Bloomberg News

KFC Using Rain-Forest Wood in Boxes, Greenpeace Says

June 13, 2012

(Corrects with reaction from Asia Pulp & Paper, beginning in 10th paragraph, in story published May 23.)

Yum! Brands Inc. (YUM:US) is making its trademark KFC chicken buckets using wood harvested from Indonesia’s rain forest, destroying the habitat of the endangered Sumatran tiger, Greenpeace International said.

Independent tests on food boxes purchased at stores in Indonesia, the U.K. and China in the past two years found fibers from tropical hardwood trees, according to a Greenpeace report released today. More than half the material in some KFC chicken buckets in China came from such wood, said Rolf Skar, forest campaign director for Greenpeace.

Since 1996, Indonesia has lost about 5 million acres of forest a year to logging, double the rate in the 1980s, according to Global Forest Watch in Washington. Globally, the loss of forests, which remove carbon dioxide from the atmosphere, accounts for a fifth of emissions blamed for global warming. Yum’s China unit generated 44 percent of 2011 revenue (YUM:US).

“Do consumers want to have chicken wrapped in rain forests, or is there a better way of doing business,” Skar said in an interview. “A big customer like KFC, they’re massive in places like China and Indonesia, they have a lot of control over where they get their paper.”

Greenpeace supporters hung a sign on Yum’s headquarters building in Louisville, Kentucky, early today as part of the protest. Police and fire units were at the scene before 8 a.m., Jessa Latona, a Greenpeace spokeswoman, said in an e-mail.

Forensic Tests

Forensic tests on KFC’s paper products confirm a previous Greenpeace report linking the fast-food chain to deforestation. Yum buys packaging from the Jakarta-based Sinar Mas Group’s pulp-paper unit, Asia Pulp & Paper, which Greenpeace said has been logging in the rain forests.

Jonathan Blum, a spokesman for Yum, in an e-mail said 60 percent of the paper purchased by the company is from sustainable forests, with suppliers aiming for 100 percent. The Greenpeace protest is a “publicity stunt,” Blum said in an e- mail.

Food packaging should have “the least impact on the environment as possible,” Yum said in a 2010 report. Yum owns and franchises more than 37,000 restaurants worldwide.

Nestle SA (NESN) and Unilever NV (UNA) are among companies that have stopped buying paper products from Asia Pulp & Paper. More than 60 companies have either ended supply contracts with Asia Pulp & Paper or sold their shares, Latona said.

Asia Pulp & Paper “deplores this distortion of the facts by Greenpeace,” according to a May 23 statement. “We are asking that Greenpeace stops portraying Indonesia and its leading companies as the villains in the fight against climate change.”

Mixed tropical hardwood fiber “can be found easily in recycled paper, or it can come from the legal and sustainable harvesting of trees in primary rainforest,” Asia Pulp & Paper said. “It can also come from tree residues that are cleared, after a forest area has become degraded, logged-over or burned, as part of a sustainable development plan. APP has strict policies and practices in place to ensure that only residues from legal plantation development on degraded or logged-over forest areas and sustainable wood fiber enters the production supply chain.”

Sumatran Tiger

Asia Pulp & Paper also is logging ramin trees, a species protected by Indonesia and the Convention on International Trade in Endangered Species of Wild Flora and Fauna, Greenpeace alleged in a March report. The work is pushing the Sumatran tiger, protected under international conservation programs, closer to extinction, Skar said.

The company said it’s in compliance with Indonesian government laws and regulations and that an independent report confirmed that no protected tree species were entering the supply chain. The government cleared Asia Pulp & Paper of that charge, the company said.

“APP’s chain of custody system traces the origin of raw material, evaluates its legal and environmental status, to minimize the risk of contamination and to ensure that endangered species are protected,” according to a Feb. 29 statement. “However, APP accepts that no system in the world, no matter how rigorous, is 100 percent failsafe. We welcome the recent report from Greenpeace International and will study it carefully to ensure that we identify and act on any weaknesses in our chain of custody systems.”

Ramin grows in peat land swamp forests, home to the Sumatran tiger, one of six subspecies. It is classified as critically endangered with about 400 left in the wild, according to WWF’s website.

Greenpeace hired the Institution for Paper Science and Technology in Darmstadt, Germany, and Integrated Paper Service in Appleton, Wisconsin, to test for fibers in Yum’s food packages. Seven out of 10 food boxes from the U.K. shows rain forest fiber, according to today’s report.

“Certainly by now, companies should know that buying paper products from Asia Pulp & Paper brings with it a risk,” Skar said.

To contact the reporters on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net; Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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