The Paradise Papers: Leaked records reveal offshore’s role in forest destruction

Desdemona Despair

By Scilla Alecci
8 November 2017

(ICIJ) – On the island of Padang, in the heart of Indonesia’s industrial logging country, a group of teenagers pointed to the charred remains of sago palm trees – the remnants of the fires that have scorched the archipelago nation’s lush forests for two decades.

“There’s a sense of anger,” said Alvin, 15, who grew up in the village of Bagan Melibur. “The effects of forest burning and deforestation are enormous” for both humans and animals, he said.

In 2015, the fires were so intense across the island chain that a bitter haze blanketed much of Indonesia and drifted as far as Thailand. Airline flights were grounded. Children wore protective masks to school. Studies linked smog levels to at least 19 deaths and respiratory problems in as many as half a million people. Indonesia’s meteorology agency called the unbreathable murk “a crime against humanity.”

The fires that produced the smog were a result of a prolonged dry season and slash-and-burn practices used to clear Indonesia’s lush peatland forests to make way for palm oil and pulpwood plantations. In the fires’ wake, environmental groups lashed out at the industrial players involved in clearing Indonesia’s forests, including Asia Pacific Resources International Holdings Ltd., also known as April, one of the world’s largest pulp and paper producers.

Appleby and the banks, the team that helps this happen

A leak of offshore records now reveals that April, like some other natural resources companies, owed its ability to thrive and log huge sections of Indonesia’s tropical forests, in part, to a global network of elite bankers, lawyers and accountants that helped it navigate corporate and tax challenges.

The documents come from the offshore law firm Appleby and corporate services provider Estera, two businesses that operated together under the Appleby name until Estera became independent in 2016.  They show how the Bermuda-based law firm Appleby and brand-name banks such as Credit Suisse and the Netherlands’ ABN Amro have continued to help April structure its operations despite questions about the company’s environmental record.

Internal records from Appleby underline concerns of scholars, advocacy groups and government officials that the offshore financial system contributes to the expansion of companies involved in leveling forests and other practices that contribute to global climate change. Compounding the problem is the fact that Indonesia, home to the world’s third-largest expanse of tropical forests, has the highest rate of deforestation.

The leaked documents, now known as the Paradise Papers, were obtained by German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ) and 94 other media partners.

An ICIJ analysis of the documents found that April is one of a dozen Asia-based forest products companies that have used the services of Appleby, which calls itself “one of the world’s largest providers of offshore legal services.” April has shuffled billions of dollars through a web of offshore companies stretching from the Cook Islands in the South Pacific to the British Virgin Islands in the Caribbean, ICIJ’s review found. [more]

Leaked Records Reveal Offshore’s Role In Forest Destruction