Letter of Intent between WWF Indonesia, Asia Pulp and Paper Co. Ltd. and its fiber
suppliers, the Sinar Mas Group forestry companies (in this case being PT. Arara
Abadi, PT. Mapala Rabda, PT. Satria Perkasa Agung, PT. Wira Karya Sakti,
including their joint ventures, as detailed in Annex 1, hereto collectively referred to as
“SMG”) covering the period until February 19, 2004.
1. Protection of Forests with High Conservation Values
APP and SMG agree that conservation value assessments should take place before forests
are converted to Acacia plantations so that identified values can be conserved.
a. Studies by APP and SMG found that an area of 58,500 hectares of peat swamp
forest, within the concessions of SMG and its joint venture partners near Bukit
Batu and Giam Siak Kecil conservation areas, contained high conservation
values. APP and SMG agree to place this area under permanent protection (see
b. WWF will help APP and SMG to prepare a management plan for the 58,500
hectare area, in consultation with the joint venture companies, Government,
NGO’s and local communities, with the objective of maintaining the
conservation values of this peat swamp forest, in collaboration with the
conservation section of the provincial forestry office (KSDA).
APP and SMG agree that protected areas within and adjacent to SMG’s plantations should
be designed to maximize conservation benefits by including wildlife corridors and greater
c. Therefore, SMG will immediately place 8,500 hectares of forest within the
concessions of SMG near Bukit Batu and Giam Siak Kecil conservation areas
under temporary moratorium.
d. WWF will conduct an assessment of waste lands in Riau Province that have the
potential to be used to establish new plantations as alternative to further natural
forest conversion. SMG will be consulted on the Terms of Reference (ToR) for
the assessment, and the findings will be shared with APP and SMG before
October 31, 2003.
e. SMG may use the study to help it obtain non-forest lands that can be planted
with Acacia to replace any forest areas planned for conversion. Should this
process result in an additional area of land being available and acceptable to
SMG, SMG will immediately place under permanent protection an equivalent
area of the forest, up to the 8,500 hectares referred to in paragraph 1c above.
2. Legal Compliance and Wood Sourcing
APP and SMG agree to fully comply with national laws relating to forests, plantations and
the pulp and paper industry, and to implement a wood sourcing system that will identify
and reject any wood not coming from legal wood harvesting and transport operations.
a. APP and SMG will commission an independent audit to evaluate the ability of
the company’s wood sourcing system to ensure the legality of all the wood
supplied to APP mills. The ToR for the audit will be based on the legal
verification process outlined in LEI Chain of Custody procedures. WWF will
participate in the writing of the ToR and the selection of the auditor and has the
right to accompany the auditors as an independent observer during their
b. The audit findings and implementation steps for APP will be shared with WWF
by November 30, 2003. WWF will be consulted in the design of the
c. The findings and implementation steps will be incorporated in the Action Plan
specified in section 4 on Long Term Sustainability.
d. APP and SMG will commission an independent audit to assess progress on
legal compliance and wood sourcing system six months after the release of the
audit findings and implementation steps. The results of this audit will also be
shared with WWF.
3. Resolution of Social Conflicts
SMG agrees to resolve land disputes with communities, where those land disputes have
legal merit, such as overlapping permits, or are based on customary law.
a. SMG commits not to convert forests to Acacia in areas under its concession
where communities possess a legal or reasonable customary claim to ownership,
until such claim is resolved.
b. SMG has recently recruited a professional Community Forester who will
support the SMG Forestry Division and other stakeholders to resolve land claim
c. APP and SMG will work with relevant government institutions to resolve
encroachments on its concessions where no reasonable legal or customary claim
d. APP and SMG agree that a third party professional acceptable to the concerned
communities may assist in resolving disputes over land.
e. APP and SMG will develop a plan, with input from affected communities and
relevant NGOs, for resolving disputes between SMG and communities over
land ownership. This plan will be incorporated in the Action Plan specified in
section 4 on Long Term Sustainability.
4. Long Term Sustainability
APP and SMG agree to prepare and share with WWF an Action Plan covering all the
above issues, and those contained in the AMEC Sustainable Wood Supply Review.
a. Before January 31, 2004, APP and SMG will provide WWF with an Action
Plan for the year 2004 onwards which will be based on the AMEC 12-Year
Sustainable Wood Supply Review, as well as the findings of other studies, such
as, the above mentioned WWF waste lands study and the independent audit on
the legal compliance and wood sourcing.
b. The Action Plan will include a detailed time-bound plan for APP to achieve a
Sustainable Wood Supply to protect high conservation value forests under the
management of APP and SMG and/or its joint venture partners in Riau and
Jambi Provinces; ensure full legal compliance and wood sourcing system to
eliminate any wood deliveries that are illegal or of doubtful legality and resolve
legitimate social conflicts with local communities.
c. The process for preparing the Action Plan will include regular consultations
with a stakeholder review group, which will review the results of the AMEC
Sustainable Wood Supply studies as they become available.
d. APP will provide WWF with the Final Report of AMEC on Sustainable Wood
Supply submitted to SMG and APP as soon as it is available.
Signed on 19th August 2003, by:
Mubariq Ahmad Michael Black Muktar Widjaja
WWF, Indonesia Asia Pulp & Paper Co. Ltd. SMG Forestry Companies
The Joint Venture Companies
of PT. Arara Abadi
(PT. Riau Abadi Lestari)
of PT. Mapala Rabda
(PT. Sekato Pratama Makmur and PT. Bukit Batu Hutani Alam)