Plantations, poverty and power - Critical Information Collective

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67 CEDHA has also filed complaints with the OECD against Finnvera 334 and Nordea, 335 claiming that the Finnish export credit agency and the bank failed to comply with the OECD Guidelines for Multinational Enterprises in its support of Botnia. Decades of subsidies The international support for the pulp industry in Uruguay is not a one-off case of helping to cover a private company’s risks with public money. For more than 50 years, plantation proponents have helped to build the political and physical infrastructure to enable the development of large scale industrial tree plantations in Uruguay. In 1951, a joint FAO and World Bank mission made a series of recommendations for the development of forestry in Uruguay. Among the recommendations was the promotion of suitable species for the timber industry. In 1985, the Japanese International Cooperation Agency funded a study of the feasibility of building a chemical pulp mill in Uruguay. JICA produced a “Master plan study for the establishment of tree plantations and use of planted wood in the Oriental Republic of Uruguay”, which promoted the establishment of pine and eucalyptus plantations. The 1988 Uruguayan National Forestry Plan is based on the JICA master plan. In 1989, the World Bank provided a forestry loan to Uruguay, which enabled a series of benefits to the industry, including: “tax exemptions, partial refund of plantation costs, long-term soft loans, duty cuts on the import of machinery and vehicles, construction of roads and bridges, equal benefits for foreign investors.” 336 By 2000, the Uruguayan government had provided more than US$400 million in subsidies to the plantations industry, through direct subsidies, tax breaks, cheap loans and investments in infrastructure. 337 Monocultures and water shortages Botnia and its subsidiaries in Uruguay now own over 180,000 hectares of land, of which almost 100,000 hectares is to be planted with monoculture eucalyptus plantations. The plantations have caused serious problems for communities in rural Uruguay. 338 Earth International, 18 May 2006. http://www.cedha.org.ar/en/initiatives/paper_pulp_mills/compliance-complaintcalyon.pdf 334 “Commentary by CEDHA regarding the case of the Finnvera Specific Instance to Finnish NCP Rebuttal to Finnvera’s Commentary”, CEDHA, 30 August 2006. http://www.cedha.org.ar/en/initiatives/paper_pulp_mills/commentary-cedha-finnvera-specific-instance.pdf 335 “OECD Guidelines for Multinational Enterprises Specific Instance Regarding Nordea’s involvement in Pulp Paper Mill Investment in Fray Bentos Uruguay by Botnia S.A.”, CEDHA and The Bellona Foundation, 28 June 2006. http://www.cedha.org.ar/en/initiatives/paper_pulp_mills/nordea-specific-instance.pdf 336 “Uruguay: Either with the people or with pulp mills and tree plantations”, World Rainforest Movement Bulletin 83, June 2004. http://www.wrm.org.uy/bulletin/83/Uruguay.html 337 “Uruguay: The absurd injustice of promoting tree plantations”, World Rainforest Movement Bulletin 68, March 2003. http://www.wrm.org.uy/bulletin/68/Uruguay.html 338 Raúl Pierri (2006) “Uruguay: Pulp Factions: Uruguay’s Environmentalists v. Big Paper”, CorpWatch, 16 January 2006. http://www.corpwatch.org/article.phpid=13111
68 Botnia, of course, denies the impacts and issues statements such as this: “All of Forestal Oriental’s plantations have received FSC certification There are no rain forests in Uruguay Only planted eucalyptus is used for pulp production” 339 What Botnia does not mention is that the consultants responsible for the IFC studies and the FSC assessment (carried out by SGS Qualifor) failed to listen to what rural people are saying about the plantations. In its EIA, Botnia didn’t even look at the plantations. IFC’s Cumulative Impact Study notes that: “The EIA Study prepared by Botnia did not address specific impacts relating to plantations.” 340 While IFC noted this omission, it did nothing to remedy it. IFC’s consultants point out that Forestal Oriental knows that its fast growing tree plantations have an impact on stream flows. In 2000, Forestal Oriental hired a South African consulting firm, CSIR Division of Water in South Africa, which found that Forestal Oriental’s eucalyptus plantations resulted in reduced stream flows by an average of around 25 per cent. Nevertheless, the study concluded that as long as the plantations did not cover too large an area in a given watershed the impact should not be a problem. Whether CSIR spoke to any local people about the problems is not documented in IFC’s Plantations Annex. IFC’s consultants make no mention of any discussions with local people. 341 While FSC certification should include taking local people’s problems into consideration, SGS failed to do so. Even when its assessors talked to local people SGS avoided dealing with what they told them. One villager told SGS that “the eucalyptus plantations consume a lot of water that in the long term can affect neighbouring populations.” SGS’s response was to explain that “The area is subject to prolonged droughts affecting the water table,” and that Forestal Oriental is carrying out a study into the impacts of plantations on water. In April 2006, World Rainforest Movement published a study written by Ricardo Carrere. The study is based on a visit to the plantation areas by a team of WRM researchers and interviews with the people living there. 342 Residents of Algorta (Río Negro), told WRM’s researchers that “because of the eucalyptus trees the Arroyo Negro stream dried up, it used to be the town beach.” Forestal Oriental, Botnia’s plantations company, owns plantations in this area. A farmer in Guichón whose land is now surrounded by plantations owned by Forestal Oriental, complained that as a result of the plantations the Boyado stream, which runs though his farm, has completely dried up. SGS’s public summary of their assessment of Forestal Oriental’s plantations fails to deal with the impacts 339 “Botnia’s Fray Bentos pulp mill project”, Botnia, Company presentation, May 2007. 340 “Annex B: Plantations”, International Finance Corporation Cumulative Impact Study, prepared by Ecometrix Incoporated, September 2006. http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills_CIS_Final 341 “Annex B: Plantations”, International Finance Corporation Cumulative Impact Study, prepared by Ecometrix Incoporated, September 2006. http://www.ifc.org/ifcext/lac.nsf/Content/Uruguay_Pulp_Mills_CIS_Final 342 Ricardo Carrere (2006) “GREENWASH: Critical analysis of FSC certification of industrial tree monocultures in Uruguay”, World Rainforest Movement, April 2006. http://www.wrm.org.uy/countries/Uruguay/book.html
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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
Page 10 and 11:
9 plantations established on grassl
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11 Nations Food and Agriculture Org
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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 64 and 65: 63 Staples and Office Depot in the
Page 66 and 67: 65 “the exhaustive studies have c
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
Page 114 and 115: 113 The Food and Agriculture Organi
Page 116 and 117: 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
Page 122 and 123:
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
Page 140 and 141:
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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