In October 2007, the Forest Stewardship Council disassociated from the notorious forest destroyer Asia Pulp and Paper. In a statement, FSC announced that,

FSC disassociated from APP in October 2007 because of substantial, publicly available information that APP was involved in destructive forestry practices, which brought it into conflict with the FSC mission.

That didn’t stop Nippecraft, a company controlled by APP, from selling products carrying an FSC label, as FSC-Watch revealed in November 2018.

A company called Paper Excellence also markets its products using FSC labels, despite the fact that it is controlled by the same group that controls APP. In November 2023, Greenpeace Canada and Indonesian organisation Auriga Nusantara filed a formal complaint with FSC about this breach of FSC’s Policy for Association.

The Environmental Paper Network reports this week on the “progress” of this formal complaint. No prises for guessing that FSC’s process of investigating the complaint is staggeringly incompetent (to the point where the incompetence appears deliberate).

Here is Environmental Paper Network’s report:

The FSC and the ‘independent’ business consultant

By Sergio Baffoni, Environmental Paper Network, 20 May 2024 

How an  ‘independent third-party’ assessment casts shadows over the most highly regarded sustainable forestry certification scheme.

Is Paper Excellence, Canada’s largest forestry company, controlled by the notorious giant Asia Pulp & Paper (APP)?

The question is relevant because the certification standard Forest Stewardship Council (FSC) formally disassociated from APP in October 2007, citing “substantial, publicly available information that APP was involved in destructive forestry practices.” As a consequence, APP is no longer allowed to sell its products as FSC certified. 

Meanwhile, Paper Excellence, despite being controlled by the same group controlling APP, continues to market its products using the FSC. This is why Greenpeace Canada and Indonesia’s Auriga Nusantara have submitted a complaint to the FSC, calling it to acknowledge that they are operating as a single business entity.

Last week, after reviewing Paper Excellence’s corporate structure, FSC announced that Paper Excellence and Asia Pulp and Paper have no current ‘relationship of control’. FSC reported having hired the Canadian law firm McMillan LLP to carry out an “independent third-party” review, by examining corporate records and documents from governments, boards, commissions and courts.

However, the firm failed to analyze the investigation carried out by the International Consortium of Investigative Journalists (that includes among others CBC News, Radio France, Le Monde), in which they concluded that Paper Excellence’s day-to-day management was run from APP’s offices in Shanghai. 

That’s not all: the independent consultant hired by FSC is the same law firm that handled the billion-dollar acquisition of two major Canadian paper companies by Paper Excellence. “We are shocked that the FSC would hire McMillan LLP, Paper Excellence’s lawyers, to conduct an investigation of Paper Excellence,” said Shawn-Patrick Stensil, Program Director of Greenpeace Canada.

Greenpeace added that a credible investigation would require reaching out to whistleblowers who spoke to and provided documents to the international team of journalists. “The evidence the FSC used in the ‘investigation’ was limited to public and corporate government records and documents provided by Paper Excellence, which naturally would not reveal how control is actually exercised in these companies.” added Stensil. “A credible investigation would require examining real-world evidence: for starters, reaching out to whistleblowers who provided documents and interviews to an international team of journalists. We call on the FSC to stop covering for Paper Excellence and to conduct a credible investigation by a truly independent expert on corporate control.”

“As a complainant of the case from which this so-called ‘investigation’ emerged, I am dismayed to receive such a final conclusion without being previously informed about the methodology or firm appointed as investigator,” added Timer Manurung, Chairman, Auriga Nusantara.

Paper Excellence has massively expanded its footprint in recent years. In 2021, it acquired the forestry giant Domtar Corporation for US$3 billion, and later in 2023, Resolute Forest Products for US$2.7 billion. The company controls 42 pulp, paper and saw mills with FSC certifications in Canada, the U.S. and France. According to Greenpeace, it also manages 22 million hectares of forest land in Canada, of which 7.3 million hectares are certified by the FSC. 

“The FSC claims the investigation was conducted by an ‘independent third-party,’ yet McMillan advised Paper Excellence on its last three mergers (Catalyst, Domtar, and Resolute) and appears to have represented Paper Excellence to the Government of Canada on anti-trust issues where its relationship with APP was being examined” added Stensil.

Interviewed by CBC News, Allan Hutchinson, a law professor at York University’s Osgoode Hall Law School, suggested there were “a number of conflicts of interest,” he said. “The corporation may be happy for this law firm to be involved, because they think that the law firm will protect their own interests against the agency,” he said. “The agency may think, ‘We’re happy to use the corporation’s lawyers because we’ll get a better sense of what’s going on.’ Both of those are conflicts of interest.” Hutchinson added that the review “obviously wasn’t an independent one, because if you wanted an independent one, it’s hard to imagine why you would utilize and employ the law firm of the corporation that you’re looking into.”

“I am urging the FSC to rescind its decision, provide more transparency on the process, and conduct a genuinely independent investigation,” concluded Timer Manurung. “We urge the FSC to remember its mission and to improve its approach towards Paper Excellence, which has tremendous implications for both Indonesia’s and Canada’s forests.”