Posted on September, 21 2016

WWF has concerns over the credibility of the certification of pulpwood plantations in Sumatra, Indonesia, by AJA Registrars under the Indonesian Forest Certification Cooperation (IFCC) standard. The IFCC is the Indonesian arm of the PEFC (Programme for The Endorsement of Forest Certification) - an international certification system.

Most of Indonesia's pulpwood plantations were established by clearing natural forests and peatlands, and many are associated with unresolved conflicts with local communities. 
 
With so little in the public domain to enable stakeholder review of audits under the IFCC system, WWF first raised these concerns in an open letter to the IFCC. The IFFC replied, but declined to comment on the substance of the concerns, citing a strict separation of its role in standard setting from certification and accreditation. It invited WWF to contact the certification body, in this case AJA, as the party responsible for compliance assessment. The letter is silent on how the IFCC/PEFC system vets the quality of auditing by its certification bodies. 
 
WWF requested AJA to provide public summaries of the certification audits (see downloads). 
 
The public summaries provide scant evidence of rigour and depth in AJA’s auditing process. They are silent on which stakeholders were consulted and how. Very little detail is provided on social and environmental values impacted by the plantations or the adequacy of management practices in avoiding or mitigating negative impacts.  Given that many of these plantations are established on drained peatland, the dearth of information on the effectiveness of management practices in preventing fire and subsidence is another glaring gap. 
 
The brief information provided suggests the audits were extremely light. For example, in certifying 248,511 hectares of PT Riau Andalan Pulp and Paper’s plantations, AJA only visited half of the eight estates covered by the certificate, and did not record a single instance of non-compliance.
 
By contrast, seven major points of non-compliance were raised for PT Wananugraha Bimalestari. Yet, the auditors recommended that certificates could be granted without any on-site verification that these points of non-compliance had been closed out. Take, for example, the audit finding that the company lacked a clear action plan to manage tigers and elephants in the concession. It is difficult to imagine how the auditors could meaningfully assess the company’s response to an issue as critical as this without a follow-up site visit.
 
The IFCC standard has important safeguards related to local community and indigenous peoples’ rights. For example, it requires the participatory identification of tenure and legal rights for communities with respect to land and forest resources; and respect for their right to give or withhold Free Prior Informed Consent (FPIC). Forest managers are required to make agreements with communities in a participatory and equitable manner, with consideration of the rights and obligations of stakeholders, including fair and equitable distribution of incentives, cost and benefits. Yet the public summaries barely pay lip service to social issues. This is despite the many unresolved social conflicts linked to acquisition of land for plantations in Indonesia.
 
Take for example the case of PT Arara Abadi  (part of the Sinar Mas Group and supplier to Asia Pulp and Paper). The audit purports to cover 78 villages over 11 districts. Yet the auditors’ remarks on social issues are almost surreal. According to AJA, “The existence of the company is very meaningful for the community around the work area. Harmonious relationship to be achieved in forest management. The positive impact is felt by the community are: the opening of accessibility, employment, community empowerment.”  On the issue of conflict with communities, the auditors’ rather cryptic conclusion is that the company’s management unit “has a resolution of the conflict to resolve”.
 
The IFCC standard imposes no obligations on companies to restore, or otherwise compensate for, natural forests that they converted prior to 2011. However it has several important safeguards related to land clearing and acquisition from 2011. Plantations established by forest conversion after this cut-off date are only eligible for certification if the conversion: does not occur on "environmentally and socially important biotops"; “provides long term contributions to social, economic and environmental benefits”; and the areas of converted forest do not "represent more than 5% of the total forest area of the management unit". 
 
AJA found that PT Arara Abadi had converted 1346 ha in 2012. Yet the summary report does not list this as non-compliance, nor does it assess whether this conversion met the above criteria for acceptable conversion. Rather, the area was simply “not registered for certification”.  The company was thus able to excise an offending portion of its estate from the certificate.
 
Under this approach, a company could secure IFCC certification for older parts of a management unit, having converted, or even while still converting, forests in the same unit after the cut-off date in the standard. A customer could thus buy PEFC certified wood from this plantation estate without knowing that its owner established part of the same estate by converting natural forests after the cut-off date in the IFCC standard.  Would the chain of custody systems be capable of segregating the certified and non-certified portions of pulpwood harvested on the estate? 
 
Indonesia’s largest pulp sector companies, APP (affiliated to the Sinar Mas Group) and APRIL (affiliated to the Royal Golden Eagle Group)  have recently committed to halt further deforestation and take steps to redress the social and environmental legacies of their historical deforestation and peatland development. It is a pity that the IFCC system does not seem to have the rigour or standards to verify how these companies are progressing in the implementation of these commitments. We therefore caution the market against relying on IFCC/PEFC certification as evidence that forests and peat are being restored, conserved and managed, and that social conflicts have been resolved, in line with reform commitments made by Indonesia’s largest companies.