A founding member of the Forest Stewardship Council (FSC) has called on the green credentials body to “immediately terminate” sustainability certificates for Canada’s largest forestry company.
In a statement Wednesday, the World Wildlife Fund (WWF) called on the FSC to “rigorously apply” its policy for association after a recent filing with the European Commission indicated Paper Excellence would fall under the same ownership as the Sino-Indonesian conglomerate Asia Pulp & Paper (APP).
Paper Excellence has rapidly expanded its footprint in recent years, buying up several Canadian public forestry companies — including Domtar and Resolute Forest Products — in multibillion-dollar deals that gave them control of more than 22 million hectares of forest. The company is the largest private manager of forests in Canada and currently owns more than 30 mills across Canada, the U.S., Brazil and France.
In Asia, APP stands as one of the largest forestry companies in the region, with a vast network of forest holdings and more than a dozen pulp and paper mills — some among the largest in the world — scattered across Indonesia and China.
The company took a hit to its brand in 2007 when the FSC disassociated from APP over concerns of deforestation, human rights violations and illegal logging.
In a statement last week, a spokesperson for Paper Excellence — recently re-branded as the Domtar Group — confirmed Jackson Wijaya would consolidate control over both companies after taking over for his father Teguh Ganda Widjaja, the longtime chairman of APP. That corporate realignment prompted calls Wednesday for the FSC to treat Paper Excellence as part of the same corporate group as APP.
“WWF calls on FSC to rigorously apply the Policy for Association requirements and immediately terminate FSC certificates for Paper Excellence, Domtar and Resolute,” wrote the conservation group.
WWF helped found FSC in 1993. In recent years, the FSC has faced criticism, including concerns over conflict of interests in its green certification process.
Compared to other organizations, however, many environmental groups and industry experts say the FSC is the most rigorous credentials body overseeing sustainable forestry practices around the world.
Investigations suggest nexus of ties linked companies
In recent years, investigations carried out by environmental groups and the International Consortium for Investigative Journalists (ICIJ) — including media partners Glacier Media, the CBC, the Halifax Examiner, Le Monde and Radio France — have found evidence of a network of overlapping employees, ownership links and business ties.
Under Wijaya’s ownership, Paper Excellence denied links with APP.
The ICIJ investigation prompted Canada’s Standing Committee on Natural Resources to launch its own probe of Paper Excellence’s ownership structure and business ties.
Testimony provided to the parliamentary committee by a Paper Excellence executive last year later suggested ties between the two companies existed, but were severed in 2015.
According to a ministerial briefing note reviewed by Glacier Media at the time, the Nova Scotia government of the day considered APP the ultimate controller of Paper Excellence as late as October 2017 — at least two years after Paper Excellence said the companies had parted ways.
NDP natural resource critic Charlie Angus, who sits on the parliamentary committee, spoke to ICIJ partner the CBC last week after learning Wijaya would ultimately control both APP and Paper Excellence.
“We got completely played for suckers by a very dubious company,” he told CBC.
“I don't think the Canadian government would have ever allowed Asia Pulp & Paper [to buy Domtar and Resolute] because of its dubious record. So the family sets up another company. The family says, 'Oh, we're not connected in any way.' Despite the obvious connections, they get.… to buy Canadian resources. So we are in a position that was entirely predictable.”
Company 'engaging directly' with FSC to avoid losing green certificates
Last week, the FSC said it had been informed Wijaya was becoming the beneficial owner of the re-branded Domtar and APP.
An FSC statement said it was evaluating the implications of Wijaya's consolidated ownership and what it means for its policy of association.
“To determine the potential consequences of this change in ownership, a rigorous legal review of relevant company connections will be initiated,” the group said.
FSC has been in negotiations with APP since 2013 on how the company can regain association with the green credentials body.
On Nov. 20, Domtar spokesperson Jennifer Johnson said the company is “engaging directly and cooperatively with FSC” to ensure Wijaya’s ownership of APP doesn’t impact the company’s certification.
Johnson added Wednesday: “APP’s track record has no bearing on Domtar, given Domtar continues to be a separate company from APP with its own management structure and governance.
“Moving forward, Domtar and APP will remain separate and distinct entities, with no operational overlap and independent governance structures.”
