Plantations, poverty and power - Critical Information Collective

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5 New investors have emerged recently, such as “Timber Investment Management Organisations” (TIMOs), that are investing in industrial tree plantations. While these have mainly focussed on plantations and forest operations in the US, they are increasingly looking to invest in the South. Private equity companies are also getting involved in financing the pulp and paper industry. So far, however, these new investors appear to have played only a minor role in the expansion of plantations in the South. More important in this process is public money handed out as “aid”. Development funds are supposed to be used to relieve poverty. The pulp industry does not relieve poverty. On the contrary, for the rural communities faced with a sea of industrial tree plantations on their land, it increases poverty. Section 2 of the report looks in detail at five pulp projects, in Brazil (Veracel), Swaziland (Sappi), Thailand (Advance Agro), Indonesia (Asia Pulp and Paper) and Uruguay (Botnia). Each example looks at how industrial tree plantations were established and subsequently pulp mills build, including where funding came from and the impacts on local communities. These examples are not chosen to show the worst five pulp and paper companies in the world but are intended to illustrate the structural problems underlying the global pulp and paper industry. All of these projects were heavily subsidised with Northern tax payers’ money. In fact, it is unlikely that any of these projects would have gone ahead without these subsidies. All of the projects provided a series of lucrative contracts for European, Nordic and North American consulting firms, machinery companies, chemical suppliers and engineering firms. All of the projects have resulted in serious problems for the people living in the area of the plantations and near the pulp mills themselves. Section 3 of the report investigates some of the actors involved in promoting the pulp and paper industry. Pöyry is the largest forestry consulting firm in the world and has facilitated (and benefited from) the expansion of the pulp industry in many countries, both North and South. Pöyry’s role in promoting the pulp industry in Indonesia and Russia is looked at in more detail. The Confederation of European Paper Industries supports the European pulp and paper industry regardless of its impacts on people and forests. The Asian Development Bank, the International Finance Corporation and the European Investment Bank provide examples of multilateral aid agency support to the pulp industry. Each institution has different standards which it is supposed to apply to potentially destructive projects such as industrial tree plantations and the pulp industry. In each case, the standards (and the application of the standards) are inadequate to prevent the impacts on local communities and the environment. The United Nations Food and Agriculture Organisation has for decades supported the expansion of the pulp industry and today continues to provide justification for the expansion of industrial tree plantations to feed the industry. By defining plantations as forests, the FAO helps create the illusion that plantations are not destructive, but simply another form of forest. FAO’s most recent support to the industry comes in the form of voluntary guidelines for “planted forests”. Section 3 ends with a look at the role of the Forest Stewardship Council which supports the pulp industry by certifying industrial tree plantations as well managed. In turn, FSC is supported by the pulp industry leading to questions about its independence from the industry it is supposed to be regulating. FSC has failed to address in any meaningful way the impacts of industrial tree plantations. Section 4 looks at the pulp industry’s plans for new pulp mills in the global South. With the current
6 financial crisis, several of these mills may be postponed or cancelled. Nevertheless, the industry has been expanding rapidly in recent years and is planning further expansion in the future. The problems of overproduction and overcapacity are becoming increasingly severe. The conclusion of the report suggests an alternative way that the pulp industry could develop, which would provide the paper needed to meet local demand, based on small-scale pulp and paper mills using local raw materials. Paper could and should be produced without destroying forests, grasslands and local people’s livelihoods. A first step in moving towards a less destructive pulp and paper industry would be to stop the subsidies which help to keep the status quo. No more development funds should be used to facilitate the expansion of the global pulp industry and its associated industrial tree plantations.
Page 2 and 3: 1 Plantations, poverty and power: E
Page 4 and 5: 3 CONTENTS Introduction 1. Plantati
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
Page 54 and 55: 53 • US$4.5 billion owed by APP i
Page 56 and 57:
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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