"template, report and xmlData are supposed to be parameters passed to the method. did I not do that correctly?"

You did, but then you also defined them as part of the class definition, outside the method, which makes them object properties.

"or when I try to add arguments I get the error:

"'can't convert arg to object'"

That's because the generatePdfReport method expects to be passed three Java objects as parameters. This is totally possible with Inline::Java, but generally speaking I find it much easier to pass plain old strings back and forth over the language barrier.

In your case, the FileInputStream and FileOutputStream objects can easily be constructed from a filename (i.e. a string), so it certainly makes a lot of sense to pass them into the method as plain old strings instead of instantiating InputStream/OutputStream objects at the Perl end and passing them in.

Anyway, this is how I'd do it...

#!/usr/bin/perl

use strict;
use warnings;

BEGIN {   
    $ENV{CLASSPATH}='.:/usr/share/java/*:/the paths to the jars used/'
+;
}

use Inline Java => <<'END', CLASSPATH => $ENV{CLASSPATH};
import java.datasource.dom4j.Dom4jDataSource;
import java.xmlreport.ProcessPdf;
import java.xmlreport.ProcessReport;
import java.io.InputStream;
import java.io.OutputStream;
import org.dom4j.Element;

public class PdfReportGenerator
{
    public static void generatePdfReport(
        String template_filename,
        String report_filename,
        String xmlData_filename
    ) throws Exception
    {
        // This function gets passed its parameters as strings
        // (makes it easier to call from Perl), so turn them into
        // InputStream and OutputStream objects.
        InputStream template = new FileInputStream(template_filename);
        OuputStream report   = new FileOutputStream(report_filename);
        InputStream xmlData  = new FileInputStream(xmlData_filename);

        ProcessReport.init();

        // create the report.
        ProcessPdf proc = new ProcessPdf(template, report);
        proc.processSetup();
        proc.processData(new Dom4jDataSource(xmlData), "");
        proc.processComplete();
    }
}
END

my $generator = PdfReportGenerator->new;
$generator->generatePdfReport(
    "/path/template.docx",
    "/path/report.pdf",
    "/path/datasource.xml",
);
[download]

This is obviously untested, as I don't have the required Java libraries on this system. But, based on my fairly limited experience of Inline::Java, I think it ought to work (or at least be close to working).