Woolworths drops contract with APP, activist group remains wary

Another good example of how consumer can and does carry a lot of influence with multi-national companies.

Woolworths drops contract with APP, activist group remains wary.

Jeremy Hance, mongabay.comAugust 10, 2008

Last week Woolworths announced it was dropping its contract with Asian Pulp and Paper (APP). Woolworths had come under considerable fire for carrying APP, which has a notorious record of environmental degradation on the Indonesian island of Sumatra.

Previously APP has lost contracts with several other large companies including Office Depot, Wal-Mart, and Staples. APP has also fallen foul of several environmental groups like the World Wildlife Fund, the Rainforest Alliance, and the Forest Stewardship Council, which certifies sustainable wood products.

Tim Woods, head of Wake Up Woolworths—an organization which has been campaigning for Woolworths to break all ties with the Asian paper giant—told Mongabay.com in an earlier article that "APP is widely considered the worst fibre manufacturer in the world".

He explained that APP was responsible for widespread habitat loss for species such as tigers, orangutans, and Asian elephants; through massive deforestation and draining peat-swamps the company was contributing to climate change; and that it had devastated traditional land used by indigenous tribes.

Despite Woolworths' announcement, Woods warns that this may not be the end of the partnership between Australia's largest retailer and one of the world's biggest paper producers.

"This announcement is still very vague," Woods said. "It leaves open the possibility that as soon as they think the coast is clear, they will go back to selling unsustainable product made by Asia Pulp & Paper." He adds that Woolworths has done just that in the past. Woods said that he would like to see the company state that their partnership with APP has been permanently terminated.

He also believes that Woolworths has an obligation to assure its customers that "it will not deal with the many satellites of Asia Pulp & Paper to assist them to 'launder' illegal or unsustainable timber by routing it through different operations and countries."

As to the future, Woods believes Woolworths must be completely transparent in its business interactions if it wants to regain lost trust.

"Transparency is the only way for Woolworths to demonstrate that it is genuine in its sustainability intentions and after so much pressure, it's the least consumers and shareholders should expect." Woolworths sourced APP for its signature 'Select Brand' of paper products. At one time the company claimed on stickers that the 'Select Brand' products were produced from 'sustainable forest fibre'.

According to Wake Up Woolworths, there was no evidence to verify this claim. When the issue was brought to the attention of Woolworths, they covered over the stickers. APP responded to the loss of Woolworths contract by claiming that it is on track towards sustainability.