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ASIAN PAPER AND PULP/SINAR MAS: TOO BIG, TIME TO BREAK IT UP?

13 November 2015   21:28 Diperbarui: 14 November 2015   17:12 429
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But, the mutual symbiotic relationship with APP serves Greenpeace's political strategy. Therefore, it seems Greenpeace accepts the evil in order to gain political mileage.

After all, it seems APP was calling for a stronger moratorium. But, it hasn’t done so because of its bleeding heart. According to Greenpeace, APP lost 75% of its U.S. market share and APP has agreed to change legislation as a result of targeting campaign . The blackmail worked, Greenpeace is running the show, which is bizarre, but kudos to them. Greenpeace and the rest of the green lot has managed what many others were unable to complete. Put the fear of the Green Devil into the largest paper and pulp and palm oil company on the planet. Seemingly, APP executives have not figured it out that social radical experiments often flop. At great cost to society, one must add. 

Paradoxically, Greenpeace is mum with the public identifying the APP contractors as the cause of the haze. The reason for this selective amnesia is that Greenpeace is actually aiming for the main prize of the evening:  A radical policy change by Jokowi to expand the existing forest moratorium to include peat land. And, it worked; Jokowi buckled under Greenpeace’s pressure and issued ministerial instructions  to halt the industry dead in its track. The letter and instructions require not only the central and local governments to no longer issue new licenses on peatlands except for public interest, but also companies to no longer conduct land clearing in peatlands for forestry and plantation business, even in already licensed areas.

Applause for the green warriors, but it still leaves one question unanswered: is APP too large? Even the biggest conglomerates from the financial industry, the “Too Big to Fail” eventually did collapse when the going got really tough. 

Like AT&T, the solution for APP being too large for its own good is: It is about time APP breaks up to make itself much leaner, more effective and more profitable company to avoid haze in the future, and avoid being brought down all together.

More importantly, if the Jokowi administration fails to deliver on the haze next year, it could eventually threaten his already weakened presidency further. Which translates into the cruel fact that the administration will do everything in its power to tackle that issue and if that means the downfall of APP, then who knows?

The president’s weak knees on his reactions during times of panic comes at a price. The Indonesian economy is tanking primarily because jungle goods, herbs and insect eating and guys in loincloths are not sustainable economy. Debt continues to increase, the property market is stagnant, the middle class will feel the pinch and Indonesia will revert to remain irrelevant and emerge as the new socialist utopia making the now dead Hugo Chavez proud. Greenpeace and other NGOs started the proverbial fires, but Jokowi’s forestry ministry burned down the economic wealth. Critically examined, the question who started the fires remains unanswered, but the answer to who will burn in its blazing heat is quite apparent.

Oddly enough, Jokowi’s knee-jerking befits the foreign NGO movement dubbed by a conservative think-tank as the new fundamentalism. Claims made by others lack credible economic data. For now, for APP, the fires could prove costly and affect supplies of pulpwood to its mills, particularly a US$2.6 billion (S$3.7 billion) pulp mill under construction in South Sumatra.

For now, APP might just be able to keep the losses under check. For now, but given the mammoth size of the company, it is difficult to say how APP will trim its losses going further. Maybe, it is about time to break up APP. Maybe, APP is too big for our collective good.

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