One of the most important companies in pulp and paper production is the Asia Pulp & Paper Company, ranking tenth in the world. One of its branches is Indah Kiat Pulp & Paper, which has a pulp and paper mill located in Perawang to the south of Sumatra. This company has a long history regarding environmental impact. It is accused of environmental devastation, of blatant disrespect to the rights of local communities and the country's legislation, resorting to undue pressure and to bribes to government officials. The "cheap" paper they produce - obtained at a high cost in destruction of forests, river contamination and liquidation of the local inhabitants' means of living - is finally exported, mainly to Europe and Asia.
Indah Kiat Pulp & Paper acquires most of the wood it uses as raw material through a long term contract with the PT Arara Abadi company (a company affiliated to Indah Kiat Pulp & Paper) which has a concession granted by the Government of Indonesia to exploit 300,000 hectares of forest.
This company is responsible for the destruction of forests to ensure a supply of wood to the Indah Kiat Pulp & Paper. Presently, it is also starting to use as raw material wood from plantations of fast-growing species such as acacias and eucalyptus, which are also causing the destruction of forests and means of life of the local populations.
Not only do the activities of the Indah Kiat Pulp & Paper Company destroy the forests of Indonesia --that have always been and still are a very important element in the lives of the local peoples-- but they also contaminate rivers with emissions from the pulp and paper mill, thus depriving the local communities of an important source of subsistence.
In fact, the inhabitants of Perawang used to earn their living by fishing in the Siak river. According to declarations to the British newspaper The Guardian made by one of the inhabitants in the area "each fisherman's daily catch used to average 10 kilos ... now those few people who still do it are lucky if the catch one or two --fish, not kilograms-- a day." As a result the inhabitants have been forced to resort to illegal logging to ensure their subsistence.