Plantations, poverty and power - Critical Information Collective

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75 Management’s experts the possibility to operate successfully worldwide in different environments, sharing their hands-on expertise for the client’s benefit.” 371 Consultants and conflict of interest Pöyry describes its work in the South as “sustainable forestry development”. 372 It is, of course, nothing of the sort. Pöyry’s activities illustrate the conflict of interest faced each time the company is employed to carry out a study of a proposed pulp and paper development. “Consulting firms have a conflict of interest as long as they themselves may benefit from one outcome over another,” a Nordic consultant speaking on condition of anonymity told journalist Ann Usher in the 1990s. “For example,” he continued, “if they find that a certain project is feasible, they are often in a good position to undertake the subsequent studies, design work and construction supervision associated with further project phases (which is often more profitable than the initial feasibility study). . . . This conflict could be avoided if the evaluation were carried out by an impartial party which was aware that it would not subsequently receive any further project-related work, regardless of evaluation outcome.” 373 Pöyry’s role in Indonesia illustrates this conflict of interest. In the 1980s, when Pöyry’s “experts” started to work in Indonesia, they could have explained that a massive expansion of the pulp and paper industry in Indonesia would bring with it billions of dollars of debt, land conflicts, destroyed forests, destroyed livelihoods and polluted rivers. They might have suggested that perhaps it would be better not to expand the pulp and paper industry. Had they done so, however, there would have been nothing more for industrial forestry consultants like Pöyry to do. As it was, Pöyry won contracts on several of the pulp mill projects that they had recommended should be built. Local communities and their environments end up paying the price for this conflict of interest. Economic hit men Pöyry can perhaps best be described as the “economic hit men” of the forestry world. The phrase comes from John Perkins’ book, “Confessions of an Economic Hit Man”. In the book, Perkins describes how he worked as a consultant in the 1960s in Indonesia. He and his colleagues produced reports aimed at persuading the Indonesian government that it needed massive investment in electricity generation to power the industrial development of the country. Perkins and his colleagues over-estimated the anticipated demand for electricity. A raft of US-based companies, with funding from the World Bank, came in to build the necessary infrastructure. 374 Pöyry started working in south-east Asia in the early 1970s and played a key role in setting up deals in the pulp and paper industry, benefiting from a range of aid-funded consultancies. David Sonnenfeld, an 371 Patrick Sundholm (2002) “Mill performance improvement through close teamwork with the client”, Know-How Wire, Jaakko Poyry Magazine, December 2002. 372 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 373 Ann Danaiya Usher (Ed.) (1997) Dams as Aid: A political anatomy of Nordic development thinking, Routledge. page 68. 374 John Perkins (2004) Confessions of an Economic Hit Man, Berret-Koehler Publishers Inc.
76 academic at Washington State University, notes that “the Jaakko Pöyry group played a critical role in brokering the sale of pulp and paper technology in Southeast Asia.” 375 Sonnenfeld adds that almost all bleached kraft pulp mills built in Southeast Asia between 1981 and 1996, used Nordic pulping and bleaching technology. Pöyry won the contracts as consulting engineer for around two-thirds of these projects. 376 Pöyry goes global: Aracruz, Brazil In 1973, Pöyry won a contract to work on a 400,000 tons a year pulp mill for the Norwegian-Brazilian pulp company Aracruz Celulose at Barra do Riacho in the state of Espírito Santo. 377 “Jaakko Pöyry has given Aracruz the broadest technical support since the first steps of our company”, notes Aracruz’s Renato Guéron. 378 Pöyry carried out the engineering work, including wood supply planning and construction management for Aracruz’s first pulp mill. The US$600 million mill was at the time the biggest ever investment in the pulp and paper industry in the South. 379 Pöyry set up a Brazilian subsidiary in 1974 to work on the company’s first Aracruz contract. 380 “It was a highly rewarding period for our staff and their families,” says Dr. Jaakko Pöyry, about his company’s work in Brazil in the 1970s and 1980s. “As a result of our assignments in Brazil, we have today a large group of Finnish specialists with broad experience of Brazilian conditions and, in many cases, with a fluent command of Portuguese. I stayed in Brazil for long periods myself and thoroughly learned the conditions and ways of the country.” 381 Pöyry has worked won several further contracts with Aracruz since the 1970s. In 1991, for example, Pöyry carried out engineering work on the expansion of the pulp mill, increasing Aracruz’s capacity to one million tons a year. 382 In May 2002, Aracruz opened its third pulp mill in Espírito Santo province. Pöyry was involved in the project from prefeasibility and feasibility studies to conducting technical negotiations with machinery suppliers and writing the contracts for the machinery supply. Pöyry also managed the contracts for civil construction, mechanical, electrical and automation erection companies. 383 375 David Sonnenfeld (1999) “Vikings and Tigers: Finland, Sweden, and adoption of environmental technologies in Southeast Asia’s pulp and paper industries”, Journal of World-Systems Research, Vol. 5, No. 1, Spring 1999, page 31. http://jwsr.ucr.edu/archive/vol5/number1/v5n1a2.php 376 David Sonnenfeld (1999) “Vikings and Tigers: Finland, Sweden, and adoption of environmental technologies in Southeast Asia’s pulp and paper industries”, Journal of World-Systems Research, Vol. 5, No. 1, Spring 1999, page 36. http://jwsr.ucr.edu/archive/vol5/number1/v5n1a2.php 377 “Brazil honours Dr Jaakko Pöyry”, Know-How Wire, Jaakko Pöyry Client Magazine, December 2003. 378 Mario Retamal (2002) “Aracruz Fiberline C on stream”, Know-How Wire, Jaakko Pöyry Client Magazine, December 2002. (Ratamal was Project Director for Aracruz’s Fiberline C project.) 379 “Jaakko Pöyry (1924-2006) Founder and Chairman Jaakko Pöyry Group Consulting Engineers Vantaa, Finland”, Paper Industry International Hall of Fame. http://www.paperhall.org/inductees/bios/1995/jaakko_poyry.php 380 “Brazil honours Dr Jaakko Pöyry”, Know-How Wire, Jaakko Pöyry Client Magazine, December 2003. 381 “Brazil honours Dr Jaakko Pöyry”, Know-How Wire, Jaakko Pöyry Client Magazine, December 2003. 382 “Jaakko Pöyry (1924-2006) Founder and Chairman Jaakko Pöyry Group Consulting Engineers Vantaa, Finland”, Paper Industry International Hall of Fame. http://www.paperhall.org/inductees/bios/1995/jaakko_poyry.php 383 Mario Retamal (2002) “Aracruz Fiberline C on stream”, Know-How Wire, Jaakko Pöyry Client Magazine, December
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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
Page 16 and 17:
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
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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 74 and 75: 73 Thailand, a power plant for a Ne
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
Page 124 and 125: 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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