Company set to gobble up another Canadian forestry operation is controlled by Indonesian conglomerate: report

A massive wood pulp producer with ties to a conglomerate responsible for destroying huge swaths of Indonesian rainforest is set to acquire yet another Canadian forestry company in two weeks' time.

Shareholders of Resolute Forest Products — Canada’s third-largest producer of sawn wood — will vote on whether to sell the company for $3.7 billion to Paper Excellence, which says it is headquartered in British Columbia on its website.

New analysis from Greenpeace shows Paper Excellence is actually part of the same corporate group as Asia Pulp & Paper (APP) and Sinar Mas Group — a massive conglomerate controlled and owned by the multibillionaire Sino-Indonesian Widjaja family.

“We need increased accountability and increased oversight in terms of forest protection,” said Priyanka Vittal, legal counsel at Greenpeace Canada. “This report raises the question of who is basically going to be the dominant driver of logging in Canada and what do we know about them? And what are the ways in which we can hold them accountable?”

APP deforested an area greater than two million hectares in the Indonesian provinces of Riau and Jambi for pulpwood and oil palm plantations between 1984 and 2010, according to a previous report from Eyes On The Forest, an Indonesian environmental watchdog organization. This includes habitat of critically endangered Sumatran elephants, orangutans and tigers. Over 100 social conflicts and land disputes with Indigenous communities have taken place in forestry concessions either owned by APP and Sinar Mas companies or which supply wood to APP’s mills, the Greenpeace report noted.

In 2020, Paper Excellence’s submission to the Old Growth Review Committee recommended the B.C. government “[ensure] first-growth stands are available for harvesting” and increase the logging of old-growth trees.

Greenpeace describes APP and Paper Excellence as “sister companies,” both under the control of the Sinar Mas Group. Family ties, overlapping management, financial links and lobbyist filings are presented as evidence of this within the report.

The report points out Paper Excellence’s self-reported owner is Jackson Wijaya Limantara, whose father is APP’s longtime chairman and whose late grandfather was the founder of the Sinar Mas Group, along with other close family connections.

Paper Excellence denied the findings.

Graham Kissack, the company’s vice-president of corporate communications, told Greenpeace: “Paper Excellence is entirely independent of APP/Sinar Mas. Of course, it is well known that Jackson Wijaya, the ultimate owner of PE, is the son of the current leader of APP/SMG. But Jackson continues to operate PE completely independently. [...] There are no ownership or control links with APP/Sinar Mas or anybody else.”

Paper Excellence has also acquired several of the biggest pulp and paper companies in the Americas, including the largest single pulp line in the world (in Brazil) and the massive Domtar Corporation. Resolute Forest Products manages 20 million hectares of Canada’s carbon-rich boreal forest and, if the sale goes through, it will bring Paper Excellence’s total acquisitions over the last few years to US$8 billion.

After acquiring the Meadow Lake Mill in 2007, Paper Excellence sent six letters to the Saskatchewan government on letterhead stating the mill is “A Division of Sinarmas Group,” the report points out. In 2010, the company switched to letterhead that read “Paper Excellence,” but the Greenpeace report found no evidence of a change in corporate control or ownership at that time.

The analysis is based on “hundreds of pages of publicly available corporate registry documents and other official filings about entities in Canada, Indonesia, France, Brazil, Italy, Germany, the United Kingdom, the United States, Malaysia, the British Virgin Islands, and other jurisdictions.”

It traces Paper Excellence’s opaque corporate structure, including to holding companies in the Netherlands, British Virgin Islands, Labuan and Hong Kong — all of which are known for “varying levels of low corporate tax rates and secrecy,” the Greenpeace report notes.

“It's not necessarily intentionally trying to conceal information,” said Vittal, but the result is “we can't conclude who their ultimate beneficial owner is.”

This can make it difficult for the public, stakeholders, communities and Indigenous groups to hold this corporation accountable, she added.

“There is not, and never has been, an intention to create a corporate structure at Paper Excellence that is intended to hide anything,” Kissack responded, noting other considerations such as taxes factor into decisions on the corporate structure.

Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer