DTE report on UFS chip & pulp projects in S. Kalimantan, Indonesia

Sep 15, 2006

The new report by Down to Earth shows how the development of a wood chip and a paper pulp plant threatens forests and people's livelihoods in South Kalimantan in Indonesian Borneo. The Singapore-based construction company, United Fibre System (UFS), is driving the wood chip and paper pulp projects, backed by equipment suppliers and banks in Europe. The World Bank’s export credit agency, MIGA may also be involved. UFS aims to become one of Indonesia’s largest pulp producers, in a country which prides itself as being the lowest cost producer of pulp. The report, ‘No Chip Mill Without Wood’, centres on a study of the wood chip plant under construction on the island of Pulau Laut in South Kalimantan. This project is associated with a number of environmental and social problems that have, so far, been largely ignored by the relevant authorities. The wood chips will be exported to supply China’s burgeoning paper industry. UFS is also pushing to build a paper pulp mill on the South Kalimantan mainland. In addition, the same company now runs the Kiani Kertas paper pulp factory in East Kalimantan, first set up by notorious timber baron ‘Bob’ Hasan. Down to Earth concludes that these projects are completely unsustainable. UFS’ inability to provide data on the potential source of timber supplies for these three ventures indicates the likelihood that natural forests in South Kalimantan and further afield will be destroyed - legally or illegally – to meet their needs. Deforestation in South Kalimantan is already a serious issue. The few areas where natural forest remains are suffering from illegal logging. Natural disasters, including landslides and floods, have become an annual event The paper pulp industry is a major factor driving one of the world’s highest deforestation rates in Indonesia. The country’s forests – the third largest on earth – are disappearing at over 2.8 million hectares/year. There should no investment in or permits for UFS’ wood chip and pulp mills until an independent review has shown the sustainability of timber supplies for all UFS’ developments. An Indonesian version of the report is available at http://dte.gn.apc.org/ciskal06.pdf Printed copies are also available in both language. A limited number of free copies are available upon request to civil society organisations. For others, the report is priced at GBP 5.00 per copy. To order, send your name, address and a cheque or money order for GBP 5.00 made out to 'Down to Earth', to: Down to Earth c/o Greenside Farmhouse Hallbankgate Cumbria CA8 2PX England Please state which language you'd like - English or Indonesian.