Stockholm – Swedish companies pride themselves on their high standards of business ethics, but now corporate heavyweights have come in for stinging criticism for their alleged role in the destruction of Indonesian rainforests.
A report by the Swedish Society of Nature Conservation (SSNC), which was published last week, said that several Swedish blue-chip corporations have either equipped, bankrolled or traded with the Indonesian logging industry, which is accused of large-scale destruction of the country's tropical forests.
SSNC and the World Wildlife Fund accuse Indonesian companies Indah Kiat, owned by Asia Pulp and Paper, and Riau Andalan Pulp and Paper (RAPP), owned by Asia Pacific Resources International Holdings, of turning huge areas of the irreplaceable Indonesian rainforest into acacia and eucalyptus plantations, with disastrous consequences for inhabitants and wildlife.
And all this is done with the help of Swedish companies, SSNC claims in the report, which reads like a Who's Who of the country's business elite.
"Many Swedish companies show a happy face at home, but abroad they don't have control over the companies they work with and are involved in operations that destroy the environment and violate human rights," said SSNC chairman Mikal Karlsson.
Swedish financial services giant Nordea figures prominently in the report for allegedly helping to fund construction of an Indah Kiat paper plant, while ABB, the Swiss-Swedish engineering company, delivered machinery to both Indah Kiat's and RAPP's factories.
Others include the Swedish Export Credits Guarantee Board, a government-backed organisation, which issued Indonesian forestry companies with loan guarantees.
Swedish firms Korimpeks and CellMark promoted the Indonesian companies' interests in Sweden, and paper manufacturers Duni, Klippan Paper and Munkedals imported Indonesian pulp, it said.
ABB confirmed it had made the deliveries to Indonesia, and admitted it did not see any problems in doing business with the companies at the time – partly because the Swedish Export Credits Guarantee Board gave its approval.
Nordea spokesman Lena Hoeglund-Rosen said an unspecified credit was granted to Indah Kiat in the mid-1990s, but added that the bank's policy today was to deny loans to companies which "violate international practice".
But last September and this January, when SSNC contacted companies about the organisation's report, it said Nordea did not reply to their questions at all while ABB maintained it had operated according to Indonesian law.
The other companies accused of unethical business practices either declined to comment or pledged that any past mistakes would not be repeated.
But some appear unlikely to give up so easily. Currently, a new paper mill in the Indonesian part of Kalimantan is planned, with funding from United Fiber Systems and China National Machinery, SSNC said.
CellMark has committed itself to marketing 90 per cent of the plant's acacia pulp production over a 10-year period, but according to company vice-president Tomas Hedberg, financing for the project is not yet clear.
Environmental organisations both in Europe and Indonesia have criticised the plans, saying the transformation of rainforests into plantations destroys local villages and threatens endangered species such as orang utans.
Another gigantic paper mill in Kalimantan 'would be devastating for the rainforest and all its inhabitants', said Mr Karlsson.