BROKEN PROMISES: A case study on how the Tokyo 2020 Games and Japanese financiers are fueling landgrabbing and rainforest destruction in Indonesia

The Tokyo 2020 Olympic organizers and sponsors have committed to host a sustainable Olympics that “showcase solution models to people in Japan and around the world” and contribute towards the realization of the Sustainable Development Goals (SDGs).1 Unfortunately, Tokyo 2020’s substantial procurement of unsustainable tropical timber has already undermined this pledge. The world’s tropical forests are critical for achieving the SDGs and maintaining a habitable planet, but they are rapidly being destroyed due to industrial logging and conversion to plantations.Tropical forests help regulate global climate and rainfall patterns; sequester and store carbon; meet the basic needs of over 1 billion people for food, water, shelter and medicines; and safeguard the majority of the Earth’s remaining terrestrial biodiversity. Alarmingly, tropical tree cover loss has nearly doubled over the past 10 years. In 2017 alone, tropical forests covering an area the size of Bangladesh, equivalent to 15.8 million hectares (158,000 km2) or 40% of Japan, were lost, the second highest rate of deforestation since 2001.3 Tropical deforestation and degradation account for up to one fifth of global greenhouse gas emissions.As of May 2018, at least 134,400 sheets of tropical plywood from Malaysia and Indonesia have been used as concrete formwork to construct the new Tokyo Olympic venues.5 Tokyo 2020’s Sustainable Sourcing Code for Timber6 requires legality, sustainability, consideration of Indigenous and community rights, and worker safety for all new wood procured for the Olympics.

While this Sourcing Code warrants significant improvement (see Recommendations), Tokyo 2020’s extensive use of tropical plywood from these two countries flies in the face of the Code’s requirements and the Game’s sustainability commitments given the illegal logging, human rights abuses, and high deforestation rates that have been widely documented in both the Malaysian and Indonesian forestry sectors7 and given what is known of Tokyo 2020’s plywood suppliers. In April 2017, investigators found the use of tropical plywood manufactured by Malaysian logging company Shin Yang at the construction site of the New National Stadium in Tokyo.8 Shin Yang has been previously exposed for illegal and unsustainable logging of tropical forests and violations of Indigenous land rights in the state of Sarawak, Malaysia.9 The Japan Sports Council, which oversees construction of the Stadium, confirmed the use of Shin Yang wood but justified it on grounds that it had PEFC certification. However, a closer look shows that Shin Yang’s PEFC-certified wood exports to Japan are linked to labor abuses, as well as possibly social conflict and logging in the intact Heart of Borneo rainforest in Malaysia.10 Shin Yang wood was also found at the Olympic Village construction site in December 2017.11 Shin Yang has denied the allegations of labor abuse.

In May of this year, investigators uncovered the use of tropical plywood manufactured by Indonesian company Korindo for construction of the Ariake Arena, the planned volleyball venue. The wood had no associated sustainability certification according to information disclosed by Tokyo 2020 authorities, and was supplied by Japanese timber and building materials trading company Sumitomo Forestry (TYO: 1911). Korindo has been implicated in illegal logging and forest clearance as well as human rights abuses (see Section 2), indicating a high risk that wood supplied to the Tokyo 2020 Olympics was tainted and illegal. Sumitomo Forestry stated to RAN that it is committed to responsible timber procurement and that it only supplied legally sourced timber to Olympics authorities, in accordance with Indonesian standards.

Tokyo 2020 Olympic organizers insist that they are complying with the Timber Sourcing Code. However, the Tokyo 2020 Olympics’ use of high risk timber from Malaysia and Indonesia is a result of the inadequacy of Tokyo 2020’s timber sourcing standards. For example, the standards have no requirement to protect High Conservation Value (HCV) areas or High Carbon Stock (HCS) forests, which is essential to avoiding deforestation and reducing greenhouse gas emissions. This issue is also indicative of a wider problem in Japan’s timber supply chain: an addiction to the use of tropical wood by the construction industry and a widespread failure by companies to conduct proper due diligence to ensure the wood is legal, sustainable and not linked to human rights abuses. Japan is the largest global consumer of tropical plywood, largely from Malaysia and Indonesia. These reckless practices are being facilitated by the financial sector, notably Tokyo 2020 Gold Sponsor bank SMBC Group, which is heavily exposed to the forestrisk commodity sector and until recently had no clear policies to safeguard against risks in the sector (see Section 4). The timber procurement practices of the Tokyo 2020 Olympic organizers and Japanese companies have already compromised the sustainability credentials of the Tokyo 2020 Olympics. They further risk undermining Japan’s commitment to the SDGs, which aim to halt deforestation and restore degraded forests by 2020. The following case study on Korindo demonstrates why Tokyo 2020 must urgently strengthen its Timber Sourcing Code in order to avoid further damage to its reputation and commitment to sustainability.

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