policy brief This reveals the negative impacts generated by the pulp and paper industry in Indonesia, especially in Riau, related to environmental damage and human rights violations. From 2016 to September 2022, major banks such as BRI, Mandiri, BCA, BNI, and Mizuho Financial played a significant role in financing this sector, with total financing reaching USD 26,432 billion. Although this industry is expected to boost the regional economy through job creation, the reality is that irresponsible financing practices have worsened environmental and social conditions.
The pulp and paper industry in Riau faces serious challenges, including massive deforestation and social conflicts between companies and indigenous communities. Between 1982 and 2023, natural forest cover in Riau declined drastically from 6,4 million hectares to 1,3 million hectares, causing various natural disasters and threatening biodiversity. Local communities dependent on forests are increasingly marginalized due to non-transparent policies and corrupt practices in issuing permits.
policy brief This emphasizes the need for stricter regulation and commitment from financial institutions to ensure that financing in the pulp and paper sector is not only economically profitable but also environmentally responsible and respects human rights. The implementation of Environmental, Social, and Governance (ESG)-based policies is essential to encourage companies to be more responsible. Without these steps, the risk of environmental damage and social conflict will only continue to increase, threatening the sustainability of ecosystems and the well-being of communities around the company's operating areas.
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