Plantations, poverty and power - Critical Information Collective

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3 CONTENTS Introduction 1. Plantations do not plant themselves. Nor do pulp mills build themselves 2. The anatomy of five pulp projects • Veracel (Brazil) • Sappi (Swaziland) • Advance Agro (Thailand) • APP (Indonesia) • Botnia (Uruguay) 3. Pulp Inc. Profiles of seven pulp industry proponents • Pöyry: The economic hit men of the pulp industry • The Confederation of European Paper Industries (CEPI): Expansion at any cost • Asian Development Bank: Plantations are increasing poverty in Asia • International Finance Corporation (IFC): Public money for private profits • European Investment Bank (EIB): Investing in destruction • The Food and Agriculture Organisation (FAO): Promoting the lie of “Planted Forests” • Forest Stewardship Council (FSC): Misleading consumers about paper products 4. Future plans for industrial tree plantation expansion and new pulp mills 5. Conclusion and recommendations
4 Introduction The area of industrial tree plantations is expanding in the global South. Vast areas of monocultures have been established to feed raw material to the pulp and paper industry. This report investigates the role of European companies and institutions in promoting this expansion and to look at the impacts on local communities and their environments in the South. It demands an end to financing business as usual in the plantations and pulp and paper sector, and an end to development “aid” to the sector. European companies, aid agencies and institutions play a significant role in promoting the expansion of the industry in the South. The largest pulp and paper machinery exporters are Germany and Finland. In 2005, Germany exported more than US$2 billion worth of pulp and paper machinery and Finland more than US$1 billion.1 European companies and institutions promote the expansion of the pulp and paper industry in the global South not as a form of “development” but because it is beneficial to Europe. The first section of this report looks at the process by which plantations are established and pulp mills are built. What happens before a pulp mill can be built Often the first stage is to build the political framework, to convince the public that large scale industrial tree plantations would be beneficial for the country. Plantation proponents, who include elites in the South, as well as Northern actors, repeat a series of lies to justify the expansion of plantations in the global South. Depending on the audience, they tell us that plantations provide jobs, relieve pressure on forests, are only established on degraded land, restore soils, sequester carbon and help meet the global demand for paper. The biggest lie of all is that plantations are forests. The reality for people living in the areas where plantations have been established is that plantations have destroyed their livelihoods and sucked streams and rivers dry. The few jobs created are dangerous, poorly paid and often seasonal. Plantation proponents do not point out that pulp mills are among the most polluting of industrial processes and that one of the reasons that the South looks so attractive is that regulation is less strict in many countries in the South. Other reasons for the expansion to the South include the fact that trees grow faster in the tropics, meaning that plantations can be logged on much shorter rotations than in the North. Labour is cheaper in the South and governments provide a series of subsidies to encourage the expansion of the industry in the South. In several countries the area of industrial tree plantations expanded rapidly under brutal military dictatorships, when protest against the impacts of plantations was either extremely dangerous or impossible. The nature of global finance is another reason for the expansion in the South. To investors looking to finance the pulp industry, a US$1 billion pulp mill in Brazil is a much more attractive investment than, say, a small scale mill in the UK fed with locally collected waste paper. This is related to the notoriously cyclical nature of the industry. When pulp and paper prices are high, the industry expands, leading to overcapacity and inevitably a price crash. Once the price starts to recover, the industry expands again and the next boom-bust cycle is under way. 1 “Paper mill and pulp mill machinery, paper-cutting machines and other machinery for the manufacture of paper articles”, Index Mundi website. http://www.indexmundi.com/trade/exports/product=725
Page 2 and 3: 1 Plantations, poverty and power: E
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 16 and 17: 15 In his book, “Khor Jor Kor, Fo
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
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53 • US$4.5 billion owed by APP i
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55 explained that “association wi
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57 Indah Kiat faces a series of lan
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59 logging. While the investigation
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61 experimental areas and not from
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63 Staples and Office Depot in the
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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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