CONTROVERSY REPORT - Stand.earth
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CONTROVERSY IRRESPONSIBLE PULP PROCTER & GAMBLE’S REPORT & PALM OIL SOURCING AND ITS IMPACTS ON PRIMARY FORESTS AND HUMAN RIGHTS 1 P&G sources pulp from clearcuts like these. Photo: National Resources Defence Council P&G sources palm oil from clearcuts like these. Photo: Pok Rie from Pexels
EXECUTIVE SUMMARY Consumer goods giant Procter & Gamble (P&G) is now embroiled in a growing number of controversies stemming from its sourcing of wood pulp and palm oil.1 These controversies implicate P&G in violating human rights, degrading primary forests and endangering threatened species for ubiquitous products like toilet paper and soap. They also create material and reputational risk for the company’s brand equity, especially among socially and environmentally conscious consumers and investors.2 P&G has four key areas of controversy linked to its sourcing of pulp and palm oil: P&G sources from palm oil plantations that pose an immediate threat to nearby habitats like this. 2
CONTROVERSY 1: P&G sources pulp from clearcuts like these. Photo: Kels Pitchenese, Eagle Lake First Nation in Canada DESTROYING & DEGRADING PRIMARY FORESTS, INTACT FOREST LANDSCAPES For its pulp and palm oil supply • Purchases hundreds of thousands of last place these trees should end up. chains, P&G has failed to adopt and tons of fiber annually from clear- P&G uses zero recycled fiber in its implement mandatory policies and cut logging in primary and old tissue products, while competitor enforcement protocols that prohibit growth forests in British Columbia, Kimberly Clark uses an average of deforestation and conversion of and key boreal forests in Ontario, nearly 30% with a goal to reach 50% natural ecosystems, as well as Alberta, and Quebec, rather than recycled fiber by 2025. halt expansion into Intact Forest adding recycled fiber to its single- • Sources palm oil from 22 Indonesian Landscapes (IFLs), old growth and use name brand products such as producers engaged in on-going primary forests. It has also failed Charmin toilet paper and Bounty peatland destruction, some under to commit to time bound goals Paper Towels.3 Boreal forests store government indictment. for reducing forest fiber in tissue massive amounts of carbon, and products. For example, the company: single use tissue products are the 3
CONTROVERSY 2: P&G purchases palm oil from suppliers that dramatically impact farmers like this. Photo courtesy of Rainforest Alliance Network, Farmers of Jambi Province, Indonesia VIOLATING HUMAN RIGHTS In regions affected by P&G’s fiber • In Canada, some of P&G’s pulp linked to corruption as executives and palm oil sourcing, the company suppliers in BC, Ontario and Quebec from its subsidiaries were sentenced seems comfortable perpetuating have Free Prior and Informed to prison for bribing government colonialist practices rather than Consent (FPIC) policies that fail to officials. working to build respectful enforce non-compliance issues or • A September 2020 investigation relationships with frontline and offer transparency to the Indigenous by the Associated Press found that Indigenous communities, affected people who depend on these more than one-hundred current rights holders and the civil society forests, one of the fundamental and former workers from two organizations supporting them. P&G rights laid out in the United Nations dozen palm oil companies had been does not require its suppliers to Declaration of Indigenous People. cheated, threatened, held against demonstrate that adequate policies, • In Indonesia, Astra Agro Lestari their will or forced to work off standard operating procedures and (AAL) is implicated in ongoing land insurmountable debts. Others said independent verification mechanisms conflicts in rural areas in West and they were harassed by authorities are in place to guarantee that Central Sulawesi. AAL’s subsidiaries and detained in government Indigenous Peoples and traditional allegedly seized land from the facilities. In Malaysia, P&G’s palm communities’ rights to free, prior, local communities without their oil suppliers4 like FGV and Sime and informed consent (FPIC) are consent and then felled forests to Darby are linked to forced labor and respected. P&G has also failed make way for oil palm plantations. human trafficking and U.S. Customs to commit to Zero Tolerance Impacted communities allege that and Border Protection has blocked for Violence, Harassment and the company has criminalized local palm oil imports from them. Intimidation. Examples of supplier community members who have violations include: • P&G has refused to meet with resisted the takeover of their lands, impacted communities in conditions leading to the wrongful incarceration that guarantee their security and of several land defenders. Another anonymity, and arbitrarily picks the supplier, Golden Agri Resources, is communities it consults. 4
CONTROVERSY 3: P&G sources pulp from clearcuts like these. PUTTING THREATENED AND ENDANGERED SPECIES AT RISK P&G continues to source from • In Quebec, Resolute Forest • In British Columbia, P&G sources a suppliers that degrade critical caribou Products is likely sourcing wood range of companies impacting old habitat, putting threatened caribou from the Pipmuacan caribou range growth and primary forests in the populations already on a trajectory of in Quebec, where approximately province. Some of the logging takes decline, at further risk. For example: one-hundred caribou eke out an place in critical caribou habitat • In Ontario, Domtar is likely existence in habitat that is already including various endangered sourcing wood from the Sydney 68 percent disturbed, primarily herds. caribou range, where the caribou from logging, and being more and population is fewer than one- more disturbed every year.5 hundred animals and declining past the point of no return. 5
CONTROVERSY 4: P&G sources pulp from clearcuts like these. Photo: Kels Pitchenese, Eagle Lake First Nation in Canada TRANSPARENCY & ACCOUNTABILITY P&G has failed to develop the • Despite the weaknesses of the • Failed to meet the demands of systems necessary to create industry-controlled Roundtable on shareholders, 67% of whom voted transparency and public Sustainable Palm Oil (RSPO), P&G in favor of a resolution put forward accountability within P&G’s pulp and still fell far short of its commitment by Green Century Equity Fund palm oil supply chains. The company: to achieve one-hundred percent calling on the company to report on • Relies on third party certification RSPO certification of all palm oil how and whether it can eliminate systems to provide oversight and processing facilities. Less than 10 deforestation and intact forest accountability for its pulp supply percent of P&G’s palm and palm degradation from its supply chain.7 instead of developing effective due kernel oil sourced in 2019 was diligence systems and infrastructure RSPO certified.6 that ensure intact primary forests and threatened species habitat are not in their supply chains. 6
P&G’S FAILURE TO DISTANCE ITSELF FROM IRRESPONSIBLE SUPPLIERS--SUPPLIERS THAT VIOLATE HUMAN RIGHTS, DEGRADE PRIMARY FORESTS AND ENDANGER CONCLUSION THREATENED Consumer goods giant Procter & Gamble has knowingly and willfully refused to take full responsibility for its supply chain and failed to manage the reputational risk associated SPECIES--HAS with its suppliers of pulp fiber and palm oil. P&G’s failure to distance itself from irresponsible suppliers that violate human rights, degrade primary forests and endanger BECOME A threatened species--has become a material risk to P&G and its investors. The ongoing controversy regarding its pulp fiber and palm oil sourcing MATERIAL RISK will continue to tarnish its brands, including Charmin, Bounty, and Head & Shoulders. P&G has the resources to grow its capacities and lead its sector in TO P&G AND ITS truly innovative ways. It simply lacks the will and follow through. These controversies will continue to haunt them unless they make the kinds of INVESTORS. changes that the planet and future generations need. 7
BODY OF REPORT For years, mounting evidence indicates that Procter & Gamble is sourcing forest products from suppliers implicated in environmentally irresponsible logging and human rights abuses. Last October, 67 percent of P&G’s shareholders responded by voting in support of a shareholder resolution urging the company to eliminate deforestation and forest degradation from its supply chain.8 Rather than demonstrating leadership by distancing itself from irresponsible suppliers and adding recycled fiber to its toilet paper and other tissue products, P&G responded to the shareholder revolt with a misleading marketing campaign that failed to include a clear plan to end its reliance on irresponsible and high risk suppliers.9 P&G’s management has chosen to retreat to tired old talking points about “replanting trees” and outsourcing supply chain oversight to third-party certifications. 10 This leaves P&G right where it began—highly P&G sources pulp from clearcuts like these. Photo: Kels Pitchenese, Eagle Lake First Nation in Canada exposed to suppliers that degrade intact primary forests and critical habitats and fail to adequately protect the rights of local and Indigenous peoples, particularly in Canada’s boreal forest and in palm oil operations in Indonesia and Malaysia. The growing understanding of deforestation, forest degradation, and human rights controversies means most of P&G’s shareholders know that such ineffectual steps cannot prevent the destruction of intact primary forests and threatened species habitat and guarantee respect for human rights. More importantly, P&G’s obfuscation and inaction creates significant reputational and financial risks that undermines socially responsible investment funds that hold P&G stock. 8
P&G CONTROVERSY safeguards, putting at risk the is likely sourcing wood from the rights of Indigenous communities, Pipmuacan caribou range in Quebec, IN CANADA critical habitat for a federally listed where approximately 100 caribou threatened species, and an important eke out an existence in habitat that Procter & Gamble purchased 523,900 storehouse of carbon. And yet is already 68 percent disturbed, metric tonnes of wood pulp from Procter & Gamble continues to primarily from logging, and being Canada in 2019-20 to make its source its pulp from these companies more and more disturbed every year.19 flagship brands Charmin toilet paper to make single-use products like Why is so much critical habitat and Bounty paper towels.11 This toilet paper while boasting about the of a federally listed threatened pulp is made from industrial-scale sustainability of its operations. species being destroyed by logging? logging operations that are driving Because the Ontario and Quebec the loss and fragmentation of forests IMPERILING THREATENED CARIBOU governments have allowed too much in boreal and mountain ecosystems POPULATIONS logging to take place in federally across Canada. The boreal forest, According to a recent analysis by designated critical caribou habitat. in particular, is a climate-critical NRDC, these three companies Inexplicably, Ontario has exempted ecosystem known as the “Amazon of sourced an average of 9.4 million logging operations from prohibitions the North” that stores more carbon cubic meters of wood from boreal in its 2008 Endangered Species per hectare than just about any other forests in northern Ontario and Act against destroying habitat of forest on Earth.12Both boreal and Quebec.15 This wood comes from caribou and other species at risk.20 mountain forests are populated by boreal forest that is carved up by In 2018, the Quebec government hundreds of Indigenous communities roads that allow for industrial-scale announced that it would not protect and also home to an array of logging, the primary threat to the the Val D’or caribou herd, which wildlife species, including dozens of health and persistence of Canada’s excessive logging and road building woodland caribou herds that were threatened woodland caribou had reduced to just 18 individuals, listed as threatened or endangered populations. because it would be too expensive.21 by the federal government in 2012. Much of the wood supplying the In late 2019, the Quebec Ministry of Federal guidelines also established mills that make P&G’s pulp comes Forests, Fauna and Parks revoked that these threatened caribou will from forest units that encompass a policy that protected 46,000 have a much greater chance at legally designated critical habitat hectares of critical caribou habitat so long-term survival if their range for Canada’s threatened woodland that it could be logged.22 habitat is 65% intact. However, P&G caribou populations. To maintain and refuses to commit to ensuring that its recover these caribou populations, FAILED CERTIFICATION SCHEMES suppliers adhere to this science-based Canada’s 2012 caribou recovery In practice, this leaves only forest threshold - essentially cementing their strategy indicates these forests certification programs as the primary acceptance of key threatened species must remain at least 65 per cent means of protecting caribou habitat habitat in their supply chains. This flies undisturbed (i.e. only 35 per cent can outside of protected areas. Forest in the face of the 85% of Americans be altered by logging and wildfires). certification programs are, in theory, that want greener toilet paper.13 Aditya Birla Group, Domtar and supposed to voluntarily impose Resolute Forest Products likely are stricter forest management practices ONTARIO AND sourcing wood from several caribou ranges (which each harbor several than required by law. Only one, Forest Stewardship Council (FSC) QUEBEC Each year, Procter & Gamble local populations) that are already approaching or beyond the 35 per certification, has standards that have the potential to raise the bar above cent disturbance thresholds, beyond status quo industrial clearcut logging.23 purchases approximately 500,000 which caribou herds will continue to But P&G still finds a way to cut corners. tonnes of pulp made from industrial decline. In Ontario, Domtar is likely forest-clearing in primary boreal P&G has publicly committed to a sourcing wood from the Sydney “preference” for wood pulp from forests in Ontario and Quebec. caribou range, where the caribou These mills are owned by powerful Forest Stewardship certified suppliers. population is fewer than 100 animals Yet its commitment is misleading. companies such as Aditya Birla and declining past the point of no Group, Domtar (Paper Excellence)13 The company exploits loopholes in return.16 Their forest habitat is 64 the FSC system, resulting in more and Resolute Forest Products, some percent disturbed, almost twice of the largest producers of pulp and than half of its North American the sustainable limit.17 The caribou wood pulp (5.6 million cubic paper in the world, and they are key population in the Churchill range (45 suppliers of pulp to U.S. markets. meters) coming from non-FSC- percent disturbed) is also fewer than certified forest units. That fiber is Unfortunately, these companies 100 and declining, and the habitat is sourced through some of the worst consistently fail to implement already 35 per cent disturbed.18 logging practices in North America, critical social and environmental Resolute Forest Products, likewise, including excessive spraying of 9
toxic chemicals that poison people, FSC-certified.26 In the Domtar- All of these inconvenient facts water and wildlife, destruction of managed Trout Lake Forest Unit, about P&G’s sourcing of pulp from critical habitat for threatened and which is almost all critical caribou Canada’s boreal forests are likely endangered species, and massive habitat, logging has increased by 431 only going to get worse. Global pulp clearcuts in old-growth forests. percent in the last six years.27 and paper giant Paper Excellence, There is no requirement to obtain These three companies are just headquartered in Richmond, BC, free, prior and informed consent the tip of the iceberg. Many more recently purchased Domtar. Domtar from Indigenous People whose land timber companies also operate in is now owned by a private company is being transformed into clearcuts and cut down Canada’s boreal forest, run by a family that is notorious and/or plantations, and there are and decades of scientific research for both human rights abuses and not adequate grievance systems for has made it very clear that wide deforestation.29 Transitioning from a impacted communities.24 scale industrial logging continues publicly-traded company to a private to reduce the size and resilience one could limit both transparency of Canada’s caribou herds, despite and accountability and make it even more difficult for P&G to make “CARIBOU ARE, SADLY, the fact they have been listed as “threatened” for two decades. good on its unfulfilled promises of sustainability. VERY SENSITIVE TO INDIGENOUS RIGHTS HUMAN DISTURBANCES, The continued decline of threatened caribou herds isn’t the only problem BRITISH COLUMBIA In BC, industrial logging of intact AND WE ARE from such unsustainable logging activity in the boreal forest. Several forests is the primary reason for the massive losses of old growth DISTURBING CARIBOU First Nations have traditional territories and treaty rights in the forests and steep declines in caribou MORE AND MORE,” populations over recent decades, boreal forest areas being logged particularly the threatened southern for wood pulp. Aditya Birla Group, mountain population of woodland DR. JUSTINA RAY, Domtar and Resolute Forest Products caribou. Southern mountain caribou WILDERNESS CONSERVATION SOCIETY may have Free Prior and Informed once roamed suitable habitat in CANADA PRESIDENT AND SENIOR SCIENTIST Consent (FPIC) policies, but they all of SW BC, but today, only 17 fail to provide transparency, ensure subpopulations hang on in a fraction compliance, and enforce non- of their historic range. Despite being Reliance on inadequate certification compliance for the Indigenous listed under Canada’s Species at Risk schemes explains why caribou people who depend on these forests, Act in 2003, logging, as well as other habitat is being destroyed by P&G’s one of the fundamental rights laid human activities and forest fires, suppliers. Of those public forest units out in the United Nations Declaration has extirpated six subpopulations of that are majority (i.e. more than 50 of Indigenous People. southern mountain caribou30 and per cent) caribou range habitat, only three additional population units are Eagle Lake First Nation, for 10 per cent (425,700 of 4.3 million now all but guaranteed to vanish from instance, is working to protect its cubic meters) of the wood sourced the face of the earth in the near future. traditional lands on the Farabout each year by Aditya Birla Group, In 2018, a scientific analysis indicated Peninsula in Eagle Lake, which is Domtar and Resolute Forest Products that 18 of 23 (78%) local population slated to be logged by non-FSC- combined is from FSC-certified units were declining and 22 of 34 certified Dryden Forest Company forests.25 This means that the vast (65%) subpopulations were less than Ltd. There are no caribou here, majority of the wood being sourced 100 individuals.31 but it’s an unspoiled refuge of from critical caribou habitat is from biodiversity full of thousands of The central reason for these tragic non-FSC-certified forests, which puts irreplaceable Indigenous cultural and declines and disappearances is the caribou herds in these areas at archaeological sites dating back 7000 the destruction of caribou habitat, significant risk of continued decline years. “The peninsula is sacred to us,” primarily by road building and clear- and extirpation. wrote Chief Arnold Gardner to the cut logging of old growth and intact Resolute Forests Products, for Ontario Minister of Natural Resources primary forests. More than 900 sq km instance, sources 2.6 million cubic and Forestry in 2018. “Any disruption of southern mountain caribou critical meters of wood from non-FSC- of these sites … by the Dryden Forest habitat was logged in BC during the certified public forest units that are Management Company would be five years after it was identified in 2014, majority caribou habitat, and none of a violation of the Ontario Heritage an estimated 50% increase in the area the wood sourced by Aditya Birla and Act” and “would violate Indigenous of critical southern mountain caribou Domtar in public forest units that are rights and would be an action of habitat logged. Logging in old growth majority caribou habitat is remarkable cultural insensitivity.”28 forests and caribou habitat continues 10
EAGLE LAKE FIRST NATION CASE STUDY In the heart of Ontario’s boreal forest, Migisi Sahgaigan (Eagle Lake) First Nation is a rural Anishinaabe Ojibwe First Nation of about 700 people in northwestern Ontario, situated along the northeast shores of Eagle Lake, approximately 25 km southwest of Dryden. Historically, their livelihood consisted of fishing, hunting, trapping, gathering, harvesting wild rice, and horticulture. Today, the Eagle Lake First Nation’s economy is based primarily on trapping, forestry and manufacturing, as well as employment in the service sector. Cultural activities are as important to Eagle Lake society as economic affairs, and include pow-wows, ceremony, sharing circles, arts & crafts, traditional healing and Elders’ activities. And at the center of it all is the land and the water they have occupied for thousands of years. “Everything that makes us up as people comes from the land,” says Miles Pitchenese who works for ELFN Lands and Resources. “Our language comes from the land. We go out there to look for answers. The trees, rocks, water have spirits, too, and understand. We have to stop and listen and understand, and we have to make decisions not only for us but also our great great grandchildren.” Several decades ago, members of the community started to notice logging crews and equipment, and large clear cuts soon followed. Logging companies cut trees right up to the edge of waterways and fly over spraying herbicides with helicopters, practices that demonstrate a blatant disregard for health, safety and sovereignty of Eagle Lake First Nation. Now they are trying to protect their traditional lands on the Farabout Peninsula in Eagle Lake, which is slated to be logged by non-FSC-certified Dryden Forest Company Ltd. “The biggest problem for the community is that irresponsible logging is changing how community members interact with the land,” says Daniel Morriseau, also with ELFN Lands and Resources. “It reduces what areas the people can interact with the land safely. “Cutting to shore impacts fish habitat, water quality, changing wetlands and canoe routes, and wild rice harvesting areas. It also affects food and medicinal plant gathering and how far community members have to go to harvest.” The forest destruction leaves “a sadness you can’t explain,” Morriseau laments. “You can’t understand why [the logging is] happening. It’s a tragic feeling to know that the impact on plants and animals will have a severe impact on the people. It’s heartbreaking.” Morriseau knows there are better, more sustainable forestry practices, and would like the logging companies to work with Eagle Lake First Nation to implement the best possible practices: no cutting to shore, no spraying, no clearcutting and protections for sacred sites and areas of intact forest. “The practices now are unsustainable,” he says. “P&G needs to hold itself to a higher standard. Some forests are FSC certified, some are not FSC at all. FSC has the highest standard for environmental and social. Those standards are not being adhered to.” WILL P&G HONOR THEIR RIGHTS AND WISHES? 11
to threaten and extirpate southern and pending cutblocks, as per Interfor is the largest sawmiller in the mountain caribou populations.32 government data, clearly overlaps region around Celgar: it mills over one Procter & Gamble admits on its with caribou habitat (see Map 1). million cubic meters of logs annually website to buying pulp from BC.33 This includes critical habitat of at two facilities alone, accounting for They purchase an estimated 25,000 multiple southern mountain caribou over 40% of the lumber production to 50,000 metric tons per year of herds east of their mills in Prince capacity in the Selkirk Natural Resource BC northern bleached (NBSK) kraft George: George Mountain, Narrow District.44 Both of these mills are major pulp from industrial logging in BC, Lake, North Caribou and the Hart wood chip suppliers to Celgar,45 and or roughly 15% of the total volume Ranges. The George Mountain herd one is located immediately adjacent to of NBSK pulp exports from BC to the is already likely extirpated,38 and Celgar and supplies all its US.34 While the lack of transparency the Narrow Lake herd is down to co-product wood chips to the pulp in pulp supply chains makes it difficult approximately 40 individuals.39 The mill. The majority of logs for these to know with certainty from whom North Cariboo herd has declined sawmills come from Interfor’s nearby P&G buys it’s BC pulp, a review from more than 275 in 2005 to about forest operations, which overlap conducted by Stand.earth Research 210 in 2016,40 while the Hart Ranges extensively with mountain caribou Group of customs data, trade herd, the largest of the mountain habitat (see Map 2) and includes statistics, investor presentations, caribou ecotype, has experienced many endangered southern mountain corporate filings, company websites a 45% decline since 2006; the last caribou herds. and government data indicates pulp population estimate in 2016 found Overall, of the 909 sq. km. of critical mills owned by Canfor and Mercer just 375.41 And still Canfor logs in southern mountain caribou habitat was likely constitute supplies the vast critical caribou habitat identified as logged in the five years between 2014- majority of BC softwood pulp to the part of the recovery plan meant to 19, which had been legally identified US market, with most other BC mills prevent these herds from declining under Canada’s Species at Risk Act focused on Asian markets. further, including in old growth forest. (SARA).46 This includes forest habitat of According to an upcoming analysis the recently extirpated (locally extinct) being conducted by Stand.earth Research Group, Canfor and Interfor “THE THREATS TO South Selkirk herd47 located to the east of Celgar (see Map 2). (Mercer’s primary chip supplier - see below) are among the top loggers of CARIBOU CRITICAL P&G’S ROLE old growth forests in the province, and are active in several mountain HABITAT HAVEN’T To minimize its responsibility, P&G claims that lumber is really the driver caribou herd ranges.35 Like their peers in Ontario and Quebec, these forestry REALLY CHANGED. of logging, not tissue products.48 However, selling wood chips for companies have been certified by one or another third-party IT’S UNSUSTAINABLE pulp is so lucrative that even the logging industry regularly refers to certification schemes. (SFI, PEFC, LOGGING IN PRIMARY it as a “co-product” and not a “by- product.”49 Furthermore, according FORESTS, MOSTLY IN FSC).36 Unfortunately, like Ontario to the government’s own data, BC and Quebec, the lack of meaningful pulp mills consumed about 5.8 million government regulations means these third-party certifications have WESTERN CANADA, AND cubic meters of whole trees in 2019, representing over 26% of their total been wholly ineffective at protecting old-growth forests, critical caribou UNSUSTAINABLE OIL fiber input.50 For some mills such as Mercer Celgar, the figure is even habitat and other environmental values in BC. AND GAS DESTRUCTION higher, as noted above (i.e. 33%). Regardless of whether the fiber used CANFOR OF CRITICAL HABITAT.” by pulp mills comes directly from forests (whole trees) or indirectly Canfor’s logging operations around HEBBLEWHITE Prince George are the primary (wood chips from sawmills), BC pulp supplier for their NBSK pulp mills mills and the demand for pulp by (Northwood and Intercontinental), CELGAR AND INTERFOR companies like P&G are a key driver of Canfor claims that 100% of In 2019, Mercer’s Celgar mill, logging in caribou habitat, despite the their supply comes from non- in Castlegar, BC, processed fact the federal recovery strategy for controversial sources, avoiding approximately 2.3 million cubic meters woodland caribou indicates no more wood harvested from areas that of fiber, made from both whole logs critical habitat should be disturbed. threaten high conservation values (33%) and wood chips (67%).42 Celgar’s P&G’s Box Elder Mill in Utah and Cape such as endangered caribou.37 chips are sourced from 30 different Girardeau Mill in Missouri are among However, Canfor’s currently active suppliers (primarily sawmills) in the the P&G paper mills buying BC pulp.51 southeast part of the province.43 These mills produce Bounty and 12
¯¯ Km 0 Km 50 100 150 0 50 100 150 MAP 1 Canfor Pulp mills Canfor's Canfor Pulp mills Canfor’s Prince Canfor's Prince George Canfor Sawmill Canfor Sawmill George Prince Pulp Pulp Mills Mills George sourcing Canfor Active & Pending Cutblocks Canfor Active & Pending Cutblocks sourcing PulpCanfor's from Millsfrom sourcing logging Caribou Herd Risk Status Canfor’s from logging in Canfor's logging in critical Caribou Herd Risk Status Endangered Endangered critical incaribou cariboucritical habitat habitat Threatened Data Sources: BC Government Data Sources: caribou habitat Threatened Trace Occurrence Data BC Catalogue, Government National Geographic Trace Occurrence Data Catalogue, National Geographic RESEARCH GROUP 13
¯ Km 0 25 50 Mercer Celgar Pulp Mill MAP 2 Interfor Sawmill Mercer Celgar Pulp Mill Mercer's Celgar Pulp Mill's Interfor Logging Tenure Mercer’s Celgar pulp Interfor Sawmill sourcing from Interfor's logging M Caribou Herd Risk Status mill’s sourcing from Recently Extirpated Data Sources: in Logging Interfor criticalTenure caribou habitat Interfor’s logging in Endangered Trace Occurrence BC Government Caribou Herd Risk Status Data Catalogue, National Geographic sour critical caribou habitat Recently Extirpated Data Sources: i BC Government Endangered Data Catalogue, Trace Occurrence National Geographic RESEARCH GROUP 14
Charmin brand tissue products. P&G Approximately 85 percent of all plantations in Indonesia’s protected has not done enough to ensure that palm oil comes from Indonesia Forest Zone. More than 75,000 these brands do not source from and Malaysia, where environmental hectares of GAR’s plantations -- , high-risk supply chains. It matters very devastation and attendant labor and more than 15% of its total plantation little if Bounty or Charmin is made human rights abuses are common.55 area -- appears to be devoted to from certified pulp, or if the pulp mills Large, often shady companies set unpermitted oil palm production. that supply P&G claim to reduce their fires to remove primary forests Corruption and related governance environmental harm because if we and make room for increasing issues also pose significant risks. In pull focus from the just cutblocks that numbers of huge monoculture 2019, three executives from GAR are planned and look across all the palm plantations. This process subsidiaries were convicted and harvesting that has already occurred, warms the planet, destroys the only imprisoned for bribing local officials we see that there is very little left of remaining habitat of endangered to overlook the lack of permits and mountain caribou habitat that has Sumatran tigers, Sumatran rhinos and extensive water pollution.59 not already been impacted, while the orangutans, driving them towards risks to their habitat and their future extinction. Local people who have continue to compound. been making a subsistence living for generations are kicked off the land “THE USE OF FORCED P&G SCANDAL IN without their consent, denied the right and opportunity to practice their LABOR IN THE SOUTHEAST ASIA traditional livelihoods, and threatened with violence—even killed. PRODUCTION OF SUCH A Palm oil is the world’s most widely consumed vegetable oil and is used Despite its no-deforestation policy, UBIQUITOUS PRODUCT in everything from food to cosmetics and biofuels, including P&G’s Head P&G is among a host of consumer goods companies and palm oil ALLOWS COMPANIES & Shoulders shampoo and Gillette shaving gel. More than 70 million traders that continue to purchase palm oil linked to illegal deforestation TO PROFIT FROM THE tons are produced annually, and in Indonesia and Malaysia.56 P&G’s supply chains continue to be linked ABUSE OF VULNERABLE WORKERS…. ” that number is predicted to more than triple by 2050.52 Unfortunately, to palm oil operations that have been palm oil production is one of the subject to court action, administrative most poorly regulated and harmful sanctions and other government BRENDA SMITH, EXECUTIVE ASSISTANT industries in the world, responsible intervention, all of which have failed COMMISSIONER OF CBP’S OFFICE OF TRADE for massive deforestation of primary to resolve the problems. HTTPS://WWW.CBP.GOV/NEWSROOM/ forests, upending healthy ecosystems INDONESIA NATIONAL-MEDIA-RELEASE/CBP-ISSUES- and destroying endangered animal DETENTION-ORDER-PALM-OIL-PRODUCED- P&G continues to source from as habitat, exploiting workers, and violating Indigenous Peoples and many as 22 palm oil producers FORCED-LABOR-MALAYSIA and traders engaged in ongoing local communities’ land rights. deforestation and peatland Astra Agro Lestari, another P&G Deforestation driven by palm destruction, at least six of which are supplier, is implicated in ongoing land oil production also releases vast also facing government sanctions conflicts in rural areas in West and quantities of carbon into the for their role in the massive 2019 Central Sulawesi. AAL’s subsidiaries atmosphere. The tropical forests fires that scorched Indonesia’s have allegedly forcibly seized land destroyed for palm oil plantations are forests and peatlands.57 from the local communities without some of the most carbon-rich in the their consent and then felled Two specific cases from one world. The slash-and-burn clearing forests to make way for oil palm Indonesian province serve to illustrate and subsequent burning of forests plantations. Impacted communities the problem. As of late 2019, P&G and the conversion of swamps allege that the company has continued to source palm oil from PT releases large amounts of carbon criminalized local community Marita Makmur Jaya, which cleared dioxide and methane. For example, members who have resisted the 2,100 hectares of peat and peat forest fires in Indonesia in 2019 takeover of their lands, leading forest in 2019, and from Tunas Baru released 708 million tons of CO2.53 to the wrongful incarceration of Lampung, which cleared a reported The wastewater from palm oil 2,900 hectares of peat forest in 2019, several land defenders. More than 30 refineries is another huge source of both in South Sumatra.58 complaints have been made related methane; the methane produced to intimidation and incarceration In Central Kalimantan, Golden Agri of community members, as well as by a single pond of palm refinery Resources (GAR), another P&G regarding deforestation, flooding, wastewater has the same annual supplier, unlawfully operates oil palm and landslides as a result of the climate impact as 22,000 cars.54 15
conversion of intact forests to palm they were harassed by authorities and serious labor rights violations on oil plantations. detained in government facilities. One Malaysian palm oil plantations.67 In Jambi Province, AAL has cleared of these companies was FGV Holdings The U.S. Department of Labor has forests for oil palm plantations Berhad, one of Malaysia’s largest palm highlighted the widespread use of on lands traditionally owned, oil companies and a joint venture forced labor in the Malaysian palm oil occupied and used by Orang Rimba partner and major palm oil supplier industry since 2010. communities. Land expropriation to P&G. The allegations against FGV involved violence, intimidation, were so egregious the U.S. Customs FAILED CERTIFICATION SCHEMES and Border Protection banned the As in Canada, P&G relies on third- poisoning and forced evictions.60 importation of FGV palm oil.65 party certification programs to PT Setia Agrindo Lestari, one of uphold its stated policies of no the largest palm oil producers in deforestation, the protection of Indonesia, obtained a government environment permit in 1995, which was renewed in 2006 without “SUSTAINABILITY wildlife habitat and upholding the rights of workers and Indigenous any consultation and no prior IS MUCH BROADER people. In particular, P&G requires its palm oil suppliers to “ensure no THAN JUST SPECIES agreement with the Orang Rimba.61 deforestation and no development Deforestation and displacement on peatlands” and to “protect, by industrial palm monocultures have undermined the Orang Rimba PROTECTION. conserve, and enhance the habitats for wildlife and endangered species traditional way of life based on gathering, hunting and small- IT’S ABOUT PEOPLE’S that call forests their home.” It also commits to “source our palm and scale rotational farming. Some communities have been displaced LIVELIHOODS; palm derivatives in a manner that respects workers and indigenous onto their remaining ancestral forest lands within Bukit Duabelas National IT’S ABOUT THEIR peoples’ rights.”68 Park,62 while more than 750 remain as landless squatters on their own WELL-BEING; However, the overwhelming evidence in Indonesia and Malaysia land. Affected communities have lost traditional sources of food and IT’S ABOUT indicates that these certification schemes do not adequately regulate income, and have lost their forests and seen their sacred sites destroyed. GREENHOUSE GAS supply chain transparency for sustainable palm oil, and continues P&G has refused to meet with directly EMISSIONS; to allow corruption, exploitation of migrant labor, forced labor and impacted communities and their civil society supporters. Prominent IT’S ABOUT CLEAN, human trafficking (i.e. human rights abuses), as well as mass deforestation Indonesian civil society groups have repeatedly requested a meeting with HEALTHY WATER; and the destruction of critical habitat for endangered species.69 P&G -- without P&G’s main supplier (Wilmar) present. P&G has refused, IT’S ABOUT HAVING P&G has been a member of the saying they would only meet with impacted groups and communities ACCESS TO A DECENT Roundtable on Sustainable Palm Oil (RSPO) since 2010. The RSPO with Wilmar present. WAGE.” claims to have “developed a set of environmental and social criteria MALAYSIA MATTHEW STRUEBIG, TROPICAL which companies must comply In Malaysia, palm oil plantations cover CONSERVATION SCIENTIST AT THE with in order to produce Certified more than 15 percent of the country’s Sustainable Palm Oil (CSPO). When land area and occupy 63 percent of UNIVERSITY OF KENT IN THE UNITED they are properly applied, these the farmland.63 P&G’s palm kernel oil KINGDOM HTTPS://WWW.LIVESCIENCE. criteria can help to minimize the supply chain is the company’s single COM/PALM-OIL.HTML negative impact of palm oil cultivation biggest supply chain.64 Here, P&G’s on the environment and communities palm oil suppliers have been linked to in palm oil-producing regions.” P&G forced labor and human trafficking. This is only the latest evidence in a has committed to use only RSPO- A September 2020 investigation by long-standing saga of widespread, certified palm and palm kernel oil in the Associated Press found that more ongoing forced labor conditions its products by the end of 2021.70 than 100 current and former workers on FGV plantations. In 2015, the Wall Street Journal exposed serious In its latest annual report, P&G states from two dozen palm oil companies it sourced a total of 188,034 tonnes had been cheated, threatened, held human rights and labor abuses on FGV’s plantations.66 In 2014, of palm and palm kernel oil in 2019. against their will or forced to work off Despite a commitment to achieve insurmountable debts. Others said Finnwatch released a report finding 16
100 percent RSPO certification of all It gets worse. “The vast majority of palm oil processing facilities by 2016, palm oil is traced only as far back less than 10 percent of its palm and as the mill where it’s processed, not palm kernel oil sourced in 2019 was to the field where it’s produced. RSPO certified.71 And it is far from Eyes on the Forest, a coalition of likely that the other 90+ percent will Indonesian NGOs that includes the be certified by 2022. WWF – the same organization that Even if P&G does achieve its goal spurred palm oil certification – said of sourcing 100 percent RSPO- in a 2016 report that ‘mill traceability certified palm and palm kernel oil, [on its own] wastes time and money this alone will not allow it to meet without offering a solution to the its stated policy objectives. After all, issues of illegal products entering the Golden Agri Resources, one of P&G’s supply chains.”73 Indonesian palm oil suppliers that It’s clear that P&G can’t rely solely on unlawfully operated in protected the RSPO to ensure that its stated forests and bribed local officials to sustainability goals—no deforestation, look the other way, is a member of protecting critical wildlife habitat for RSPO. endangered species, respecting the Numerous investigations and rights of working and Indigenous allegations indicate that RSPO- people—are achieved. Instead, it certified suppliers continue the must conduct its own due diligence unlawful and unethical practices that and take a more proactive role it’s “environmental and social criteria” in ensuring that it’s suppliers and are supposed to curtail. In 2016, the supply chains are not involved in Environmental Investigation Agency deforestation and human rights concluded that RSPO is “woefully abuses.74 substandard” and “in some cases … colluding … to disguise violations”. The Guardian reported in 2019 that “a product can earn a ‘certified sustainable’ label even if 99% of the palm oil it includes came from freshly deforested land.”72 17
P&G MISLEADS ITS CUSTOMERS Despite all the evidence to the contrary, Procter & Gamble likes to portray itself as a sustainable company that cares about people and the environment. But instead of holding their suppliers accountable, P&G relies on misinformation to convince its investors and customers that its products don’t cause deforestation, destroy wildlife habitat or infringe on the rights of local and Indigenous people. P&G SPIN THE TRUTH Wood pulp and water are The wood pulp P&G uses P&G SPIN THE TRUTH 100% of our wood pulp P&G outsources “ingredients found in nature” for its Charmin, Bounty and is certified by a leading responsibility for social and and “sourced from forests.” Puffs products is sourced third-party certification environmental impacts by from logging 100 percent system ensuring forests are hiding behind third-party virgin primary forests. responsibly managed certification schemes Instead of using recycled that do not guarantee fiber, P&G promotes sustainability or responsible logging that destroys and sourcing. Some of these degrades wildlife habitat, certification schemes do threatens the land and not provide adequate way of life of Indigenous protections for intact peoples, and robs the primary forests, critical planet of one of its more habitat of threatened important defenses caribou populations, or against climate change. ensure the free, prior The alternative is to use and informed consent of recycled fiber, which has Indigenous peoples. the least impact on forests, water, climate and wildlife, which P&G has so far refused to do. P&G SPIN THE TRUTH P&G ensures all our P&G sources all its palm P&G SPIN THE TRUTH We’re Acting with Urgency P&G recently announced suppliers have the and palm kernel oil from to Reduce Emissions its “Climate Transition necessary policies and Malaysia and Indonesia, Action Plan” to make P&G procedures in place to and relies on the emissions “Net Zero” by ensure responsible sourcing Roundtable on Sustainable 2040. Yet their climate of palm oil, palm kernel oil, Oil Palm certification targets exclude emissions and their derivatives. scheme to ensure from their tissue and responsible sourcing. paper towel products, However, only a small selectively excluding portion of its products them from the products are RSPO certified, and their targets apply to. By the RSPO has proven comparison, Kimberly- incapable of ensuring that Clark has indicated that palm oil production does it will expressly include not result in deforestation, greenhouse gas emissions destruction of wildlife from natural forest fiber habitat, and human rights into its scope 3 supply abuses. chain target 18
P&G SPIN THE TRUTH All forest certification P&G promotes the logging P&G SPIN THE TRUTH For every tree we use, at Replanting trees does not schemes adequately industry’s misleading least one is regrown. fully compensate for the protect forests and greenwash about forest environmental impact Indigenous people certification programs. of cutting down primary Not all forest certification forests. Clearcutting does schemes are created permanent damage to equal. P&G “prefers” to forests that replanting use Forest Stewardship does not fix—scarring Certified wood pulp, the the landscape and most credible and effective changing the fragile certification scheme, but balance of organisms and less than 50 percent of microorganisms in the soil, its pulp is FSC chain of which reverberates all the custody certified. Instead, it way up the food chain. relies on other certification Boreal trees grow very schemes, such as the slowly, and it takes decades Sustainable Forest Initiative to centuries for newly and the Programme for replanted trees to capture the Endorsement of Forest the carbon that mature Certification systems, trees do. Clearcutting in which do not adequately the boreal forest allows protect high conservation the release of enormous forests, wildlife habitat, or amounts of greenhouse the rights of Indigenous gases stored in the boreal’s peoples. Even FSC is an carbon rich soils. In much imperfect and inconsistent of the boreal, replanting tool to protect forests and operations are not proving people’s rights. P&G must successful at replicating commit to ensuring that forests that resemble the suppliers adhere to 65% biodiverse, carbon-rich habitat range intactness ancient forests that were thresholds for caribou and removed and research additional due diligence in Ontario shows that to provide an assurance of deforestation in this key responsibly sourced wood boreal forest province is products. happening at a rate that is seven times greater than the reported deforestation rate by forestry for all of Canada - underscoring that deforestation in other provinces is also likely being under-reported.75 19
P&G SPIN THE TRUTH We’re committed Some of the energy P&G SPIN THE TRUTH In October 2020, the We are committed to the to purchasing 100% Procter & Gamble is responsible management world’s largest asset renewable electricity sourcing to meet its goal of the world’s forests and managers, including globally by 2030. is from biomass. Biomass our conscientious use of BlackRock and State Street, means burning forests forest products. voted overwhelmingly to create energy. P&G to urge P&G to eliminate partnered with Exelon to deforestation and intact build a new 50-megawatt forest degradation from biomass facility in Albany, its supply chains, making GA, one of the largest it the first ever forest- biomass energy plants related shareholder in the U.S. P&G is telling proposal to pass. Instead its customers that this of taking the necessary is part of its renewable action to improve energy portfolio, but its sourcing of forest environmental benefits products, the company from burning biomass doubled down on selling instead of coal depends a myth of sustainability on the specifics of the to consumers. Though a feedstock sourcing and recent Charmin ad touts how the facility is operated. the brand’s commitment It is improbable that this to “Protect, Grow, and facility’s feedstock will Restore” forests, P&G’s consist entirely of sawmill recent announcements residuals and forestry and PR campaigns have waste. The carrying more closely resembled capacity of forests in the a “Deflect, Distract, and area is approximately 25 Ignore” approach, once tons/acre: at least 400 again choosing spin over acres of Georgia forests meaningful action to must be cut daily to feed protect climate-critical this plant. The volume forests. alone is troubling enough, but burning green wood chips can produce as much pollution and carbon as coal. This facility is, at best, questionable in terms of sustainability.76 Burning trees to produce electricity releases up to 50 percent more carbon dioxide per kilowatt hour than burning coal.77, 78, 79 20
RECOMMENDATIONS The following actions by P&G will HUMAN RIGHTS begin to address the environmentally • Respect the human rights of First halt expansion into Intact Forest and culturally unsustainable and Nations and frontline communities. Landscapes and primary forests. unethical controversies linked to its • Require suppliers commit to obtain • Embrace FSC forest certification: products, and eliminate the financial free prior, and informed consent Any virgin forest fiber in tissue risks posed by the significant gap (FPIC) from Indigenous Peoples and products must be responsibly between its current choices and its frontline communities. sourced, but also certified by the stated values. • Publically commit to only source Forest Stewardship Council (FSC), • Address the concerns of the only acceptable third-party from suppliers that adhere to the shareholders, impacted certification system. Commit to practice of obtaining free, prior, and communities, and organizations work with Canadian suppliers to get informed consent (FPIC). representing millions of concerned all of their management units FSC citizens. • Require all suppliers to prove certified and in compliance with the that adequate policies, standard new FSC Canada standard in a way • Adopt and publish aggressive, time- operating procedures and that excludes ranges with a 35% or bound leadership commitments. independent verification greater disturbance level. mechanisms are in place to prove that Indigenous Peoples and THREATENED SPECIES: PROTECT CARIBOU traditional communities’ rights to • Protect boreal caribou habitat. free, prior, and informed consent Publicly commit to avoid sourcing (FPIC) are respected in existing from Canadian boreal caribou and new forest-risk commodity ranges with a 35% or greater production operations on their disturbance level. Commit to lands and traditional territories. responsible, caribou-safe fiber • Commit to Zero Tolerance sourcing that doesn’t put caribou for Violence, Harassment and and First Nations at risk. Intimidation, as proposed by The • Eliminate all suppliers that Geneva Declaration.80 degrade or destroy critical caribou • Accept all requests to meet one- habitat. Replace or establish an on-one with communities affected exit plan for P&G’s suppliers that by irresponsible palm oil and fiber continue to aggressively log suppliers. intact Canadian boreal forests and who are not compliant with PROTECT FORESTS 65% habitat intactness thresholds • Stop sourcing from primary forests. that threatened caribou (reindeer) populations require for long-term • Publicly support new protected areas. survival, as defined by Canadian • Continue to invest in alternative Federal scientific analysis. fibers and work with credible • Adopt a clear standard that P&G third parties such as Closed Loop will, within 6 months, no longer do Partners to help drive system business with logging companies change as a pathway to reduce that harvest in critical caribou range virgin forest fiber. Commit to habitat beyond 35% disturbed. reduce forest fiber in tissue products by 50% by 2025. Replace • Require suppliers to qualify by virgin fiber with recycled81 and having plans that meet or beat alternative fiber and invest in Canadian federal caribou science research to overcome any technical standards within 1 year. or cultural barriers.82 • Require suppliers provide proof • Adopt and implement mandatory every quarter that they are not policies and enforcement harvesting in any remaining critical protocols for P&G’s pulp and caribou habitat. palm oil supply chain that prohibit deforestation and conversion of natural ecosystems as well as 21
• Actively and publicly advocate on • Disclose independent verification These actions will enable P&G to behalf of forest protection and mechanisms that are in place to step into a leadership role and indigenous sovereignty with the ensure that suppliers can prove demonstrate that it is making Canadian government. fulfillment of FPIC rights. progress on implementing a suite • Inform the Canadian Federal • Create a grievance process that of credible actions, against clear and Provincial governments that provides a clear method for timelines, which have been designed their lack of action on boreal individuals and organizations to to immediately address its impacts on caribou recovery and caribou file complaints over violations of primary forests and endangered and science standards outlined by P&G’s supply chain policies and threatened species habitat; uphold their own government scientists procedures and timelines within human rights; and hold suppliers is now putting P&G’s continued which P&G will respond to credible who do not comply with P&G’s no business relationship with logging complaints. This program should deforestation and human rights companies in Canada at risk. include a publicly accessible policies accountable. grievance tracker with a minimum ADDRESS THE CLIMATE IMPACTS OF PULP AND PALM SUPPLY CHAINS of 60 months history. • Disclose names and contact CONCLUSION: • Analyze, disclose and cut information for P&G pulp suppliers, greenhouse gas emissions from We share Procter & Gamble (P&G)’s and publish the results of a forest goal of minimizing the company’s land use impacts (including forest footprint analysis for its pulp sourcing) by 50% by 2025. impacts on globally important supply chain and palm oil and forests, the climate, and human palm kernel oil supply chains in BE TRANSPARENT AND ACCOUNTABLE Malaysia and Indonesia. rights. We believe progress is • Stop outsourcing 100% of supply possible at P&G, as is true corporate chain oversight of fiber and palm • Publish a regular progress report on leadership. The current context of the oil supply chains to third-party the enforcement of P&G’s policy climate emergency, the biodiversity certification systems. Implement to prohibit deforestation and Intact crisis, and ongoing human rights a publicly transparent in-house Forest Landscape and primary violations associated with high-risk process to evaluate and manage forest degradation in its pulp and commodities in P&G’s supply chains suppliers, including robust non- palm oil supply chains including: requires the company to act with compliance protocols with clear • The pulp and palm oil suppliers that urgency and deliver auditable results. metrics that trigger suspension or have been independently verified as termination of bad actors and sub- compliant with P&G’s policies and standard suppliers. No Deforestation, No conversion • Immediately replace irresponsible and degradation of natural suppliers that fail to meet P&G’s ecosystems and Peatlands, and No standards or that use violence, Exploitation production practices. intimidation or coercion against • Fulfillment of P&G’s commitment to local communities. The measure eliminate pulp supply from critical of any commitment, policy or caribou habitat protocol is the extent to which it • An update on the implementation results in P&G taking action against of its deforestation and forest irresponsible suppliers and replacing degradation policy, as well as the them with those that are aligned company’s progress toward its with P&G’s values and policies. commitment to reducing forest • Publish the steps P&G will take fiber in its tissue products. to consult affected communities and to manage allegations and complaints. Immediately sever relationships with suppliers that use violence or intimidation against local communities. 22
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