Asia Pulp & Paper (APP) Sinar Mas recognizes its responsibilities not only to its employees but also to the local communities living in and around its operation areas. As such, under the Sustainability Roadmap, we are investing in human capital management to ensure our business continuity, as well as empowering and involving communities to be part of our sustainable operations.

We believe that thriving local communities will lead to thriving business. As such, we make investment in various community empowerment initiatives, whether at forestry, mill or HQ level. The majority of the programs that we support not only improve local economic condition, but also provide additional benefits to the environment.

Communities play an important role in forest conservation. In many places around the world, people are living not only nearby but also inside forests. It is therefore important to engage with local communities to work together to protect the environment.

Consequently, we created our flagship community-forestry program to work towards that goal by improving the welfare of the communities living in and around forest areas, while at the same time reducing the risks of illegal logging, forest fires, and land disputes.

Our objective with the DMPA program, which evolved from the Integrated Forestry & Farming System (IFFS), is to empower and involve communities in our sustainable operations, to achieve landscape-scale sustainable forest management, as well as to improve the protection and restoration outcomes across APP Sinar Mas and supplier operations.

This participatory community engagement program aims to improve livelihoods, transfer knowledge, improve collaboration, and create a virtuous circle of forest management.

Over the long term we aim to have 500 villages to join DMPA and until the end of 2022, 421 villages had joined this program, benefitting more than 80,000 people. In the short term we are now focused on increasing the numbers of households participating in the program, within the villages that are already involved.

The program also encourages economic empowerment for women, and to date has involved 135 women’s groups. Our interim observations have indicated better incomes for families in two-thirds of DMPA villages, with greater diversification of livelihoods, fewer forest fires, and better relations with industry.

In our effort to improve lives, we have focused on community empowerment programs that deliver long-term and sustainable livelihood improvements. Our responses to on-ground needs are guided by a Social Impact Assessment (SIA) for each case, and if relevant and feasible, the creation of a targeted five-year CSR plan.

The CSR program priorities are divided into four pillars: Charity, Infrastructure, Capacity Building, and Community Empowerment. Our community investment programs are key to our commitment to addressing the United Nations’ SDGs, especially goal number 1 (no poverty), number 2 (zero-hunger), and number 3 (good health and well being). One such program focusing on women empowerment, in collaboration with Martha Tilaar Group and supported by Indonesia Global Compact Network, aims to train 1,000 women from communities in and around our concessions and mill operations. Meanwhile, another program seeks to provide the communities with access to clean water and hygiene facilities.

For more information of APP Sinar Mas social programs, please see APP Sinar Mas Sustainability Report.

We are committed to the principle of Free, Prior and Informed Consent (FPIC) for indigenous and local communities on any proposed development or forest management activities in existing plantation areas. We will also seek to resolve conflict effectively and handle complaints responsibly.

Forests are at risk of clearance when ownership or tenure is contested. With economic pressures, the need to alleviate poverty often becomes the root cause of environmentally unsustainable practices. Complex historical and customary rights could also be a factor in these practices. Over recent years we have employed an array of measures to drive the resolution of land disputes. These includes clear mapping of land dispute cases, develop and implement working plans specific to each case, as well as develop standard operating procedure for responsible dispute resolution. 

Together with Earthworm Foundation (previously The Forest Trust), in 2013 APP has conducted land dispute mapping across its pulpwood suppliers’ concessions area in Indonesia. We have trained our staffs on how to undertake dispute mapping and to develop action plans to resolve land dispute. As part of this, we have developed a methodology for classifying different levels of land dispute. Classification helps to inform our decisions on how best to allocate resources for resolving disputes. 

APP classifies disputes into the following typologies (2018 revision, based on stakeholders consultation):

1. Villages inside concession
2. Customary Land
3. Livelihood
4. Speculators
5. Non-procedural land use 
6. Overlapping licenses.

APP further devides the dispute resolution process into four stages on dispute resolution process. This helps us to monitor and reporting the progress. Below are the phases in dispute resolution stages:

APP considers the dispute has reached its resolution when it already in phase III & IV, where the agreement has been reached and/or points of agreement has been implemented. 

We have also established Regional Social Working Group to facilitate a multi-stakeholder approach with the aim to speed up the dispute resolution process. These Social Working Groups are active in Riau, Jambi and South Sumatra, with members from industry, local authorities, NGOs and legal experts. 

The RSWG mechanism process

By the end of 2022, 63.3% of land disputes were resolved, reflecting steady growth in conflict resolution. Some 31% of these conflicts were related to villages inside concession areas which already existed in the area before the concession license was given to the company.

Our approach for resolution of typology one (villages inside concession) is to accelerate recognition of community areas, aligning with the Government of Indonesia’s policy. This is done through delineation of areas used by communities, resolving disputes during the mapping process, finding agreement between APP suppliers and the community on the functional boundaries, as well as maintaining the consultation and alignment with the Government’s policy. 

 We strive to do our best in managing all land disputes as part of our commitment to sustainable and responsible operations through engaging with the Government and others related stakeholders as part of the resolution process.
 

Our Human Rights Policy drives our action, detailing our commitment to meet the requirement of ILO Standards on employee safety, well-being, human rights, labor rights, skills, and data protection.

APP Sinar Mas is a dynamic company with strong employment benefits that extend beyond salary, health insurance, pension, the ability to earn an additional bonus through various recognition schemes, and annual career development reviews that our permanent employees receive.

Our target in 2030 is to strengthen the agility of our organization, particularly in adapting to crisis. To achieve that, we have put in place an HR roadmap which will put focus on five streams : (1) Integrated HR digital, (2) System-based talent pool management, (3) Succession planning, (4) Competency management, (5) employee development using latest HR technology in order to increase transparency in career management and development opportunities as well as to reduce subjectivity.

Additionally, attracting new talents to our business remains a key focus for the long-term sustainability of our business. We have stepped up our work to ensure that young talent is recognized and that these employees can envision a prosperous future at APP Sinar Mas. We are also working to improve the capacity of our company’s leaders through the APP People Development Program, which seeks to cultivate strong leadership in the company culture.

APP Sinar Mas continues to look to attract and retain women in its workforce by ensuring equal benefits irrespective of gender, in order to create an enabling working environment and opportunities to diversify our workforce. Each of our mills pays a salary equal to or greater than the locally determined minimum wage, which varies by location, irrespective of gender.

We have committed to increase the number of women in senior management positions by 30% by 2030 and will report our progress each year through our Sustainability Report.

APP Sinar Mas’ established special Division, Corporate Risk and Integrity Division (CRI) to oversee ethics and risk management within the business; asset protection, integrity management, fraud prevention and business ethics.

APP believes that maintaining the highest ethical standards is crucial to long term sustainability and growth of our business. Our main focus has been enhancing the existing baseline programs to achieve better ethics and compliance and risk management standards in our business. To kick start this initiative, we launched an ethics and compliance survey to assess our employees’ awareness and knowledge about the APP Business Code of Conduct (BCoC) and to assess our Speak Up culture. The results of this survey are being used as a foundation to further develop the APP compliance program. The BCoC communications and training program is further improved through the launch of the APP Circle newsletter and the appointment of trained APP Ethics Ambassadors at our Mills.

In 2018 APP Sinar Mas’ existing Ethics Call Center (ECC) was enhanced into a more robust communication platform, which we have named the Integrated Call Center (ICC). This platform is for employees and external stakeholders to raise concerns, ask questions, product queries, emergency handling and raise grievance.

We continue to improve our risk management policies and tools including upgrading risk management policy aligned to ISO 31000: 2018 - Risk Management, gift and entertainment and managing conflict of interest (e-kinship).

Our Asset Protection Programme has been focused on implementing the APP Business Resilience and Asset Protection Programme across its main mills and offices. This programme is focused on building APP’s capability to effectively prepare and respond to adverse events so that disruption to our operations is minimised and the continuity of our business maintained.

Our integrity program continues to improve our controls to minimise our exposure to reputational risk from our suppliers, vendors, customers and our employees. As part of APP’s commitment for continuous improvement, our integrity program underwent an internal audit, which highlighted areas for improvement to ensure that our program meets global best practices.

Our program is also focused on fraud identification and prevention. We always investigate incidents of fraud and where possible provide recommendations to the Group on fraud prevention. The reduction of fraudulent activity will ensure shareholder value and improve the confidence of our stakeholders.

A copy of our Business Code of Conduct can be found here.