Plantations, poverty and power - Critical Information Collective

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63 Staples and Office Depot in the US. When Staples stopped buying paper from APP in February 2008, Staples’ Vice President for Environmental Issues Mark Buckley told the Wall Street Journal that a decision to continue selling APP products would be “at great peril to our brand.” 315 315 “That was easy”, Grist, 8 February 2008. http://www.grist.org/news/2008/02/08/staples/
64 Botnia, Uruguay: Monocultures, pollution fears and an international dispute The US$1.2 billion Botnia pulp mill is the largest single foreign investment in Uruguay’s history. 316 Built on the Uruguay River at Fray Bentos, the plans for the pulp mill led to massive protests in Argentina and Uruguay. Spanish company ENCE also planned to build a pulp mill near Fray Bentos, but relocated its pulp mill to Colonia in the south-west of Uruguay, as a result of the protests. 317 The Argentinian government was so concerned about pollution from the mill that it took Uruguay to the International Court of Justice (ICJ) in the Hague. In July 2006, the ICJ ruled against Argentina. But this first ruling only stated that the court could not order a halt to construction of the pulp mills because there was no immediate danger. In other words, any pollution would happen once the pulp mill starts operations and the court cannot rule on something that has not yet happened. 318 It will take the ICJ several years to reach a decision about whether the construction of the pulp mill violates the 1975 Uruguay River Treaty. Under the treaty, either country has to inform the other about any developments which might have an impact on the river, before the project starts. In the case of the Botnia pulp mill, Uruguay did not do so, claims Argentina. The pollution from the pulp mill has received much attention internationally. Less discussed is the fact that the pulp mill sources its raw material from thousands of hectares of eucalyptus plantations, which are drying up streams and leaving communities without water supplies. Botnia is a Finnish company, owned by the Metsäliitto Group (a cooperative of Finnish forest owners, 53 per cent) and UPM Kymmene (47 per cent). 319 Despite the controversy, the pulp mill received a series of subsidies from European bilateral institutions as well as from the World Bank. In November 2006, the International Finance Corporation agreed to finance the project, giving a green light to other financiers to get involved. Lavish international subsidies Financing for Botnia’s pulp mill comes from the following sources of public money: •US$170 million from the International Finance Corporation; •US$350 million guarantee from the Multilateral Investment Guarantee Agency; •US$100 million reinsurance from Finnvera of MIGA’s guarantee; •USS$70 million from the Nordic Investment Bank; •US$230 million buyer credit guarantee from Finnvera; •US$7 million from Finnfund to Botnia’s plantation subsidiary Forestal Oriental. When IFC announced its support for the pulp mill, Erkki Varis, Botnia’s CEO and President, wrote that 316 “URUGUAY: World Bank gives go ahead to Botnia mill”, Brazil Report, 24 October 2006. 317 “Ence’s Relocation of New Uruguay Mill Settles Dispute with Argentina“, TAPPI, 13 December 2006. http://www.tappi.org/s_tappi/doc.aspCID=183&DID=553739 318 “Uruguay welcomes World Bank report on paper mills bordering Argentina”, Xinhua General News Service, 14 October 2006. 319 “Oy Metsä-Botnia Ab”, Botnia website: http://www.botnia.com/en/default.asppath=204,208,225
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1 Plantations, poverty and power: E
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3 CONTENTS Introduction 1. Plantati
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5 New investors have emerged recent
Page 8 and 9:
7 1. Plantations do not plant thems
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9 plantations established on grassl
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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
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 66 and 67: 65 “the exhaustive studies have c
Page 68 and 69: 67 CEDHA has also filed complaints
Page 70 and 71: 69 of converting grasslands to indu
Page 72 and 73: 71 3. Pulp Inc. Profiles of seven p
Page 74 and 75: 73 Thailand, a power plant for a Ne
Page 76 and 77: 75 Management’s experts the possi
Page 78 and 79: 77 A year after Aracruz’s third p
Page 80 and 81: 79 In January 2003, Pöyry announce
Page 82 and 83: 81 Bank in the early 1990s. Groome
Page 84 and 85: 83 Pöyry’s role in the Baikal Pu
Page 86 and 87: 85 Under carbon financing, Pöyry o
Page 88 and 89: 87 Pöyry is working on second gene
Page 90 and 91: 89 The Confederation of European Pa
Page 92 and 93: 91 CEPI Eurokraft states that “it
Page 94 and 95: 93 sectors need to reduce by 21% co
Page 96 and 97: 95 The ADB’s report notes that th
Page 98 and 99: 97 Nepal In Nepal, the target area
Page 100 and 101: 99 loan for the second plantations
Page 102 and 103: 101 International Finance Corporati
Page 104 and 105: 103 •In December 2000, IFC approv
Page 106 and 107: 105 firm’s activities. After his
Page 108 and 109: 107 safeguards are in practice.
Page 110 and 111: 109 Bank projects are approved by a
Page 112 and 113: 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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