water level management. Raising water levels reduce subsidence, reduce emissions, and
form a key component in avoiding carbon emissions, as well as APP’s contribution to supporting the Government of
Indonesia meeting carbon reduction targets.

During 2019 we undertook a preliminary water assessment in the concessions around our OKI mill, where peatland
forestry is impacted by sea water intrusion. This sea water intrusion can also affect the water quality available for our
mill. We have established plot monitoring and are working to understand the water requirements of local communities
too. We expect the assessment to continue through 2020.

In 2020 we intend to work with the academic institutions on a project that looks at retirement of plantations and the
science of restoration, with the objective of developing a methodology for peatland restoration. We will also continue
to improve our peatland management on the ground as well as research projects in collaboration with experts in
hydrology and ecology.

72
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

High Carbon Stock and

High Conservation Value
assessments
Our approach to sustainable forest management is based on a clear understanding of current forest
conditions. Two assessments are central to this approach.

High Carbon Stock (HCS) assessments identify forest conditions, and most importantly areas of high-
density forest which contain a high carbon content and young regenerating forests that will grow
and absorb carbon, and therefore must be conserved. To identify these areas we apply the globally
recognised High Carbon Stock Approach Toolkit.

Full details of our HCS Methodology, Assessment Results and Management and the Toolkit we
apply can be found on our sustainability dashboard.

We apply the globally recognised High Conservation Value (HCV) classifications to protect important
environmental and social value in production landscapes. Community relations are part of HCV
management, a feature emulated by our own sustainable forest management plans. Engagement with
relevant stakeholders about land management, wildlife, and borders for example, are at its core.

Full details of our HCV Methodology, Assessment Process Results and Management plan can be
found on our sustainability dashboard.

73
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Conservation
and Biodiversity
We continue to maintain, protect, and enhance the We track estimated minimum numbers of tiger,
High Conservation Values that have been identified elephant and orangutan and maintain a detailed wildlife
in our suppliers’ concession areas. To demonstrate atlas for each species, which provides us with the most
sustainable forest management, we must include a reliable data to base our conservation efforts around.
clear strategy for key endangered and priority species To minimize human-wildlife conflicts we establish
protection and maintain their ecosystem and habitat, ecological corridors within and between concessions,
which may exist in our concession or protected including feeding pockets, as well as working on
forest areas. Our activities support the Government collaborative law enforcement to reduce risk of wildlife
of Indonesia’s target to protect national priority and poaching within APP pulpwood suppliers concession
critically endangered species of wildlife and rare trees. areas.

Based on HCV assessments, we focus our effort We also work to conserve and cultivate indigenous
on three priority species of fauna: Sumatran tiger, tree species. There are 10 indigenous tree species that
Sumatran elephant, and Bornean orangutan with the we are focussed on protecting and we have identified
objective to create the conditions for coexistence of the respective protected areas as the ecosystem of
protected species and forest plantation production. these species. These local tree species will be planted
as part of the continued enrichment efforts aimed to
rehabilitate areas that have been degraded.

Conservation Strategy

Determining Forest
areas with Protection
HCV/HCS Strategy
Mapping of
Endangered
Species
Operational
Monitoring & Adjustment
Evaluation Based on
Wildlife
Movement
Forest
Rehabilitation

74
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Wildlife Conflict
Mitigation
We are committed to ensuring zero fatal conflicts In 2012 our pulpwood suppliers developed and
between humans and wildlife within our concession implemented a Standard Operating Procedure (SOP)
areas. Unfortunately, we had two fatalities occurred for Prevention and Management of Conflicts between
within our supplier’s concession area in 2019 where two Humans and Wildlife. The procedure was later
contractors were attacked by a Sumatran tiger at PT enhanced in 2015, creating updated procedures and
RIA. We believe the tiger had recently given birth and the formation of a Task Force Team at each APP’s
was protecting the cubs. We also found an elephant pulpwood suppliers. All of APP’s pulpwood suppliers
had died in a concession area as a result of poaching. implement the same SOP, ensuring a uniformed and
Following the incident, we worked with The Natural standardized approach in addressing conflict risks.
Resources Conservation Agency (BKSDA), Sumatran
Tiger Conservation Forum and Tiger Heart Official to Rapid surveys are conducted before undertaking
remove wildlife snares that are used to trap boars, but harvesting activity in concessions with wildlife corridors.
become a hazard for tigers and elephants. If required, harvesting plans are adjusted or postponed
allowing for wildlife movement.

Human - wildlife conflict mitigation activities

75
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Training and Education

for Human-Wildlife
Conflict Mitigation
We engage with wildlife experts and The Natural Resources Conservation Agency (BKSDA) to provide routine training
for APP’s pulpwood suppliers Task Force Team. With the wildlife experts and local forestry offices training and
education to forestry workers, contractors as well as local communities related to the conservation of endangered
species and tips on how to prevent, avoid and mitigate conflict with wildlife.

Estimated minimum numbers of wildlife population

in our pulpwood suppliers’ concessions

7% 9% 15%
of Sumatran Elephant population of Sumatran Tiger population of Bornean Orangutan population
in Sumatra in Sumatra in Kutai landscape

76
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Mapping
Endangered
Species
Using camera trap survey information and on the
ground monitoring techniques we have established
detailed population maps for critical target species in
all our major forest concession areas. This detailed
analysis, based on best practice techniques provides
us with a reliable baseline on which to base our
conservation plan on. We track estimated minimum
numbers for each species – this is the minimum number Camera traps are installed in areas aimed in the
we would expect to find in a specific area. The figure is direction researchers predict to have the highest
estimated because we base our modelling on expected probability of detection for the target species,
movement patterns and confirmed sightings, while we and widely distributing the camera-sites across
recognise wildlife naturally roam within their habitat. an area of interest with the principle of closed
Ultimately, our distribution models developed for each population in habitat variations.
species demonstrate that plantation forestry areas are
also suitable wildlife habitats.

Example, wildlife habitats in South Sumatra

77
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Sumatran Tiger
Conservation

With help from several partners, we improved tiger We were also involved in the implementation of the
habitats and increase the opportunity for the Sumatran first ever robust monitoring framework of The Sumatra-
tiger to thrive and grow in a sustainable manner to a Wide Tiger Surveys (SWTS) initiated by several NGOs in
viable population level and avoid extinction. We are Indonesia. The SWTS in APP’s pulp wood supplier areas
pleased to report that on average five cubs are born in were carried out by SINTAS Indonesia, a non-profit
our suppliers' concession areas each year, based on scientific and educational organisation established with
data we have gathered since 2013. This demonstrates aim of conserving Indonesia’s natural resources. The
low stress levels for the tigers and a sign that the project involved establishing 27 plots covering an area
habitat provides a safe environment for breeding. of 289 km2 (17 x 17 km) for closely monitoring tigers.
It is part of the long-term tiger population monitoring
By establishing wildlife corridors and conducted camera program set up by the Government of Indonesia in
trap surveys, supported by a sighting questionnaire to its National Tiger Recovery Program (NTRP) to double
track tiger population and movement patterns are able the number of Sumatran tigers by 2022.
to estimate the proportion of a given area is occupied
by tigers at a production forest landscape scale. This Our tiger conservation partners include the
allows us to develop a predictive distribution map for government, the Sumatran Tiger Conservation
tigers and create the conditions where APP’s pulpwood Forum (Forum HarimauKita), Zoological Society of
supplier concessions become supportive towards tiger London (ZSL), SINTAS Indonesia and Sumatran Tiger
conservation. Conservation Foundation (Yayasan Pelestarian Harimau
Sumatera).
We established a specialist team to deal with human-
tiger conflict mitigation who are responsible for
conducting regular education programmes and raising
awareness with field workers and communities.

Sumatran tiger

78
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Sumatran Elephant
Conservation

Our conservation goal is to establish and maintain the conditions where APP’s pulpwood supplier concessions are
supportive of elephant conservation. We collaborate with neighbouring concession and stakeholders to implement
landscape approach for elephant conservation to achieve this goal.

Working with various experts, we established elephant feeding stations within our suppliers’ concessions to provide
a reliable food supply and reduce the risk of elephants straying into community settlements searching for food. The
feeding stations also enhance opportunities for population monitoring.

We established a specialist team to manage human-elephant conflicts whose role is to educate communities and
oversee anti-poaching patrols using non-violent and educational methods. Our partners include the government,
Indonesian Wildlife Conservation Foundation (Yayasan Konservasi Satwa Liar Indonesia) with the Indonesian Elephant
Conservation Forum (Forum Konservasi Gajah Indonesia) assistance, and the Belantara Foundation.
We also launched a project to protect elephants around the OKI mill site. We hosted a two-week exhibition to raise
awareness of wildlife conservation and undertook special events with a local newspaper to raise awareness. Based
on our latest surveys there are between 110 and 120 elephants in the area, a population level we believe will be
sustainable over the long term.

Sumatran Elephant

79
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Orangutan
Conservation
We support measures to reduce human-orangutan conflicts and continue to raise awareness to help enforce our zero-
tolerance policy on harming endangered species. We work together with Natural Resources Conservation Agency –
East Kalimantan, Kutai National Park, Mulawarman University, the Orangutan Foundation International, The Orangutan
Tropical Peatland Project (OuTrop), International Animal Rescue (IAR) Indonesia and Ecology and conservation Center
For Tropical Studies (ECOSITROP) to achieve this goal.

Borneo Orangutan

80
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Indigenous Tree Species

Conservation
A key part of forestry restoration activities is planting indigenous local tree species. This is done to maintain the natural
composition of the local ecosystem as well as to conserve the local species, many of which are getting increasingly
rare due to over exploitation or forest conversion.

In 2019, APP and its pulpwood suppliers predominantly planted Ramin (Gonystylus bancanus) and Balangeran (Shorea
balangeran) species in the restoration areas where these two species are native of.

The focus on Ramin and Balangeran is driven by the lack of availability of the seedlings of the other indigenous species
that APP focuses on. To address this, APP and its pulpwood suppliers have been working to establish seed stands for
several of the indigenous tree species. The seed stands of the Kulim tree in one of APP’s pulpwood suppliers in Riau,
PT Arara Abadi, has been certified, which demonstrates that there is sufficient high quality Kulim trees available that
will be able to continuously provide a reliable source of good quality Kulim seeds.

Kulim nursery at our pulpwood suppliers in Riau Kulim nursery at our pulpwood suppliers in Riau

81
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Collaborative Conservation
Management
Collaborative Conservation Management (CCM), was developed in partnership with Earthworm Foundation and piloted
in July 2018. The aim is to work with local communities and other key stakeholders in collaboratively implementing
forest protection measures by addressing third party deforestation. Our approach is based on the key principal that the
lack of long term and reliable incomes sources is a driver for deforestation and forest encroachment.

Initially working with our pulpwood supplier, PT Arara Abadi, we selected an area of 3,000 hectares in Riau Province
for the CCM trial. The area forms part of a Wildlife Conservation Area due to the number of key species that are
presence in the area including the Sumatran elephant. Our MDA forest monitoring (see page 63) also identified that the
area had suffered from deforestation since 2016. APP worked together with Earthworm Foundation and our pulpwood
supplier to run a series of collaborative projects, from non-timber forest products for alternative livelihood, education
programmes, stakeholder engagement activities and collaborative approach to forest patrols.

The trial programme has proved an invaluable learning experience. We have identified that a well thought out and
detailed conservation agreement and management plan is critical to the success of forest conservation. We also
recognise that guidance, tools, facilitation and resources are among the types of support that should be provided in
short term, given that the consent is already secured, and we cannot lose momentum. Looking forward we plan to
continue to implement CCM in the four pilot villages, before scaling up the approach to include other locations.

Sumatran Elephant

82
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

SMART Patrols
As part of our CCM approach we trialed SMART (Spatial Monitoring and Reporting Tool) patrols in
the Musi Banyuasin supply area of South Sumatra. SMART is a digital tool for recording any findings
during on the ground monitoring activities spatial based. The results can be analyzed and evaluated to
measure, evaluate and improve the effectiveness of forest management. Our security teams patrol in
the participating villages to prevent illegal activities in conservation areas and feed information into the
tool. In 2019 we continued to roll out the SMART Patrols approach, developing the programme in Riau
Province.

Our partners in developing this approach are High Conservation Value – Network Indonesia (Jaringan
NKT Indonesia) with Zoological Society of London assistance on the KELOLA Sendang Project.

SMART Patrols activity of our supplier concession in Musi Banyuasin area

83
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Integrated Fire
Management
Forest fires are a complex global issue that affects both The exceptionally dry season was directly related
local communities and the environment. The complex to measurements such as the IOD Index. The Indian
nature of the problem necessitates a multi-stakeholder Ocean Dipole (IOD) is the name given to a climatic
approach that is at the heart of our Integrated Fire phenomenon which is similar to El Nino. The IOD refers
Management strategy. We place great emphasis on to the difference between the sea-surface temperatures
working closely with our pulpwood suppliers, local in opposite parts of the Indian Ocean. Temperatures in
communities and relevant stakeholders, basing our the eastern part of the ocean, which is closest to where
approach on global best practices for fire management, many of our concessions are found, fluctuate between
and comprises of four pillars: prevention, preparedness, warmer and cooler temperatures in comparison with
early detection, and rapid response. the western Indian Ocean. In 2019 the Index was in the
‘positive’ phase, meaning warmer sea temperatures in
Our target is to maintain area affected by fire to less the west and the opposite in the East. The dipole was
than 2% of APP Sinar Mas’ and its suppliers’ total the strongest in six decades, brining drought conditions
concession areas annually. in south-east Asia and Australia.

The dry season during 2019 was an extreme weather We also experienced a number of illegal fires. In the
event. During the year some of our concessions OKI region, the local community began to use slash and
experienced 120 days without rain. The number of burn techniques to access areas of the forest to unlock
fires reported was markedly higher surrounding our the commercial potential of the local Getlam (Melaleuca
concessions and within the concessions the number Cajuputi) trees. In response we are now developing a
of small hotspots increased. In 2019 1.69% of APP new training course, with the intention of promoting
suppliers’ total concession area was impacted by fires. continuous learning to communities we identify as
Around 70-80% of our firefighting effort is typically being at risk of using slash and burn techniques to clear
outside our concession area, to assist where fires have forest areas.
been started outside and need to be contained.

APP's special Helitac firefighter team

84
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Integrated Fire Management

85
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Daily Hotspot
Summary
A daily hotspot summary is available on our sustainability dashboard. Remote sensing ‘Hot Spot’ data allows potential
fires to be quickly detected and investigated. Our total number of hotspot data is provided daily from National
Institute of Aeronautics and Space of Indonesia (LAPAN) & ASEAN Specialized Meteorological Center (ASMC), also
we compared it with data from SIPONGI (Fire Forest Monitoring website from Ministry of Environment and Forestry of
Indonesia). We classify each with the following categorisation.

Hotspots: A small area or spot with relatively higher temperature in comparison to its surroundings and detected by
satellite sensor.  Hotspot does not necessarily mean fire. Additional field verification is needed to determine whether
the hotspot indeed represent fire.

Hotspots verified no fire: hotspot information that has been verified by both APP’s fire monitoring centre and field
team, and the result confirms that there is no fire in the location.
 
Hotspots verified fire: hotspot information that has been verified by both APP’s fire monitoring centre and field team,
and the result confirms that there is fire in the location.

Meet Our Firefighters

Meet Iwan and Eldi Ramadanis, our firefighter
squad members tasked with fire monitoring.
They’ve not only have proven physical and
mental prowess, but they qualified to join
the squad for their skills, eagerness, and
persistence as well. Iwan and Eldi begin their
daily activities at 8 AM every day, exploring the
Kayan concession in West Kalimantan to collect
and provide hotspot data around the area.
Aside from the usual schedule, they must be on
constant vigil, be it day or night. Given that their
role is crucial as the first responders when there
is a fire.

"We patrol a radius of 24 kilometres using

either cars or motorbikes. But to date, we’ve
never encountered any fires; this area is still
considered safe. Members from the Community
Fire Prevention (also known as Masyarakat
Peduli Api) participate in our patrols," said Iwan,
who is originally from Sambas.  Monitoring on fire tower as part of early detection activity

86
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Desa Makmur
Peduli Api (DMPA)

82 Women
Groups

DMPA programme KPIs

Communities livelihood Environmental sustainability

• Household income are increased • Trees and vegetation in the

• Livelihood options are increased landscape are maintained
• People's education are sustained • Fire is reduced
• People's health are sustained
• Livelihood equity is sustained

87
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Our Desa Makmur Peduli Api (DMPA) programme, based on the Integrated Forestry and Farming System (IFFS) is
a participatory community engagement program that aims to create greater diversification of livelihoods for forest
communities, empowerment, reduced fires, and better relationships between forest communities and industry.

The priority criteria used in the final selection are of beneficiary villages are:
• The village is located within concession areas or are within 3 km concession areas
• The villagers interact closely with forest resources found in concession areas
• The villages have a history of forest and/or bush fires, illegal logging or deforestation in the last three years

EAST
KALIMANTAN
JAMBI
WEST
KALIMANTAN 30
88 37

RIAU
236
SOUTH
SUMATERA
109

Implementation Plan

500 5 5 USD 10
villages provinces years million

88
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

At the end of 2019 we had implemented the DMPA We acknowledge the challenge of meeting our
programme in 324 villages, up from 284 in 2018, commitment to implement DMPA in 500 villages by
against a target of 500 villages by the end of 2020. the end of 2020. One point we have learned is the
Progress to date represents 7,783 households. We now importance of maintaining programme momentum,
have a total of 751 activities with 100 farmer champions particularity now the programme is in its fourth year.
- a huge increase from just 2 farmer champions in 2016 Resources are limited in certain districts too. We also
when the programme began. identify a barrier in connecting the programme with
external markets – a vital mechanism for delivering
We are particularly focussed on connecting our income from community products.
programmes to the markets to maximise the
commercial opportunities, boost incomes and ensure In response, we have paid particular focus on linking
communities are benefiting. In 2019 we focussed on markets with community farmers. Our own operations
linking the market to our farmers, and if appropriate and suppliers also buy products, for example
in certain cases we buy product direct from the forestry suppliers purchasing compost produced by
community, for example compost which we then the communities. We have also identified logistical
provide directly to pulpwood supplier for forestry challenges and begun to address these too. Ultimately
applications. by demonstrating the success of the programme and
benefits to each community involved, we hope to drive
In a strong link with our Integrated Fire Management new interest and deliver the growth we are committed
Strategy we are increasingly placing increased focus to achieving.
on reducing fires by monitoring fires around the DMPA
project villages. If required, we direct fire management While growth in village inclusion remains an important
resources from our pulpwood suppliers for support. goal, we believe that quality and impact are also
We are pleased to report a correlation between DMPA important measures that should not be compromised
villages and fire incidents. in search of growth. With this in mind we are working
closely with host villages to expand scope. We currently
estimate we are able to reach approximately 30% of the
village community.

Vegetebles farming in one of DMPA programs

89
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Women in Jambi raise income from community’s compost industry facilitated by DMPA program

Jamin is a leader of the Maju Tani Group of Bukit Batu Village that consists of 24 farmers. The Bukit Batu Village is
located in Air Sugihan District, Ogan Komering Ilir Regency, South Sumatra Province, and consists of 802 families who
relied on oil palm and rubber. This village is located near PT. Bumi Andalas Permai, one of APP’s pulpwood suppliers.

After becoming one of the beneficiaries of DMPA programme, the Maju Tani Group was able to utilise a 24 hectares
corn field inside the 910 hectares livelihood plantation area. The land has been distributed so that each farmer of the
group owns 1 hectare. Jamin leads the farmers’ collective to take advantage of this golden opportunity. The group
receives corn seeds, fertilisers, and insecticides through the DMPA program. In the first harvest since the programme
was initiated the farmers harvested around 2.4 tons of corn per hectare. This boost in productivity has enabled Jamin
to employ other farmers, during the harvesting season he employs around 10 people to support him.

90
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Minister of Environment and Forestry, Siti Nurbaya presented the 2019 Main Climate Village
Program award to representatives of Dataran Kempas Village, Tebing Tinggi District, Jambi, Asbar
Novendra, Village head of Dataran Kempas

24 DMPA villages achieved the ProKlim award from Indonesia Ministry of Environment and Forestry.
The Climate Village Program (ProKlim) was developed by the Ministry of Environment and Forestry
to encourage community and other stakeholders’ involvement in implementing good practices for
increasing climate resilience and reducing greenhouse gasses in the local level.

Scaling up impact is key to the future of DMPA. We identify two key mechanisms that are vital to
achieve this. The first is to maximise the capacity of village institutions, such as village cooperatives,
and Village-Owned Enterprises (known as BUMDES). The second is to work on breaking down barriers
to market access at a local, national, and international level to ensure the sustainability of the program.

91
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

And that 4 century way of doing things

certainly does not fit today's standards. It is
what we now call the slash-and-burn method. In
his own words: "I used to farm corn and rubber.
Back then, I would move from place to place,
burning lands every year to clear areas for
farming."

Through the DMPA programme, he learned

that the old method of clearing land is not only
harmful but also expensive. Protecting the
environment, on the other hand, could instead
be beneficial for him and his fellow villagers.
The farmers in the village received substantial
support from the program, including hand-
tractors, fertilizers, pesticides, and herbicides.
The assistance was to encourage the villagers
to take part in responsible and sustainable
forest management actively. 

"I used to harvest 60 sacks (about 4.5 tonnes)

Meet Lidat, a 49-year-old farmer from of rice before. Now, I can have around 105
Mengkiang, a village in Sanggau Regency, sacks (about 7.8 tonnes)," explained Lidat, who
West Kalimantan, Indonesia. The area, which is also now the head of Mutia Agung Farmers
is now home to a population of over 400,000, Group, sharing his accomplishment. "Back in
had been the territory of Sanggau Kingdom in the days, when we were using hand hoes, the
the 4 century AD. However, this village has cost of labour could easily reach over Rp2
recently written its own story. million (around US$131). Since 2016, we have
started using hand-tractors, and we only spend
Just like most of his fellow villagers, Lidat about Rp400 thousand (around US$26) per
cultivates rice to make a living and as his daily hectare."
meal. Some villagers also depend on farming
natural rubber, fish, and poultry. Nature has It never occurred to him before that protecting
always been the primary source of income for the environment could bring positive impacts
the people of Mengkiang, and the village has to his family and fellow villagers. But in the
plenty of it. But that does not necessarily mean end, the DMPA programme not only helped
that there are never problems. environmental conservation but also, for the
farmers, reduced the cost of land preparation
"We have always depended on the forest to and increased the sum of farm production. Lidat
make a living. It was like a supermarket for us certainly hopes more and more people will join
because we could obtain all of our everyday the program and leave behind the irresponsible
needs in the woods," said Lidat. "Yet due to the land clearing methods. 
lack of accessibility and information, we only
have limited knowledge to manage our lands. The Mengkiang Village was awarded with
We've always followed the old way taught by the main climate village award by Indonesia
our ancestors."  Ministry of Environment and Forestry in 2019.

92
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Multistakeholder
Collaboration Program
We recognised that a multi-stakeholder approach is needed to successfully scale up the DMPA programme. Our
Multistakeholder Collaboration Program aims to develop the business model that can deliver on this goal. The first
phase of the programme saw the collaboration with World Agroforestry (ICRAF) and Center for International Forestry
Research (CIFOR) in 2018 to formulate the typology and characteristics of the DMPA villages and identify the factors
that influence the success of the DMPA program. In 2019 we broadened the programme to embrace other potential
parties to be involved in further programs such as Yayasan Konservasi Alam Nusantara, IDH Sustainable Trade
Initiative, PISAgro, Ministry of Villages and Underdeveloped Regions.

The next step will be for three parties, ICRAF, CIFOR, YKAN to conduct field studies to establish the business model
with key indicators of success of the intended program. ICRAF will use the Public-Private-People-Partnership (P4)
scheme, CIFOR will use the Participatory Action Research approach on the Community Level Business Model (PAR-
CLBM), YKAN will use SIGAP approach.

The results of the pilot studies will be discussed with relevant stakeholders and further details will be presented in out
2020 Sustainability Report.

CIFOR and ICRAF

Our collaboration with CIFOR and ICRAF which began in 2018, becomes a key component in our model to implement
DMPA. We identified 4 key steps over a five-year timescale:
1. analysis context and typology of villages
2. sampling frame and piloting
3. monitoring system in place, cascading landscape down to household level
4. look for ways to upscale positive impacts wider

We are now at the second phase of implementation in two pilot villages and anticipate moving to the third stage in mid-
2020.

CIFOR is supporting APP in Riau Province, meanwhile ICRAF is supporting APP in South Sumatera Province. They are
working to improve the market access of the products from DMPA programmes. We aim to have a business plan in
place for each pilot village by June 2020, before embarking on an implementation plan. Ultimately, we see this as a
model for contributing towards Indonesia’s sustainable development, which can be replicated by others and upscaled
for maximum impact.

93
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Yayasan Konservasi
Alam Nusantara
Our work with Yayasan Konservasi Alam Nusantara is providing equipment and expecting results. The work
another example of our Multistakeholder Collaboration in improving village development plans is connected to
Programme. In September 2019 we began working with the planning processes at the district and sub-district
Yayasan Konservasi Alam Nusantara (YKAN), the main levels, creating a more holistic approach to sustainable
partner of The Nature Conservancy in Indonesia. The development. Over the long term we hope to be able to
programme was established on the Sanggau District on demonstrate improved community wellbeing, lowered
the Indonesian island of Kalimantan, focussing on 1,200 poverty rate and improved village development index (a
ha of forest within our pulpwood supplier’s concession measure used by the Government of Indonesia).
area.

Core to this programme is the ‘SIGAP’ approach, or

“We appreciate APP’s
the ‘communities inspiring actions for change’ which commitment and support in
YKAN has been developing and supporting for almost
10 years in East Kalimantan. The approach has been
this programme. By acting in
so successful that has been adopted by regional partnership, we are able enrich
Government.
the impacts of the programme.
The programme engages the local community on fire Like so many other programmes
prevention. Basic training and facilitation are provided,
with a focus on strengthening village governance
we truly see the benefit of a
(including improving village development and land use collaborative approach”
plans), improving livelihood, and strengthening forest
management. We have identified from our experience
that for long lasting change we must position changes Dr. Herlina Hartanto, Executive Director,
within the village government’s infrastructure and Yayasan Konservasi Alam Nusantara.
the communities way of life. It is not simply a case of

Earthworm Foundation
The Earthworm Foundation (formerly known as TFT, or The Forest Trust) has supported us with many aspects of
our FCP. One example is how we have worked together to integrate and align the ISFMP (see page 70) with other
documentation and KPIs to develop one clear single approach to forest management. We are now making good
progress in developing a joint roadmap on several topics, setting out how each party will contribute to the solutions.
Prioritised issues include forest conservation, labour standards rights implementations, and peatland management.
KPIs have been created for each and quarterly monitoring established.

The Earthworm Foundation have also hosted visits to a number of DMPA villages for our key customers, which have
been positively received.

As we look towards 2020, the focus will shift towards Collaborative Conservation Management (or CCM, see page 82).
Initially focussing on four villages in Riau Province we will investigate the extent to which they have used alternative
livelihoods to stop illegal logging. Earthworm Foundation will also try to develop additional communications channels
with Government departments and Corporates, with the aim of developing interest in contributing towards landscape
level initiatives.

94
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Martha Tilaar
Group
In support of SDG 1 No Poverty, SDG 5 Gender Equality and SDG 8 Decent Work and Economic Growth, we partnered
with the Martha Tilaar Group (MTG) in a programme to encourage alternative livelihoods that are free of deforestation
risk by empowering women in rural areas around APP pulpwood suppliers and mill operations. The partnership was
facilitated by Indonesia Global Compact Network and aims to train participants to identify and process valuable local
herbs which in turn enables micro-entrepreneurship and alternative livelihoods for women and their families. We also
seek to diversity income, so communities are not only dependant on traditional products such as palm oil. The target
was to reach and train 1,000 women by 2020 and aligns closely with the DMPA programme which promotes income
diversification.

We are pleased to report we have exceeded our goal, to date over 1,000 women have been provided with training,
through 80 villages across 5 Provinces. We work in collaboration with local government and community groups to
decide who to attend the training. The programme is so well known now we are receiving direct requests to participate
in the programme.

The training consists of three different parts.

• Guidance and advice on the potential of local plants (e.g. ginger or turmeric) to be processed into as a health food,
herbal drink, cosmetic ingredients and how to grow, for own consumption and sale
• Beauty training, such as technique to apply makeup or improve skills and opportunity to open a beauty salon
• Select and train high school students to enrol in the scholarship programme to become a spa therapist in the
Martha Tilaar Group’s salon and spa network.

Support does not end following the training. Ongoing mentoring is provided, particularly in selling products and
access to market. The increase in income is one of the biggest advantages to the local community, which makes the
programme appealing to others to enroll.

Women empowerment program collaborating with Martha Tilaar

95
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Belantara
Foundation
Our conservation commitments are ambitious, and we cannot achieve these alone. APP funds specific projects that
are coordinated by the Belantara Foundation and other partners to enable us to support the protection and restoration
of natural forests in Indonesia. Belantara is an implementer institution, having transitioned from a solely grant making
institution. The work of the Belantara Foundation supports the Government of Indonesia to achieve its commitment
to the protection of endangered species and forest. APP continues to provide funding to the organisation, alongside
other donors and funds raised through crowdfunding digital platforms.

Wildlife Friendly
Tourism Villages
Villages
(Main Program)
(Main Program)

Collaborative
Climate-Smart
Management Forum
Villages
on Landscape
(Supporting Program)
(Supporting Program)

96
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

In 2019 Belantara Foundation broadly focussed on eco-tourism development, wildlife conservation and fire-
free villages, with the overall goal of improving the welfare of the community through sustainable community
empowerment. Belantara identified a number of Belantara Intervention Villages to channel efforts, selected
because they are located in peat areas that are at the highest risk of conflicts with wildlife, land and forest fires. The
development of tourist villages are also part of the programme. By carefully selecting communities that have valuable
natural assets and providing the support and guidance to restore, maintain and protect these natural assets while at
the same time encouraging responsible tourism, an eco-tourism village becomes established.

Belantara has also been working in collaboration with the University of Indonesia to conduct a natural capital
assessment valuation study. In Indonesia, several activities have the potential to negatively impact ecosystem services,
such as forest degradation through illegal logging, land disputes, land use change causing degradation of structure
and unclear land boundaries. The study will consider these threats, engaging with relevant stakeholders for conserving
the area, particularly the subnational government to develop a credible and relevant natural capital assessment. Initially
the study area will be focussed on the Banyuasin and Musi Banyuasin Regency, where the Sembilang National Park is
situated. Initial findings are expected to be released in 2020.

Other key activities undertaken through Belantara during 2019 include the development of tourism villages through the
preparation of tourism grand designs and revitalization of agro-tourism management groups in Bungaraya District, Riau
Province, and ecotourism management groups in Sungsang Village, Banyuasin II District, South Sumatra Province.

97
Asia Pulp & Paper Section 1 Section 2

SECTION 6
Sustainability Report 2019 About Us Senior Statements

People
APP recognizes its responsibilities not only to its employees but also to the local
communities living in and around its operation areas. Under the Sustainability
Roadmap, we are investing in human capital management to ensure our business
continuity, as well as empowering and inclusiveness of communities as part of our
sustainable operations.

98
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

99
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

How we work – CSR

GRI: Disclosure of Management Approach

Our CSR programmes are guided by our Vision 2020 Sustainability Roadmap, which sets out a focus on community
empowerment and employee welfare. The APP CSR policy sets our commitments to ensuring that our operations and
that of our supply chains have long lasting positive impacts on the social and economic welfare of the surrounding
communities. Programme planning, implementation and monitoring and evaluation of our CSR activities aligns
with the Indonesian Corporate Performance Rating Assessment (PROPER) standard (a government environmental
evaluation programme). The Indonesian regulations UU Perseroan Terbatas No. 40 Th. 2007 provides us with the legal
framework with regards our obligations towards social responsibility programmes and alignment with the sustainable
development agenda in Indonesia. We identify the highest priority needs based on robust Social Impact Assessment
(SIA) data, in line with government development strategic planning, and the majority of programmes have a five year
plan in place. All CSR programmes are reviewed annually through stakeholder forums and surveys to gather feedback
and consider improvements.

Our CSR Programmes

GRI: Disclosure of Management Approach (Indirect economic impacts, Local communities), 203-1, 203-2, 413-1, 413-2

This section of the Report showcases a small sample of our CSR programmes at our mills and at a Group level. We also
conduct CSR programmes in collaboration with our forestry suppliers. You can read about these in the Forestry section
of this Report [page 87].

100
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Pindo Deli
Karawang
Eco tourism Community resource efficiency programme

Located in a small forest in the area around the Pindo In a collaboration between the community, local
Deli Karawang mill, the Hutan Kertas, or ‘Paper Forest’ government, and Pindo Deli Karawang, the community
is now a well-established eco-tourism hotspot. Thanks resource efficiency programme has been running since
to the support from the mill, the recreation area is now 2015. Waste materials, donated from the mill or sourced
equipped with a canopy, photo spot, music stage, toilet from within the community are repurposed or recycled,
and a seating area. Managed by a local youth group, the sale of these products generate additional income
the site hosts live music and camping events as well of between IDR 6 to 8 million per month. The mill
as hosting school visits. To promote the circular bio- provided training, equipment and facilitated networking
economy approach, waste wood and plastic provided to establish the programme and continue to support
by the mill was used to set up the location. The mill various aspects of the programme.
provided the location, technical assistance in preparing
the site as well as building and stocking a small library. The programme has received external recognition,
winning the Climate Resilience Village Program –
The site draws tourist from a wide area, who pay a fee PROKLIM award from the Ministry of Environment and
to use the facilities. The local community have free Forestry in 2019.
access to the site. 35 employees work at the site, with
a salary of between Rp 500.000 – Rp 4.000.000 per
month.

In the future the site plans to expand to further grow

the revenue stream from additional facilities, including
a parking area, motorcycle repair facility, coffee shop,
shoe shop, laundry, wedding organiser and waste
wood handicraft.

101
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Tjiwi Kimia
Farmer group empowerment Economic empowerment through entrepreneurship

Tjiwi Kimia collaborate with the farming department in Micro, Small & Medium Enterprises (MSMEs) have a
local government in the Bogem Pinggir village, near key strategic role in Indonesia’s national economy,
Tjiwi Kimia mill. Taking a multi-stakeholder approach, providing a strong source of employment and boosting
each party takes an important role in the programme. economic activity. The mill is keen to support this vital
Tjiwi Kimia provides water pumps for farming irrigation sector of the economy. Tjiwi Kimia generates waste
with technical assistance to set up the equipment, that can be recycled back into economically valuable
in addition to fertilizer. The local government takes products including wood and strapping bands. By
responsibility for operational and maintenance aspects fostering and facilitating the supply of raw materials to
of the water pumps. 112 farmers from 2 farmer group local businesses, recipients then have the potential to
benefit from the project, which covers a total of 12 Ha. process the waste and generate products which can be
The paddy field harvest doubled as a result of the sold.
programme, reducing hunger and empowering the  
farmer group through increased production and raising Two MSME groups in two villages around the company,
income levels through product sales. shoe shop, namely Kramat Temenggung and Singkalan Village.
laundry, wedding organiser and waste wood handicraft. The first group process strapping band waste to be
used as furniture products and household appliances.
While the second group process used wood pallet
Community health service waste into wood kraft. The programme is now well
underway and continues to scale up. We anticipate it to
be fully commercially operational during 2020.

In collaboration with the Citra Medika hospital, the

local community are offered training and awareness Infrastructure development
raising in good hygiene and sanitation practices. Five
villages around the mill; Sebani, Singkalan, Kramat
Temenggung, Mlirip Rowo, Kedung Bocok are all
offered transportation, provided by local government, To improve community infrastructure, Tjiwi Kimia
to bring them to the medical facilities based on the donated over 700,000 paving slabs to improve the
mill site. Two doctors, two nurses and two pharmacists roads in and around local schools and government
support each training activity, in 2019 about 90 agencies. The paving stone project was an employee
community members took part advantage of this innovation, produced by utilising bottom ash waste
support. from the power plant process as a substitute material.
By replacing poorly surfaced roads prone to becoming
muddy, the paving slabs greatly improve access and
transport communications, proving economic and social
benefits.

102
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Lontar Papyrus
Agriculture and farming

The local government launched an initiative in 2011 to increase cattle population in the area. However, there are
bottlenecks that hinders the success of this program. The main challenge is the insufficient and unreliable supply of
liquid nitrogen that is key in storing the semen needed to artificial insemination. In response, Lontar Papyrus has been
providing a supply of liquid nitrogen since 2012. In 2019, the mill produced and donated more than 6,400 liters of liquid
nitrogen to the district government to support the programme. As a result of the donation, cattle stock has improved
almost 40% from an average of 915 new calves born to an average of more than 1,270 calves following the donation.

In a separate project the mill supported Tani Makmur Farmers Group with training and provided equipment to improve
the quality of compost produced. The mill facilitated discussions between the group and one of APP’s forestry
suppliers, which culminated with a commercial agreement for compost purchase. Overall production of composts
increased from 300 tons to more than 4,300 tons in a year, generating additional income of IDR 340 million. The mill
also provides zero interest loans to financially support building improved storage facilities and purchasing trucks for
logistic purposes.

Improving the agriculture sector is another key priority of the local government. To support the government achieving
this objective, Lontar Papyrus provided 5 hectares of land which formed a centre for community empowerment
activities in an area adjacent to the mill. The land is donated to two farmers groups who developed the area into a
watermelon plantation, orange orchard, as well as guava and papaya. In addition to the fruit trees they also use the
land to breed cattle. The mill also provided free accommodation for the farmer group to use, equipment, and zero
interest loan for the initial capital investment.

Indah Kiat Tangerang

Community economic empowerment Mangrove conservation in Tangerang

The mill supported the training of 40 farmers in In collaboration with local government and a farmer
urban farming (hydroponics) across 6 villages. The group, an eco-tourism project was established in the
collaboration involved local collaboration involved local Tangerang Mangrove Centre (TMC) area to conserve
government, community and hydroponic consultants, coastal Mangrove, vital for coastal protection and
with the mill providing the materials for urban farming, biodiversity conservation. The mill provided the
monitoring, technical assistance and covering the mangrove seed and the government provided the land,
cost of the hydroponic consultant. We also supported constructed buildings and infrastructure as well as
marketing activities to improve product sales in local provided technical assistance to the farmer group who
markets and communities. The project has a great provide seedlings, planting and maintenance of the
potential for growth, in the future we plan to scale up mangrove. A total of 40,000 mangroves were planted
the project to other villages. in Tangerang North Coastal area and the area has seen
positive economic benefits for the community through
increased tourism which stimulates economic income
and demand for small business and community-owned
shops.

103
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Ekamas Fortuna
Community Health Service Waste bank

Addressing stunted growth is one of Indonesia’s Ekamas Fortuna supported the Gampingan Bersinar
development priorities and Posyandu⁽5⁾ plays a critical Waste Bank by providing funding to improve the
role in this effort. Together with Wava Husada Hospital, infrastructure of the Waste Bank. Established in 2016,
Ekamas Fortuna organized a series of trainings to the facility only collected household waste from one
improve the Posyandu teams’ skill, who are on the front village. With the support from the mill the facility is
line in assisting pregnant mothers and infants. One of serving more than 250 households across two village.
the training courses offered in 2019 was Baby Massage, Now employing ten people, the facility also has the
chosen to optimise baby growth through specialised capacity to collect and process recyclable waste too.
massage techniques. 39 cadres took part in the training
and they also received a set of training materials and The programme has received external recognition,
equipment. winning the Climate Resilience Village Program –
PROKLIM award from the Ministry of Environment and
In a separate progamme, Ekamas Fortuna collaborated Forestry in 2019.
with the Wava Husada Hospital, providing awareness
raising activities, medical checkups and medicines to In a separate waste project, as part of its commitment
the local community. In 2019 this initiative served more to improve the environmental health in the area,
than 1,200 people across 4 villages. The health workers Ekamas Fortuna invested in infrastructure and facilities
also conducted home visit for elderly group who could to turn livestock waste into energy. By the end of 2019,
not travel to the hospital to access the services. the mill had installed 4 biogas production units of
biogas facilities which were donated to local farmers.
The initiative also reduces the carbon emission from
the local cattle industry.

OKI
Educational development

In a collaborative partnership between OKI mill, local government and the Simpang Heran village, educational facilities
were improved for the local community. The mill supported the development of the community center (Rumah Pintar),
establishing IT resources and a library, the facility also includes a play area forchildren and a meeting room. Between
20 and 30 children use the community centre every day for studying. The centre also hosts dancing and English
classes training for children. The internet access is also used for the final examination at senior high school.

{5} Posyandu: an integrated service center for pregnant mothers, infants, and children under 5.

104
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Indah Kiat Serang

Improving living conditions for the community Economic empowerment through upcycling  

Access to clean water is still a challenge for the Cipta Handicraft Innovation Product (CHIP) was set up
community surrounding the mill, especially during in 2017. The mill spotted the opportunity to utilise waste
the dry season. In 2019 the mill helped build 11 wells generated on site by using discarded wood waste
and related infrastructure such as water tanks and from packaging materials to make creative products
pumps. The clean water is used to supply the latrines such as souvenirs. CHIP employs 15 workers, and
to improve the sanitation in the area, reducing risks of since receiving the support from the mill, sales have
various sanitation-related illnesses such as diarrhoea increased by 80%, generating much needed additional
and typhoid for more than 1,000 households. The mill income for members of local community. The team
also provided free clean water from PDAM (State- were proud to receive an order from the Ministry of
Owned Clean Water Provider) to four sub-districts that Environment and Forestry for personalised gifts for
suffer from drought during the dry season. more than 300 high-level delegates across the world
during the international environmental conference.
Within the local community in the area surrounding the In 2019, the mill supported CHIP to construct a
mill, the district government estimates 700 houses are showroom from repurposed wood to showcase their
considered uninhabitable. To address this issue, the products. CHIP also provides an educational facility and
mill renovated 10 houses for the communities living workshops for students looking to learn practical skills.
under the poverty line to bring their accommodation
up to an acceptable standard. The programme is The mill also provides training for a local youth group
part of a multistakeholder collaboration, with many to make simple furniture such as desks and chairs from
other contributors working towards the same goal of the discarded wood waste. In 2019 they made 410
improving living conditions for the community. The sets of furniture and donated these to local schools,
initiative is a collaboration between the district benefitting more than 800 students.
government, military, and Department of Social Affairs.

Indah Kiat
Mangrove conservation in Serang

In the past several years the Serang north coastal shore

has been significantly eroded, with further degradation
Perawang
forecasted. The mill provided 20,000 mangrove
seedlings, covering a total of 2 hectares across three Economic Empowerment through Entrepreneurship
sub-districts. By helping to secure the shoreline, Indah
Kiat Serang also support securing the livelihood and
community infrastructure of the local community.
In collaboration with Honda Motorcycle Pekanbaru, the
mill supported the training of 10 youths in motorcycle
maintenance. Following completion of the training, 8
of them went on to full time employment with several
companies while 2 established their own motorcycle
maintenance workshop. Indah Kiat Perawang provided
soft loans and help in building and equipping a
workshop. Overall monthly income for participants
in the program is around IDR 3 millions. Future plans
include increasing the workshop size to provide the
facilities to maintain the mill’s motorcycles fleet.

105
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Group level CSR

Projects
Case Study: Community Based Total Sanitation We also provide assistance to cadres for the
(STBM) improvement for the community sanitation. They
become the extension to support the acceleration of
The Indonesian Speak Foundation (SPEAK) works access to proper sanitation for the community itself.
with government and communities to enable access
to water and sanitation for all through collaborative In the village of Kutanegara, Karawang Regency,
community focussed programmes. APP work in a approximately 300 homes did not have basic sanitation
collaboration with SPEAK on several sanitation projects facilities, which creates a risk to both the environment
through a number of our flagship CSR programmes. and health. We worked with local stakeholders,
representing NGO’s, local government and the private
Sanitation remains a challenge in Indonesia, even in sector to construct water sanitation facilities and
urban areas. Only 63% of Jakarta has proper sanitation provide training and awareness raising activities.
infrastructure; over 5,000 neighbourhoods need
support to develop healthy and proper sanitation. In We wanted to change behaviour and improve health
our Jakarta based programmes we focussed on two for the community, but we also saw the opportunity
areas as an initial pilot; Tebet Timur and Padamangan to boost the villages creative economy. The demand
Barat. In both projects a support team is established, for toilet production has stimulated economic growth,
study visits undertaken to identify areas requiring most as local businesses responded to the demand. The
improvement, then training is provided on sanitation community youth become active in campaigning
practices, wastewater infrastructure and sanitation care through art to support Community Based Total
for communities. Sanitation, spreading the message to neighbouring
communities too.
A wastewater treatment system based on communal
biofilter technology was built in Tebet Timur. The Women empowerment groups formed community hubs,
system consists of 6 tanks for processing water and the called ‘Buteka’ who conduct developed businesses
output is suitable for domestic household use. Other based on recycling activities, turning waste into
neighbouring communities were supported in building decorative leaves or flowers.
septic tanks and mini treatment facilities too. In total, we
improved the sanitation facilities for over 400 families. As we look towards the future, we want to encourage
others to participate in similar initiatives, , using our pilot
In Pademangan Barat, Jakarta Region, the community projects as templates for further sanitation projects so
chose a mini biofilter cylinder waste water treatment that other communities can also benefit from the huge
system comprising 3 tanks for the Child Friendly improvement the programmes bring to their health and
Integrated Public Space (known as RPTRA, a public their surrounding environments.
space provided for the local community equipped
with games, libraries, and other public facilities), and
developing their own family latrines.

106
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Promoting Water Security and Clean Water for Following the success of a pilot project to improve
Indonesia water access and its quality in Pari Island, the IWMWG
is looking to initiate new water projects in UNESCO
Through international and local collaborations, APP is Biosphere Reserves at Berbak Sembilang, Komodo
contributing to Indonesia’s advance towards a cleaner and Wakatobi. The IWMWG introduced better water
and more sustainable water future. storage and sanitation infrastructure, and also provided
training to the people of Pari Island to help them
Water is an essential resource for life. The global better understand the importance of water and waste
demand for water has been increasing at a rate of management.
about 1% per year over the past decades as a function
of population growth, economic development and In Sungsang village in Berbak Sembilang, Asia
changing consumption patterns, and it will continue to Pulp & Paper (APP) Sinar Mas and the Belantara
grow significantly over the foreseeable future. Despite Foundation have already begun work, delivering two
this, access to clean water and proper sanitation water treatment machines to produce clean water,
remains a challenge in many communities around and setting up a waste collection centre with special
the globe. Even the islands of Indonesia, surrounded chopping machines to cut up plastic waste to be sold
by water on all sides, face looming water security for recycling.
challenges. It is estimated that 30 million Indonesians
have no access to clean water, while another 51 APP and the IWMWG are also exploring alternative
million lack adequate sanitation facilities. Both rural technologies, such as biopores, to help mitigate
and urban communities also face further water-related climate-related water issues. Biopores help alleviate
complications, including floods and droughts that are floodwater damage by helping funnel excess surface
worsened by climate change. water back into the ground through deep holes drilled
into the earth. As a result, biopores both help enhance
As chair of the Indonesia Water Mandate Working natural water cycle processes and preserve needed
Group (IWMWG), a special organization under the water and land resources for future use.
United Nations Indonesia Global Compact Network,
APP has been working to address these water Through these international and local collaborations,
challenges. APP is helping Indonesia press on toward a clean and
sustainable water future, one project at a time.

107
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Our People
GRI: Disclosure of Management Approach (People, Labour/management relations, Diversity and equal opportunities),
102-14

At APP, we believe business success comes from creating an environment where our employees can thrive. We are
committed to providing a collaborative work environment that recognizes and rewards success and where innovation
is encouraged.

Our Employee Welfare Policy sets out our commitments to meet the requirement of ILO Standards on employee safety,
well-being, human rights, labor rights, skills, and data protection. We strive to position APP as a dynamic company
with strong employment benefits that extend past salary, besides health insurance, pension and the ability to earn an
additional bonus through various awards and recognition schemes we have in place. All our permanent employees
receive career development reviews at least annually.

We recognize the challenge of attracting and retaining young talent, so we work actively to make APP an attractive
employer. With a loyal and long-serving workforce, the turnover of management is low. We have also stepped up our
work to ensure that younger team members are recognized and that they understand that they have a prosperous
future at APP.

108
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Our Employees
GRI: 102-8, 102-41, 202-1, 202-2, 401-2, 402-1, 403-1, 403-4, 404-3, 405-2, 406-1

Management composition Non-Management composition

305 2,393
(15%) (9%)

1,714 25,464
(85%) (91%)

Male Female

At the end of 2019 we employed a total of 29,876⁽6⁾ people. While this marked a small decrease (3%) compared to the
previous year for mills employee, this was due to natural fluctuations in employment levels and not as a result of any
employee reduction programmes.

Amongst our mills, gender diversity decreased slightly, 7% of our workforce were female, a change from 8% in 2019.
Amongst mill management, 6% are female, with no change from 2018. In line with the pulp and paper sector in general,
gender diversity is a challenge for APP, as we operate in a sector that has traditionally employed a high proportion of
males. Amongst our head office roles, 38% of our workforce are female.

{6} In 2019 we included Head Office roles in our employee data

109
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

We have committed to Increase the number of women in senior management positions to 30% by 2030, as part of our
Vision 2030 Sustainability Roadmap commitments.

All mills provide equal pay and benefits, with a salary equal to or greater than the locally determined minimum wage,
which varies by location, irrespective of gender. Benefits include paid annual leave, maternal and paternal parental
leave, sabbatical leave, health insurance and a company pension plan. Certain benefits are provided to permanent
employees only, but this varies by each mill, in line with local regulations.

Maternity and paternity leave is provided to all employees, following the local government guidance at each location.
Parental leave data is provided in the social data section of the Report. Our Integrated Call Centre (see page 40)
provides the mechanism to report discrimination and other concerns anonymously. Reporting channels indicated no
confirmed cases of discrimination in 2019.

In 2019 10% of our employees were hired locally. Our policy is to prioritise hire local people, unless the specific skills
for the role are not available. All our permanent employees career development reviews, annually as a minimum. In the
event of operational changes, APP allows a minimum of seven days’ notice, as per Government of Indonesia regulation.
Employees are free to select and join a union of their choice, 99% of employees are covered by collective bargaining
agreements.

All employees are free to associate with their chosen labor union. Our mills encourage active and collaborative
communications, facilitating discussions between the employees and labor unions on a regular basis, ensuring issues
raised are dealt with and the appropriate follow up and action if necessary. The most regular topics are issues related
to salary, scholarships, PPE and leave entitlement.

2019 2018 2017

Total 6 6 5
New employee Male 6 6 5
hire rate
Female 7 5 2

Total % 11 6 13
Turnover rate
Male 11 7 10

Female 22 25 37

Senior 9 6 7
Management
hired locally

GRI: 401-1

110
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Training
GRI: Disclosure of Management Approach (Training), 404-1, 404-2

To build and maintain a world class workforce, we employees we have so far passed 174 through the
invest heavily in training and competency development courses. The aim was to improve productivity, as
for our employees. Developing broad, technical skills, more employees became skilled in new areas of
management techniques and leadership qualities mill operations. By broadening employee’s skills we
requires a dedicated companywide training effort. become more flexible, improve business contingency
APP’s training and development is managed at group for critical tasks and also found that employee
level through the APP Academy, with each mills confidence and satisfaction grew too.
developing their own supplementary programmes
to meet their own needs. A separate leadership A dedicated programme is in place for employees
programmes exist from supervisor to divisional approaching the end of their working careers. We run
management level, ensuring our leaders are equipped courses that include farming techniques, entrepreneur
with the skills and competency to lead and succeed. In training, husbandry, handicrafts and home industries,
2019 we conducted an average of 26 hours of training designed to provide sources of income once their
per employee. work at APP comes to an end. We also provide life
skills training, for example in financial planning.
At Lontar Papyrus we focussed on diversifying our Where possible, we embed these programmes within
employee’s skillsets through a number of dedicated established CSR projects at our mills.
training programmes through 2019. Targeting 600

Human Rights
GRI: Disclosure of Management Approach (Human Rights Assessment), 412-1, 412-2, 412-3

Through audits and risk assessments conducted across all our mills, APP recognises that our operations are exposed
to human rights related risks. These risks are present both at our mills and through the operations and activities of
our suppliers. The way we manage these risks is informed by the United Nation’s Guiding Principles on Business
and Human Rights and the International Labour Organisation (ILO). Our Forest Conservation Policy aims to deliver
community development, transparent conflict resolution and Free, Prior and Informed Consent (FPIC). We incorporate
resolution action planning into professional performance indicators of site managers. In 2019 we conducted 26,860
hours of human rights training amongst our employees., with participation covering 90% of our employees.

APP Policies explain our commitments, procedures, and expectations on human rights. This includes policies that all
suppliers must comply :
• APP Corporate Social Responsibility Policy sets out our overall commitment to human rights
• APP Employee Welfare Policy sets out how we respect and protect our employees’ human rights, as well as our
responsibility towards contractors
• APP Responsible Fibre Procurement & Processing Policy explains our commitment on wood legality and
compliance by our fibre suppliers
• APP Forest Conservation Policy includes our grievance mechanisms through which stakeholders can raise
concerns related to our fibre supply

111
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Scholarship and Talent

retention programmes
At APP we see it as our social commitment to support At Tjiwi Kimia we aim to award at least three ITSB
educational development in our local communities. scholarships each year. The mill CSR team work closely
We also recognise that by supporting our employee’s with several local schools and involve the ITSB in the
families though education we demonstrate a long-term selection process too. A group of students are selected
commitment to our workforce. Strategic support for for the final exam, with the highest scores receiving the
scholarships and talent retention programmes also help scholarship award. Vocational training is also provided
to secure the long term sustainability our workforce, in the form of 3 months industrial apprenticeships. By
bringing in the next generation of skilled employees participating in this program students are expected
into our organisation. to have more abilities and of course become trained
to face the workforce when they graduate later.
Three scholarship programmes are currently ongoing This program is attended by more than 50 students
at Indah Kiat Serang. Scholarships are awarded to from vocational high schools each year who come
employees' children who have passed administrative, from several vocational schools. Roles include
academic, psychological tests, and interviews Office Administration, Animation and Multimedia and
conducted by Mill and HQ. We have three programmes Automotive Engineering.
in place, the Dr Anne C. Cleveland scholarship with 7
students, the ITSB Scholarship with 1 student and the The Skilled Operator Training programme is aimed
Tali Kasih programme (for the children of employees at graduates of vocational or high school equivalent
who have passed away) with 116 students.The latter can who have graduated from school but been unable to
be applied at any level of education, from kindergarten find employment. Under the guidance of a dedicated
through to university. All scholarships provide mentor, the participants are given 6 months of On Job
financial support through education and culminate Training. After successful completion the students get
in employment at the mill and we hope a long and the opportunity to be recruited as employees at Tjiwi
successful career at APP. Kimia if they pass the competency test. And during
2019, 90% of training participants have successfully
passed and become permanent APP employees.

Health and Safety

GRI: 403-1, 403-2

We are committed to ensuring every employee and committees are in place at all mill sites, representing
contractor returns home safe, every day. the whole workforce and providing one mechanism
for all employees to communicate concerns, provide
Each of our mills manages health and safety at a local input into safety management systems and for safety
level, supported by a dedicated team of experts at messages to be communicated. We don’t currently
Group level. The Mill Head is directly accountable to have employees whose work, or workplace involves in
APP’s Chairman for health and safety performance occupational activities which have a high incidence or
at each mill. All mills except for OKI and Univenus high risk of specific diseases.
Perawang, have OHSAS 18001 certification for
occupational health and safety, and five mills have Safety Performance Index (SPI) became fully
moved to aligning with the new ISO 45001 in 2019. established in 2019, with full support from APP’s
All mills have SMK3, the Indonesia national standard Chairman. The SPI is designed to systematically
for health and safety in the workplace. Joint safety measure and monitor mill occupational health and

112
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

safety performance, while also considering precautionary measures, preventive measures and near misses. The index
covers serious injury and fatality rates, equipment risk inspection frequency, permit to work compliance, behaviours-
based safety compliance and mill walk inspection frequency. The approach centres around safety being a personal
responsibility and SPI scores are part of each employees personal KPIs.

Process Safety Management was a key programme for APP in 2019. We conducted a pilot at three mills and will
expand to others in the coming years. It covered 14 elements of process safety, including hazard analysis, operating
procedures, training, contractor management, work safety permits, incident investigation and emergency planning and
response. It sits alongside our Safety Performance Index as an important tool in monitoring performance.

We also conducted an OHSMS Performance Audit in 2019. We reviewed strategy and leadership, planning, level of
support available, as well as operational and performance aspects too. The results enabled us to target improvements
in process safety management systems, contractor management, permit to work systems, emergency response,
behavioural based safety and compliance with various regulations.

Performance in 2019

We report no significant change in performance against key Health and Safety metrics in 2019, compared to previous
years. For performance at a mill level, please refer to the social data tables on page 123 of this report. We failed to
meet our Vision 2020 target of zero fatalities, each incident and our response is detailed below.

113
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Incidents
We are saddened to report 11 fatalities in 2019, these refresher training. All employees involved in river or
involved 6 employees and 5 contractors. In addition to sea activities were checked to ensure their Sea Survival
the improvement actions identified from each and every certificates are up to date.
case, a fatality prevention program is part of the Safety
Performance Index (see page 113). We involve the mill In a third incident a contractor was fatally injured after
leadership team in inspections and risks assessments being struck by a truck. The incident prompted revised
as part of the response, demonstrating to all employees driver safety training, identifying, and implementing
and contractors that our focus on safety improvement is clear pedestrian zones within the mill site, inspections
supported from senior management. for vehicle safety compliance and increasing speed
checks for all vehicles. We also reiterated through mill
At Lontar Papyrus an employee fell from a walkway. wide communications the mandatory requirement for all
Following the incident, the mill inspected all walkways motorcycle riders to wear helmets at all times.
for corrosion and other unsafe conditions. Where At Indah Kiat Serang an employee was fatally injured
required, additional warning signs and access after becoming trapped between two winder drums on
restrictions were put in place. We also installed the paper machine. The winding process was updated
permanent lifelines to provide anchoring for body following the incident to ensure activities are always
harnesses and reviewed all Standard Operating supervised by a properly trained employee. Additional
Procedures to ensure adequate control measures are in guarding was installed and signing improved. Finally,
place for all activities involving working from height. Standard Operating Procedures were revised, and
refresher training provided to all employees in the
In a second incident a contractor was hit by a falling effected section of the mill.
concrete wall, after entering an area without the
required permission, following demolition works. In At Pindo Deli Karawang a contractor was struck by a
response we conducted a review of all cast designs paper roll as it was moved by crane. After the incident
to ensure that the designs are in accordance with civil was investigated, we installed a safety fence to prevent
engineering principles. We assigned a team who are employees accessing high risk areas without the
responsible for conducting supervision of any activities necessary process stops in place. We also installed
in high risk zones and introduced audits and periodic additional warning alarms to indicate equipment is
inspections to ensure lifting procedures are conducted moving or about to move. Training was improved and a
as per the relevant Standard Operating Procedure. We revised competency standard introduced.
appointed and assigned a dedicated team of Riggers,
certified according to the relevant regulations. Because At Indah Kiat Perawang an employee was killed
the incident involved a contractor we reinforced the following a fall from height whilst conducting
procedure that all contractors working in the mil must maintenance on air fan ducting. In response we
prepare a HSE plan in accordance with the exact scope installed a barricade and improved safety signs in
of work being undertaken, and safety briefings are hazardous open work zones We improved safety
conducted before each shift begins. equipment and revised the risk assessment for this
particular activity. We provided additional training
At OKI mill, an employee was fatally injured whilst on our Working at Height Procedure and introduced
performing cleaning on the tissue machine. Following periodic inspection and audits too. We also developed
the incident lockout/tagout (LOTO) procedures were Lone Worker Procedures and disseminate information
introduced for specific tasks, including cleaning. to all employees. Finally, we carried out training on
Additional physical barriers were also put in place, the correct procedure to rescue victims from confined
with improved guarding and revised engineering spaces to the emergency response team.
procedures. Training was also provided to all
employees involved in cleaning activities. In a second incident at the mill, an employee was
drowned after becoming trapped in a excavator vehicle.
In a separate incident at the mill, a contractor drowned In response we improved under water rescue training
after slipping and falling between two boats. In and revised the safety induction for high risk activities.
response we improved boat access to reduce the risk We worked to ensure pre job safety briefings included
of falling during transfer at the pickup points. Training specific discussion and consideration for activities
on lifejacket use was repeated to all employees and involving water and action plans for ‘person overboard’
will be conducted every month as part of an ongoing are discussed and rehearsed.

114
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Safety Improvement
Programme
Indah Kiat Serang ran several safety improvements in 2019. We worked hard to improve our risk assessment process,
enhancing our employee’s ability to identify hazards and develop the appropriate response and Standard Operating
Procedures. A Safety Ambassador programme was updated to involve the victims of workplace accidents, sharing
their experiences, and learning with a wider team to drive awareness and encourage a more collaborative approach to
health and safety. We also developed a ‘Tarpaulin Centre’, a dedicated area with proper fall protection for transported
goods to be properly secured before leaving the mill. Inspection rate was increased too, with walkways, railings,
ladders, doors and gates all closely inspected for defaults or areas of risk.

Contractors Safety
Management
We have a responsibility to ensure our third-party contractors have a safe working environment. Contractor safety
is an integral part of our overall approach to health and safety management, which is now in place across all mills.
Before any contractual arrangement begins, an in depth assessment for each contractor takes place. Once we are
comfortable that the contractor has the correct approach to safety that aligns with our principles we then consider
the leadership and behavioural aspects of safety. Where opportunities to improve are identified we work with our
contractors to help them address these gaps. We introduced the SPI for contractors in 2019 too, expanding the index
from our employees only, covering – job safety analysis, behaviour based safety, inspections and corrective actions,
safety inductions and meetings. In 2019 we conduced audits at six of our mills.

115
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

About This Report

GRI: 102-51, 102-56

This report continues Asia Pulp & Paper (APP) Sinar Mas long-term commitment to annual sustainability reporting. Our
most recent report, the 2018 Sustainability Report, was published in October 2019.

Asia Pulp & Paper’s Sustainability Report 2019, published in November 2020, communicates a summary of our
approach and performance against our Sustainability Roadmap: Vision 2020 and, within the roadmap, our Forest
Conservation Policy (FCP) commitments. We also introduce our future sustainability strategy, Vision 2030, and we will
report progress against our updated commitments in our 2020 Report, based on performance to date.

The contents of this report should be read alongside the information provided in the sustainability section of the APP
website. Relevant links are provided throughout this report.

This report serves as our Communication on Progress (COP) for the United Nations Global Compact (UNGC) and
coverage of activities related to the ways in which we contribute towards the UN Sustainable Development Goals
(SDGs) and activities to support the UN Global Compact's CEO Water Mandate.

This report has been externally assured to the internationally recognised AA1000(AS) standard for assurance. Our
intention is to continue to seek external assurance for future sustainability reports and respond as appropriate to
any areas of improvement identified in the assurance statements. The assurance statement covering this report is
presented on page 145.

Defining Report Content

The content and quality of this report is guided by the latest Global Reporting Initiative Standards (GRI Standards)
and has been prepared in accordance with GRI Standards – Core option. We apply the guidelines and associated
indicators to ensure we report against our relevant economic, social and environmental impacts and mitigation
activities.

116
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Report scope and boundary

GRI: 102-1, 102-5, 102-10, 102-47, 102-48, 102-49, 102-50, 102-52, 102-53, 102-54, 102-55

Asia Pulp & Paper (APP) Sinar Mas is a brand name under which our products are sold. The scope of the report
covers APP Sinar Mas pulp and paper manufacturing operations in Indonesia. There were no significant changes to
the organisation’s size, structure, ownership, or supply chain during the reporting period. We have restated carbon
footprint emission data (scope 1 and scope 2) for 2017 and 2018 due to a change in the methodology we apply to
energy allocation between our mills located in Perawang. This change does not impact our overall total carbon
emission.

Unless stated otherwise, information in this report relates to the period 1 January 2019 to 31 December 2019 (“the
reporting period”). Continuing the approach first applied in 2016, we report mill production capacity based on quoted
capacity in relevant legal documentation (business permits).

The following operational facilities are within scope of this report.

Legal entity

PT Ekamas Fortuna Ekamas Fortuna

PT Indah Kiat Pulp & Paper Tbk Indah Kiat Perawang
Indah Kiat Serang
Indah Kiat Tangerang
PT Lontar Papyrus Pulp and Paper Industry Lontar Papyrus
PT OKI Pulp & Paper Mills OKI
PT Pabrik Kertas Tjiwi Kimia Tbk Tjiwi Kimia
PT Pindo Deli Pulp and Paper Mills Pindo Deli Karawang (mill 1, 2 and 3)
Pindo Deli Perawang
PT The Univenus Univenus Perawang

{7} For the purpose of GRI definitions, each mill is a ‘significant location of operation’.

117
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

On page 37 we set out our material topics, which relates to the following GRI disclosures. For each, we state the topic
boundary. There are no significant changes to this list from our previous Sustainability Report.

Topic boundary

GRI topic Suppliers APP Customers

201
202
203
205
206
301
302
303
304
305
306
307
308
401
402
403
404
405
406
410
411
412
413
414
417

118
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

We began reporting fully on our OKI mill in our Sustainability Report 2017. We exclude OKI mill from our baseline
calculations (2012 for all commitments, except for water commitments which use 2013) to avoid misrepresenting our
performance during 2017, 2018 and 2019.

Sites which do not manufacture pulp or paper and head office are excluded from the report. APP will consider
reporting on these functions in future reports. Due to organisational structure and differing stakeholder priorities,
APP China publishes a separate Sustainability Report which can be viewed here http://www.app.com.cn/sustain/
report.htm.

One of the highest priority issues for our stakeholders is the activities of APP pulpwood suppliers. Our forestry
management team supports APP pulpwood suppliers. The majority of pulpwood is provided by ‘continuous suppliers’
which have a contract to supply to APP on an ongoing basis. Occasionally we also use ‘one-time suppliers’, on a per-
contract basis. All our suppliers, both continuous and one-time, must first be approved through our Supplier Evaluation
and Risk Assessment (SERA) process. 

Our continuous pulpwood suppliers currently comprise 33 pulpwood supplier companies who manage 38 concessions
(forest management units based on government forest concession licenses). In addition, there are three Community
Forest suppliers, and a small number of one-time suppliers, also supported by our forestry management team.
Despite not being under APP’s direct ownership (although we have shared ownership in nine of our continuous
suppliers), we have a responsibility to manage and monitor their activities, therefore details of our approach are
included in the scope of this report for the benefit of communicating these issues to our stakeholders transparently.

119
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Group Environmental Data Table

Unit 2019 2018 2017

289,266,411 277,027,035 279,846,791

Water
% 14% 15% 14%

211,218,625 225,303,756 227,403,254

511,844 518,696 513,988

175,889 251,899 283,392

442,819 486,892 380,755

10,076 8,522 3,563

Waste tonnes 1,140,629 1,214,416 1,181,697

1,793 0 3

242,219 240,731 228,313

7,762 910 5,588

16,923 50,224 41,668

262,496 291,865 275,572

Others tonnes 0.79 0.88 1.06

28,379,532 30,210,689 31,171,296

Environmental
expenditure US$
10,208,559 6,272,320 10,275,563

120
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Mill Environmental Data Table

Indah Kiat Perawang Indah Kiat Serang Indah Kiat Tangerang

Environmental Parameters
2019 2018 2017 2019 2018 2017 2019 2018 2017

pH 8.00 7.75 7.58 7.92 7.89 7.81 7.55 7.33 7.40

TSS 40.08 63.08 69.50 32.97 31.64 24.72 5.82 5.56 6.08
Water 46.42 41.08 38.22 7.91 13.89
BOD mg/l 46.67 51.08 32.97 11.15
Emissions
COD 205.17 230.33 230.08 167.83 150.19 135.36 34.45 65.67 40.72

AOX 0.97 2.53 4.00 NA NA NA NA NA NA

NO2 210.20 202.96 151.81 460.00 369.11 171.63 150.25 203.13 165.25

SO2 217.83 173.81 193.16 260.13 219.22 9.13 19.25 32.50 27.83

ClO2 1.46 35.99 29.60 NA NA NA NA NA NA

HCl 0.15 3.11 2.61 NA NA NA NA NA NA

Air Emissions mg/N
m3 0.22 5.41 5.28 NA NA NA NA NA NA
Cl2

Opacity < 20 < 20 < 20 < 20 < 20 < 20 < 20 < 20 < 20

TRS 1.09 8.59 10.08 NA NA NA NA NA NA

Total Particulate 57.64 101.77 100.25 24.38 48.78 15.25 47.26 60.58 65.58

NO2 0.91 0.08 0.98 2.71 2.23 1.04 0.28 2.76 5.13
Air Emissions
kg/t
Load
SO2 0.89 1.21 1.76 1.48 1.29 0.83 0.03 0.40 0.82

Distance to protected Halimun Mountain National Park Rawa Danau Tukung Gede
km Tesso Nilo National Park (50)
area (40) Conservation Area (20)
Others
Local water source &
Siak River Ciujung River Cisadane River
discharge

Lontar Papyrus Pindo Deli Karawang Pindo Deli Perawang

Environmental Parameters
2019 2018 2017 2019 2018 2017 2019 2018 2017

pH 7.00 6.94 7.00 7.71 7.56 7.43

TSS 25.67 38.00 32.33 64.48 33.99 19.69

Water 81.33 21.17
BOD mg/l 56.33 69.50 63.99 16.19
Emissions
COD 127.00 232.08 181.00 149.25 62.89 76.06

AOX 3.67 3.33 3.27 0.10 0.08 0.17

NO2 134.68 72.99 87.49 236.30 227.57 81.16

SO2 245.62 176.15 172.32 72.18 36.00 35.29

Discharge via
ClO2 1.58 2.17 8.74 NA NA NA Indah Kiat Perawang

HCl 1.21 0.21 1.61 NA NA 0.06

Air Emissions mg/N
m3 0.71 1.23 3.54 NA NA NA
Cl2

Opacity < 20 < 20 < 20 < 20 < 20 < 20

TRS 9.34 8.23 7.63 NA NA NA

Total Particulate 141.31 150.89 130.77 40.49 41.33 75.61

NO2 4.39 1.90 2.41 4.95 3.58 4.76

Air Emissions
kg/t
Load 5.17 1.29
SO2 1.11 1.92 1.82 0.78

Distance to protected Bukit Tigapuluh National Park Natural Reserve of Tangkuban Tesso Nilo National Park (50)
km
area (30) Perahu Mountain (40)
Others
Local water source &
Pengabuan River Citarum River Siak River
discharge

121
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Tjiwi Kimia Univenus Perawang Ekamas Fortuna OKI

Environmental Parameters
2019 2018 2017 2019 2018 2017 2019 2018 2017 2019 2018 2017

pH 7.42 7.36 7.42 7.45 7.33 7.50 7.82 7.42 7.15

TSS 19.00 13.55 16.92 8.27 18.00 19.17 39.00 38.67 24.40
Water BOD mg/l 28.83 14.82 10.42 32.27 27.17 20.67 51.55 51.25 101.23
Emissions
COD 59.25 36.45 32.50 98.00 75.50 70.58 198.00 210.08 219.67

AOX 0.00 0.00 0.00 NA NA NA 3.00 4.00 3.67

NO2 199.06 72.27 153.67 143.50 53.03 35.00 322.00 379.50 105.00

SO2 39.20 156.42 146.83 51.50 206.61 234.80 186.25 53.00 8.53

ClO2 NA NA NA NA NA NA 0.00 72.27 43.81

Discharge via Indah
HCl 1.32 1.34 0.58 Kiat Perawang NA NA NA 0.50 1.25 0.80

Air Emissions Cl2 mg/Nm3 0.00 0.00 0.31 NA NA NA 1.00 1.60 0.41

Opacity < 20 < 20 < 20 < 20 < 20 < 20 < 20 < 20 < 20

TRS NA NA NA NA NA NA 1.67 6.50 7.72

Total
12.13 29.83 14.50 22.70 110.33 128.00 21.38 21.25 17.69
Particulate

Air Emissions NO2 8.20 1.41 0.07 4.51 0.96 1.01 2.39 1.11 0.18
kg/t
Load
SO2 1.84 0.37 9.98 1.60 5.27 8.64 1.03 0.96 0.02
Distance
to Bromo Tengger Semeru Tesso Nilo National Park Pulau Sempu Nature Reserve Berbak Sembiland
km
protected National Park (80) (50) (30) National Park
Others area
Local
water
Brantas River Siak River Lesti River Baung River
source &
discharge

122
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Mill Social Data Table

123
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

124
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

125
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

GRI Index

126
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

127
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

128
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

129
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

130
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

131
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

132
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

133
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

UNGC Index

UNGC Communications on Progress Section

Human Rights

People

Labour

Environment
Strategy

Anti-Corruption

134
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

UNGC CEO Water Mandate Section

Conduct a comprehensive water-use assessment to understand the

extent to which the company uses water in the direct production of
goods and services.
Set targets for our operations related to water conservation and
Direct waste-water treatment, framed in a corporate cleaner production
Operations and consumption strategy.
Seek to invest in and use new technologies to achieve these goals.
Raise awareness of water sustainability within corporate culture.
Include water sustainability considerations in business
decision-making – e.g., facility-siting, due diligence, and production
processes.

Supply Chain
and Watershed
Management

Production

Collective Action

Public Policy

135
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

UNGC CEO Water Mandate Section

Community
Engagement

Production

Transparency

136
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

SDG's Indicator Mapping

Goals and targets Indicators Status Vision 2030 target

Improve the welfare of local

communities within APP`s
Vision 2030 target directly concession and it`s supplier`s
addresses this indicator concession area by building
capacity on natural resources
management and facilitate
product market placement.

Improve the welfare of local

communities within APP`s
Vision 2030 target directly concession and it`s supplier`s
addresses this indicator concession area by building
capacity on natural resources
management and facilitate
product market placement

Improve the welfare of local

communities within APP`s
Vision 2030 target directly concession and it`s supplier`s
addresses this indicator concession area by building
capacity on natural resources
management and facilitate
product market placement..

137
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Goals and targets Indicators Status Vision 2030 target

Improve the welfare of local

communities within APP`s
concession and it`s supplier`s
concession area by building
capacity on natural resources
management and facilitate
Vision 2030 target directly product market placement.
addresses this indicator

Increase number of women in

Vision 2030 target directly senior management positions to
addresses this indicator 30% (level 12 and above) by
2030

Reduce water consumption

Vision 2030 target directly

addresses this indicator

Conserve critical peatland

ecosystem in APP`s suppliers
concession areas.

Increase renewable energy.

Vision 2030 target directly

addresses this indicator
Reduce energy consumption.

Vision 2030 target directly Improve the welfare of local

addresses this indicator communities within APP`s
concession and it`s supplier`s
concession area by building
capacity on natural resources
management and facilitate
product market placement.

138
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

Goals and targets Indicators Status Vision 2030 target

Vision 2030 target directly

addresses this indicator

Vision 2030 target directly

addresses this indicator

Vision 2030 target directly

addresses this indicator

Vision 2030 target directly

addresses this indicator

Vision 2030 target directly

addresses this indicator

139
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

Goals and targets Indicators Status Vision 2030 target

Vision 2030 target directly

addresses this indicator

Vision 2030 target directly

addresses this indicator

Vision 2030 target directly

addresses this indicator

140
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

APP Assurance Statement 2020

141
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

142
Section 3 Section 4 Section 5 Section 6
Strategy Production Forest People

143
Asia Pulp & Paper Section 1 Section 2
Sustainability Report 2019 About Us Senior Statements

144