Plantations, poverty and power - Critical Information Collective

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15 In his book, “Khor Jor Kor, Forest Politics in Thailand”, Oliver Pye notes that, “The Khor Jor Kor Project represented a pinnacle of state-directed authoritarian forestry. It was closely connected with the return to military dictatorship in Thailand.” 38 The plan was defeated by large scale rural protests and when a broadbased movement resulted in the end of the military junta in May 1992, the scheme was dropped. 39 South Africa’s plantation boom took place during the apartheid regime, under which black people lost all their rights, including rights to land. The South African pulp and paper company Mondi was formed in 1967, during the apartheid regime. The company expanded its plantations rapidly during the 1980s, buying up hundreds of farms to become one of South Africa’s largest land-owners. According to Mondi 48 per cent of its land is currently under land claims. 40 The Finnish consulting firm, Jaakko Pöyry, it seems, had no qualms about working for Mondi during the brutal apartheid regime. Mondi’s Richards Bay pulp mill was commissioned in 1984, 41 at the height of the company’s apartheid-backed land grab. Pöyry won a series of contracts from Mondi on its Richards Bay mill going back to the start of the project. The expansion of the area of industrial tree plantations in Chile took place under Pinochet’s brutal neoliberal dictatorship. Under the Chilean Decree Law 701, the Chilean government reimbursed companies most of their development and management costs for establishing industrial tree plantations. 42 The area of Brazil’s plantations expanded as the result of a generous series of tax breaks for companies which established plantations. The subsidies ran from 1967 to the early 1980s, 43 implemented under Brazil’s military dictatorship. Uruguay’s plantations also expanded in part during a military dictatorship, with the foundations for the country’s plantations boom being laid in 1951, when a joint FAO and World Bank mission made a series of recommendations for the country’s forestry sector, which, taken togetherwith those of a later FAO mission, formed the basis for forestry laws adopted in 1968 and 1987. 44 When a company has covered thousands of hectares of land with tree monocultures, the next step is often to build a pulp mill. More government subsidies are available, such as Free Trade Zone status for the mill (thus avoiding the need to pay taxes or duties on imported machinery to build the mill). Other subsidies might include the building of roads or ports to transport fibre to the mill and to export the pulp. International treaties can also be a form of government subsidy – covering topics such as insurance and 38 Oliver Pye (2005) Khor Jor Kor Forest Politics in Thailand, White Lotus Press, page 109. 39 Ricardo Carrere and Larry Lohmann (1996) Pulping the South Industrial Tree Plantations and the World Paper Economy, Zed Books, page 237. 40 “Land claims and indigenous people”, Mondi’s website: http://www.mondigroup.com/desktopdefault.aspx/tabid-1153/ 41 Graham Ferreira (2005) “Richards Bay expansion: Higher capacity, improved environmental performance”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2005. 42 Dennis Neilson (2007) “Corporate Private Sector Dimensions in Planted Forest Investments”, Forestry Department Food and Agriculture Organization of the United Nations Planted Forests and Trees Working Paper Series, Working Paper FP/40E, October 2007. http://www.fao.org/forestry/site/10368/en/ 43 Dennis Neilson (2007) “Corporate Private Sector Dimensions in Planted Forest Investments”, Forestry Department Food and Agriculture Organization of the United Nations Planted Forests and Trees Working Paper Series, Working Paper FP/40E, October 2007. http://www.fao.org/forestry/site/10368/en/ 44 “Uruguay: Either with the people or with pulp mills and tree plantations”, World Rainforest Movement Bulletin no. 83, June 2004. http://www.wrm.org.uy/bulletin/83/Uruguay.html
16 even public demonstrations against the plant. For example, before construction of Botnia’s pulp mill in Uruguay, the Government of Uruguay and the Government of Finland signed an agreement “regarding the promotion and protection of investment”. This was in effect an agreement assuring Botnia of the Uruguayan Government’s constant support. The agreement even forces the government to pay compensation to Botnia for any losses, caused by, among other things, riots. 45 In 2006, the Uruguayan government sent police and the army to keep protesters away from the pulp mill building site, as a result of massive organised opposition in neighbouring Argentina, bringing back memories of the dictatorship for activists in Uruguay. 46 In Indonesia the rapid expansion of the pulp industry during the 1990s was preceded by a series of studies funded by, among others, the World Bank and the Asian Development Bank. Subsidies and tax concessions, implemented under the Soeharto dictatorship, encouraged the establishment of hundreds of thousands of hectares of industrial tree plantations. The result has been massive deforestation. Much of this was fraudulent: companies took the subsidies, logged the forest and did not establish plantations. 47 Today, more than two decades after the pulp industry’s expansion in Sumatra was planned, there are not enough plantations to provide raw material to the pulp mills, which remain dependent on timber from Sumatra’s rapidly-shrinking rainforests. 48 While production of pulp is moving South, much of the advice that governments, companies and financiers rely on comes from northern-based consulting firms. Much of the financing for pulp and paper mills comes from the North. The machinery and equipment for pulp and paper machines is manufactured in the North. The manufacture and export of pulp and paper machinery is often backed by export credit and guarantee agencies. The expansion in the South is as much a factor of structural problems within the pulp industry, and the North’s “need” to expand its industry and gain access to raw materials as it is a question of economics. Certainly, it has nothing to do with “development”. The pulp sector in Europe The pulp and paper sector in the North may not be expanding as fast as in Latin America or south-east Asia but the North still plays a large role in the industry. According to PricewaterhouseCoopers, more than three-quarters of the 100 biggest companies in the forestry, packaging and paper sector, are from North America, Europe and Japan. 27 have their headquarters in the US, 11 are from Canada, 26 are from Europe and 12 are from Japan. 49 45 “Uruguay: Either with the people or with pulp mills and tree plantations”, World Rainforest Movement Bulletin no. 83, June 2004. http://www.wrm.org.uy/bulletin/83/Uruguay.html 46 “Uruguay: Though not yet in operation, Metsa Botnia’s pulp mill already smells rotten”, World Rainforest Movement Bulletin no 113, December 2006. http://www.wrm.org.uy/bulletin/113/Uruguay.html 47 The most notorious example is Bob Hasan, a close friend of Indonesian dictator Soeharto. Hasan was jailed for corruption after Suharto’s fall. Chris Lang (2006) “Indonesia: Deutsche Bank pulls out of UFS pulp project”, World Rainforest Movement Bulletin no. 102, January 2006. http://chrislang.org/2006/01/24/indonesia-deutsche-bank-pulls-out-of-ufs-pulpproject/ 48 See, for example, my post on Pulp Inc: “APP and APRIL still cannot legally supply their pulp mills”, 10 April 2008. http://pulpinc.wordpress.com/2008/04/10/app-and-april-still-cannot-legally-supply-their-pulp-mills/ 49 “Global Forest and Paper Industry Survey: 2006 Edition - Survey of 2005 Results”, PricewaterhouseCoopers, 2006.
Page 2 and 3: 1 Plantations, poverty and power: E
Page 4 and 5: 3 CONTENTS Introduction 1. Plantati
Page 6 and 7: 5 New investors have emerged recent
Page 8 and 9: 7 1. Plantations do not plant thems
Page 10 and 11: 9 plantations established on grassl
Page 12 and 13: 11 Nations Food and Agriculture Org
Page 14 and 15: 13 Another reason for the move to t
Page 18 and 19: 17 Between 1991 and 2006, the numbe
Page 20 and 21: 19 are asking for”, notes WWF. 60
Page 22 and 23: 21 consume fewer goods. Less advert
Page 24 and 25: 23 credit crunch, unstable oil pric
Page 26 and 27: 25 Investment in plantations in the
Page 28 and 29: 27 possible price. Subsidies, linke
Page 30 and 31: 29 2. The anatomy of five pulp proj
Page 32 and 33: 31 However, while the Bank confirme
Page 34 and 35: 33 make way for its tree plantation
Page 36 and 37: 35 In April 2004, about 2,000 famil
Page 38 and 39: 37 Sappi, Swaziland: 50 years of in
Page 40 and 41: 39 after an assessment by the Soil
Page 42 and 43: 41 impact of the plantations on wat
Page 44 and 45: 43 Advance Agro, Thailand: Deforest
Page 46 and 47: 45 confiscation and liquidation of
Page 48 and 49: 47 management was facing a bankrupt
Page 50 and 51: 49 Indah Kiat, Asia Pulp and Paper,
Page 52 and 53: 51 company owners want profits to b
Page 54 and 55: 53 • US$4.5 billion owed by APP i
Page 56 and 57: 55 explained that “association wi
Page 58 and 59: 57 Indah Kiat faces a series of lan
Page 60 and 61: 59 logging. While the investigation
Page 62 and 63: 61 experimental areas and not from
Page 64 and 65: 63 Staples and Office Depot in the
Page 66 and 67:
65 “the exhaustive studies have c
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67 CEDHA has also filed complaints
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69 of converting grasslands to indu
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71 3. Pulp Inc. Profiles of seven p
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73 Thailand, a power plant for a Ne
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75 Management’s experts the possi
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77 A year after Aracruz’s third p
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79 In January 2003, Pöyry announce
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81 Bank in the early 1990s. Groome
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83 Pöyry’s role in the Baikal Pu
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85 Under carbon financing, Pöyry o
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87 Pöyry is working on second gene
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89 The Confederation of European Pa
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91 CEPI Eurokraft states that “it
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93 sectors need to reduce by 21% co
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95 The ADB’s report notes that th
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97 Nepal In Nepal, the target area
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99 loan for the second plantations
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101 International Finance Corporati
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103 •In December 2000, IFC approv
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105 firm’s activities. After his
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107 safeguards are in practice.
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109 Bank projects are approved by a
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111 •€80 million to Portucel to
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113 The Food and Agriculture Organi
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115 Nevertheless, Poore and Fries n
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117 failure to define industrial tr
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119 FAO’s guidelines recommend th
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121 Rosengren did not reply to my e
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123 Forest Stewardship Council: Mis
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125 body that rubber stamps operati
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127 Criterion 1.6, for example, sta
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129 fast wood plantations have take
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131 Principle 10.8 should prevent t
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133 By April 2004, FSC had, at last
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135 plantations, because it creates
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137 integrated set of common Princi
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139 for clearing areas of Atlantic
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141 Colombia were certified by SGS.
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143 The dissociation became necessa
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145 4. Future planned pulp mills As
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147 Planned pulp projects: 698 Comp
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149 UPM and Sveza Group Vologda Rus
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151 paper industry along ecological
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