Plantations, poverty and power - Critical Information Collective

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73 Thailand, a power plant for a Nestlé baby milk factory in the Philippines, a nuclear power plant in Finland, a styrene monomer and propylene oxide wastes oxidation plant in Spain, developing software to manage electrical project documents, rewriting water policies in Egypt, Ethiopia and Sudan, or a massive plantation project and pulp mill in Indonesia, Pöyry will provide services, from pre-feasibility studies to design and construction supervision. Pöyry and pulp Pöyry has worked on more than 400 pulp and paper mills. 360 During the 1970s and 1980s, the company expanded internationally, promoting the same model of industrialised forestry wherever it went. The company’s first contract in the global South was in Brazil, for Aracruz’s first pulp mill, which was completed in 1978. One of Pöyry’s important roles in shaping the pulp and paper industry is through providing information, particularly through forecasts of paper consumption worldwide. These forecasts are almost invariably optimistic. In 2002, the company produced a report titled “World Paper Markets up to 2015”, which Pöyry describes as “essential business information for pulp and paper companies, machinery, equipment and related suppliers, investors, financiers, institutions, traders and other interest groups”. 361 Pöyry anticipated that between 2005 and 2015, demand for paper and paperboard would increase by 120 million tons, with 35 million tons increase in China. 362 In January 2006, Pöyry published its “World paper markets up to 2020” report, which predicts more growth: 2.1 per cent growth a year in world demand for paper reaching a total of 490 million tons by the year 2020. 363 In a similar vein, Pöyry’s Ilkka Kuusisto wrote in 2004 that “World demand for paper and paperboard continues to grow. With an average growth rate of 2.2 percents (sic) a year, it will reach 450 million tons by the year 2015.” 364 Of course, Pöyry has an interest in predicting that paper consumption will increase. New pulp and paper mills are needed to meet the predicted demand and Pöyry looks forward to winning contracts studying, designing and building these mills. Neither is Pöyry’s predicted demand inevitable. The current over-consumption in the North could be reduced, with a redistribution of paper consumption worldwide. And Pöyry’s estimates of future growth are not always accurate. For example, in 1994, Pöyry predicted that paper use per capita in the US would increase by 1.6 per cent a year until 2005. 365 In fact, paper consumption in the US peaked in the late 1990s and fell by 12.75 per cent between 1999 and 2005. 366 360 Tove Selin (2004) “Jaakko Pöyry and the Fin(n)ished Forests of the Mekong Region”, Watershed, Vol. 9, No. 3, March-June 2004. http://terraper.org/pic_water/Watershed%209(3).pdf 361 Know-How Wire, Jaakko Pöyry Magazine, December 2002. 362 “FFIF says Finnish pulp & paper sector must adjust to globalization”, RISI, 20 December 2005. http://www.risiinfo.com/content-gateway/pulpandpaper/news/pp20051219102.html 363 Timo Suhonen (2006) “World Paper Markets 2020”, Know-How Wire, Jaakko Pöyry Client Magazine, January 2006. 364 Ilkka Kuusisto (2004) “Trends and Developments in the Chinese Pulp and Paper Industry”, International Forum on Investment and Finance in China’s Forestry Sector, 22-23 September 2004, Beijing, China. 365 Bernard Simon (1994) “Survey of World Forest Products (2): Paperwork expands – Forest products fight for survival in the electronic age”, Financial Times, 17 May 1994. 366 The statistics come from the World Resources Institute’s Earthtrends website: http://earthtrends.wri.org
74 Nevertheless, pulp and paper companies rely on Pöyry’s knowledge of paper markets for information on their business decisions. “As we focus on our core business we need Pöyry’s expertise in engineering and consultancy all the more,” notes Einar Agnaess of Norske Skog. “If we’re thinking about expanding in India, for example, they know what’s happening in the market. We simply don’t.” 367 Technology “to help the environment” Dr. Jaakko Pöyry’s public statements provide a good insight into Pöyry’s role in promoting the pulp and paper industry. For example, at the Financial Times World Pulp and Paper Conference in 1989, Dr. Pöyry said: “Re-establishing the image of pulp and paper as environmentally acceptable products is a necessity.” His solution did not involve considerations about the way the pulp and paper industry is structured, or an attempt to address the massive amounts of wood that the industry needs each year. Instead, his solution was the use of technology, “to help the environment”. 368 Dr. Pöyry’s firm would be happy to provide further advice on the technology. For a fee, of course. The Phoenix Pulp and Paper Company’s misnamed “Project Green” in the north-east of Thailand provides one example of the sort of technology that Pöyry promotes, supposedly to “help the environment”. Project Green was designed to address the pollution from the Phoenix pulp mill, which was facing increasing criticism from local people and the Department of Industrial Works over its pollution of the Phong River. Instead of pouring the effluent into the river, Pöyry came up with “Project Green”, a scheme to use the water to irrigate eucalyptus plantations. Under “Project Green”, yellowbrown frothy water from the pulp mill is piped into irrigation channels in nearby eucalyptus plantations. From there it spreads into farmers’ adjoining fields, ruining the rice crop. When it rains heavily, the water overflows into the Phong River. The effluent seeps into the ground water. Local people complain that the water is now salty and undrinkable. When I visited the pulp mill in 1998, villagers complained that their rice harvest in fields near to Project Green had failed. 369 While Pöyry sometimes acts as consultant on paper mills using recycled paper, its main area of interest is in promoting large scale pulp mills and industrial tree plantations. Pöyry lobbies behind the scenes and in public for the continued expansion of the industry. In 1995, Pöyry’s Per Jerkeman told the Financial Times that “public opinion about the desirability of recycling as much paper as possible should be changed. Utilisation of recycled fibres should be high, ‘but not so high that reforestation is diminished or prevented and paper quality impaired’.” 370 Pöyry explains that the company’s technical expertise can be applied anywhere in the world, regardless of history, politics or culture: “[A]ny paper machine, in spite of sophisticated software control systems, is operating according to the same papermaking principles around the world. Papermaking is a universal art. This gives JP Operations 367 Satu Jussila (2008) “Cementing partnerships”, Know-How Wire, Pöyry Client Magazine, 2/2008. 368 Maggie Urry (1989) “Eastern European market beckons. Political changes open opportunities for pulp and paper makers”, Financial Times, 14 December 1989. 369 Chris Lang (1998) “Phoenix pulp mill: The polluter pays” Watershed, Vol. 4 No. 2, November 1998 – February 1999, page 54. 370 Deborah Hargreaves (1995) “Forestry status boost forecast”, Financial Times, 26 January 1995.
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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
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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
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13 Another reason for the move to t
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15 In his book, “Khor Jor Kor, Fo
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17 Between 1991 and 2006, the numbe
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19 are asking for”, notes WWF. 60
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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 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 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
Page 118 and 119: 117 failure to define industrial tr
Page 120 and 121: 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
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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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