The paper is actually a gasket designed to keep oil from leaking out to the shoes.
If you look at the back side of the axle flange you will see an oil catcher trough. There is also a hole through the flange inline with this trough. If oil leaks from the axle seal the trough will catch it and direct it through the hole in the flange through a matching hole in the drum and on to the back side of the wheel. Without the gasket oil will seep out between the flange and drum and onto the shoes.
