Who can we trust? A ginormous company making paper and pulp called Paper Excellence based in Canada with links to Asia Pulp & Paper and Sinar Mas. Sinar Mas is an enormous conglomerate based in Indonesia. Plan It Green Printing wants nothing to do with pulp/paper products coming from Indonesia since it’s contributing to the destruction of habitat, extinction of species and deforestation. This article highlights how difficult it is to know if the paper one is buying is truly what it claims to be.

Article by Joshua Martin courtesy of the Environmental Paper Network

Investigation reveals giant North America pulp and forestry company’s links to deforestation and social conflicts through ownership structure

by Joshua Martin | Oct 24, 2022

ASHEVILLE/TORONTO/SAN FRANCISCO – A new report released today by the Environmental Paper Network, together with Greenpeace, Rainforest Action Network and Woods & Wayside International reveals in new detail the corporate ownership of Paper Excellence, which is about to become the largest pulp and forestry company in Canada. The investigation exposes a complex ownership structure with links leading to the notorious Sinar Mas Group, an Indonesia-based private corporation linked to extensive deforestation and social conflict.

The investigative report, Papering over Corporate Control, analyzes hundreds of pages of corporate registry documents and other official filings. Despite a multi-layered corporate structure with holding companies in numerous jurisdictions, the report findings clearly demonstrate a series of factors such as family ties, overlapping management, and lobbyist filings providing strong evidence that the Sinar Mas Group controls Paper Excellence and that Paper Excellence’s sister company is Asia Pulp & Paper (APP).

Joshua Martin of the Environmental Paper Network said, “As Paper Excellence is now emerging as a major corporate actor in the pulp/paper and wood products industries of Canada, the United States, and Brazil, it is increasingly important for stakeholders to ask: Who owns, controls, and benefits from Paper Excellence and its operating companies?”

Paper Excellence’s links with the Sinar Mas Group and APP are obscured through a complex corporate structure. This corporate structure includes an extensive network of entities registered in offshore jurisdictions characterized by high levels of corporate secrecy, which has the effect of limiting transparency and accountability for Paper Excellence and its affiliates.

On October 31st, shareholders of Resolute Forest Products will vote on Paper Excellence’s proposal to acquire the company, which has over 40 pulp, paper, and lumber mills, forestry operations, and processing centers in Ontario and Quebec, Canada and in the southeast U.S. Last year, Paper Excellence bought Domtar Corporation, which has a dozen mills in the U.S. and Canada. In 2017, Paper Excellence began acquiring the largest single pulp line in Brazil, Eldorado Brazil Cellulose, which culminated in an arbitration decision last year to complete the acquisition. If the proposal to buy  Resolute is approved by its shareholders and regulators in the U.S. and Canada, Paper Excellence will become Canada’s largest forestry company and one of the biggest pulp, paper, and lumber suppliers in North America.

Martin added, “Stakeholders need to understand the evidence of connections between Paper Excellence and APP/Sinar Mas, take this into account in their own due diligence processes, and assess to what extent they would like to be connected to APP and Sinar Mas’ track records on environmental, social, and financial issues.”

APP and its parent conglomerate the Sinar Mas Group have cleared more than two million hectares of rainforest in Indonesia, including habitat for orangutans, Sumatran tigers, and Sumatran elephants. And a recent investigation by Indonesian civil society found APP’s pulpwood plantations have land conflicts with more than 100 communities. In 2001, Asia Pulp & Paper had the largest corporate debt default ever in emerging markets, and the subsequent debt restructuring process involved a number of questionable practices alleged by creditors.

Gemma Tillack of Rainforest Action Network concluded by saying, “The expansion of the Sinar Mas Group’s forestry empire across Indonesia was enabled by decades of easy money from major banks and sourcing of Asia Pulp and Paper products by well known brands. Now a new grouping of banks and brands are at risk of association with APP’s ongoing social and environmental harms.”

This analysis aims to inform Paper Excellence, Resolute and/or Domtar stakeholders, such as banks and major consumers of wood pulp, paper, tissue, packaging products. For instance, Barclays, Bank of Montreal, CoBank (providing a government-backed U.S. Farm Credit System loan), the Royal Bank of Canada, Wells Fargo, Credit Suisse, and U.S. Bank are all known for their connection to Paper Excellence, Domtar, or Resolute. Furthermore, other relevant stakeholders such as the Forest Stewardship Council are advised to take note of Paper Excellence’s relationship with APP and the Sinar Mas Group.

Notes to media

A summary of main findings of the report were shared with Paper Excellence, Asia Pulp & Paper, and the Sinar Mas Group prior to release. The full comments provided by Paper Excellence and Asia Pulp and Paper can be found in the Appendix in the report.

Papering over corporate control: Paper Excellence’s relationship with Asia Pulp & Paper and the Sinar Mas Group, published by Environmental Paper Network, Greenpeace, Rainforest Action Network and Woods and Wayside International on October 24, 2022.

The executive summary is available here. (Also available in Bahasa here)
The full report is available here.

Contact: Joshua Martin, joshua@environmentalpaper.org, +1-828-242-4238

Article by Joshua Martin courtesy of the Environmental Paper Network