A turning point in the war over Asian paper

It seemed inevitable to me that APP would eventually arrive at a point where some global green groups would accept the efforts that the paper company was making to address its impact on the Indonesian environment.

I’m also not surprised that other green groups are still arguing with APP on historical issues, ones that cannot be resolved.

Firstly, Greenpeace had to accept that the way things are done in Asia, particularly Indonesia, is not the same as in economies such as North America and Europe. Indonesia is a developing nation with a relatively solid industrial base and a growing economy. The economy is based on extractive industries. That is not going to change. Just like Australians mining coal, protest as much as you like but the coal will still get mined and sold.

Secondly, continuous pressure on APP’s activities would only address its business in Europe and North America. The real future growth would come from Asian countries such as China and India.

APP are engaging in a wide range of eco projects, plantations strategy and social programs. While they cannot turn back time and undo past mistakes, they are progressing in the right direction.

They have collected just about the entire suite of environmental certifications and standards, everything that anyone would expect from a European and North American business. Green groups have historically attacked the certification bodies for giving the different certifications to APP, but that proved to be a fruitless exercise. The widely recognised certifiers do their job pretty well and it always seemed to me a desperate measure in order to attack the certifier.

Many would argue that the next step for APP is to address their methods of business. They have had a history of not playing by the same rules as companies in Europe and North America. But this raises interesting historical issues. Simply put, the nature of capitalism in Asia is different to other parts of the world. This widely recognised issue is perplexing to a global economy, not just the pulp and paper industry.

Australia is one of the most globalised economies in the world. Our currency is traded twice the volume of the RBA’s reserve each day. We are the world’s 12th biggest economy despite our small population. Indonesia has 20 times our population and is currently the world’s 26th largest economy.

The variety of capitalism evident in Indonesia is neither European nor North America; it is a home-grown version built on an initial rejection of western capitalism in 1945. The basis of Indonesian business is one of low external trust; there is a tendency to employ the key management group from with a narrow population. This is a common feature throughout Asia. Many Chinese firms are very strong family businesses; it is common that family is the management. This is changing. Gradually Indonesian businesses are embracing Western-educated management, making businesses more global in their thinking.

It is, however, likely that APP will still have issues in the future with other green groups because of APP’s history. APP has changed with the changing nature of the nation in total.  As one scholar says, Indonesia is becoming a normal country.

Phillip Lawrence is a PhD scholar, consultant and speaker who specialises in print and the environment