California’s Paper Trail Leads to Rainforest Destruction in Sumatra – and Governor Newsom Has the Power to Change That

by Jeff Conant, senior international forest program manager

Each year, California spends over $2.5 billion on everything from vehicles and office furniture to snack food and toilet paper. A look at California’s 2019 public purchasing data reveals that up to a quarter of California’s purchases of goods – $600 million – may be linked to deforestation in sensitive tropical forests across the world.  

So let’s travel for a moment to one of those regions. 

South Sumatra Province, Indonesia is a land of lush rainforests, serpentine river systems, expansive peat swamps and diverse cultures. It’s also home to mile upon mile of oil palm and pulp plantations where vast swaths of forested land have been razed for industrial crops to be sold to global markets.  

For industry, these lands are a tremendous resource to be exploited. For the people who have inhabited the region for millennia, these lands are home – a home that is increasingly unlivable. In the last half century, companies in Indonesia have razed an area of rainforest twice the size of Germany, and the forest loss continues. In recent years peat fires have filled the air with haze and fine particulate matter resulting in premature death and billions of dollars in economic losses. 

It’s a tragic situation that should hit close to home for Californians, facing their own very grim wildfire disaster. 

The largest pulp and paper mill in South Sumatra – indeed the largest in the world – is the OKI Mill, owned by Asia Pulp and Paper (APP). The plantations that supply the mill are developed on tens of thousands of acres of peat and degraded soils that are drained, carbon-rich and highly flammable.  

Large areas of land under the company’s control have been burned repeatedly; in 2015, nearly 300,000 hectares (an area the size of Rhode Island) were burned. The company has drained peatlands twice that size, emitting CO2 equivalent to the annual emissions of Norway. APP itself is linked to over 100 unresolved conflicts with communities across Indonesia.  

Currently, APP’s OKI paper mill is seeking financing to expand its operations and grow its market. APP owns Paper Excellence, one of the North America’s largest pulp suppliers. Paper Excellence, in turn, is in the process of buying North American pulp giant, Domtar Corporation. And Domtar, in turn, sources over a million square meters of timber annually from Canadian boreal forests, much of which is supplied to multinational consumer brands like Procter & Gamble. These companies form a multi-headed hydra of multinational capital all geared toward grinding precious ecosystems to pulp. 

Now let’s return to California.  

California buys paper from over 900 different suppliers – so there is every reason to assume that paper from APP, or Paper Excellence, or Domtar, or Procter & Gamble, makes it into the state’s janitorial closets and office supply cabinets. In fact, it is already on the record that California buys paper from APRIL, another massive pulp company known to have deforested over a million acres of intact Indonesian rainforest over the last two decades. 

Currently, California’s procurement department doesn’t have any way to know what these companies are doing, or any incentive to root out the environmental destruction hidden in its file cabinets.  

Industry, of course, would prefer to keep it that way. Some industry groups – specifically the paper and pulp industry – have opposed transparency on the grounds that tracing their supply chains would be too costly.  

But in the age of big data, this is far from the case. As a recent article in a leading conservation news outlet put it, Everything is Traceable – Unless You Don’t Want it to Be.  

“Consumers have the right to know where the products they buy come from,” the author writes, “and to trace them back to the source of the raw materials to ensure that they are not linked to anything dodgy, such as deforestation and human rights violations. Consequently, brands, retailers, and manufacturers have the responsibility to provide this traceability information to consumers.” 

Ironically, those words were not penned by an environmentalist or a consumer advocate, but by the former director of sustainability at Asia Pulp and Paper – an industry insider who spent years defending the company’s devastation in Sumatra. 

She writes, “The longer a company waits to achieve full traceability and transparency for its supply chains, the longer the company deliberately tolerates possible environmental and social non-compliances…. It’s 2021: The science and technology are there, the stakeholders are willing, and, according to the latest IPCC report, the planet is burning. What are the companies waiting for?” 

Indeed, a household brand like Procter & Gamble, with membership in the Consumer Goods Forum’s Forest Positive Coalition and a proud commitment to comply with California’s Transparency in Supply Chains Act, should welcome such regulation. 

The California Deforestation Free Procurement Act 

This regulation is very close to being law in California. The California Deforestation Free Procurement Act (AB416) would require that all companies supplying the state demonstrate that their production does not degrade tropical forests and biodiversity. Under the proposed law, companies will be required to provide precise details about the source of forest-risk commodities found in products they sell to the state—down to the plot of land they are grown on. 

The relevant products include palm oil, paper pulp, timber, rubber, cattle or soybeans derived from tropical regions. The legislation would also require companies ensure that their operations and supply chains respect the rights of Indigenous Peoples and local communities whose lands are considered for plantation development.  

In its essence, the Act is designed to drive transparency, traceability, and accountability in global supply chains. 

Why does this matter? 

The California Deforestation Free Procurement Act, if signed into law, will mandate that the state either cut ties with companies like APP and APRIL, or require them to clean up their act if they want the state’s business. Either outcome would be positive.  

Now imagine what happens when other states, provinces, and nations follow suit.  

Globally, governments spend an estimated $13 trillion annually in the procurement of goods. That’s one-sixth of global GDP. So, instead of enabling the further destruction of places like South Sumatra and further trashing the global climate, this money could transform the way goods are produced.  

In Europe, both Norway and France have policies that restrict “imported deforestation,” and the EU is considering something similar. So why not California?  

If the $13 trillion that the world’s governments spend on procurement were to be invested in deforestation free purchasing it would, quite literally, change the world.