PT Toba Pulp Lestari Comments on Foreign NGO Approach to Customary Land in Indonesia

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Parmaksian, June 8th, 2017 – PT Toba Pulp Lestari Tbk. (PT TPL) appreciates the government’s program of recognizing customary community land/forest as regulated by Forestry Law No.41 of 1999, and calls on foreign NGOs campaigning on customary land issues to respect and uphold the independence and integrity of the government’s settlement process.

PT TPL’s concession area is state property, and the company follows all rules and regulations issued by the Indonesian Government regarding settlement of community land claims. PT TPL is not authorized to release state forest areas without the approval of the Government of the Republic of Indonesia.

“The Company fully supports the process of dealing with land claims. This can be evidenced by the Company’s attitude in resolving a 5,172 hectare plot which was designated by the government as an incense forest for the people of Desa Pandumaan & Sipituhuta in December 2016. The land claim resolution has been applauded by the Indonesian Government and other company’s stakeholders including Rainforest Action Network. This area is currently being restructured to adjust the boundaries of TPL concessions, which were completed in 2013,” said Mulia Nauli, Director of PT TPL.

Regarding other land claims within the Company’s concession, PT TPL is in productive and constant discussions with the Directorate General of Social Forestry and Environmental Partnership (Dirjen PSKL) to undertake the analysis, identification and verification of such claims.

“We hope that the parties can understand and respect the ongoing process in the State of the Republic of Indonesia in accordance with the mechanism as set forth in the Forestry Law no. 41 of 1999,” continued Mulia Nauli.

“The Company expressed concern that the “Beyond Paper” website campaign created by a foreign NGO may undermine the process of settlement being carried out by the Government through the Dirjen PSKL of the Ministry of Environment and Forestry of the Republic of Indonesia.”

“Such campaigns are not productive, do not solve the problems and can disrupt the process of settlement that is being run by the sovereign Government,” said Mulia Nauli.

Mulia Nauli explained that, in managing its Industrial Forest Plantation (HTI), the Company follows all applicable rules and regulations and has received recognition from authorized parties and the Government. TPL has been awarded certification on sustainable forest management by independent and professional auditors as well as by the Government. The Company adheres to environmentally friendly principles, has been certified ISO 14001, and awarded a Green PROPER rating.

“We allocate 1 percent of our net sales, an average of more than IDR 10 billion annually, to conduct comprehensive community development programs to improve the livelihood, healthcare, education and infrastructure of the people living in the Toba Region. This shows TPL’s deep commitment in developing resilient and successful communities in our operational areas. In addition, the Company maintains a strong partnership with small-medium enterprises locally for our silvilculture and transportation activities. We 2

believe in sustainable development, hand in hand with the community, to create enduring jobs for more than 1000 people in the region.” Mulia Nauli said.

“If there are concerns or requests from the local community, the Company encourages the application of the Grievance Mechanism process as per Operational Standard. TPL prioritizes an open and transparent dialogue towards a mutually agreed and legally valid outcome” Mulia Nauli said.

PT.TPL is one of the leading pulp companies in the country. Its raw materials come from sustainable eucalyptus plantations in its concession areas. It is licensed by the Government through Decree of the Minister of Forestry no. 493 of 1992, originally 269,060 ha located in production forest, and recently licensed by Decree of the Minister of Forestry no 179 year 2017 (SK.179 / Menlhk / Setjen / HPL.0 / 4/2017 which covers 185,016 hectares.