Forest Management Overseas

Basic Policy

As national governments throughout Southeast Asia strengthen their promotion of natural forest conservation, they are implementing restrictions on harvesting and exports, among other measures that reduce the supply of natural wood. In addition, as momentum toward SDGs and sustainable development increases, it has become necessary to convert to timber obtained through forest plantation and certified forest management practices that ensure both environmental consciousness and stable supply. The Sumitomo Forestry Group implements forest plantation operations that take local communities and ecosystems into consideration to enable a stable and sustained timber supply while helping to reduce the impact on natural forests.

Overseas Plantation Area (Unit: ha)

Country Name of Plantation Business Managed Area Plantation Area for Social Forestry Planted Area in FY2019 Logged Area in FY2019
Indonesia Industrial tree plantation PT. Mayangkara Tanaman Industri 104,664 - 2,787 2,396
PT. Wana Subur Lestari 40,750 - 2,766 2,463
PT. Kutai Timber Indonesia (KTI) 5,873 - 0 172
Social forestry PT. Kutai Timber Indonesia (KTI) - 5,779 - -
Koperasi Serba Usaha Alas Mandiri (KAM KTI) - 1,005 - -
Koperasi Bromo Mandiri KTI (KBM KTI) - 1,003 - -
PT. Rimba Partikel Indonesia (RPI)*1 - 416 - -
Other*2 - 4,548 - -
  Subtotal 151,287 12,751 5,553 5,031
Papua New Guinea Industrial tree plantation Open Bay Timber Ltd. (OBT) 31,260 - 491 200
New Zealand Industrial tree plantation Tasman Pine Forests Ltd. (TPF)*3 36,360 - 1,386 776
Total 218,907 12,751 7,430 6,007

*1 The land area is calculated by conversion from the number of seedlings distributed at RPI. Vegetation determined to have withered is included in the harvest.

*2 Others includes data of environmental reforestation for social contribution and consulting business for other companies

*3 Includes plantation forest and logged area for land afflicted by forest fires in February 2019.

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Forest Management Overseas

The Sumitomo Forestry Group is expanding three approaches to conducting plantation forest operations; industrial tree plantation, environmental reforestation, and social forestry. The purpose of industrial tree plantation is to produce wood and increase the supply of plantation timber (raw material). By zoning its managed land appropriately, the Group aims to achieve both the conservation of valuable ecosystems and the development of local communities through plantation forest operations.

In addition, the Group also conducts environmental reforestation, planting trees for environmental conservation. It aims to contribute to environmental conservation through the expansion of forested areas and the fulfillment of the ecosystem services function of forests, by actively planting trees on land where natural regeneration would otherwise be difficult. The Group has also been engaged in “social forestry” which shares the economic benefits of forest plantation with local communities while enlisting the cooperation of local residents.

Sustainable Plantation Business by Leveraging Forestry Certification System

Of an approximately 30,000-hectare plantation owned and managed by OBT* of Papua New Guinea, about two-thirds, or 20,000 hectares, has received FSC® forest certification*1. Under the goal to plant on the 500-hectare land a year, OBT practices sustainable forest management that lays basis for communities and environment to function in harmony. The area planted in fiscal 2019 was 491 hectares. Approximately 36,000 hectares managed by Tasman Pine Forests Ltd. (TPF) of New Zealand has been FSC®-FM certified*2. In fiscal 2019, they planted approximately 1,386 hectares of forest, carrying out sustainable forest management in harmony with the local community and environment.

* OBT: CW certification FSC-C019117, FM certification FSC-C103694, TPF: FM certification FSC-C132002

* TPF plantation area includes plantation forest afflicted by fire.

Plantation Forest Operations in West Kalimantan, Indonesia (Industrial Tree Plantation)

Since 2010, under the license from Indonesian Ministry of Environment and Forestry permitting utilization of timber from commercial forests*, Sumitomo Forestry has been committed to a large-scale forest plantation business conducted in cooperation with the ALAS Kusuma Group, a company involved in forestry management and plywood manufacturing in Indonesia. The project covers areas in which forest degradation has advanced due to commercial harvesting from the 1960s to the mid-1990s in addition to repeated illegal logging and slash-and-burn farming practices. In these types of lands, Sumitomo Forestry Group actively uses devastated forests that are not economically viable as plantation forests while taking on the responsibility of preserving forests with high conservation value. In addition, we believe it is important to prevent further degradation of forests by providing an economic infrastructure to local communities through businesses.

The plantation land used in these operations exists in tropical peatland which plays an extremely vital role in the carbon water cycle on a global scale. Sumitomo Forestry launched these operations by conducting detailed typographical survey and a boring test to understand the peat distribution and depth at a level never achieved in the world before. We properly manage water according to the wealth of data gained through these surveys to control greenhouse gas emissions from peatlands and forest fires. This peatland management model is the first in the world to contribute greatly to measures that combat climate change. Even today, Sumitomo Forestry continues in efforts to improve peatland management models by using satellites, drones, and other leading-edge technologies.

* Issued by the Indonesian government, this is a business license to engage in industrial tree plantation operations in Indonesia. The license is valid for 60 to 100 years.

  • Signed a contract with International Finance Corporation (IFC)—member of the World Bank Group for the provision of advisory services. In accordance with the concept of High Conservation Values Forests (HCVF)* that draws great attention in recent years, Sumitomo Forestry conducted assessments on its operational properties with IFC and investigated whether the property use plan is implemented as stated and adequate consideration is made for biodiversity and livelihood of local residents. The reports of the investigation results were audited by a third-party organization, and valuable comments made by stakeholders on the report were adapted in the business plan.
  • Held public hearings where stakeholders such as local residents, companies in the communities, academics, NGOs, and government officers were invited to share the results of the investigations.
  • Obtained the PHPL certification, formally called Sertifikat Pengelolaan Hutan Produksi Lestari issued by Ministry of Forestry (Departemen Kehutanan) on sustainable forest management.
  • Held public hearings with stakeholders prior to plantation forest harvest with the aim of deepening stakeholders' understanding about our businesses and consideration to environment and social issues that we promote. This venue also actively pursued cooperation from our stakeholders to prevent forest fires. Participants not only shared a lot of positive feedback but also gave us comments fruitful in the formulation of our business plans.
  • Advanced efforts with the Indonesian Ministry of Environment and Forestry to build a model for sustainable plantation forest operations and peat management methods in peatlands through our businesses and research activities.
  • The Commissioner of Peat Land Recovery visited the local grounds to observe the peat management technology. Gained high praise for groundwater level control technology and the newest initiatives founded in data as well as introduced both in an international venue for government officials as beneficial examples for Indonesia.
  • Entered into a Memorandum of Understanding (MOU) with the Indonesian Ministry of Environment and Forestry for a pilot project that aims to examine unique water level management technologies to sustainably manage peatlands and establish peatland management models in Indonesia. The term of this project is set for five years. The project is being conducted with the cooperation of the Ministry of the Environment and Forestry as well as the Peatland Restoration Agency.
  • The peatland management technology from this project was introduced as an example of excellent, leading-edge peat management at the November 2017 United Nations Climate Change Conference (COP23) held in Bonn, Germany.
  • In 2018, the Group formulated a grievance mechanism with the help of the IFC. Together with the University of Indonesia, we also conducted a social survey of operational and surrounding areas on a three-year plan.
  • We reported on peatland management technology at the December 2018 United Nations Climate Change Conference (COP24) held in Poland.
  • We announced initiatives related to WSL peatland management and plantation operations at The Seventh Tokyo International Conference on African Development (TICAD7) held in Yokohama in August. We introduced for the first time in the world that tropical peatland forest not only acts as the lungs of the Earth but also a heart that circulates water around the globe.
  • We also announced a peatland management system that prevents fires at a side event of the United Nations Climate Action Summit held in New York in September.
  • At the United Nations Climate Change Conference (COP25) held in Madrid in December, we presented water management technologies and the preservation of rare species.

* In considering the value of forests, it goes beyond their value as absorbers of greenhouse gases, outlining methods of extracting each one of the many aspects of value forests contain. These aspects include their value as habitats of rare, endangered animal species, as water resources, as providers of essential natural services such as soil erosion control, and as land that has an intimate relationship with the lifestyles and cultures of local communities.

Conservation of Peat Swamp Forests

Conventionally, reforestation in peatlands* pushed water out of the soil and dried the land by digging many drainage routes for planting. However, drying-out land results in the decomposition of organic matter in the peat soil and acts to heighten global warming due to the emission of greenhouse gases. Dried peat, once ignited, is very difficult to extinguish, creating the risk of large-scale forest fires. The soil needs to always be in a damp state to prevent fires, but this means maintaining a constant groundwater level throughout the year through proper water level management is extremely vital. Therefore, in drawing up a forestation plan, the Sumitomo Forestry conducts detailed measurements and surveys based on which the following areas are identified: (1) forests to be protected with riparian forest and high rarity value, (2) areas to set as buffer zones between protection zones and plantation zones, and finally (3) areas the final determination as plantation zones. In plantation zones, water routes that function as round log transport, water level control, and fire belts are constructed while allowing a constant water level in the peatlands to always be maintained without affecting the rivers by not directly connecting the water routes and the rivers. Maintaining a constant groundwater level not only prevents forest fires and minimizes the breakdown of peats but also limits the emission of greenhouse gases. These results have been announced at relevant government agencies, universities and other institutes in addition to the United Nations Framework Convention on Climate Change (COP25), and some aspects have even been adopted as new policy measures.

Regions where peatlands thrive, such as the Amazon, the Congo Basin, and Indonesia, have the most rainfall throughout the world. Tropical forests and peatlands act as a pipeline dispersing water into the air from a large amount of rainwater accumulated in the ground during the monsoon season through evaporation. The tremendous evaporation from these tropical forests and peatlands has the potential to act as a necessary water cycle function not only locally but at a continental and global scale. The collapse of the world’s water cycle will result in abnormal weather and adversely impact agriculture, which will cause even greater food shortage issues. Sumitomo Forestry recognizes this fact in its peatland operations. Our presentation at The Seventh Tokyo International Conference on African Development (TICAD7) held in Yokohama in August 2019 advocated the importance of proper tropical forest and peatland management because these regions act as the heart of the Earth circulating water throughout the planet.

* Characteristics of the peat soil found in the peat swamps is known to emit enormous amounts of greenhouse gases, typically carbon dioxide and methane gas, if the soil was inappropriately exploited. Owing to joint researches by Japanese and Indonesian academic institutes, this project takes consideration to minimize greenhouse gas emissions that accrue as the peaty soil dissolves during exploitations.

Landscape management of plantation forest operation designed based on detailed data

Monitoring the water level in peatlands

Tasman Pine Forests Ltd. (TPF) Forest Fire Response

Forest fires that hit farmland in the Nelson region of New Zealand on February 5, 2019 burned nearly 2,300 ha of forest. The damage from this fire included about 1,300 ha of TPF-owned plantation forest.

In response to this disaster, TPF worked with Fire and Emergency New Zealand (FENZ), local municipalities, and forestry associations and other relevant agencies to continuously conduct awareness-raising activities about fire in the local community and take other proactive fire-fighting measures. We also increased fire-fighting equipment provided to FENZ and strengthened patrols.

Specific measures included enhancements to the Fire Index bulletin board that shows the fire risk level, distribution of leaflets to evoke caution in the local community, the creation of a system to always have fire-fighting helicopters on standby when the risk of fire is high, stockpiling of fire extinguishing agent, new preparation and management of fire water ponds, fire-fighting equipment acquisition and training, increase in the number of people conducting patrols, and preparations of forest routes.

TPF continues to put in place measures to minimize damage caused by forest fires as much as possible.

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Sustainability Report