The forestry industry in Indonesia is out of control in regards to corruption and illegality. Up to 90% of all industrial wood extraction is illegal. For 2003, the Forestry Department's annual allowable cut for the nation's forests was set at 6.9 million cubic meters. This was dwarfed by an estimated 80 million cubic meters that were logged to feed the nation's ply, pulp and saw mills and for illegal export. More conservative estimates still show that over half of the wood supply in Indonesia is from illegal sources (50%-70% in 2000).

Overall, illegal logging is said to have destroyed around 10 million hectares of forest. With Indonesia having one of the highest rates of illegal logging in the world, and Asia Pulp & Paper (APP), one of the subsidiary of Sinar Mas Group, being the largest Indonesian pulp producer, it would be hard to believe that APP is not also a partner in crime. APP of course denies all such allegations, stating that "all wood source that is used by APP retains legal documents."

Sinar Mas Group started to cooperate with Yunnan provincial government in August of 2002. During the short period of one year, Sinar Mas Group has enclosed a huge forest pulp paper manufacture base of 27,500,000 mu in Yunnan. Sinar Mas Group has set up a fast-grown-trees company in the areas in the above plan to plant eucalypts. Facing the practice of "enclosing the land by riding a horse", 27,500,000 mu in Yunnan to build the eucalypt fast-grown-trees base, what Sinar Mas Group claimed was that the entire forest-pulp-paper integration base contracted by it in Yunnan was all "barren land (for planting forests); the whole of Yunnan is 100% barren land (for planting forests)". But in fact, there was not so much barren land in the agreement signed by Sinar Mas Group and Yunnan province.
Greenpeace expressed its concern that the mistakes of APP in Indonesia will be repeated in China: the building of large-scale paper pulp companies before an assured continuous raw material supply. However, the Chinese APP companies are following the same disastrous road. This will surely lead to the result that APP depends on demolishing forests in China and other Asian regions to satisfy its shortage of raw materials.