Plantations, poverty and power - Critical Information Collective

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83 Pöyry’s role in the Baikal Pulp and Paper Mill illustrates how the company works. In 1998 to 2000, Pöyry worked on an EU-funded assessment of the existing Baikal and Selenginsk pulp and paper mills. 417 Since it started operations in 1966, on the shore of Lake Baikal in Eastern Siberia, the Baikal mill has been a disaster, leading to severe pollution in Lake Baikal. A Greenpeace campaign aims to close down the pulp mill. It was also one of the few targets of environmental protests during the Soviet Union period. Before the mill was built, scientists from the Irkutsk State University’s Scientific Institute of Biology spoke out against Nikita Khrushchev’s plans to build a pulp and paper mill on the shore of Lake Baikal. Marina Rikhvanova, a founder of the NGO Baikal Ecological Wave and the 2008 winner of the Goldman Prize, is among those fighting to close down the mill. 418 Pöyry, of course, did not recommend closing down the Baikal pulp and paper mill. Instead, they recommended expanding and “modernising” the pulp mill, converting it first to elemental chlorine free production and later to totally chlorine free production. Pöyry was critical about the logging that was taking place to supply the mill, but still recommended expanding production. In 1998, timber for the mill was coming from as far as 1,400 kilometres away. Pöyry suggested sourcing timber from old-growth forests between Krasnoyarsk and Irkutsk, about 600 kilometres from the mill. 419 Under pressure from environmentalists, Continental Management and the State Property Committee of Russia, the Baikal plant owners, are looking for a way out. A plan to convert the mill into a Coca-Cola bottling plant fell through when Coca-Cola was put off by the high level of pollution around the mill. 420 In December 2007, Russia’s environmental protection agency, Rosprirodnadzor, imposed a five-day ban on dumping waste into Lake Baikal and filed a lawsuit against the company for damages of US$19.9 million. Rosprirodnadzor subsequently increased the legal claim to US$176 million.421 In March 2008, Governor of Irkutsk, Alexander Tishanin demanded that the pulp mill should be relocated. 422 The company installed a closed water cycle, at a cost of US$11.4 million, which started operating in September 2008.423 The Baikal Pulp and Paper Plant halted production at the beginning of October, “due to a lack of raw materials”, according to a report by the Russian News and Information Agency, Novosti.424 http://www.taigarescue.org/_v3/files/taiganews/TN37.pdf 417 Elisa Peter (2001) “On Jaakko’s Tracks”, Taiga Rescue News, Issue 37, Winter 2001, page 5. http://www.taigarescue.org/_v3/files/taiganews/TN37.pdf 418 Mike Eckel (2008) “2 fight to save world’s deepest lake in Russia”, Associated Press, 10 August 2008. http://ap.google.com/article/ALeqM5jvw9CirL6lW1KJk_0OVzE2iKRmQgD92FGP400 419 Elisa Peter (2001) “On Jaakko’s Tracks”, Taiga Rescue News, Issue 37, Winter 2001, page 5. http://www.taigarescue.org/_v3/files/taiganews/TN37.pdf 420 “Coca-Cola refuses to acquire Russian pulp-and-paper plant”, RosBusinessConsulting, 21 April 2008. http://www.rbcnews.com/free/20080421095841.shtml 421 “Russia’s Baikal pulp mill launches closed water cycle”, Novosti, Russian News and Information Agency, 29 September 2008. http://en.rian.ru/russia/20080929/117274716.html 422 “Governor Calls for Pulp Plant on Lake Baikal to Be Moved”, Moscow Times, 14 April 2008. 423 “Russia’s Baikal pulp mill launches closed water cycle”, Novosti, Russian News and Information Agency, 29 September 2008. http://en.rian.ru/russia/20080929/117274716.html 424 “Baikal pulp mill set to cut staff amid supply problems”, Russian News & Information Agency, Novosti, 6 October 2008. http://en.rian.ru/russia/20081006/117453509.html
84 In 2003, an editorial in Pöyry’s Know-How Wire magazine summed up why Pöyry is interested in Russia. “Russia holds almost half of the world’s softwood resources,” writes Rainer Häggblom, Chairman and CEO of Jaakko Pöyry Consulting. He estimates that Russia’s forests could be logged at a rate of 500 million cubic metres a year, more than three times the current rate. “I trust our investment in being a leading consultant in the forestry sector of Russia will pay off,” Häggblom writes. 425 Petteri Pihlajamäki has worked for Pöyry in Russia since 1988, working on almost 100 consulting projects in the last 20 years. He estimates that the demand for tissue paper and printing and writing paper in Russia is set to grow at between seven and nine per cent a year until 2020. “Projected demand growth is three to four times higher than the global average,” Pihlajamäki says in an interview in Pöyry’s magazine, Know-How Wire. Pöyry acknowledges that “environmental pressure” for example “related to old-growth forests” is a threat to their plans in Russia, but Pihlajamäki sees Russia as “one of the most active investment regions in pulp and paper worldwide for the next ten to 20 years.” 426 Pöyry and Climate Change Climate change to Pöyry is just another opportunity to do business. The company has succeeded in positioning itself to win contracts in several new areas. “Pöyry is in an excellent position in the fight against global warming, as the company has been on the forefront of providing environmentally sound solutions long before the public debate,” writes Risto Laukkanen, president of Pöyry’s Infrastructure and Environment Business Group.427 The company looks forward to new contracts in “energy efficiency, biofuels, mass transportation, urban planning, water distribution and forestry planning services”. 428 In 2004, Pöyry took part in the “PulPaper” industry event in Helsinki. The three themes of the event were “Energy and Carbon Management, Coating and Efficiency”. 429 At the event, Pöyry gave a presentation titled “Does my company have to bother with emission trading” Predictably, Pöyry’s answer is yes. Equally predictably, the presentation describes the various services that Pöyry is offering to guide companies through the possibilities of profiting from climate change. These include Pöyry’s Energy, Environment and Costs model, which aims to help pulp and paper companies to analyse “Kyoto-related economic impacts”. Combined with another Pöyry model, the Periodic Table of Paper Grades, Pöyry offers to rank a company’s various options in terms of “currency, tons of CO 2 , energy consumption and actions taken”. 430 “Pöyry provides a wide variety of carbon-related services,” notes Sari Siitonen of Pöyry Energy Oy, in a 2006 company presentation. 431 These services include an EU Emissions Trading Scheme Model which includes a price forecast for carbon between 2006 and 2012 and an assessment of post-Kyoto options. 425 Rainer Häggblom (2003) “Russia – a hotspot in the world’s pulp and paper industry”, Know-How Wire, Jaakko Pöyry Client Magazine, December 2003. 426 Satu Jussila (2008) “Evolving Russia”, Know-How Wire, Pöyry Client Magazine, 2/2008. 427 Risto Laukkanen (2008) “Climate change and our role”, Pöyry Client Magazine, 1/2008. 428 “Heikki Malinen appointed president and CEO of Pöyry”, Pöyry press release, 22 January 2008. http://www.poyry.com/press/press_1_08.htmlId=hex_1184000.html 429 “Global networking the Jaakko Pöyry way”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2004. 430 Petri Vasara (2004) “Myths and home truths: Does my company have to bother with emission trading”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2004. 431 Sari Siitonen (2006) “Innovative Clean Energy Solutions in Practice , Carbon Consultancy and Emissions Reductions ”, Pöyry Energy Oy company presentation, Nairobi, 12 November 2006.
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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
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27 possible price. Subsidies, linke
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29 2. The anatomy of five pulp proj
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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 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 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
Page 128 and 129: 127 Criterion 1.6, for example, sta
Page 130 and 131: 129 fast wood plantations have take
Page 132 and 133: 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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