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77 A year after Aracruz’s third pulp mill in Espírito Santo started up, Pöyry won yet another contract from Aracruz, to provide engineering services on the Veracel pulp mill (see section on Veracel, above). 384 In 2006, Pöyry won another contract with Aracruz to provide engineering services for the “optimisation” of Aracruz’s pulp mills in Espírito Santo, increasing the capacity from 2.13 million tons a year to 2.33 million tons a year. 385 “We don’t operate anything” Aracruz’s operations in Brazil are among the most controversial pulp operations anywhere in the world. The company’s vast monoculture eucalyptus plantations have taken land from Indigenous Peoples, destroyed areas of the Atlantic Rainforest and led to the drying up of streams and water sources over a huge area in Espírito Santo province. Pöyry has played a key role in helping the company to establish and to expand its operations. Yet when activists and Indigenous People protested outside Pöyry’s office in Espírito Santo against the company’s support to Aracruz, Pöyry staff claimed to be surprised that they were the target of the activists. “We only provide technical services to Aracruz, advising them where the machinery should go, and so on”, a Pöyry representative told the protesters. This response is typical. Pöyry routinely denies any responsibility for its actions. Norman Lord, head of Pöyry’s Canadian operations, says the company is just following orders. “We don’t own operate anything, we don’t operate any assets in the industry. We are advisors to the industry,” Lord told Radio- Canada in 2003. 386 Petteri Pihlajamäki, head of the Jaakko Pöyry Management Consulting, said more or less the same thing in an interview with Finnish researcher Tove Selin: “It needs to be emphasised that we are a consulting organisation, not a project implementer, the projects are always implemented by governments, companies or other organisations which also make final decisions as to applied policies, technologies and methods.” 387 Larry Lohmann, of the UK-based solidarity and research organisation, the Cornerhouse, gives another example of Pöyry’s denial of the impacts the company creates: “When Poyry Chief Executive Officer Henrik Ehrnrooth and Poyry Consulting Division president Jouko Virta were publicly criticized in Finland about Poyry’s involvement in a plantation project in the Dominican Republic, they simply denied that the firm had even been in that country, despite being shown Dominican newspaper clippings and photographs reporting Virta’s negotiation of a Dominican plantation contract.”388 2002. 384 “Jaakko Pöyry Group Oyj subsidiary wins engineering contracts in Brazil”, Nordic Business Report, 30 July 2003. 385 “Pöyry to provide EUR 20 million EPCM and owner’s engineering services for Klabin and Aracruz mills in Brazil”, Pöyry press release, 18 August 2006. 386 “Wood supply hearings begin”, CBC/Radio Canada, 18 November 2003. http://nb.cbc.ca/regional/servlet/Viewfilename=nb_woodhearings20031117 387 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 388 Larry Lohmann (no date) “Briefing on Finnish Consultancy Firm Jaakko Pöyry”, World Rainforest Movement, http://www.wrm.org.uy/plantations/material/JP.html
78 As well as designing the pulp mills and providing technical expertise on establishing plantations, Pöyry (along with other industrial forestry consulting firms) also design the political infrastructure which enables the pulp and paper industry to expand. As Larry Lohmann points out, Pöyry’s work involves “lobbying governments, evaluating forest and land resources, lining up contracts from close colleagues in aid agencies, subcontracting lucrative work out to potential local allies, doing feasibility studies or market surveys, mapping out logging roads, establishing tree nurseries, and designing or engineering factories.” 389 Pöyry explains that its “business concept is based on early involvement in its clients’ business development”. 390 Indeed, Pöyry’s business concept is based on as much involvement as possible. By working as a consultant to governments, Pöyry sets the political framework for the projects on which it can sell its services. In the pulp sector, Pöyry convinces governments that producing pulp for export equals “development”, that planting monocultures of exotic tree species is “reforestation”, that the few and dangerous jobs that will be provided will address unemployment and that the land to be planted is “degraded” – usually as a result of the farmers living there, according to Pöyry. In recent years, Pöyry has pulled out of aid-financed forestry consulting, selling its company JP Development to the Helsinki Consulting Group (HCG), leaving foresters only with engineering or economic expertise in the forestry section of Pöyry. “If we need the so called ‘soft’ competence in our industrial projects the deal is that the HCG provides us such expertise,” explained Petteri Pihlajamäki, head of the Jaakko Pöyry Management Consulting in a 2004 interview with Tove Selin. 391 Pihlajamäki told Selin that “development consulting had very limited synergies with [Pöyry’s] core business which is management consulting mainly for corporate sector.” 392 At least now there can be no doubt about where Pöyry’s true loyalties lie – the corporations. Some recent Pöyry projects Pöyry’s recent projects in the forestry industry include the implementation of VCP’s pulp mill in Mato Grosso do Sul, Brazil, a paper machine rebuild for Stora Enso at Wisconsin Rapids in the US, the rebuild of two paper machines for Billerud AB in Sweden, Holmen Paper’s plant upgrade at the Braviken mill in Sweden, a containerboard production line project with Mondi Packaging Paper and a new paper mill project for Portucel in Portugal. 393 Pöyry won a €2 million contract to build the chemical plants associated with Botnia’s pulp mill in Uruguay. 394 Pöyry also worked on the pre-engineering phase of Botnia’s pulp mill and on detailed engineering services.395 389 Larry Lohmann (no date) “Briefing on Finnish Consultancy Firm Jaakko Pöyry”, World Rainforest Movement, http://www.wrm.org.uy/plantations/material/JP.html 390 “Jaakko Pöyry Group At a Glance”, Pöyry website: http://www.poyry.com/txten/glance.html (accessed 18 October 1999). 391 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 392 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 393 “Pöyry reports pre-tax profit of Euro 53.2 million in 3Q 2007”, Pöyry press release, 30 October 2007. http://www.risiinfo.com/content-gateway/pulpandpaper/news/Poyryreports-pre-tax-profit-in-3Q-2007.html 394 “Pöyry awarded site management services contract for Kemira’s chemical plants in Uruguay”, Pöyry press release, 7 June 2006. 395 Olof Andersson (2007) “Botnia’s open book approach: Good cooperation between all project parties key to success”,
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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
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23 credit crunch, unstable oil pric
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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 76 and 77: 75 Management’s experts the possi
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
Page 126 and 127: 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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