RGE Response

RGE and its group of companies are significant global organisations that comply completely with
the relevant local and international rules and regulations that govern our business. We operate
legally and ethically and that is a key requirement of us by our financiers and our customers in
more than 75 countries around the world.
The sectors in which we operate also require us to conduct our business with a clear and
consistent sustainability charter and strong corporate governance. Constructive engagement with
all of our stakeholders, including local communities, has been at the heart of what we do and our
continued business success for more than 20 years.
Our core philosophy, one we stick to rigorously, is to ensure that we conduct business in ways
that are good for the countries where we operate, good for the community and good for the longterm future of the company and our business partners.
The claims made have already been comprehensively publicly rebutted on several occasions,
with evidence of our commitments supported by credible third parties. We are disappointed that
some parties continue to make claims that have no basis and that have already been
comprehensively and transparently addressed.
Please allow us to address below the key allegations and issues raised.
Bribery and corruption: All RGE companies, operate within a strict code of corporate
governance that explicitly prohibits illegal acts.
Involvement in any corrupt activities, including payment of inducements to Government officials,
is expressly and strictly prohibited. These elements of corporate governance are reflected in our
companies operating procedures and employment contracts. Our suppliers and business
partners must adhere to the same requirements.
If there are any suspected breaches of these commitments, we investigate, we cooperate with the
appropriate authorities and if necessary we take action to reinforce our implementation of our
corporate governance.
Asian Agri: Asian Agri (AA) and its group of companies have never been charged, convicted or
given the opportunity to present itself in court on the matter. Since investigations began in 2007,
AA repeatedly wrote to the Tax Department requesting for the amount of the payment shortfall, if
any. However, there was no reply. Instead the Tax Department started criminal proceedings
against one AA tax staff to court at the end of 2010.
In March 2012, the Central Jakarta District Court declared that the criminal proceedings were
weak and premature; hence, the charges were unacceptable. This was further affirmed by the
High Court in July 2012. The prosecutors then appealed to the Supreme Court in November
2012.
In December 2012, it was suddenly reported in the media that the Supreme Court had ordered
AA to pay Rp 2.5 trillion in fines and one AA tax staff was declared guilty. The relevant Supreme
Court judge retired shortly after in January 2013.
In good faith and without admission of guilt, AA paid the IDR 2,5 Trillion fine to the Attorney
General of Republic Indonesia, even though the company has never been charged, convicted or
given the opportunity to defend itself in court. While this issue remains in dispute, AA made these
payments in good faith to continue business operations, so as to safeguard the interests of
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various stakeholders in particular the livelihood of our 25,000 employees and 29,000
community farmers. The Attorney General of the Republic of Indonesia gives appreciation for the
good will and cooperation of AA.
14 companies within AA have appealed to the Tax Court on the tax amount and its computation.
The companys total profit from 2002 to 2005 was Rp1.24 trillion. During the same period, AA was
actually the second highest tax payer compared to the listed companies in the palm oil industry.
Yet, the tax charge stipulated in the verdict by the Supreme Court is Rp1.25 trillion, which would
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mean an effective tax rate of over 100% additional.
AA has also the right to appeal to the Supreme Court against the fine. AA works within the laws
of Indonesia and continues to vigorously appeal for justice.
Illegal Logging: There is claim on illegal issuance of forestry permits, which resulted in illegal
logging.
Among many other companies that were investigated at the time, APRIL cooperated fully and
transparently with the investigating authorities. The investigation involved the police, members of
the judiciary and forestry department experts.
The investigations of these matters found no wrongdoing or involvement in illegal activities that
warranted further action by the authorities in relation to APRIL. APRIL, through its group of
associated companies, has then obtained a dismissal of case in 2008.
The basis and legality of APRILs forest concessions licenses has been reviewed and audited
over a number of years by various authorities and we have been found to be, and remain, in full
legal compliance with licensing requirements and all regulations.
Alleged Environmental and Social Risks
APRIL is fully committed to sustainability and social responsibility through its Sustainable Forest
Management Policy (SFMP) announced in January 2014. Our publicly stated commitment is to
reach a point in 2019 where all wood used in our mill in Indonesia comes from plantation sources
and APRIL is on track in achieving that commitment.
An independent Stakeholder Advisory Committee (SAC), consisting of prominent members in
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NGOs and the forestry field, guides APRIL in the implementation of its SFMP.
More recently, the SAC commissioned KPMG to review APRILs SFMP procedures and
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implementation. That report has been submitted to the SAC for deliberation and the SACs
recommendations and APRILs response are currently being finalised.
Claims that APRIL is deforesting Indonesia are false. APRILs plantations account for just 0.4% of
forested areas in Indonesia and it manages its concessions with rigorous approaches to
sustainable forest management as embodied in its SFMP.

http://www.thejakartapost.com/news/2014/02/20/asian-agri-attempts-deflect-accusations-through-jointstudy.html
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http://epaper.thejakartaglobe.com/jg/2014/05/06/files/assets/basic-html/page17.html
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http://aprildialog.com/2014/08/29/kpmg-appointed-to-assess-implementation-of-aprils-sustainabilitypolicy/

APRIL will have completed plantation establishment by the end of 2014. It categorically does not
establish plantations on areas where its assessments show there is high conservation value
forest and does not source wood from those areas. While plantations are maturing for future
wood supply, APRIL sources wood only from plantations or non-high conservation value areas of
its concessions or suppliers concessions.
APRILs suppliers must comply with the same strict provisions of its SFMP.
Overall, APRIL uses just 50% of its concession land for plantation establishment and that land is
already in a degraded state. The balance of its land concessions is given to conservation and
community use.
Adoption of responsible sustainability practices: The claim that APRILs SFMP does not
address environmental and social impact is incorrect. It is responsible and sets out a clearly
defined pathway to a sustainable social, economic and environmental future for the company and
the communities where APRIL operates.
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APRIL has committed to a robust Sustainable Forest Management Policy that, among other
highlights, includes:

Identifying and protecting High Conservation Value (HCV) forests

Conserving 1 hectare of forests for every hectare of plantation established. This is
unprecedented amongst pulp and paper companies.
Undertaking eco restoration projects
Completion of plantation establishment by 2014 and 100% plantation-sourced supply by 2019
APRIL has been conducting high conservation value assessments on its concessions since 2005,
long before any other major Indonesian pulp and paper company. As a result of those efforts, the
company already conserves and protects 250,000 hectares of conservation forest within its
concessions.
APRIL has also more recently bolstered its conservation efforts through a pioneering eco
restoration commitment. In 2013, it commenced the Restorasi Ekosistem Riau (RER) project.
This initiative involves managing, restoring and protecting approximately 20,000 hectares of biodiverse forest reserve on the Kampar Peninsula in Riau province with partners such as Flora
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Fauna International.
Earlier this year, APRIL announced a further restoration commitment for another 20,000 hectares
of degraded forests on the island of Pulau Padang.
Through its plantations, APRIL improves the productivity of degraded land by planting 150 million
trees per year. APRILs plantations are established on its concessions in such a way that they
form a protective ring around conservation areas, reducing the incidence and likelihood of
degradation through human encroachment by third parties.
Impact on local communities: In keeping with RGEs philosophy of Good for the Community,
Good for the Country, Good for the Company, APRIL and other RGE companies actively
embrace, engage and employ the communities surrounding their estates and operations. In
managing any disputes, such as over land rights, we uphold the principles of Free, Prior,

http://www.aprilasia.com/news/APRIL%20SFM%20POLICY.pdf http://www.wwf.or.id/en/?31064/WWFwelcomes-APRIL-Sustainable-Forest-Management-Policy
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http://www.rekoforest.org/index.php/en/

Informed Consent (FPIC), act in accordance with the law, and use respected third-party
intermediaries to mediate with local communities.
Extensive consultation with local communities is undertaken as part of standard operating
procedures as APRIL establishes operations in any land concession. This includes community
meetings, community social surveys, the implementation of grievance resolution mechanisms and
the signing of agreements with local communities which provide community development benefits
including community farming assistance, funding of small businesses, provision of education,
health services and infrastructure improvement.

APRIL strives to promote socio-economic prosperity in the local communities for the good of the
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people. Actions include:
Supporting the livelihoods of 90,000 people
Planting over 70,000 hectares of fiber farms for the community
Awarding of more than 20,000 scholarships to students and teachers
Training of over 150 teachers and construction or renovation of 20 schools
Provision of facilitated free health care for more than 36,000 people
Impact on biodiversity and natural forests: APRIL does not deforest. It conserves, restores
and revitalises degraded forest. It only plants on land that is already degraded or is not of high
conservation value.
Through identification and active management of the 250,000 hectares of conservation forest
APRIL protects and the restoration of 40,000 hectares of previously degraded land, the company
provides important and lasting landscapes for flora and fauna biodiversity.
Indonesia must balance its socio economic development objectives with protection of the natural
environment. With poverty still a major issue and a rapidly growing population, achieving that
balance is challenging. APRILs sustainable forest management and conservation activities add
to, not detract from, Indonesias overall commitments on protection of high conservation value
forest and bio diverse landscapes.
Compliance with international norms: APRIL understands that its customers and business
associates are assured by APRILs compliance with national and international certifications.
Certification is part of APRILs commitment to continuous improvement and product and process
assurance for stakeholders such as customers, bankers and governments. It currently holds a
diverse portfolio of national and international certifications that provide end-to-end assurance,
from the efficiency, quality and sustainability of our mill and plantation operations down to that of
the end product.
APRILs operations in Riau Province, Indonesia are certified under OHSAS 18001 (Safety
Management Systems), ISO 9001 and (Quality Management Systems), and ISO 14001
(Environment Management Systems).
Since 2010, APRILs production facilities have been certified under Programme for the
Endorsement of Forest Certification (PEFC) Chain of Custody standards, ensuring that all raw
materials coming into the mill are from non-controversial sources.
In October 2011, RAPP successfully certified under Bureau Veritas standards for Origins and
Legality of Timber (OLB), the first industrial plantation company in Asia to do so. APRILs
certificates OLB Standards for Forestry Companies cover our forestry operations and production
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http://www.inside-rge.com/

facilities. RAPP supply partners also successfully passed audits under OLB Chain of CustodyAcceptable Wood standards.
APRIL is also certified under the Hong Kong Green Label Scheme (HKGLS) for selected
plantation-based paper products including PaperOne (All Purpose, Presentation, Copier), Laser
and Copy brands.
Since 2006, APRILs subsidiary in Indonesia RAPP has been certified for Sustainable Plantation
Forest Management (SPFM) under the Indonesian Ecolabel Institutes (LEI) standards. In late
2011, RAPP successfully re-certified under SPFM-LEI for the period of 2011-2016.
In October 2012, RAPP successfully attained full Sustainable Production Forest Management
and Timber Legality Verification (PHPL-SVLK) certification for all its manufacturing facilities and
forestry operations.
Unibank: The allegations about Mr. Tanotos previous ownership of PT Unibank Tbk, an
Indonesian bank that was closed in 2001 following the Asian financial crisis with associated
outstanding debts as a result of him allegedly transferring huge funds to his own companies, is
untrue and needs to be put in perspective. Firstly, Mr. Tanoto held an interest of over 50% in the
bank before its initial public offering in April 1997 and subsequently reduced his stake in the bank
over time, holding less than 5% at the time of the banks closure in 2001 and secondly, he has
not served on the banks board of directors or commissioners, and has held no management role
in the bank, since 1998. The bank fell under the administration of IBRA after its closure in 2001,
and IBRA concluded the process of liquidating 50 Indonesian banks, including PT Unibank Tbk in
April 2004. There were no pending claims against Mr. Tanoto in respect of PT Unibank Tbk.

Pacific Oil & Gas: Pacific Oil & Gas (PO&G) is the sole shareholder of Woodfibre LNG
(WLNG). PO&G is run by team of professionals. The company has impeccable track record in
safety, health and environment and has professionals managing it.
The Canadian subsidiary of PO&G is run by a team of professionals with international and local
experience. WLNG is following both provincial and Federal environmental approval process and
will design the plant that meets and exceeds local and industry standards.