Plantations, poverty and power - Critical Information Collective

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“the exhaustive studies have clearly endorsed the benefits the mill will bring. We hope that today’s
decision can contribute to convincing the various stakeholders that the mill will comply with relevant
environmental standards and not compromise the wellbeing of the inhabitants in the area.” 320
But research by World Rainforest Movement in the areas of Botnia’s industrial eucalyptus monocultures
shows that IFC’s studies were far from “exhaustive”. Instead they played down the problems and most
importantly, failed to take into account the views of local people living near the plantations.
One of the IFC’s own reports illustrates problems. In April 2006, IFC hired Hatfield Consultants, a
Canadian firm, to review Botnia’s (and Ence’s) environmental impact assessments. Hatfield’s report,
written by Wayne Dwernychuk and Neil McCubbin, was critical of the assessments (which had already
been accepted by the Uruguayan government). For example, Dwernychuk and McCubbin point out that in
the previous assessments, “The reference to dioxins/furans in mill discharges appears to be handled in a
rather cavalier manner.” Dwernychuk and McCubbin noted that “These compounds are of significant
concern to the general public, and should be discussed fully. Setting the issue aside by concluding that
dioxins/furans will be at ‘undetectable levels’ is unacceptable.” 321
Nevertheless, the IFC reported on its website that “Studies by independent university and international
research centers have shown that wastewater from ECF bleaching is virtually free of toxic chlorinated
compounds such as dioxin.” 322 IFC fails to explain what the phrase “virtually free” means in the context
of dioxins, how this differs from “undetectable levels”, or even whether this poses a risk.
Botnia is well aware of the risks of pollution from pulp mills. In 2003, a UPM pulp mill in Finland spilled
7,500 litres of black liquor into Lake Saimaa. A town called Bay of Hauki (named after a fish) is now
known as “Pulp” because of the smell from the nearby pulp mill. 323
Once the IFC loan was in place, other financiers jumped on board – without carrying out their own
studies of the project. MIGA’s guarantee covers the investments for a period of up to 15 years, “against
the risks of expropriation, war and civil disturbance, and breach of contract.” 324
In April 2007, the Nordic Investment Bank (NIB) signed an agreement with the government of Uruguay
to allow NIB to grant a loan to Botnia for its pulp mill. The agreement includes tax exemption to NIB and
its debtors in Uruguay. It also provides legal and administrative immunity for representatives of NIB. 325
Finnvera is Finland’s official export credit agency and is 100 per cent state-owned. In March 2007,
320 “Botnia’s project approved by the boards of IFC and MIGA”, Botnia’s website:
http://www.botnia.com/en/default.asppath=204;210;211;1097;1456
321 Diana Cariboni “Uruguay: Environmental tweaks recommended for paper mills”, Inter Press Service, 13 April 2006.
322 “FAQs: Uruguayan Pulp Mills”, IFC website: http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_PulpMills_FAQ
323 Romina Picolitti, “Complaint on behalf of citizens affected by proposed paper mills in Fray Bentos, Uruguay”,
CEDHA, no date. http://www.cedha.org.ar/docs/papermill-presentation.ppt
Ricardo Carrere, “Tras la huella de la celulosa en Finlandia. La otra cara de la moneda”, Grupo Guayubira, Junio de
2005. http://www.guayubira.org.uy/celulosa/Finlandia.html
324 “Project: Botnia South America S.A.”, Multilateral Investment Guarantee Agency website.
http://www.miga.org/sitelevel2/level2.cfmid=1078&proj=690&ghol=514
325 “Repercussions of Agreement Signed Between Uruguay and Nordic Investment Bank”, Broadcast on
radiomudoreal.fm, 20 April 2007. http://www.radiomundoreal.fm/rmr/q=en/node/22316