Plantations, poverty and power: Section 3

By Chris Lang. Published by World Rainforest Movement, December 2008

Back to contents

Pulp Inc. Profiles of seven pulp industry proponents

There is a range of actors who actively promote the expansion of industrial tree plantations in the global South. These include consulting firms, UN organisations, “aid” agencies, research institutions, industry associations, industry publications and some NGOs. This network of actors, sometimes works together, sometimes in competition, but all tending towards keeping the status quo: an increasingly large scale, wood-based, globalised pulp industry.

The pulp and paper industry today looks the way it does to a large extent because it has relied on the advice of northern-based consultants. Thirty years ago, Ken King, then-head of forestry at the FAO, pointed out that developing countries very often could not afford to borrow the huge amounts of money required to build a modern pulp mill. King described the “international clubs of consultants” who travelled the world recommending precisely such large scale developments. This section starts with a profile of the largest and most notorious of these forestry consulting firms: Pöyry.

Most industries form associations and alliances to promote their interests and in the case of the pulp and paper industry these organisations can be extremely powerful. In Europe, the Confederation of European Paper Industries (CEPI) constantly supports the interests of the European pulp and paper industry, issuing press releases, lobbying at a European level, commissioning research and publishing industry-friendly reports.

Aid agencies continue to play a crucial role in promoting the expansion of the pulp and paper industry and its industrial tree plantations in the South. This role is illustrated by looking at the way the Asian Development Bank, the World Bank’s International Finance Corporation and the European Investment Bank support the industry.

The United Nation’s Food and Agriculture Organisation supports the pulp and paper industry in several ways. Its definition of plantations as “planted forests” allows companies and governments to claim that they are reforesting, when in fact, they are establishing vast areas of industrial tree monocultures. No one would describe a sugar plantation as a “planted grassland”, yet this is precisely what the industry and its supporters do when they describe industrial tree plantations as “planted forests”.

FAO recently produced a set of “voluntary guidelines on planted forests”. The guidelines may include some useful statements, but they are voluntary, there is no enforcement mechanism and no penalty for companies which choose to ignore the guidelines entirely. Ultimately the guidelines are a sham which will do nothing to prevent the expansion of industrial tree plantations in the South. On the contrary, the guidelines promote this expansion.

This section ends with a look at the Forest Stewardship Council (FSC), an organisation which is effectively greenwashing the spread of industrial tree plantations in the South. FSC has certified millions of hectares of monoculture tree plantations as “well managed”. By doing so, FSC is undermining local struggles in the South. By remaining members of the FSC, NGO members of FSC also risk undermining these struggles. By promoting paper products manufactured from FSC-certified plantations as “environmentally friendly”, they are also guilty of misleading the public.

Pöyry: The economic hit men of the pulp industry

Pöyry is the world’s largest forestry consulting firm. Based in Finland, the company was formed in 1958, by Dr. Jaakko Pöyry, as a two-man business to carry out the engineering work on Metsäliito Oy’s pulp mill at Äänekosi in Finland.[349] Since then, Pöyry has worked on projects in more than 100 countries and now has offices in 45 countries, employing 7,300 professionals.[350]

The company was owned by Dr. Pöyry until 1985 when he sold half of the company to Henrik Ehrnrooth, who became President and CEO the following year. In 1995, Finnvest Plc, a Finnish “development and investment company” bought the Jaakko Pöyry Group. Under the deal, senior management of Pöyry became shareholders in Finnvest. The Jaakko Pöyry Group was publicly listed in 1997.[351] In January 2008, Pöyry announced that it would be appointing Heikki Malinen as the company’s new President and CEO. Malinen’s previous job was executive vice president of strategy at UPM-Kymmene.[352] Malinen started his new job in June 2008, taking over from Erkki Pehu-Lehtonen, the President and CEO for the past 10 years.[353]

Pöyry describes itself as a “growth oriented company”. Over the past ten years Pöyry has expanded its sales three-fold.[354] In 1999, 4,000 people were employed at Pöyry. The company had net sales of €259.7 million and profits of €20.6 in 1998.[355] By 2007, the company’s net sales amounted to €718 million with profits of €73.8 million.[356] Today, Pöyry employs 8,000 people.[357]

Pöyry is organised in three sectors: energy; forest industry; and infrastructure and environment sectors.[358] The Pöyry Group is the result of a huge number of takeovers and mergers. Some of the recent takeovers include Electrowatt (Switzerland), Interforest (Sweden), Scancontrol (Sweden), Inframan (Finland), GKW Holding (Germany), IGL Consultants (Scotland), ECON Analyse (Norway) and Giprobum Engineering (Russia). In 2006, the Jaakko Pöyry Group rebranded itself as “Pöyry” with a new company logo. All the companies in the group were given names to include the word “Pöyry” and the group got a new slogan: “Competence. Service. Solutions.”[359]

Whether it is hydropower in Laos, roads in Austria, a railway in Venezuela, a biomass power station in 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]

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”, yellow-brown 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:

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,

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 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.

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]

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:

388

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.[3918] 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]

In January 2003, Pöyry announced that it had been hired by UPM-Kymmene to provide engineering services on UPM’s new 450,000 tons a year fine-paper mill in Changshu, China. Pöyry was also engineering consultant to APRIL for the construction of the first paper mill in Changshu in 1998.[396] In 2007, Pöyry was commissioned by Ningxia Meili to oversee the start up of the company’s new coated board line in Zhongwei, China. Pöyry employs about 160 people in China, with offices in Beijing, Shanghai and Jinan.[397]

Also in China, Pöyry has been working with Sino-Forest since 1997. Sino-Forest is the largest foreign-owned industrial tree plantation operation in China, managing about 350,000 hectares of plantations. Pöyry has worked on contracts looking at the expansion of the plantation area and looking for possible pulp and paper processing ventures for the company.[398]

In virtually every country with a pulp and paper industry, Pöyry has played a key role in shaping that industry. The following sections look at Pöyry’s role in Indonesia and Russia to provide examples of how the company works.

Pöyry in Indonesia

Between 1979 and 1993, Pöyry won more than one hundred contracts in Indonesia, covering a wide range of issues, from industrial tree plantation projects to a contract for overseas training for Indonesian foresters in Brazil. In a series of reports, Pöyry recommended a massive expansion of Indonesia’s pulp industry.

In 1983-84, Pöyry worked on a Master Plan for Indonesian Pulp and Paper Industry, funded by the World Bank. Pekka Hemmi worked for the company as a consultant in Southeast Asia. Hemmi describes the work in an interview with the website Asia Paper Markets:

399

According to Hemmi, little came from these reports.

“At that time it was too difficult to raise the funding so the projects never went forward. . . . We at Jaakko Pöyry didn’t fully realize the boom that was about to come in the pulp and paper industry even though we knew well the potential.”

But Hemmi is candid about the benefits (to him) of the studies carried out in the early 1980s: “Doing those studies and sales contracts in Indonesia in the 80s gave me a great insight into the industry, the region and the country. I’ve learned the language. It has been a very fruitful time.”[400]

Once the Widjaya (Sinar Mas Group, including APP) and Tanoto (RGM International Group, including APRIL) families started investing in the pulp and paper industry, the boom arrived and Pöyry was well placed to benefit. Having recommended the construction of several massive pulp projects, Pöyry won contracts to design and build these pulp mills. Pöyry won contracts to work on the Indorayan, Indah Kiat, Riau Andalan and PT-TEL pulp mills in Sumatra. “Pöyry has provided consulting and engineering services for the [RGM International] Group since 1983, including complete development of their pulp operations in Sumatra,” boasts Pöyry.[401]

As described above (see section on APP), the impact on the forests of Sumatra of these massive pulp and paper projects has been devastating. WWF estimates that APP, which runs the Indah Kiat pulp and paper mill, is responsible for 80,000 hectares of deforestation every year. Pollution from the pulp mills has caused serious skin diseases for villagers living downstream of the mills. Villagers rely on the water from the river for washing and previously for drinking.

Pöyry won at least 10 contracts from Indah Kiat in the ten years after 1987 when Pöyry carried out a contract to produce a preliminary study for a pulp mill in Sumatra. Pöyry’s involvement continued with a plan for establishing fast growing tree plantations, technical assistance for the pulp mill, assistance with the nursery and plantation establishment and technical studies on the machinery used at the mill.[402]

Indah Kiat has missed several targets for running the mill entirely on plantation wood. According to a 1993 article in Pulp and Paper International, Indah Kiat was to run on plantation wood by 1998.[403] In fact, Indah Kiat still uses timber from rainforests to keep its pulp mills running. In March 2007, APP announced plans to expand production in Sumatra by 800,000 tons a year by the end of 2007, meaning that the destruction of the rainforests will continue.

Jouko Virta set up Jaakko Pöyry’s Jakarta office in 1983. He was project leader on a contract that Pöyry won from the World Bank in the early 1980s, aimed at “strengthening the structure of the Indonesian pulp and paper industry.” I interviewed Virta in 1996. He was then based in England and was the chairman of Jaakko Pöyry Consulting. I asked him how he felt about the way the rate of deforestation in Sumatra had increased dramatically since the pulp mills started up. He laughed and told me not to worry about deforestation when the forests would be replaced by acacia plantations. To Virta, there is no difference between Sumatra’s massively biodiverse lowland rainforests that provided habitat for hundreds of species and livelihoods for local communities and an acacia monoculture that does neither.[404]

Pöyry’s New Zealand subsidiary, Groome Pöyry, won another contract with the Asian Development Bank in the early 1990s. Groome Pöyry’s report, titled “Institutional Strengthening for Timber Plantation Development”, looked at ways of achieving the Indonesian government’s target of 4.4 million hectares of industrial tree plantations outside of Java. Pöyry recommended “enhancing the [Forestry] Ministry’s control over its land base”, technical research, forestry education and training, institutional strengthening and support for the private sector. “The prospects for pulpwood production in Indonesia are considered to be good,” wrote Groome Pöyry’s experts. They noted that increasing the area of industrial tree plantations (Hutan Tanaman Industri, HTI in Bahasa Indonesian) would increase the pressure on Indonesia’s rainforests. To Groome Pöyry, however, this is not a problem. On the contrary, it will provide a source of wood and therefore money for pulp companies:

405

Pöyry has also played an important role in supporting United Fiber System’s plans to build a 600,000 tons a year pulp mill in South Kalimantan. UFS hired Pöyry in 2004 to produce a “Review of Wood Supply for Proposed South Kalimantan Pulp Mill”. The following year, Pöyry produced a report for RZB Singapore to look the environmental impacts of UFS’s Wood Chip Mill on Pulau Laut. CIFOR points out that “UFS has not produced a detailed and accountable forest management plan that ensures protection of the natural forest areas that currently remain.”[406] In spite of the pulp industry’s record of forest destruction in Indonesia, Pöyry concluded that the pulp mill and the wood chip mill could supply their raw material from plantations. Yet a series of independent studies document the fact that UFS cannot show that it has sufficient raw material supplies to keep its pulp operations running without using timber from native forests and illegally harvested timber.[407]

Pöyry in Russia

Pöyry has been involved in many projects shaping the Russian pulp and paper sector. Pöyry’s consultancies[408] include the following:

Syktyvkar (2008): a €10 million contract to provide engineering services for the rebuilt of Mondi’s Syktyvkar pulp and paper mill.[409]
St Petersburg Cardboard and Printing Plant: (2006) a rebuild of a board machine at the plant at Kommunar, Gatchina are in Leningrad Region.[410]
Arkhangelsk (2004): assessing the company’s operations at its Novodvinsk mill and a strategic development plan for the company;[411]
Syassky (2003): a feasibility study about rebuilding Syassky’s mill near St. Petersburg;[412]
Pioneer Group (1993-1994): a forest management project in the Khabarovsk region;
Huet Holdings (1993-1994): a forest management project in the Komi Republic;
Master Plan for Forestry and Forest Industries in the European part of the then USSR (1990-1993): a master plan aimed at increasing production of forest products;
World Bank: (1992) planning of privatisation of mechanical wood industries in north-western parts of Russia;
Regional Forestry Master Plan for Karelia (1991-92): including plans for wood production, primary forest industries and nature conservation;
Enso-Gutzeit Oy (1989): a feasibility study for establishment of forest management company in the Karelian Republic; and
Krasnojarsklesprom (1988): prefeasibility study of forest management and utilisation project in the Krasnojarsk region.[413]

In the late 1980s, Pöyry was involved in discussions with the USSR about a feasibility study looking at the economic potential of 200 million hectares of forest in the north-eastern regions of Komi, Arkhangelsk, Volgoda, Soviet Karelia, Leningrad and Novgorod. In a one-to-two-year project, Pöyry aimed to chart the infrastructure needs and the potential to set up a forest-based industry, including pulp and paper mills.[414]

“The Soviets approached us a year and a half ago on this matter and we have been carrying out talks with the (Soviet) Ministry of Forest Industries and Gosplan,” Jukka Nyrola, then-managing director of Jaakko Pöyry, told the Financial Times in 1989. “After this [feasibility] phase is over, we hope to take part in follow-up studies for concrete projects,” Nyrola added,[415] illustrating Pöyry’s conflict of interest in advising governments about the pulp and paper industry.

The project started in 1992, and included an assessment of the entire forestry sector in Russia. Pöyry recommended doubling the rate of logging in Russia’s forests (increasing the annual cut from 100 million cubic metres to 200 million cubic metres – which Pöyry estimated was still far below the “optimum” harvest level).[416]

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]

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 CO2, 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. Under carbon financing, Pöyry offers development of Joint Implementation and Clean Development Mechanism projects, estimation of project additionality, preparation of project documents and a purchasing strategy for companies looking to buy carbon credits to allow them to carry on polluting.

Another company in the Pöyry Group, Econ Pöyry, has teamed up with IDEAcarbon to produce “The Global Carbon Report”, which is a subscription based report aimed at informing “carbon market participants on key fundamentals and policy developments”. In January 2008, Econ Pöyry and IDEAcarbon held a seminar in London titled “After Bali – What’s Next”. The seminar included a presentation by the Vice Chairman of the IDEAglobal Group, Sir Nicholas Stern.[432]

Pöyry’s connections in high places are well illustrated by the role of Harald Dovland, who headed Norway’s climate negotiations team for 12 years.[433] Dovland is an advisor to Econ Pöyry. He is also the chair of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG), which has been meeting since 2006. According to Dovland, what is needed now is “acceptance of long-term goals on a high political level, further development of markets, and innovative financing solutions”.[434] An article on Econ Pöyry’s website about the 2007 Bali climate conference states that “Carbon trading is instrumental to achieve sufficient reduction [in greenhouse gas emissions]”.[435] As Nicola Bullard of Focus on the Global South points out, it is “rather strange that one of the most important negotiating forums on climate change is under the gavel of an employee of a firm which makes money out of promoting carbon trading.”[436]

In January 2008, Econ Pöyry produced a report commissioned by the Nordic Council of Ministers looking at how Nordic countries might contribute to the Copenhagen Conference of Parties which will take place at the end of 2009. Econ Pöyry’s report recommends expanding the carbon market, encouraging “more countries to establish [carbon] trading systems” and financing avoided deforestation through a carbon market.[437] Harald Dovland is the contact person on Econ Pöyry’s website for more information on this report.[438]

Pöyry has worked on several Joint Implementation and Clean Development Mechanism projects. The company describes itself as “well equipped to evaluate project eligibility and additionality,” adding that “Pöyry has also established close contacts with buyers in the carbon market and can provide the best buyer candidates and carbon finance structuring for each specific CDM and JI project.”[439]

One of Pöyry’s carbon service projects is Botnia’s CDM project in Uruguay, which enables the company to profit from selling electricity to the Uruguayan state utility and selling CDM registered carbon credits from its Biomass Power Generation Project.[440]

In 2005, Pöyry completed an expansion of Mondi’s Richards Bay pulp mill in South Africa. Pöyry has had a close relationship with the Richards Bay mill, being involved from the start of the project. The mill was commissioned in 1984, since when Pöyry has worked on a series of rebuilds and in 2002 carried out a feasibility study for the Richards Bay mill expansion, followed by pre-engineering studies. Pöyry subsequently won the contract to carry out project management and detailed engineering services, together with the engineering group Murray & Roberts. Under the project, the capacity of the pulp mill increased from 575,000 tons per year to 720,000 tons per year. Meanwhile, water consumption was reduced by 42 per cent and the amount of coal used was almost halved, down from 562 tons a day to 234 tons a day.[441]

While this amounts to a reduction in greenhouse gas emissions, it raises several questions. Why did Pöyry not install a closed loop system, reducing the amount of water used and the pollution from the mill even further? Why didn’t Pöyry redesign the mill so that it used no coal at all? In May 2007, the Richards Bay mill was registered as a Clean Development Mechanism project.[442] Carbon credits sold from the project mean that any greenhouse gas emission reductions achieved at Richards Bay were transferred somewhere else.

A year before the Richards Bay project was completed, an article in Pöyry’s magazine Know-How Wire claimed that Pöyry aims for “integrated pulp and paper mills that operate totally without auxiliary fuels, producing a net surplus of electricity from 100% biomass fuels.” Not at Richards Bay, though. The pulp mill will use more than 70,000 tons of coal a year, resulting in emissions of almost 200,000 tons of carbon dioxide emissions each year.[443]

“The pulp and paper industry is facing a new era,” states Pöyry’s article. “It is not enough only to reduce emissions. Pulp and paper mills should maximize their bioenergy potential and minimize their electricity consumption.”[444] This sounds good, perhaps, but the biomass has to come from somewhere. In a world where it is cheaper to grow trees in Brazil than in Sweden, this means that the biomass raw material, along with the pulp raw material will come from the global South.[445]

Pöyry is working on second generation biofuels such as ligno-cellulosic ethanol and biomass-to-liquid fuel. Pöyry is looking at ways of integrating liquid biofuels production into existing pulp and paper mills. The company is involved in several bioenergy projects for pulp and paper companies. “With its combined know-how in the areas of forest industry, energy, environment and infrastructure, Pöyry is uniquely equipped to serve clients pursuing biomass-based projects,” writes Pöyry’s Peter Fabritius.[446] Pöyry’s North American offices are benefiting from the agrofuel bonanza in North America, winning several contracts for engineering services for agrofuel projects using corn, wheat and oilseed rape as the raw material. Pöyry is also sending trainees from other parts of the world to work in the company’s North American offices. “Trainees will return to their home office fully capable of taking on biofuel projects in their region of the world,” write Pöyry’s Zennie Lamarre and Otto von Ubisch.[447] Pöyry is also looking forward to getting winning contracts on wood-based second generation biofuel projects. “The potential for the North American forest industry to become a prime producer of biofuel is promising,” note Lamarre and Ubisch.

One of Pöyry’s “solutions” to climate change is hydropower. Since taking over Electrowatt-Ekono in 1999, Pöyry has become a major player in promoting and building dams worldwide.[448] Pöyry describes hydropower as “a renewable, emission-free, cost-efficient form of power generation,”[449] thus ignoring the impacts of dams on fisheries, local communities who must be evicted to make way for the reservoir, emissions from rotting biomass in the reservoir, siltation in reservoirs, cost overruns and massive subsidies.[450] In March 2004, Pöyry’s Canadian subsidiary, Jaakko Pöyry NLK Inc., organised an energy seminar for British Colombia’s pulp and paper industry. The seminar, which was jointly sponsored with BC Hydro, was held in BC Hydro’s Vancouver office. Pöyry presented Electrowatt-Ekono’s energy projects for the Nordic pulp and paper industry along with case studies and comparisons with the Canadian and US pulp and paper sectors.[451]

Inevitably, Pöyry’s “solutions” to climate change also include large-scale industrial tree plantations. According to Pöyry, plantations “represent significant potential to . . . [a]bsorb carbon emissions and act as carbon sinks”.[452] Writing about the development of plantations in Australia, Pöyry’s Rob de Fégeley noted that although most plantations established in Australia are “primarily commercial”, there “is now increasing interest in dual commercial/environmental plantations which can assist Australia address some of its environmental concerns.” Australia’s “environmental concerns”, according to de Fégeley, include “salinity control, sequestering carbon and improving the biodiversity in rural regions where it has been depleted as a result of agricultural development”.[453]

Pöyry’s conflict of interest reaches new levels in its carbon services work. Through its partnership with IDEAcarbon, Pöyry is aiming to influence the carbon market, while advising companies on the “Optimisation of [their] carbon portfolio”. Pöyry is also “consulting both Governments and companies in various types of carbon projects worldwide”.[454] Nowhere in any of Pöyry’s documents that I have read about climate projects does Pöyry even begin to address the fact that there is a glaring conflict of interest in helping to shape the carbon market and simultaneously winning contracts advising companies on how to profit from carbon trading.

Pöyry’s involvement in the carbon market will create more profits for the companies in the Pöyry Group. It will not produce benefits for the climate. Trading carbon, in particular through carbon offset projects, will not reduce greenhouse gas emissions, it simply moves them from one part of the planet to another. As George Monbiot points out, “Even if, through carbon offset schemes carried out in developing countries, every poor nation on the planet became carbon-free, we would still have to cut most of the carbon we produce at home. Buying and selling carbon offsets is like pushing the food around on your plate to create the impression that you have eaten it.”[455]

The Confederation of European Paper Industries (CEPI): Expansion at any cost

The Confederation of European Paper Industries was established to support the interests of the pulp and paper industry. CEPI represents 800 pulp and paper companies in 18 European countries, producing more than one-quarter of world paper production.

CEPI aims to promote the expansion of the pulp and paper industry. Several of the European companies that CEPI represents also have operations in the global South. One of CEPI’s key roles is to act as a lobbying organisation on behalf of the industry in the European Commission, aiming for industry-friendly regulation:

“CEPI champions the interests of the pulp and paper industry in Europe, representing those interests towards the European Institutions. It monitors, analyses and acts upon EU legislation and initiatives relevant to industry, communicating on the industry’s achievements and the benefits of its products. Through CEPI, the paper industry makes expert and constructive contributions to the official European consultation process with industry.”[456]

CEPI routinely plays down the problems created by the pulp and paper sector, as the following (typical) statement makes clear: “The European paper industry is one of the most competitive and sustainable in Europe producing 100 million tonnes of paper and board and 40 million tonnes of pulp annually. It provides directly 230,000 jobs and indirectly 2,950,000 jobs along the forest and paper chain.”[457]

In May 2008, CEPI organised a side event at the Convention on Biodiversity meeting in Bonn. Titled “Biodiversity protection, not just words on paper but real best practices by the paper industry!” it promised to show “how through best practices the European Pulp and Paper industry supports forest biodiversity protection.”[458]

The presentations, of course, had little to do with biodiversity protection. The first presentation came from Hans Verkerk, of the European Forest Institute (EFI).[459] Verkerk’s presentation was based on a CEPI-funded report he had co-authored, titled, “Impacts of Biological and Landscape Diversity Protection on the Wood Supply in Europe”. Verkerk’s presentation looked at how much wood might be removed from Europe’s 29.2 million hectares of protected forests if there were no restrictions on logging. The study found that forest protection in Europe resulted in a total of 68 million cubic metres of wood being “unavailable” to the industry.

Verkerk’s conclusions were predictable and banal: “Forest protection has a clear impact on the availability of wood,” Verkerk said, with a straight face.[460] Conversely, if the forest is less well protected, the industry would have a lot more wood available. Verkerk made no mention of what the impact of this might be on the biodiversity of the forests.

CEPI has various sub-groups which focus on supporting the interests of specific types of paper production. CEPIPRINT is the Association of European Publication Paper Producers. CEPIFINE represents Europe’s fine paper producers. CEPI Eurokraft looks after the interests of Europe’s paper sack manufacturers.

Each of these groups produces material supporting the consumption of ever more paper. CEPI Eurokraft, for example, has produced a series of reports on the benefits of kraft paper packaging. A CEPI Eurokraft report produced between 1998 and 2000, for example, looked at a life-cycle analysis of paper sacks. Not surprisingly, CEPI Eurokraft concluded that paper sacks are more environmentally friendly that plastic sacks:

461

But CEPI Eurokraft could only come to this conclusion by ignoring the findings of the report that it commissioned to compare the various options. CEPI Eurokraft commissioned Chalmers Industriteknik in Sweden to compare four options for delivering animal feed: paper sacks; plastic sacks; semi-bulk plastic sacks; and transporting in bulk. What Chalmers Industriteknik found in its study was that the best system for transporting animal feed was the semi-bulk option, using large, reusable, woven polypropylene sacks:

“The results of the study indicate that semi-bulk system gives the lowest contribution to all of the studied impact categories, at least in the base case where the big bags are assumed to be used on average three times.”[462]

The Chalmers Industriteknik report notes that the more often the plastic sacks are reused, the better the system is for the environment, compared to paper sacks. I am not recommending the use of more plastic bags. I am simply pointing out that CEPI Eurokraft distorted the findings of the report that it commissioned, in order to suit its own ends.

The report found that the impact of distributing the animal feed is far higher than the packaging used:

463

CEPI Eurokraft states that “it is clear that the distribution itself gives the highest environmental impact for all of the studied systems”.[464] But rather than looking at possible ways of reducing the impacts of distributing goods, CEPI Eurokraft distorts the findings of the report it commissioned and promotes the use of paper sacks instead of the semi-bulk system using large reusable plastic sacks.

In 2001, CEPI Eurokraft co-sponsored a school project in the UK, which included information on “growing trees for paper making”, “making paper sacks from paper” and “recycling paper waste by composting”. The project included teacher’s materials, wall posters for the classroom, posters for children to take home, stickers, recycled paper pots, kraft paper to make sacks, compost and tree seeds.[465]

It sounds great. Children even get to plant tree seeds in the compost “hence completing the cycle” as CEPI Eurokraft puts it. But, CEPI Eurokraft’s job is to promote the industry, not to educate. There is no mention in its material for schools of the impacts of the pulp and paper industry’s industrial tree plantations on biodiversity or local people. Neither is there any mention of the vast areas of land that European companies are taking over in the global South to establish their industrial tree plantations.

“PrintSells” is CEPIFINE’s advertising campaign promoting “the use of paper as an extremely efficient marketing tool”.[466] The campaign urges companies to “Get real with your corporate communication and see the benefits immediately.” PrintSells celebrates paper consumption, pointing out, for example, that between 1954 and 2006, the number of catalogues that IKEA prints each year has increased from 500,000 to 192 million[467] and that more than 2,860 new magazine titles were launched in 2006.[468] The PrintSells campaign promotes just about any use of paper: books, calendars, annual reports, brochures, catalogues, magazines, advertising and junk mail.

CEPI is running another paper promotion campaign titled “paperonline”, with the slogan “ideas start with paper”. The website tells us that “Paper is all around us and the demand for paper is increasing,” and “paper is a part of everyday life”.[469] On paper and climate change, the website notes that under the Kyoto Protocol, the EU committed itself to “a reduction of minus [sic] 8%”, compared to 1990 levels by 2012. “However,” CEPI continues, “the growth in greenhouse gas emissions since 1990, especially from the transport sector, suggests that the Kyoto targets are much more ambitious than was envisaged in 1997.”[470] The implication that the Kyoto targets are even remotely “ambitious” flies in the face of the scientific evidence about climate change which demands reductions of more than 90 per cent.[471]

Once a year, CEPI organises the “European Paper Week”, which it boasts is the “European paper and pulp industry’s biggest annual event”. In November 2007, about 300 pulp and paper company representatives met for a three day corporate shindig at the Sheraton Hotel in Brussels.[472]

CEPI acts quickly to defend the industry’s interests against any attempts to change it. For example, when more than 50 European NGOs launched the “Shrink” campaign, aimed at reducing paper consumption in Europe, CEPI responded with a press release in which it claimed that the pulp and paper industry is “a unique example of how an industry can avoid producing waste and one that recycles at all stages.”[473]

“By targeting the paper industry these NGOs are promoting other materials that do not have the same environmental credentials,” said Teresa Presas, CEPI’s Managing Director, in the press release. Presas ignores the fact that the Shrink campaign is not promoting other materials. It is advocating using less paper in the North, not replacing paper with something else.

Presas says that NGOs are “contributing to the relocation of paper production to other areas of the world where environmental standards are less of a concern.” She seems oblivious to the fact that the pulp and paper industry has been closing down operations in the North and expanding in the global South for many years. In any case, the NGOs behind the Shrink campaign are not recommending that the industry should relocate to the South, they are recommending that it should shrink.

Presas says that the Shrink campaign would become “responsible for the loss of thousands of jobs in Europe in particular in rural areas.” But as CEPI’s own data shows, the pulp and paper industry is responsible for the loss of thousands of jobs in Europe. In 1991, CEPI member countries employed 389,300 people in the pulp and paper sector. By 2006, this figure had shrunk by about a third, to 259,100 people. During the same period, pulp and paper production in Europe has actually increased.[474]

In January 2008, CEPI commented on the European Commission’s proposals for the EU CO2 emission trading system (EU ETS). CEPI welcomed the “special considerations for energy intensive industries, like the pulp and paper industry”, an unusual admission by the industry that pulp and paper production does in fact require a large amount of energy. CEPI is in favour of a trade in emission credits, which would allow the industry to buy credits instead of reducing its emissions to meet targets. Predictably however, CEPI opposes the auctioning of emission credits, because the industry would have to buy to rights to continue polluting. CEPI argued that the EU ETS would “generate up to 75 billion Euros per year” by 2020, which CEPI describes as the first direct EU tax in history.[475]

CEPI is also lobbying against the targets for reduced greenhouse gas emissions that are needed across all industries to prevent runaway climate change:

“Full auctioning is not needed to ensure a properly functioning carbon market or carbon price and will not help industry to meet the required targets but it will unnecessarily damage European industry. ETS sectors need to reduce by 21% compared to 2005, not by 100%.”[476]

CEPI argues that the costs to the industry in Europe would benefit competitors in the South and “will ultimately harm the competitiveness of Europe”. Teresa Presas, CEPI’s Managing Director explained in CEPI’s press release that

“The sector can not pass these extra costs on to final consumers, as it does not set world market prices. Manufacturing costs are already high. The profits and success of European companies is therefore very dependent on their local, European, manufacturing.”[477]

As usual with CEPI, industry profits come ahead of everything. Including the biggest challenge that humankind has ever faced: addressing runaway climate change.

Asian Development Bank: Plantations are increasing poverty in Asia

The Asian Development Bank was established in 1966. It has 67 members, of which about three-quarters are in the Asia-Pacific region.[478] The largest shareholders are Japan and the US.[479] The president of the ADB is always Japanese.[480]

Since its first loan for a forestry project in 1977, the ADB has handed out more than US$1 billion in loans for forestry projects. Most of the Bank’s recent forest projects were rated “partially successful or unsuccessful”.[481]

More than 80 per cent of the Bank’s loans for forestry projects went on establishing plantations. The Bank acknowledges “problems with project design and implementation” and that “its [forest] sector investments have had a minimal positive impact on forest loss and degradation”.[482] Even this “minimal positive impact” is a result of defining a plantation as a forest. According to the Bank, clearing villagers’ forests and farmlands and replacing them with monoculture tree plantations is “positive” because the Bank can claim to be reducing “forest loss and degradation”.

In fact, the ADB’s forestry loans have both increased deforestation and led to increased poverty. Plantations have repeatedly failed due to poor selection of species, fire, disease or because the land on which they are planted is already in use by local people. Many of the ADB’s plantation projects were poorly designed and weakly monitored.

The ADB’s own documents reveal the problems, as the following selection of Bank-funded plantation projects indicates.

Western Samoa

In Western Samoa, the ADB’s Forestry Development Project “fell short of achieving its major objectives”, because of “poor plantation results”, according to a 1994 ADB report on forestry sector lending. “[T]he design was based on unproven technology and a lack of sociological understanding.” The project planned to plant a total area of 2,475 hectares of which only 787 hectares was actually planted. The area planted was subsequently badly damaged by cyclones.

The ADB’s report notes that the project was delayed “due to prolonged, and sometimes breakdown in the negotiation to secure lease of land owned collectively, and reduction of planting areas, both of which led to postponement of planting activities.” The project was rated as “unsuccessful”.[483]

Sri Lanka

A “community forestry project” in Sri Lanka, was rated “generally successful” although less than half the target of 14,000 hectares was actually planted. The Bank’s 1994 report on forestry lending notes that a community woodlots component of the project “was termed as a failure and so also the five demonstration woodlots”.[484]

Malaysia

Launched in 1982, the “Compensatory Forest Plantation Project” in peninsular Malaysia aimed to cover 188,200 hectares with acacia monocultures by 1995. By the end of 1999, 62,800 hectares had been planted. Many of the plantations failed because of extensive outbreaks of heartrot disease in the Acacia mangium plantations.[485]

The Philippines

The ADB has supported two plantations projects in the Philippines. Both projects created problems. The first, approved in 1983, “suffered from deficiencies in Project design and implementation,” according to the Bank’s Project Performance Audit Report.[486] The project was redesigned in 1988, after a typhoon hit the project area. Instead of planting different tree species, as initially planned, “the Project adopted a strategy of near monoculture plantations of E. camaldulensis.” The plantations were poorly maintained and “were characterized by highly uneven and low tree growth rate.”

The Bank failed to monitor the project adequately. Only one socio-economic survey was carried out and only one Bank mission included a visit by a forestry specialist to the project sites. The Project Performance Audit Report notes that “There was little or no assessment of plantation growth performance, review of the appropriateness of Project design, and determination of the adequacy of Project staffing input and technical competency. No technical advice on forestry establishment or assistance in the Project performance management system was provided.”[487]

A second ADB project in the Philippines, the Industrial Forest Plantation (Sector) Project also ran into problems. The project started in 1991, and aimed to establish 30,000 hectares of industrial tree plantations. In fact 6,100 hectares were planted. The cost of establishing the plantations was far higher than expected, because of “the cost of settling disputes over the land for the plantations” according to Alastair Fraser, an ADB consultant.[488]

Bangladesh

A US$46.8 million afforestation project in Bangladesh resulted in the establishment of 20,000 hectares of plantations between 1989 and 1996. The Bank’s Project Performance Audit Report notes that “Tree planting was successful, and tree survival rates during establishment were generally high.” However, the report points out, the project was largely a “tree planting exercise, without yielding significant benefits”. Villagers who took part in the project, “received only minimal benefits”. The result was “impatience and a feeling of resignation among participants” and “a potentially hostile social environment.”[489] Under the project, the Forestry Department had “confiscated lands from the locals without giving any compensation, destroyed standing crops and ignored protests of genuine landholders”, notes the Asian Indigenous & Tribal Peoples Network (AITPN). Land was taken without compensation. When villagers protested in 1994, forest guards opened fire, injuring seven people.[490]

An earlier ADB-financed “community forestry project” in Bangladesh included fuelwood plantations as the largest project component. These “fell short of optimum growth” and some plantations “were damaged by encroachment”.[491]

The ADB also funded a Forestry Master Plan for Bangladesh under the Tropical Forestry Action Plan. The Forestry Master Plan proposed an “Integrated Forest Project”, which would have resulted in vast areas of land being planted with trees. The aim was to increase tree cover in Bangladesh from about 8 per cent to 20 per cent. AITPN points out that had proposal been implemented it would have been a disaster, resulting in lost agricultural land, reduced food production and serious problems for indigenous communities.[492]

The ADB also supported the Chittagong Hill Tracts Development Board which effectively allowed increased government and Bengali control over the indigenous Jumma people. Hill people were forcibly resettled into farms and under a scheme aimed at ending shifting cultivation. In effect, control of the forest was taken from indigenous communities and handed over to the state. The ADB’s loans to the project “support and sustain the conflict until today”, notes AITPN.[493]

Nepal

In Nepal, the target area for tree planting under the Bank’s Sagarnath Forestry Development Project was reduced from 10,000 hectares to 4,140 hectares. Among the problems were “Shortage of staff, inadequate delegation of authority and responsibility, lack of flexibility in administration and overcentralization of decision-making”, according to the Bank’s 1994 overview of its lending to the forestry sector.[494]

Another ADB project in Nepal, titled “The hill forest development project,” initially aimed to plant 30,000 hectares. This was subsequently reduced to 10,000 hectares, but at project completion, “plantations and/or improved management practices” had been established on about 7,000 hectares. A third project aimed to establish fuelwood plantations on two project sites. On one project site, at Nepalganj, 1,737 hectares was planted (compared to a target of 5,000 hectares) “primarily because of encroachment by squatters”.[495] Rather than describing local people as “squatters”, it would be more appropriate to describe the Bank’s plantations as squatting on the land of local people.

Indonesia

A series of ADB loans have supported the expansion of the pulp and paper industry in Indonesia, the result of which has been massive deforestation and destruction of local livelihoods. In 1988, the ADB awarded a contract to Jaakko Pöyry, to identify sites for the development of the pulp industry in Indonesia. Pöyry went on to win further contracts with Asia Pulp and Paper (APP) and Asia Pacific Resources International (APRIL) to design some of the biggest pulp mills in the world. The resulting demand for timber has led to the destruction of hundreds of thousands of hectares of forest. (See section on Pöyry, above.)

In 1990, the ADB agreed a US$33.3 million loan to Indonesia for a Timber Plantation Project. The project ran into several problems. In the end, only US$17.33 million was disbursed. Of the target area of 51,000 hectares to be planted with fast-growing tree plantations, 26,920 hectares was established under the project. It turned out that the “unproductive shrubs and grasslands” that the ADB’s experts planned to plant with trees were already in use; some areas by local communities, others were allocated for hydropower and irrigation dams. In West Kalimantan, the company carrying out the planting, Inhutani III, clashed with Indigenous People. An Indonesian NGO, the Institute of Dayakology Research and Development, accused Inhutani III of using force in taking over lands from indigenous communities. The Bank hired a consultant for a few weeks and rejected the allegations, although the project area was reduced to exclude “areas where potential land tenure claims could rise”.[496]

The ADB’s Project Completion Report describes the damage to the plantations by fires and failing species as “staggering”. The tree species selected for the project “were not based on proven field trials, and were not sufficiently reassessed during site planning and preparation of plantation site designs.”[497]

The Project Completion Report points out an important failure of the ADB’s project – the failure to deal with land rights and Indigenous Peoples’ rights: “In securing lands for development, issues concerning land tenure, human settlements, and indigenous peoples and their legal implications should be seriously considered. State-owned lands are not necessarily free from land tenure claims by indigenous inhabitants.”[498]

Laos

The Bank’s Industrial Tree Plantations Project in Laos was a spectacular failure. The project created and increased poverty, according to the Bank’s Project Completion Report.[499] Loans were given to farmers to plant trees which then failed, leaving the farmers with no means of repaying the loans. According to a report by the ADB’s Operations Evaluation Department, “Thousands of inexperienced farmers and individuals were misled by prospects of unattainable gains, leaving the majority of farmers with onerous debts, with no prospect of repaying their loans, and with failing plantations.”[500]

The project also supported commercial tree plantations. One of the companies involved, BGA Lao Plantation Forestry (now owned by Japan’s Oji Paper) used the ADB’s loans to bulldoze commons, forest and villager’s farmlands to make way for monoculture eucalyptus plantations.[501]

As in other ADB-funded plantation projects, Bank monitoring of the project in Laos was weak. The OED reports that Bank missions included few trips outside Vientiane. Between 1996 and 2003 there was no forestry specialist on any of the Bank’s project review missions. Between July 2000 and February 2002 there were no ADB review missions at all.[502]

Despite these problems, shortly after the Project Completion Report was released, the Bank approved a second plantations project which looked set to repeat the mistakes of the first. In its appraisal of the second project, the Bank ignored the findings of its own consultants, who reported that “discussions with farmers (women and men) in the 6 villages revealed that their priorities in livelihood improvement do not include tree plantations of the kind offered by the proposed project.”[503] The ADB eventually cancelled its loan for the second plantations project after the Lao government declined to agree to the Bank’s loan conditions.

The ADB’s proposed new forest policy

Given this record, we might welcome the fact that the ADB is working on a new forest policy to replace its 1995 policy. A new forest policy might help to protect the rights of Indigenous Peoples and local communities living in and near forests. It might help to prevent ADB-financed roads, dams and mines from destroying forests and livelihoods. A new forest policy might help to prevent the destruction of forests and commons to make way for industrial tree plantations. It could also create the possibility of an open discussion about its forestry sector lending. In fact, in its forest policy review, the Bank has failed to achieve any of these things.

The Bank started working on the new policy in 2000, aiming to complete the policy by 2002. Eight years later, the Bank has failed to produce a new forest policy. The only version of the draft policy available to the public is dated June 2003 and this version was rejected by the Bank’s board in July 2003. Since that time, the preparation of the proposed forest policy has taken place in secret, behind the Bank’s closed doors. On several occasions, Bank staff and the Bank’s website have promised that new a draft would be released, but none has seen the light of day.

In January 2008, the ADB’s Senior Public Information and Disclosure Coordination Assistant, Robert Paul S. Mamonong, promised that a “draft synthesis report is being revised and is expected to be ready by April 2008.”[504] April came and went, without any sign of the “Synthesis Report”. ADB’s website continued to promise that the report would be released in November 2007, until 19 September 2008, when it was updated. The synthesis report is now expected in the fourth quarter of 2008.[505]

Bank staff have declined to answer repeated requests from civil society for information about the discussions taking place within the Bank about the Forest Policy.

While discussions may (or may not) have moved on within the Bank during the last four years, the 2003 draft version is all we have to judge what the ADB’s new policy might look like. It is not reassuring. It promotes tree plantations. An objective of the new forest policy is to: “increase the extent and productivity of plantations and trees on farms to increase wood supply and rural employment opportunities.”[506] The Bank, of course, provides no information to prove that plantations provide rural employment.

In 2002, the ADB’s forestry specialist, Javed H. Mir, gave a presentation on the Bank’s Regional Study on Forest Policy and Institutional Reforms. He answered his own question, “What not to do?” with “Not to repeat mistakes.”[507] Following his advice would mark a dramatic break with history for the ADB. The ADB, it seems, is determined to continue repeating its mistakes.

Instead of continuing to promote problems, the ADB should stop financing industrial tree plantations.

International Finance Corporation (IFC): Public money for private profits

The International Finance Corporation is the World Bank’s private sector lending institution. Founded in 1956, by 2007 it had a total committed portfolio of almost US$31 billion,[508] and has worked with more than three thousand companies in 140 countries.[509]

According to its mission statement, IFC exists to “promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives.”[510] But when talking to industry, IFC staff occasionally let slip the real purpose of IFC. “We are open for business,” announced Tatiana Bogatyreva, a senior investment officer with IFC, at a packaging industry conference in Moscow in June 2005.[511] The conference was organised by the Adam Smith Institute, a far right-wing pro-privatisation lobby group, and included sessions such as “Packaging as a marketing tool” and a “Champagne roundtable” with packaging industry executives.[512] Bogatyreva told the conference that IFC is ready to finance more packaging sector projects.

Unlike the rest of the World Bank Group, IFC provides loans directly to companies, rather than to governments. The benefits to companies are clear. As well as providing long-term, cheap financing, IFC provides advice on emerging markets, industry sectors and financial structuring. And IFC can help arrange project funding from commercial banks, as well as providing equity finance for companies.

For several decades, IFC has been a major sponsor of pulp and paper projects around the world. In recent years, IFC has approved loans for pulp and paper projects in Pakistan, China, Brazil, Uruguay, Jordan and Kyrgyz Republic. When IFC decides to invest in a project, commercial banks will follow. For example, financing of the Botnia pulp mill in Uruguay was stalled until the IFC agreed to fund the project.

The following list of projects gives an indication of IFC’s involvement in the pulp and paper sector:[513]

IFC started lending to Kenya’s Panafrican Paper Mills in 1974, since when it has made around eight loans to PPM. In 1995, IFC gave a US$15 million loan to PPM to increase capacity at its mill in Webuye. The pulp and paper mill is massively polluting and has created a series of health problems for people living in Webuye.[514]
IFC provided a total of US$104.5 in loans to Arauco in Chile.[515] Pollution from Arauco’s Valdiva pulp mill killed hundreds of protected black-necked swans and caused thousands to migrate from the Rio Cruces nature sanctuary, downstream of the pulp mill.
In 1989, IFC provided US$10 million capital to Celulosa del Pacifico (Pacifico), a joint venture between Chile’s largest papermaker, Compania Manufacturera de Papeles y Cartones (CMPC) and Simpson Paper of the USA, to build a 315,000 tonnes/year pulp mill. The following year, IFC provided a further US$147 million. The pulp mill started operations in 1992.[516]
When Klabin Bacell started its 115,000 tons a year pulp mill in the northern part of Bahia state, Brazil, IFC was part of the joint venture. A 2007 report by Ivonette Gonçalves de Souza and João Luiz Monti documents the impact of the company’s operations on local people. The company’s eucalyptus plantations have dried up water resources, seriously impacting farming in the area.[517]
IFC lent Advance Agro (Thailand) US$10 million in 1994.[518] Advance Agro’s plantations have replaced forests and taken over local people’s farmlands. Pollution from the company’s pulp mills continues to affect local people. (See section on Advance Agro, above.)
IFC owns shares in Korea’s second largest fine paper producer, Shinmoorim Paper and in October 1998 financed the company’s new pulp line.[519]
In 1998, IFC gave a US$20 million loan to United Pulp and Paper Company in the Philippines. IFC also bought US$7.5 million of shares in the company. UPPC ran into difficulties as a result of the Asian economic crisis and IFC planned to financially restructure the company to help it repay its loans.[520]
In 1998, IFC took a 20 per cent stake in Romania’s Dunapack Rambox in return for a long-term loan to help finance investment at the plant.
In 1998, IFC gave a loan of US$15 million to Bulgaria’s Celhart to renovate and modernise the company’s pulp and paper mill in Stambolijski.[521] Four years later, IFC and the European Bank for Reconstruction and Development took over Paper Factory Stambolijski in order to restart operations at the mill.[522] Mondi subsequently bought the mill and renamed it Mondi Packaging Stambolijski.[523]
Also in 1998, IFC provided a US$41 million loan to a Croatian paper and packaging company, Belice-Bel, to increase the capacity of its mill in Belice. The loan included US$6.5 million equity, giving IFC a stake in the firm.[524]
In 2001, IFC awarded a US$13 million loan to Turkish tissue producer Ipek Kagit, to support the company during a financial crisis in Turkey. In 1998, IFC provided US$65 million for the company’s US$100 million expansion plan. Ipek Kagit is jointly owned by Georgia Pacific and Turkey’s Eczacibasi Holdings.[525]
In December 2000, IFC approved a loan for Unicell Paper Mills Caribbean’s 20,000 tons per year tissue paper mill in Trinidad and Tobago.[526]
In June 2003, IFC approved a loan for the expansion of Intercell’s pulp and paper mill at Ostrolenka in north-east Poland and the construction of a sack manufacturing factory near Moscow.[527]
In July 2003, IFC agreed a US$75 million loan as part of a US$216 million refinancing and debt package to Copamex, Mexico’s leading paper producer.[528]
In June 2004, IFC agreed to finance the expansion of Carvajal’s pulp and paper operations in Colombia.[529]
In July 2004, Andhra Pradesh Paper Mills secured a US$35 million loan from IFC to upgrade its pulp and paper operations in and near Rajahmundry. IFC also bought US$5 million in shares in the company.[530]
In May 2005, IFC signed a US$1.4 million loan with Altyn Ajydar in Kyrgyzstan for renovations to its corrugated cardboard packaging operations. In 1999, Altyn Ajydar received another IFC loan to upgrade its packaging and printing plant.[531]
In June 2005, IFC approved US$10 million in loans and equity and a US$25 million guarantee to Packages of Pakistan for a new pulp and paper plant at Kasur. Packages has been an IFC client since 1964. Packages is partly owned by Stora Enso and produces pulp from straw. In 1995, IFC gave a US$37.5 million loan to expand Packages’ pulp and paper capacity.[532]
In November 2006, IFC approved a US$170 million loan to Botnia to build a US$1.2 billion pulp mill in Uruguay.[533] The pulp mill led to massive protests in Argentina and Uruguay. The company’s plantations have dried up water supplies for local people and destroyed their previous livelihoods. (See section on Botnia, above.)

As well as supporting individual pulp and paper projects, IFC also promotes the expansion of the industry by financing plans at a national level. In May 2007, for example, IFC held a seminar to announce the results of a “strategic development plan” for Ukraine’s pulp and paper industry. The plan was carried out by Pöyry Forest Industry Consulting and financed by IFC, the Association of Ukrainian Enterprises of Pulp and Paper Industry and the Ministry of Foreign Affairs of Finland.

Pöyry’s study projects five per cent growth in paper consumption in Ukraine and puts forward an “implementation plan” to meet this projected demand. Ian Luyt, IFC Senior Operations Manager for Europe and Central Asia, is clearly excited about handing over IFC loans to the pulp and paper sector in Ukraine. “This is an exciting period of growth and development for Ukraine’s pulp and paper industry,” Luyt announced in a May 2007 press release. “We believe the industry has the skills and commitment to achieve its full potential, but there are still significant improvements needed in the regulatory environment to aid this development. The strategic development plan is an important basis for planning and implementing the investment to meet future needs.”

Currently, the pulp industry in Ukraine is largely based on recycled paper. Pöyry recommends using Ukraine’s forests to produce pulp.

None of this is inevitable. First the demand has to be created. “We have a long and challenging road ahead to develop a robust and profitable domestic market for pulp and paper in Ukraine,” said Evgeny Lobanov, chairman of UkrPapir, one of the companies in Ukraine hoping to cash in on IFC’s loans. Finland’s industry is also hoping to benefit. Lauri Pullola, First Secretary at the Embassy of Finland in Ukraine, noted that

534

In China, IFC is playing an important role in financing the expansion of the industrial forestry sector:

In September 2001, IFC loaned a total of US$25 million to two subsidiaries of Sino-Forest Corporation for the construction of wood-related manufacturing plants and the purchase of plantations in China.[535] Sino-Forest, a Canadian company, has a plantation area of about 240,000 hectares in southern China. The company is currently expanding its plantation area by 200,000 hectares in Guangdong Province.
In December 2004, IFC announced a financing package to Jiangxi Chenming Paper Company for a 350,000 tons a year paper mill and an associated pulp mill. Jiangxi Chenming is a joint venture between Sappi (South Africa), Shinmoorim (South Korea), Chenming Group (China) and Jiangxi Paper Industry Company Limited (China). IFC will provide US$72.9 million in equity and loans and will arrange a further US$205 million project financing.[536]
In June 2005, Stora Enso signed a loan agreement with IFC for US$75 million to finance Stora Enso’s activities in China. A year later, Stora Enso asked for a further US$225 million. The money is to go towards Stora Enso’s eucalyptus plantations in Guangxi province in southern China and a planned expansion of the company’s Suzhou Mill.[537]

Companies which receive IFC loans often claim that the loan is some sort of independent approval of the firm’s activities. After his company received an IFC loan, Allen Chan, Sino-Forest’s Chairman and CEO, said, “IFC’s contribution is an endorsement of Sino-Forest as one of the leaders in sustainable forestry management in China.”[538]

Similarly, when IFC agreed to give a loan to Stora Enso, Markku Pentikäinen, head of Stora Enso Asia Pacific, said, “We are pleased to note that investors such as IFC appreciate our sustainability approach in both forestry operations and paper production. IFC sets a good example for other investors in the region through its emphasis on socially responsible investment.”[539]

Although the IFC has a series of policies which should mean that projects are screened against environmental and social standards, the reality is that the IFC prefers doing business to upholding standards.

The IFC gave its first loan to Kenya’s Pan African Paper Mills (Pan Paper). The mill stinks. A visitor from the US-based NGO Global Community Monitor described the waste ponds near the pulp mill that cover the land with “foaming acid smelling wastes”.[540]

Michael Ochieng Odhiambo, of the Kenyan NGO RECONCILE lists the health problems that residents of Webuye complain of as a result of the pollution from Pan Paper’s operations: “irritation of the eyes and respiratory tracts, dry mouths and scratchy throats, gross accumulation of fluid in air spaces impairing the functioning of the lungs, cancer of the lung and throat, asthma, bronchitis, bronchial pneumonia, conjunctivitis, hepatitis, dermatitis, tuberculosis, impotence, babies born with stunted reproductive organs, retarded intelligence among children, and high levels of respiratory diseases.”[541]

In 1996, when IFC lent a further US$15 million to Pan Paper for an expansion of the pulp and paper mill, IFC did not demand a full environmental assessment. Instead IFC relied on information provided by the company and decided that Pan Paper “has made commitment to fully comply with World Bank policies and guidelines”.[542]

IFC promised to “monitor Panafrican Paper’s ongoing compliance with World Bank policies and guidelines during the life of the project.” Unfortunately, IFC’s monitoring of Pan Paper only involves reading reports submitted by the company and “periodic site reviews during project supervision”.[543] In 2003, IFC promised more financial assistance for the restructuring of Pan African Paper Mills.

In February 2008, RECONCILE filed a complaint with the IFC’s Compliance Advisor Ombudsman (CAO) on behalf of the residents of Webuye town who have suffered negative health, environmental, social and economic impacts. According to the CAO’s website, “The CAO Ombudsman has undertaken an assessment of the complaint and has begun working with the parties to discuss options for resolution.”[544]

Similar patterns suggesting a failure to carry out adequate due diligence and monitoring are clear from other IFC-financed pulp projects. In November 2004, IFC approved a US$50 million loan to Brazilian pulp giant Aracruz, to finance the expansion of the company’s pulp and plantation operations. IFC gave the loan in spite of ongoing land disputes against the company.

In April 2005, representatives from 64 NGOs wrote to then-World Bank president James Wolfensohn to demand that the IFC cancel its loan to Aracruz.[545] In his reply, Atul Mehta, Director of IFC’s Latin America and Caribbean Department, dismissed the ongoing land claims against the company and stated that “land dispute issues were fully reviewed during IFC’s appraisal.”[546]

One week after Mehta sent his letter, 500 indigenous Tupinikim and Guarani people cut thousands of eucalyptus trees to demarcate the boundary of 11,008 hectares of their land, land that Aracruz had planted with eucalyptus plantations. “With this act,” the Tupinikim and Guarani wrote to Brazil’s Minister of Justice,

“we want to express to you and to the entire Brazilian nation that the land belongs to the Tupinikim and Guarani nations, and should be returned so that we may construct our own future, guaranteeing our liberty and autonomy, and the future of our children and grandchildren.”

In January 2006, Aracruz and the state police violently removed the Tupinikim and Guarani indigenous peoples from their villages, using helicopters and firing rubber bullets. Several villagers were injured.[547] Shortly afterwards, Aracruz repaid its loan to IFC in full and IFC managed more or less to avoid a public scandal of financing a company that was involved in shooting at Indigenous Peoples from helicopters.

In early 2005, Peter Neame, IFC’s Principle Environmental Specialist, wrote that “IFC is please to support this leading Brazilian forest sector company and to recognize their environmental and social programs and the progress they have made in these areas.”[548] Neame’s optimistic view of Aracruz could hardly be further from the realities faced by Indigenous People living in the area of Aracruz’s plantations. IFC’s loan demonstrates, perhaps better than any other, how ineffective IFC’s social and environmental safeguards are in practice.

European Investment Bank (EIB): Investing in destruction

The European Investment Bank (EIB) was created in 1958. The EIB is the world’s biggest public lender, bigger than the World Bank or the IMF.[549] In 2006, the EIB approved €53 billion of loans.[550]

“It is an EU institution, but is almost totally unknown to EU politicians and the public, and virtually unaccountable to other EU institutions,” notes a recent report by the NGO coalition Counter Balance. “It operates under an anachronistic ideology of ‘balance sheet growth’ and support for massive Western private corporations that is reminiscent of the worst aspects of the World Bank thirty years ago.”[551]

The projects that the EIB funds are supposed to help development and cohesion of the European Union. Up to now, much of the Bank’s lending has been to infrastructure projects to the poorer regions of the European Union – perhaps explaining why the Bank has received so little attention from politicians, the public and development NGOs. But the Bank’s role is changing. In the 1960s, the Bank started to lend to fund projects in Africa. In 1993, the EIB started lending to Asia and Latin America. Today, approximately 10 per cent of EIB lending goes outside the EU. The EIB lends to the oil, gas, mining, hydropower, transport, communication and pulp and paper sectors as well as to financial intermediaries.[552] Counter Balance points out that “Essentially, the EIB is becoming a major EU development body, without any of the expertise, capacity or operating principles such a body must have.”[553]

The EIB is a public institution established within the European Union cooperation framework. Its lending to the South is supposed to bring sustainable development and benefits for the people in the countries on the receiving end of the Bank’s loans. For example, the European Community Development Policy Statement says that “Community development policy is grounded on the principle of sustainable, equitable and participatory human and social development. . . The main objective of Community development policy must be to reduce and eventually to eradicate poverty.”[554]

The Bank has spectacularly failed to meet this objective. It has been involved in some of the most destructive infrastructure projects on the planet: the Chad-Cameroon Pipeline, the Lesotho Highlands Water Project, the Nam Theun II Dam, the West African Gas Pipeline and Veracel’s plantations and pulp mill in Brazil.

Bank projects are approved by a Board of Directors, which meets only ten times a year. During these meetings the Board is supposed to review over 300 projects. Clearly, projects are not scrutinised in anything like the detail necessary to avoid impacts on local communities and their environment.[555]

Richard Howitt, a Member of the European Parliament (Socialist Group in the European Parliament) points out that

556

A 2006 report by Friends of the Earth International, Campagna per la Riforma Banca Mondiale, CEE Bankwatch Network, World Economy, Ecology and Development found that the EIB often finances projects “where economic returns are high and guaranteed instead of prioritising lending for poverty alleviation or environmental protection”. The Bank’s mandate for lending in Asia and Latin America is based on “mutual interest”, which the Bank interprets as “development of an external market and support for EU companies”. Since 1993, more than 90 per cent of EIB loans to Latin America have benefited either European Companies or large trans-national corporations.[557] A December 2004 memorandum with the Inter American Development Bank states that “Lending activity in Latin America has a clear operational focus mainly in support of European Foreign Direct Investment.”[558]

Projects are often funded after inadequate social and environmental assessments. While EIB lending is supposed to comply with EU standards the reality is that there are no mechanisms in place to assess whether EIB projects actually comply with EU policies, either before or after the loan is given. The EIB has no internal safeguard policies. The Bank claims to follow World Bank and other international finance institution policies but the EIB has neither the mechanisms in place, nor the expertise within the Bank, to ensure compliance with these policies. While the World Bank has more than 10,000 staff, the EIB has 1,300. Projects are evaluated by economists or engineers. The Bank’s “sustainable development unit” is utterly incapable of even following all the Bank’s projects, let alone having any influence on the way the projects are designed.[559] “The reality in practice,” notes Janneke Bruil of Friends of the Earth International, “is that the EIB’s project appraisal is done on economic, financial and technical terms rather than by placing sustainable development at the core.”[560]

Friends of the Earth International’s 2006 report notes that “[T]he EIB remains one of the least transparent and least accountable institutions within the EU.”[561] Anders Lustgarden, of the Bretton Woods Project describes the EIB as a “huge black hole in the middle of EU development policy”.[562]

Although the pulp and paper sector does not form a major part of the EIB’s lending, the Bank’s loans to Veracel clearly illustrate the problems with the Bank’s involvement in this sector. While the project led to a series of lucrative contracts for European companies, Veracel’s vast areas of plantations have destroyed local livelihoods, leading to increased migration from the area. (See section on Veracel, above.)

In June 2003, EIB agreed to fund the expansion of a controversial pulp and paper operation in the Slovak Republic. The SCP Neusiedler paper mill (owned by Mondi) is notorious in the area for the stink which hangs over the town of Ruzonberok. When the World Bank’s IFC announced that it was considering a loan to expand the paper mill’s capacity, local people protested, pointing out the pollution from the mill. After IFC dropped the project, EIB stepped in with a loan for €64 million.[563] EIB announced the loan after the loan agreement had been signed, allowing local people no chance to protest.[564]

The EIB provided a €245 million loan for the Stendal pulp mill in Germany. The project went ahead despite industry overcapacity in Europe. The main justification for the project was that it created jobs. The project created 580 direct jobs and 1,000 indirect jobs. As CIFOR notes, in its report on financing pulp projects, given the total project cost of €1 billion, “the cost of creating these jobs was high, and there must have been political considerations – such as promoting the integration of Eastern Germany into the EU – that also played a role.”[565]

Stendal is in the former Eastern Germany. After German reunification, a nuclear power plant in Stendal was closed down. The pulp mill was intended to replace the jobs lost in the nuclear power plant.

Other EIB loans to the pulp and paper sector include:

€211 million to Svenska Cellulosa Aktiebolaget (SCA) for research and development (under appraisal, July 2008).[566]
€43.7 million to Sociedad Anónima Industrias Celulosa Aragonesa (SAICA) for research and development and to convert a paper machine to use waste paper as raw material (2008).[567]
€80 million to Portucel to upgrade three pulp and paper plants in Portugal (2007);[568]
€170 million to Finland’s Myllykoski Group to build a paper mill in the Czech Republic (2006).[569]

li>€200 million to Stora Enso for a new paper machine at the company’s Kvarsveden mill in Sweden (2005).[570]

€100 million to Sodra Mönsterås to increase pulp capacity and to build a new saw mill in Sweden (2003);
€25 million to Metsä Botnia to modernise a pulp mill in Finland (2000);
€160 million to Stora Enso to modernise a pulp and paper mill in Finland (2000);
€100 million to Metsa Serla to upgrade three pulp and paper mills in Finland (2000);
€40 million to UPM Kymmene to modernise pulp production at seven mills (1999); and
€49.7 million to Metsä Botnia in Finland (1998).[571]

This list makes clear that pulp and paper companies in Finland have done particularly well out of the EIB. Given the fact that Finland is clearly a “developed” country this raises questions about why Finnish corporations should be so generously supported by European tax payers. In its 2006 report on pulp mill financing, the Center for International Forestry Research (CIFOR) notes that “these transactions could easily have been done in the commercial capital markets”.[572]

EIB is also funding plantation projects aimed at sequestering carbon. The Bank is planning a China Climate Change Framework Loan, which includes two separate plantation projects. A “carbon sequestration afforestation” project aims to plant 35,000 hectares in Inner Mongolia with trees for wood and fruit production. A “forestation and bio-energy development” project aims to plant 39,000 hectares for oil and bio-diesel production in Jiangxi Province. The projects are currently under appraisal at the Bank.[573]

In 2007, the EIB approved a €4.65 million loan to New Forests Company, a UK-based company, to establish 6,544 hectares of eucalyptus and pine plantation in Uganda. “The project may generate carbon credits through carbon storage from the trees planted and may become eligible under the Clean Development Mechanism (CDM),” according to the Bank’s website.[574] In September 2008, New Forests Company secured a €8.5 million equity investment from HSBC Principle Investments.[575] New Forests Company has built schools, employs over 1,000 people in Uganda and has developed fuel efficient stoves which require half as much wood as typical stoves in Uganda. New Forests Company’s website includes photographs of road building, bush clearing and chemical spraying in preparation for the company’s plantations.[576] There is no mention on the website of how much carbon is released to the atmosphere as a result of these operations. New Forests Company plans to invest US$80 million in plantations in Uganda, to provide biomass for power generation and timber for the construction industry. The company is working with another UK company, Aldwych International, which has a license to build a 50 MW biomass plant in Uganda.[577]

CIFOR notes that EIB is “happy to focus on macro benefits such as balance of payments improvement, job creation and as yet do not work actively to mitigate any potential impacts that their investments might have.”[578] This is an understatement, as the Bank’s loans to Veracel and other egregious projects dramatically illustrate. The Bank has neither the capacity nor the interest to even attempt to deal with the negative impacts of its loans.

Friends of the Earth International ends its 2006 report on the EIB with a series of recommendations for the EIB, one of which would exclude “support for projects that are inherently incoherent with poverty alleviation and sustainability”. The four NGOs involved in writing the report specifically recommend that the Bank should not fund any large scale industrial tree plantations.[579]

The Food and Agriculture Organisation: Promoting the lie of “Planted Forests”

Created in 1945, the United Nations Food and Agriculture Organisation has worked hard on behalf of the plantation industry to reinforce the myth that a plantation is a forest. In its 2005 Global Forest Assessment, for example, FAO concludes that the “rate of net loss” of forests is decreasing. It sounds good, until you realise that in its definition of forests, the FAO includes monoculture plantations, highly degraded forests and even clearcuts which are expected to regenerate.[580]

FAO has played an important role in promoting the commercialisation of tropical forestry generally[581], and the industry with which FAO’s forestry department has had the “longest and deepest involvement” is the pulp and paper industry.[582] FAO has produced studies aiming to facilitate investment and production in the pulp and paper industry in a wide range of tropical countries.

The Fifth World Forestry Congress, which took place in Seattle in 1960, discussed “the need for action to use forest tree improvement to strengthen afforestation and reforestation programs and to increase the yield of the world’s forests”. The Congress recommended that the FAO organise a technical conference, “to co-ordinate and promote the development of tree improvement techniques, the mass production of improved planting stock, and the incorporation of these techniques and plants into afforestation and reforestation programs in a scientific and economic manner”. FAO subsequently organised a meeting, “The World Consultation on Forest Genetics and Tree Improvement,” which took place in Sweden, in August 1963.[583]

584

The conference recommended that governments in the South develop “planned programs of forest genetics and tree improvement”.[585] The conference commended the governments of Australia and Mexico “for their help in collections of eucalypts and Mexican pines, and urges FAO to encourage and support the extension of such action to satisfy critical needs.”[586] The conference recommended that the FAO’s Forestry and Forest Products Division should set up an advisory and information unit “on the introduction of forest trees with actual or potential use as exotics”.[587]

In the mid-1970s, FAO intensified its support of the expansion of the industrial tree plantations and the pulp and paper industry in the global South. The theme of a 1975 issue of FAO’s forestry magazine Unasylva was “It’s time to make paper in the tropics.” In the magazine, FAO’s Ken King argues that “plantations and mixed tropical hardwoods are the pulp sources of the future, and the future is at hand”.[588] FAO’s role in the exploitation of these “pulp sources” is equally explicit:

“It is evident that the governments of most of these [tropical] countries would require financial and technical/managerial assistance if their plans are to be implemented. FAO is prepared to assist in the bringing together of governments and potential investors, in the hope that these plants would be established.”[589]

Two years later Ken King, then-head of forestry at the FAO, reported that, a large number of Southern governments had approached the FAO to study the feasibility of establishing “some type of pulp and paper factory, of one kind or another”.[590]

By the mid-1980s, about four million hectares of eucalyptus plantations had been planted, in more than 80 countries.[591] During the 1980s, rural communities started to protest against industrial tree plantations in the South, particularly in India and Thailand. In 1986, in response to the protests, FAO produced a study, funded by Sweden’s aid agency, SIDA, titled “The ecological effects of eucalyptus”. The arguments in favour of industrial tree plantations were the same as in the 1960s (and the same as that from plantation proponents today): “There are high and increasing demands for wood for industrial use and fuel needs, especially in developing countries of the tropics with their growing populations.”[592]

The authors of the report, D. Poore and C. Fries, noted that

593

However, rather than visiting and talking to some of the local communities who had seen eucalyptus plantations established on their land, the authors attempted to answer questions such as “Do eucalypts use more water or have a greater effect on the water regime than other species of trees?” and “Are eucalypts more efficient in their use of water (producing more wood per unit of water used) than other species?” They concluded that “Perhaps there is no general answer to either of these questions.”[594]

Nevertheless, Poore and Fries note that “There is evidence from the humid tropics, however, that young, rapidly growing eucalypt plantations consume more water and regulate flow less well than natural forests.” They also found that “Eucalypts are often planted where there have been no trees before. Under these circumstances, the water yield of catchments is reduced and water-tables are drawn down. The effect is greatest when trees are young and growing rapidly.” But rather than asking local people whether they wanted industrial tree plantations on their land, or asking them how they would prefer to use their land, Poore and Fries conclude that “Other tree genera would probably produce comparable effects.”[595] According to the FAO, its seems, the need to plant fast growing trees is not negotiable.

Poore and Fries use a similar argument regarding the impact on soils. They note the impact of eucalyptus plantations on soils, but conclude that other species are as bad and in any case fertilizer can be used:

596

Interestingly, the report does differentiate between forests and plantations: “forests produce more diversity than plantations of indigenous species, which in turn produce more diversity than plantations of exotics.”[597] This differentiation has not been taken up by the FAO, which still insists on describing industrial tree plantations as “planted forests”.

Having documented the impacts of eucalyptus plantations, Poore and Fries conclude that,

598

The authors recommend that before eucalyptus plantations are established, “careful and intelligent assessment of the social and economic consequences” should be carried out. “This can probably best be done,” they explain, “by a sympathetic examination of the ecological circumstances and needs of local people, assisted by an understanding of the results of the fundamental research on water, nutrients, etc. referred to in this article.”[599]

While this sounds good, FAO’s underlying bias in favour of industrial tree plantations precludes any such “sympathetic examination”. FAO’s support for plantations has developed and adapted over the years, but the bias in favour of plantations (and against local people) remains. The latest manifestation of FAO’s support for plantations is its voluntary guidelines for “Responsible management of planted forests [sic]”.[600]

FAO started to work on a code on planted forests in 2004. This resulted in a series of voluntary guidelines, produced in 2006. The bias inherent in the process is revealed from the start. On the front cover of the guidelines is an aerial view of Veracel’s plantations in Brazil. The regimented rows of eucalyptus are contrasted by patches of native forest, where the trees are about half as high as the eucalyptus trees. Observers ignorant of the reality of Veracel’s plantations might conclude that it all looks green, well managed and productive. There is little hint of the impact on the people living there – or even that any people might have once lived here.

The guidelines acknowledge that industrial tree plantations have created problems:

601

The words “in the past” are disingenuous, implying that companies may have made mistakes in the past, but do not do so today.

FAO maintains that industrial tree plantations are a type of “planted forest”, which according to FAO refers to “Forest/other wooded land in which trees have been established through planting or seeding. Includes all stands established through planting or seeding of both native and introduced species.” FAO also uses another term, “plantation forest”, which is “a subset of planted forest”.[602] The attempt to produce guidelines covering everything from trees planted in forests as part of a management system to industrial pulpwood plantations to plantations established to prevent desertification is inevitably doomed to failure. The motivations and actors driving the tree-planting, as well as the impacts on local people are completely different.

To develop its “code for planted forests”, FAO set up a process of “multistakeholder consultations”. The aim of the process was ultimately to promote industrial tree plantations: “The intent has been to propose practical voluntary guidelines that, in particular, may promote planted forest investment and management across a wide range of situations – including to owners of small forest areas.”[603] The problems of FAO’s failure to define industrial tree plantations are clearly revealed. FAO can pretend that it is aiming to help “owners of small forest areas”, when in fact it is helping the owners of industrial tree plantations: large multinational corporations.

FAO explains that its guidelines are to be voluntary. FAO set up no system for determining whether a particular project complies with the guidelines and even explains that the guidelines are to be interpreted differently, depending on the level of industrialisation within the country involved:

604

This is an extraordinary statement. It implies that different standards would apply in, say, Laos, Brazil and Germany, because of the different level of industrialisation in each country. FAO gives no explanation for this, nor does it explain exactly how the level of industrialisation is supposed to determine how each principle is to be applied.

The guidelines consist of 12 Principles, divided into five sections: Institutional; Economic; Social and Cultural; Environmental; and Landscape approach. A series of guidelines follows each Principle. But the guidelines provide no advice about whether all the Principles and guidelines should be met, or just some of them, some of the time. FAO provides no advice on interpreting the guidelines or who should do the interpreting.

The assumption behind the guidelines is that plantations should go ahead. Principle 1, on “Good governance”, states that governments “should facilitate an environment of stable economic, legal and institutional conditions to encourage long-term investment, sustainable land-use practices and socio-economic stability.” Principle 5, on “Enabling environment for investment”, states that “Governments should create the enabling conditions to encourage corporate, medium- and small-scale investors to make long-term investments in planted forests and to yield a favourable return on investment.”

Some of the guidelines are progressive. Principle 2, on “Integrated decision-making and multistakeholder approaches”, recognises the principle of free prior and informed consent: “respecting international law to ensure that local communities and indigenous peoples retain control over their lands, unless they delegate control with free, prior and informed consent.” Principle 8, on “Maintenance of social and cultural services”, states that governments should prevent “displacement or resettlement of communities without free, prior and informed consent”.

Other guidelines are written in a bureaucratic style that is difficult to understand. For example, Principle 2 states that the guidelines should include “[I]ntegrating policies, planning and management decision-making related to planted forests into intersectoral and multidisciplinary approaches in order to reflect their role in the wider landscape, both spatially and temporally”. It is difficult to know what this means, or what impact of plantations it is attempting to address. Determining whether or not it has been implemented in practice would be pretty much impossible.

Other parts of the guidelines are meaningless: “selecting indigenous species for the establishment of planted forests if they are equal to or better than introduced species for the purpose intended.” Decades of research into fast-growing eucalyptus species for pulp production ensures that this guideline can easily be met. There is a large global market in eucalyptus pulp. To plant industrial tree plantations with indigenous species for the pulp industry would require decades of research, the development of a new market and millions of dollars of investment. No company is likely to undertake this research.

Other parts of the guidelines clearly reveal FAO’s bias in favour of industrial tree plantations. Principle 4 states that guidelines should include “deriving methods to better reflect the full value of planted forests in justifying investments by governments and private-sector investors (both corporate and small-holder)”. FAO seems to be suggesting developing new ways of justifying plantations. This is not a guideline for implementing plantations, it is an invitation for plantation proponents to produce propaganda in favour of plantations.

In another example, the guidelines recognise “the role that planted forests can play in relieving harvesting pressures on naturally regenerating forests and in providing habitats for indigenous flora and fauna.” Both of these arguments are used frequently by the pulp and paper industry. The reality however is that industrial tree plantations often increase the pressure on forests and on other ecosystems such as grasslands.[605] Industrial tree plantations have no impact whatsoever on reducing the underlying causes of deforestation such as the expansion of cash crops like soya, sugar or oil palm. Neither do industrial tree plantations have any impact on reducing road construction through native forests or the construction of massive hydropower dams which flood forests and result in the eviction of people from their land and homes.

While indigenous flora may sometimes be found within industrial tree plantations, it is more common (particularly in South Africa) that plantations provide habitat for alien invasive weed species. In any case, plantation managers do not encourage the growth of any species other than the trees which provide raw material to industry. Indigenous fauna can also be found in industrial tree plantations, but fewer species than in native ecosystems.

In yet another example of bias in favour of industry, the guidelines state that:

606

Nowhere do the guidelines mention the limited capacity and capability of governments and corporations to listen to what communities are saying. No mention is made of strengthening corporations’ capacity and capability in this regard. Instead, FAO recommends that NGOs should work with communities to teach them how to communicate.

FAO’s guidelines recommend that governments should subsidise plantations, by “providing direct or indirect incentives to encourage long-term investment in planted forests that may be justified where society as a whole will benefit”.[607] FAO provides no guidance on how to determine the interests of “society as a whole” or who should determine what those interests are. This is important. A group of farmers in rural areas will have a very different view of whether planting thousands of hectares of industrial tree plantations benefits society as a whole to that of a Northern-based consultant keen to win new contracts for their company by ensuring the expansion of the pulp and paper industry.

Having stated that governments should subsidise the establishment of plantations, FAO’s guidelines contradict themselves. Principle 6 of the guidelines is titled “Recognition of the role of the market”. This Principle states that: “Establishment and management of planted forests should be market- rather than production-driven, unless established for environmental, protective or civic reasons.”[608] Clearly, any commercial company will justify their proposed (or existing) plantations on the basis that they are “market-driven”. But if plantations were really “market-driven”, why would there be a need for governments to provide subsidies?

Principle 7, “Recognition of social and cultural values”, asks governments to recognise “the local community values, customary rights, traditional knowledge, religious values and tenure of indigenous peoples and ethnic minorities in areas targeted for planted forest investments.” But FAO provides no advice on how governments are supposed to balance the conflicting demands of “market-driven” expansion of industrial tree plantations and local communities’ rights to decide their own future.

FAO’s guidelines are in favour of establishing carbon markets to provide another subsidy for the establishment of industrial tree plantations. FAO encourages governments to recognise “the emerging carbon trade markets and the increased understanding of the role of afforestation and reforestation in providing carbon sinks to mitigate climate change, whether planted forests are for productive or protective functions.” The guidelines do not discuss the problems associated with all such carbon trade schemes, such as the impossibility of determining what would have happened if the plantation project did not go ahead. Or the complexity of calculating how much carbon is stored in soils and above ground biomass. Or the fact that if carbon is traded it allows the companies buying the carbon credits to continue polluting – thus avoiding addressing climate change. Or the fact that short rotation industrial tree plantations only store the carbon for a short period. If the wood from the plantations is converted to paper, this often has a short life and most of it ends up in landfills where it rots and produces methane (a gas which is more than 20 times as potent a greenhouse gas as carbon dioxide). Or the fact that plantations might be cut down by local communities who want their land back. Or that the plantations may be attacked by disease or fire. In each of these cases, any carbon that is stored in the plantation is released to the atmosphere.[609]

Principle 9, on “Maintenance and conservation of environmental services”, confirms that “Planted forest management will impact the provision of ecosystem services.” FAO’s solution is to “minimize negative impacts and promote positive ones”. Governments should “consider voluntary certification programmes an acceptable mechanism for addressing environmental issues”. In the introduction to the guidelines, FAO explains that

“Forest certification schemes may build upon or complement the guidelines by establishing procedures for and monitoring of technical standards and best practices in planted forest management. It is acknowledged that where planted forests are certified by recognized, credible certification schemes, the intent of these guidelines is likely to have been satisfied.”

FAO’s guidelines are intended to “complement the various forest certification schemes in existence without detracting from these schemes.” But FAO makes no attempt to differentiate between the various certification schemes. There is no discussion in the guidelines of the fact that a plantation operation can easily achieve certification under one certification scheme, whereas certification under another may be more difficult. Neither does FAO address the controversy surrounding Forest Stewardship Council (FSC) certification of industrial tree plantations (see section on FSC, below), despite that fact that FSC itself acknowledges the problems and is currently carrying out a review of FSC certification of plantations. FAO fails to discuss the fact that no certification scheme explicitly recognises free, prior and informed consent. In order to comply with FAO’s guidelines, a plantation operation simply needs to obtain certification (under any certification scheme) and can then claim to have met the guidelines. This loophole could mean that a company could claim to comply with the FAO’s guidelines even in a situation where local communities and Indigenous People are openly demonstrating against the plantations.

The guidelines allow the use of genetically modified organisms, by recommending “adopting science-based and regulatory policies, risk-management protocols, practices and monitoring in the use of biotechnology (including genetically modified organisms) in reproductive materials”. Genetic engineering “is not intrinsically good or bad” according to the FAO’s guidelines. “Each application of this technology to planted forests should be assessed on a case by case basis, under stringent national regulatory conditions, in order to recognize the various risks, depending on the biology of the trees, the type of genetic modification and how it is deployed in the field.” This is precisely the approach favoured by proponents of GM trees. Far from providing guidelines to address the risks of GM trees, FAO’s guidelines allow companies to decide whether their GM trees present a risk or not.

FAO states that “The potential of planted forests to contribute to rural development, including poverty alleviation, is well recognized and is particularly important during times of economic depression.” FAO fails to provide any information about how plantations contribute to poverty alleviation.

I wrote to Linda Rosengren at FAO’s Forestry Department to provide a source for this statement. I pointed out that in fact plantations provide few jobs and the majority of the jobs provided are poorly paid, based on contract labour and are extremely dangerous. I quoted from a 2004 study carried out by the International Institute for Environment and Development (IIED) in South Africa, which concluded that “jobs provided by forestry contracting are not able to lift the vast majority of forestry workers, mainly women, out of chronic poverty, or prevent them from falling further into poverty”.[610]

Rosengren did not reply to my email.[611]

Other questions that Rosengren and her colleagues at the FAO, Peter Holmgren (Chief of FAO’s Forest Resources Development Service) and Jim Carle (FAO Senior Forestry Officer), declined to answer include the following:

Why does FAO insist on referring to “plantation forests” or “planted forests” rather than clearly differentiating between forests and industrial tree plantations?
In a presentation to The Forest Dialogue in April 2008, Rosengren stated that the guidelines are intended to “enhance sustainable livelihoods and land use”. How does FAO anticipate that the voluntary guidelines might achieve this, particularly as in several important aspects the guidelines are even weaker than the principles and criteria of the Forest Stewardship Council?
Which institutions took part in the “multi-stakeholder process” to prepare FAO’s guidelines? How was agreement reached during this process and are comments on the draft guidelines available to the public?
Since the guidelines have been produced, FAO has started a process to implement the guidelines in China, Thailand, Laos and Vietnam. What does FAO intend to do when it finds that a company’s plantations do not comply with the guidelines in these countries (or anywhere else)? What process does FAO anticipate will take place to determine whether plantations comply with the guidelines? Will FAO (or a third party) carry out assessments of the plantation operations? What mechanisms does FAO envisage setting up to encourage companies to comply with the guidelines, and what does FAO intend to do when a company decides to completely ignore the guidelines?
Has FAO produced any information on how plantation companies are allowed to use the guidelines when selling products from their plantations? Could they, for example, advertise paper as coming from “plantations in compliance with the FAO’s voluntary guidelines on planted forests”? Is there anything to prevent companies who are negotiating a plantation contract from claiming that they will comply with the guidelines (even though at that stage no trees have been planted, and it is impossible to verify whether or not the company will comply)?
Given that the guidelines were formulated during the time that the FSC was undertaking a review of the certification of plantations, and that the FAO’s guidelines are even weaker than those of FSC, how does FAO respond to the accusation that the guidelines in effect undermine FSC’s standards?

By declining to answer these questions, FAO shows itself to be more interested in helping to greenwash the plantations industry than in encouraging a meaningful discussion about the impacts of industrial tree plantations and how the corporations responsible for these impacts might be regulated.

The guidelines make no attempt to help governments regulate the impacts of industrial tree plantations on rural communities and their environments. The guidelines state that “No attempt is made to describe detailed technical guidelines or implementation standards for planning, management and utilization.” This, apparently, was a decision taken by the FAO’s “stakeholders”. “[I]t was decided by the stakeholders that the core should be the principles and guidelines, with less emphasis on the technical guidelines for implementation practices.”

FAO’s work on promoting industrial tree plantations continues. FAO has produced a Working Paper which describes “a methodology for capacity building to translate the Voluntary Guidelines for Responsible Management of Planted Forests into action proposals.”[612] The Working Paper provides no guidance on how FAO will determine whether a company is in breach of its voluntary guidelines. Instead it describes a series of “multi-stakeholder processes”, five-day regional workshops and action plans. A meeting took place in Chiang Mai, Thailand in January 2008, with representatives from China, Laos, Thailand and Vietnam. While there were several representatives from plantation companies, governments and the FAO, there was only one NGO representative: Boris Saraber, from WWF’s Greater Mekong programme.

The code is “voluntary and non-binding”. In other words, should a company choose to ignore the code, there is nothing that can be done. What is perhaps worse, is that there is apparently no mechanism in place to prevent a company claiming to be operating in accordance with the code, no matter how severe the impacts of its operations on local people and their environment.

FAO urgently needs to review its support to industrial tree plantations and to the pulp and paper industry. It could start by defining industrial tree plantations as something completely different to forests and recognising that voluntary guidelines are simply a way that plantation company’s can claim to be environmentally and socially benign regardless of the realities on the ground. The guidelines are nothing more than a mechanism for companies to avoid meaningful regulation.

Forest Stewardship Council: Misleading consumers about paper products

Established in 1993 by NGOs and the timber industry, the Forest Stewardship Council is supposed to guarantee that products carrying its logo come from forestry operations that are “well managed”. FSC does not carry out the assessments itself, but has accredited a series of certifying bodies to carry out assessments to determine whether the forestry operations comply to FSC’s Principles and Criteria.

While it sounds like a good idea, FSC is riddled with problems. The certifying bodies interpret FSC’s standards loosely, leading to the certification of operations that are blatantly in breach of FSC’s Principles and Criteria. FSC certification is not only based on the Principles and Criteria, but on a bewildering array of policies, standards, advice notes, procedures and guidelines. These cover subjects such as accreditation, chain of custody, controlled wood, use of the FSC trademark, genetically modified organisms and high conservation value forests.[613] Currently FSC is carrying out several policy reviews, on plantations, principles and criteria, standard development, pesticides, governance and chain of custody.[614] The most common response to criticisms of FSC is that a review is currently under way, with a promise that the critique will be taken into account. Whether these promises are actually met is open to debate. In some cases, the review makes the situation worse, rather than better.[615]

FSC is supposed to reassure consumers that products carrying the FSC logo come from well managed sources. But FSC’s labels include one called “mixed sources”. A product carrying the “mixed sources” label can contain as little as 10 per cent FSC certified material, the rest coming from “controlled sources”. But the “control” of the controlled sources is carried out by the companies themselves, thus introducing a large element of self-regulation by the industry that FSC is supposed to be regulating.

“To ensure its independence it does not accept funding from industry,” stated FSC’s website in October 2003.[616] FSC has since cast off any such reservations[617] and is getting increasingly cosy with the timber industry, in particular the pulp and paper industry. Each year, FSC holds a “Global Paper Forum” which brings industry representatives, NGOs and FSC staff together to find “Market opportunities for FSC-labelled paper”. This year the Forum was sponsored by Mondi and Suzano.[618] Sponsors of FSC’s 2008 General Assembly include pulp and paper companies Mondi, Tembec and Sveaskog.[619]

One of the most serious problems with the Forest Stewardship Council is the fact that it promotes consumption. Paper produced from eucalyptus monocultures is marketed with the FSC’s logo. Consumers are tricked into believing that this is “environmentally friendly” paper. As Simon Counsell, the UK Director of the Rainforest Foundation, pointed out in an interview with Ethical Consumer magazine,

620

This criticism is not new. In September 1993, before FSC’s founding assembly, German NGO Rettet den Regenwald produced a report criticising the proposal to establish FSC. “At best the FSC initiative is naive,” wrote Rettet den Regenwald, “at worst it provides a framework for the timber industry to achieve a much desired ‘green veneer’ and defuse pressure to attack the real issues of illegal trade, indigenous people’s rights and over-consumption.”[621]

FSC’s certifying bodies exercise a large degree of control over the way the organisation functions. One of FSC’s certifying bodies, SGS, is also sponsoring the General Assembly. SGS will be sponsoring the General Assembly while under a self-imposed “moratorium” on new FSC assessments. On 29 May 2008, after a series of controversial certificates, SGS imposed the “moratorium”, which FSC misleadingly announced on its website as a moratorium on issuing new certificates. In fact, SGS continued to issue certificates, issuing 15 in the three months after announcing the “moratorium”.[622] FSC declined to answer my questions about the “moratorium”.[623]

Equally disturbing is the relationship between the certifying bodies and the companies being assessed. Companies hire the certifying bodies directly. As such, the certifying bodies compete against each other for business. Clearly, any commercial timber company is far less likely to hire a certifying body that interprets FSC’s Principles and Criteria strictly and gets a reputation for being “difficult” than a certifying body that rubber stamps operations as well managed after a cursory inspection.

“One of the things I’ve been saying for five years,” Simon Counsell explains, “is that you’ve got to remove the major conflict of interest at the core of the organisation, which is that the certifying companies contract directly with the companies that they’re supposed to be independently monitoring.” Counsell recommends a system where companies would contact the FSC and certifiers would then apply for the contract. “They would have to demonstrate that they’ve got the expertise, that they’d spend enough time in the field to carry out proper assessments and would comply rigorously with the FSC’s requirements. It would become in their interests to keep the FSC happy rather than to keep the logging companies happy.”[624]

Rather than addressing the structural problem, FSC created a body called Accreditation Services International (ASI) to monitor its certifying bodies. ASI carries out audits of the certifying bodies and publishes the reports on its website.[625] These reports often reveal serious problems, but ASI is slow to take meaningful action against its certifying bodies. In Uganda, for example, ASI found that SGS had issued a certificate to the Ugandan Wildlife Authority (UWA) for Mount Elgon National Park based on hoped for future improvements, rather than what was actually happening in the national park. In February 2008, UWA evicted more than 4,000 people, including Indigenous Peoples, from the national park. Other ASI audits of SGS found similar problems, in Russia, Poland, Guyana and Spain.[626]

Timothy Synnott, FSC’s executive director from 1994 to 2002 notes that

627

This is, unfortunately, typical of the cherry picking that FSC proponents use to promote FSC certification. In his 2003 book “The Age of Consent”, George Monbiot discusses the limits of what he calls “consumer democracy”. He notes that “mindful consumption is a weak and diffuse means of changing the world, and it has been greatly overemphasized by those . . . who wish to avoid the necessary political conflicts.”[628]

FSC and plantations

In his notes about the first years of FSC, Timothy Synnott explains that one of the reasons he became involved with FSC was that he “had grown disillusioned . . . about plantations, where the trend towards monocultures and chemical-dependence continued unabated”.[629] Synnott writes that “FSC and certification seemed to be what was needed for a major shake-up.”

Synnott notes the “rapid spread of industrial tree plantations, often at the expense of natural forests and other natural habitats.”[630] He notes that people living near plantations “objected to the march of alien-looking plantations, but they were easily brushed aside as being against the march of progress and the national interest.”[631]

Today, FSC has certified a large area of monoculture, chemical-dependent industrial tree plantations. The exact area is impossible to determine, however, because FSC does not provide information about the area of industrial tree plantations that it has certified. It classifies its certified areas as “Natural” (55.25%), “Semi-Natural and Mixed Plantation and Natural Forest” (36.41%) and Plantations (8.33%).[632]

At FSC’s Founding Assembly, in October 1993, FSC had two sets of Principles and Criteria. One set applied to forests and one to plantations.[633] Both sets had nine principles. The plantations set was dropped, and reintroduced as Principle 10 in 1996.

FSC’s Principle 10 states that “Plantations shall be planned and managed in accordance with Principles and Criteria 1 – 9, and Principle 10 and its Criteria.” In other words, the plantation itself must be managed to comply to all of FSC’s Principles and Criteria. There is nothing in the Principles and Criteria which would allow certifying bodies to issue certificates to companies that attempt to “offset” an area of monoculture plantations with an area of protected forest.[634]

Several of FSC’s Principles and Criteria should rule out the certification of industrial tree plantations.[635] Criterion 1.6, for example, states that “Forest managers shall demonstrate a long-term commitment to adhere to the FSC Principles and Criteria.” In practice, companies can get away with a public statement stating that they adhere to FSC’s Principles and Criteria, regardless of the reality. Pulp and paper companies that produce raw material in large scale monocultures cannot demonstrate commitment to all of FSC Principles and Criteria.

Principle 2 relates to “Tenure and use rights and responsibilities” and states that “Long-term tenure and use rights to the land and forest resources shall be clearly defined, documented and legally established.” One of the problems with the certification of industrial tree plantations is that disputes over tenure and use rights take place when the plantations are established. By the time the plantation is assessed for certification, the people who lost their land and livelihoods have often long since moved away from the plantation area. To uncover their stories would involve in-depth research in the slum areas of nearby towns – research which is beyond the capacity of certifying bodies.

Criterion 5.4 states that “Forest management should strive to strengthen and diversify the local economy, avoiding dependence on a single forest product.” Monoculture tree plantations which produce only raw material for the pulp and paper industry clearly do not strengthen or diversify the local economy. In fact, they do the reverse. They make the local economy heavily dependent on a single company which is in turn dependent on one single product: wood as raw material for pulp production.[636]

It is difficult to imagine how any industrial tree plantation could comply with Principle 6. It states: “Forest management shall conserve biological diversity and its associated values, water resources, soils, and unique and fragile ecosystems and landscapes, and, by so doing, maintain the ecological functions and the integrity of the forest.” Industrial tree plantations destroy biodiversity, impact water resources and soils, and are monocultures which replace native ecosystems. Plantation management is an artificial system which has little or nothing to do with the ecological functions and integrity of the forest.

Criterion 6.3 alone should exclude the certification of all monoculture tree plantations: “Ecological functions and values shall be maintained intact, enhanced, or restored, including: a) Forest regeneration and succession; b) Genetic, species, and ecosystem diversity; c) Natural cycles that affect the productivity of the forest ecosystem.” Industrial tree plantations replace ecological functions with a monoculture, which is harvested in clearcuts and replanted. No forest regeneration or succession takes place in an industrial tree plantation. Diversity is deliberately limited. Natural cycles have little or nothing to do with the productivity of industrial tree plantations.[637]

Criterion 6.6 deals with the use of chemicals: “Management systems shall promote the development and adoption of environmentally friendly non-chemical methods of pest management and strive to avoid the use of chemical pesticides.” Industrial tree plantations are at severe risk from pest and disease. While management may “strive to avoid” (whatever that means in the context of tens of thousands of hectares of monoculture) using chemical pesticides, the reality is that plantation managers are dependent on pesticides, fungicides and herbicides to prevent and control outbreaks of pests and diseases. Plantation managers often also rely on chemical fertilizer to achieve faster growth rates.

FSC’s position on genetically modified trees is confusing. Criterion 6.8 is clear: “Use of genetically modified organisms shall be prohibited.” But as with many of FSC’s standards, the problem is in the implementation of the Criterion. Can an FSC certified company carry out laboratory research into GE trees? Can it carry out field trials in areas that are not certified? Can it finance research into GE trees by universities or other research institutions? In October 2007, the US-based Stop GE Trees campaign wrote to Heiko Liedeker, FSC’s then-director, with copies to all Board members, requesting clarification on these questions. FSC declined to reply.[638]

Criterion 6.9 is almost completely meaningless in the context of large-scale industrial tree plantations planted with exotic species: “The use of exotic species shall be carefully controlled and actively monitored to avoid adverse ecological impacts.” In order to certify industrial tree plantations, FSC is saying that a plantation company that plants millions of exotic trees (which may become weedy and spread into natural ecosystems, as is the case with eucalyptus, pine and acacia plantations in South Africa, for example) is actually “carefully controlling” the use of exotic species. Clearly, this is nonsense. Any company “actively monitoring” its plantations would immediately realise that its monocultures have created adverse ecological impacts.

Principle 10 is a strange mixture of statements. On the one hand, parts of Principle 10 sound similar to the propaganda produced by plantation proponents. On the other hand, Principle 10 includes several criteria which are apparently aimed at excluding industrial tree plantations from FSC certification (although the wording used is so weak that it is wide open to interpretation by the certifying bodies).

Principle 10 includes the following statement:

“While plantations can provide an array of social and economic benefits, and can contribute to satisfying the world’s needs for forest products, they should complement the management of, reduce pressures on, and promote the restoration and conservation of natural forests.”

This is not a principle against which plantation management can be judged, it is the sort of wishful thinking produced by the pulp and paper industry. The language does not lend itself to precise interpretation. Instead of saying that plantations shall provide social and economic benefits and reduce pressure on forests, it says that they can and should do so respectively. An industrial tree plantation established to provide raw material for a pulp mill, explicitly does not provide social and environmental benefits. Proving that a particular plantation reduces pressure on forests would be difficult, if not impossible. It would involve taking into account the activities of all the people who have moved away from the area of the plantations because of the impact on their livelihoods. In many cases, they have little choice other than to clear areas of forest elsewhere to grow food. Neither do plantations “promote the restoration and conservation of natural forests”, on the contrary, plantations often replace natural forest. In its 2003 report on “Fastwood” plantations, CIFOR notes that “there is little evidence to suggest that fast wood plantations have taken pressure off natural forests”.[639]

FSC displays a bias in favour of companies and against local people in Principle 10, with the mention of “the world’s needs for forest products”. As the pulp industry relocates to the global South, local people are increasingly being forced off their land to make way for industrial tree plantations that provide raw material to meet “the world’s needs”. But the pulp is often exported from the country in which it is produced. Paper consumption in the North is way higher than in the South. FSC’s Principle 10 assumes that consumers in the North need paper more than local people in the South need land.

Criterion 10.1 appears to commit plantation managers to restoration of native forest: “The management objectives of the plantation, including natural forest conservation and restoration objectives, shall be explicitly stated in the management plan, and clearly demonstrated in the implementation of the plan.” As WRM pointed out in its critique of Principle 10, written in 2001, “management objectives of industrial plantations are always explicitly stated: the production of large quantities of timber in the shortest time possible”.[640] This has nothing to do with restoring forest.

Criterion 10.3 states that “Diversity in the composition of plantations is preferred, so as to enhance economic, ecological and social stability. Such diversity may include the size and spatial distribution of management units within the landscape, number and genetic composition of species, age classes and structures.” This should exclude the certification of monoculture tree plantations. But what do the words “is preferred” mean in this context? Could this criterion be met, as WRM suggests in its critique of Principle 10, simply by planting two species of eucalyptus over a huge area and planting two areas a couple of years apart? Apparently so, judging from some of the certificates of industrial tree plantations that FSC’s certifying bodies have issued.

Criterion 10.4 contradicts itself. It starts by stating that “The selection of species for planting shall be based on their overall suitability for the site and their appropriateness to the management objectives.” A pulp company, in, say, Brazil, will have no problem complying with this. There is a large market for eucalyptus pulp. Scientists have carried out decades of research into fast-growing eucalyptus species and matching these species to soil types and climate types. Planting eucalyptus is entirely appropriate to the company’s management objectives: to produce pulp. No problem there, then.

But the next sentence puts the pulp company in difficulty, at least if it wants to comply with FSC’s standards: “In order to enhance the conservation of biological diversity, native species are preferred over exotic species in the establishment of plantations and the restoration of degraded ecosystems.” It seems that in order to qualify for FSC certification, the pulp company will have to relocate to Australia, at least if it wants to plant eucalyptus. Fortunately, for Australia, there’s a loophole large enough to accommodate a US$1.5 billion pulp project anywhere in the world. Once again, Principle 10 uses the word “preferred”. The Criterion states only that “native species are preferred over exotic species”, not that exotic species shall not be used. So the pulp company can remain in Brazil, establish vast areas of exotic eucalyptus monocultures, and get FSC certification after all.

The final sentence of Criterion 10.4 confirms that the pulp company need not worry about its eucalyptus monocultures: “Exotic species, which shall be used only when their performance is greater than that of native species, shall be carefully monitored to detect unusual mortality, disease, or insect outbreaks and adverse ecological impacts.” Pulp companies plant exotic eucalyptus trees precisely because their performance is better for pulp production (or at least better researched) than native species. Eucalyptus pulp commands a higher price on the world market than pulp manufactured from native forests. Little is known about the growth rates of many of, say, Brazil’s tree species, and even less is known about their qualities for producing pulp. Monitoring for “unusual mortality, disease, or insect outbreaks” is business-as-usual for any company that has invested millions of dollars in an exotic monoculture plantation.

Monitoring for “adverse ecological impacts” is another matter. Replacing a natural ecosystem with a monoculture of thousands of hectares of exotic species is in itself an “adverse ecological impact”. The problem is that the impacts, such as reduced water supply as the monocultures suck streams and ponds dry, is felt by local communities and not by the scientists that the company employs to monitor its plantations. When FSC’s certifying bodies visit the plantations they listen to the company’s scientists rather than the local communities.

Criterion 10.5 is hopelessly vague: “A proportion of the overall forest management area, appropriate to the scale of the plantation and to be determined in regional standards, shall be managed so as to restore the site to a natural forest cover.” Once again this leads to a string of questions. What percentage of the management area shall be restored to forest? Is one per cent sufficient? Or 10 per cent? Or 50 per cent? What if the area never had forest cover, in countries such as Uruguay, Argentina or South Africa, where large areas of plantations have been FSC-certified?

Criterion 10.6, if applied consistently, would exclude all large scale, fast growth, exotic tree plantations from FSC certification. It states that

“Measures shall be taken to maintain or improve soil structure, fertility, and biological activity. The techniques and rate of harvesting, road and trail construction and maintenance, and the choice of species shall not result in long-term soil degradation or adverse impacts on water quality, quantity or substantial deviation from stream course drainage patterns.”

Yet FSC has certified large scale plantations with serious impacts on soil structure, fertility, biological activity and water. FSC-certified plantations in South Africa, Brazil, Chile and Uruguay are harvested in large clearcuts, leaving the soil exposed.

Criterion 10.7 states that “Measures shall be taken to prevent and minimize outbreaks of pests, diseases, fire and invasive plant introductions.” FSC does not specify the measures that companies are supposed to take. Year after year, thousands of hectares of FSC-certified plantations in South Africa burn. FSC-certified companies kill baboons, which have become a pest in plantations.[641] Obviously this slaughter has an impact on local biodiversity. Meanwhile the plantation companies’ exotic trees have turned into invasive species in native ecosystems. None of the plantation companies have lost their FSC certificates as a result.

Principle 10.8 should prevent the certification of industrial tree plantations:

“Appropriate to the scale and diversity of the operation, monitoring of plantations shall include regular assessment of potential on-site and off-site ecological and social impacts, (e.g. natural regeneration, effects on water resources and soil fertility, and impacts on local welfare and social well-being), in addition to those elements addressed in principles 8, 6 and 4. No species should be planted on a large scale until local trials and/or experience have shown that they are ecologically well-adapted to the site, are not invasive, and do not have significant negative ecological impacts on other ecosystems. Special attention will be paid to social issues of land acquisition for plantations, especially the protection of local rights of ownership, use or access.”

But what does monitoring “appropriate to the scale and diversity of the operation” actually involve in practice? This is wide open to interpretation. Any plantation company is likely to carry out trials before investing in large scale plantations. But the trials are invariably small scale and, as WRM pointed out in 2001, “the only effective test of the social and environmental effects of large-scale plantations are large-scale plantations themselves”. WRM proposed that “The criterion should therefore be revised to specify that no plantations will be certified in areas where there is enough evidence of substantial negative impacts (social, environmental or both) caused by existing large-scale plantations.”[642]

The final sentence of Criterion 10.8 is also problematic. What does “special attention” to social issues of land acquisition actually mean? If any local right has been violated, does this mean that an FSC certificate will never be issued? Clearly not, given the certificates that have been issued. So what, exactly, does this sentence mean in practice?

Criterion 10.9 states that

“Plantations established in areas converted from natural forests after November 1994 normally shall not qualify for certification. Certification may be allowed in circumstances where sufficient evidence is submitted to the certification body that the manager/owner is not responsible directly or indirectly of such conversion.”

Once again, this raises several questions. What does the word “normally” mean in the first sentence? How does FSC define “sufficient evidence”? What happens if a company buys a plantation operation after 1994, from a company that cleared forest to make way for the plantations? Can the company that bought the plantation be certified? How much investigation do certifying bodies have to carry out into allegations that companies hired local people to clear forests?

Clearly there are several serious problems with the FSC-certification of industrial tree plantations. By certifying large areas of monocultures, FSC is undermining its own legitimacy.

Plantations review

FSC is well aware of the problems with the certification of plantations. In 2001, FSC’s secretariat included the organisation’s position on plantations in a list of issues needing clarification. Subsequently, Tim Synnott, then-FSC’s Policy Director, wrote a draft FSC Plantation Policy. Synnott’s draft paper acknowledged that “Disputes have arisen around plantation certification, with reports of infraction of FSC guidelines. Some of the disagreements and disputes have been caused by different interpretations of the FSC Principles and Criteria and other policies.”[643]

At FSC’s General Assembly in 2002, a motion was passed for FSC to carry out a “Plantations Review”. The motion stated that “The current version of the FSC Plantation Policy Draft (30 May 2002) is not clear enough and needs improvement.” The motion continued to state that FSC should produce a revised plantation policy “after a broad consultation with the membership” to give “concrete guidance on the interpretation of P10 [Principle 10]“. This was supposed to take place within 18 months of the motion (i.e. by May 2004).[644] But six years after passing this motion, FSC has still not produced a revised plantation policy.

At the 2002 FSC General Assembly, members passed another motion for a review of FSC’s chain of custody. This also had an 18 month deadline. The review involved creating a new label for “mixed sources”, effectively making it very much easier for paper companies to put FSC’s logo on their products. FSC used “mainly core funding” to carry out this review, according to Sofia Ryder, who worked in FSC’s policy and standards unit at the time.[645] [646]

When it came to the Plantations Review, no funding was available.

In November 2003, a year after the motion was passed, FSC had made little or no progress towards carrying out a Plantations Review. Nevertheless, FSC produced a two page information leaflet titled “Forest Plantations”. The leaflet explains that FSC defines forest as “a tract of land dominated by trees”. According to FSC, plantations are “forest areas lacking most of the principal characteristics and key elements of native ecosystems, which result from the human activities of planting, sowing or intensive silvicultural treatments.” As such, “Plantations are included in the FSC definition of forests”. Clearly, FSC was not going to consider too radical an approach to its Plantations Review, the outcome of which might include, for example, a definition of plantations making clear that they are not forests.

By April 2004, FSC had, at last, started fundraising to carry out the Plantations Review. Two meetings were held, one in Brazil and one in South Africa. “We’re just trying to understand what are the issues, and that will help us to put to together the scope of what the review has to be,” explained Sofia Ryder in April 2004.[647] Two of the environmental organisations that took part in the meeting in Brazil had very close links to FSC-certified companies. Others, who are highly critical of FSC certification of plantations, were not at the meeting.

When a motion is passed at the General Assembly, there is no mechanism within FSC to ensure that the Secretariat carries out that motion. At the time, the Policy and Standards Unit in the FSC Secretariat consisted of two people. A motion to carry out a chain of custody review, which relaxed FSC’s standards and created a new label for the benefit of the pulp and paper industry was carried out using FSC core funding. A motion to carry out a Plantations Review, which, in theory at least, might lead to a strengthening of FSC’s standards did not even start for almost two years because FSC had no funding to carry out the review. The biases towards the industry within the FSC system are clear.

When the plantations review motion was passed in 2002, an area of 3.3 million hectares of plantations had been FSC-certified. That figure is now 8.6 million hectares.[648]

The Plantations Review finally started in September 2004. The first phase of the Review was a two year “Policy Working Group”, carried out by 12 people representing each of FSC’s chambers (economic, environment and social). The team consisted of 11 men and one woman. The second phase consists of four “Technical Expert Teams”, appointed by the FSC Board. These technical experts are working to “further develop the recommendations of the Policy Working Group”. Out of a total of 18 experts, only two are women.[649]

Needless to say, the pulp and paper industry is very interested in ensuring that no meaningful reforms come from the plantations review. A Plantation Working Group meeting in South Africa was sponsored by Mondi. The visit included a two day field trip to visit Mondi’s plantations. South African NGO coalition Timberwatch requested as much time as industry to present their point of view, but this was rejected. Nevertheless, Timberwatch ensured that the Plantations Working Group saw (and heard about) some of the impacts of FSC certified plantations in South Africa.[650]

At its fourth meeting in April 2006, the Policy Working Group produced a vision of what it would like FSC to achieve in the next ten years. The vision is titled “Raising the Bar”, implying that as a result of the Plantations Review, FSC’s standards will be improved. But there is little to suggest that things will genuinely improve.

Instead of producing concrete recommendations for tightening up Principle 10 to exclude industrial tree plantations from FSC certification, the Plantations Review Policy Working Group suggests that what is required is a “new mindset and approach”. Parts of the Group’s final report sound more like a manifesto for a new age society, than an attempt to regulate corporations that are producing billions of dollars of profit and creating massive environmental and social impacts. To give just one example from the final report:

651

Back in July 2002, Tim Synnott, then FSC’s Policy Director, wrote: “FSC P&C [Principles and Criteria] and guidelines are not always clear or precise, leading to different and contradictory interpretations by assessors, managers and FSC members”. Four years later the Policy Working Group had failed to clarify the situation. In its report of its fourth meeting, the Group states that, “the lack of confidence in FSC certification of plantations, is not because of the structure, nor the content of the P&Cs.” The Working Group suggests leaving any changes to the Principles and Criteria to a separate review process. This review process is currently under way and in April 2008, FSC’s Board of Directors issued a draft revised version of FSC’s Principles and Criteria.

The Board of Directors’ April 2008 draft is the result of a series of motions from the 2005 General Assembly[652] and the recommendations from the Plantations Review (although the Technical Expert Teams have not yet finished their work).

One of the changes is to insert the words “and plantations” throughout the principles and criteria, after the word “forest”. The draft amended version of Criterion 1.1 therefore reads as follows: “Forest and plantation management shall respect all national and local laws and administrative requirements,” (emphasis added). This is intended “to clarify that the Principles and Criteria are applicable to all types of forest and plantations management,” according to the board of directors’ notes in the revised draft.

In the draft revised version, the word “should” has been replaced with the word “shall” throughout the Principles and Criteria. This is intended to clarify that the Principles and Criteria are requirements, not recommendations.[653] This is good news for those who think that FSC should not certify industrial tree plantations, because it creates the impossible-to-meet and impossible-to-prove principle that plantations “shall complement the management of, reduce pressures on, and promote the restoration and conservation of natural forests,” (emphasis added).

A major change suggested in the draft is to Principle 4, which is retitled “Workers’ rights, social responsibility and local development”. The idea is to separate the criteria relating to each of these three issues. The revised criteria include participatory assessments, mitigation and compensation measures, adherence to ILO standards and communities are to be “identified” and consulted as well as given “opportunities for employment, training, and other services”. In addition, new criteria are proposed to give the same rights for sub-contracted workers as directly employed workers, better wages, rules on accommodation and healthcare, and mechanisms for resolving grievances.

So far so good. These changes reflect the Plantations Review Policy Working Group’s intention to “[i]ntegrate, more systematically than before, social issues into FSC structures and processes”.

Other proposals are far more problematic though. The revised draft proposes deleting the words “avoiding dependence on a single forest product” from criterion 5.4. As it stands, this Criterion should (at least in theory) exclude the certification of many industrial tree plantations, which exist to produce one product, such as raw material for pulp production.

A revision to criterion 6.1 suggests that the impacts of the operation shall have been determined before activities are started. This is to include the “ecological process of nutrient, water, carbon and biological cycles”. While this may create a bonanza for forestry consultants, it is unlikely to have any beneficial impact on plantation management. I look forward to reading the assessments of how establishing a plantation on large areas of grassland in Uruguay might impact the carbon cycle, particularly when the product produced is pulp, to be shipped to China, where it will be processed into paper which will end up rotting in a landfill and emitting methane. I look forward to the companies’ guesses of what might happen to the people whose livelihoods are destroyed by the plantations, including those who migrate to cities and take up a lifestyle resulting in far more carbon dioxide emissions (or less, depending on what they previously did – the point being that it is impossible to predict and even more difficult to monitor).

In at least one case, the Plantations Review Policy Working Group recommended a major weakening of FSC’s standards. As noted above, FSC’s Criterion 6.3 should exclude all industrial tree plantations from FSC certification. It states that: “Ecological functions and values shall be maintained intact, enhanced, or restored, including: a) Forest regeneration and succession. b) Genetic, species, and ecosystem diversity. c) Natural cycles that affect the productivity of the forest ecosystem.”

Rather than recommending a strict interpretation of this Criterion, the Plantations Review Policy Working Group proposed that it should be interpreted as follows: “An FSC certified plantation will take an active approach to optimising its conservation strategy.” There are two serious problems with this interpretation. First, it amounts to a complete re-writing of the Criterion, to the point where the words used in the Criterion no longer have any meaning. It is a dramatic weakening of the Criterion. Second, and perhaps more importantly, it suggests that an “offset” system of certification is appropriate – one where the plantation itself need not comply with all of FSC’s Principles and Criteria, but by conserving forest outside the plantation the plantation manager can “offset” this non-compliance.

The Board of Directors’ proposed revisions to the Principles and Criteria propose deleting criterion 6.3. Sure enough, the proposed amendments explicitly allow offsetting of the impacts of operations: “Each impact shall be linked with a description of how and where in the management unit the impact is prevented, mitigated or remedied.” So, a plantation company could wipe out the biodiversity in its plantations, but “mitigate” this by establishing a strictly protected forest area in another part of its forest management unit. This amounts to a double whammy for local people: excluded from the land where the plantations are established and excluded from the forest which is protected to “offset” the impacts of the plantation.

The Plantations Review Policy Working Group appeared determined to make it as easy as possible for industrial tree plantations to remain certified. The Policy Working Group suggests, for example, that FSC should introduce a “Social Management System” which forest and plantation managers could use “to address social issues in forest and plantation management, which certification bodies would then be able to audit”. This proposal overlooks the fact that local communities are sometimes in direct opposition to plantation managers. In some cases, it can be extremely dangerous for them to speak out against plantation companies. To suggest that the plantation managers simply need to refer to a Social Management System is ludicrous.

According to the Policy Working Group, plantation managers are to be responsible for “consultation”. FSC’s Certifying Bodies are supposed to be able “to determine if consent has been ‘manufactured’” and whether “the manager’s research into the local community has identified all affected parties”. But plantation managers have little interest in uncovering problems with their plantation operations. Meanwhile, determining whether all affected parties have been identified and whether consent has been manufactured could require months and years of study – certainly longer than the few days that FSC’s Certifying Bodies spend assessing plantation operations.

The Board of Directors’ revisions to the Principles and Criteria suggest introducing a requirement for a Social Management Plan, to include “tenure and use rights, indigenous peoples rights, community relations and worker rights, local development, dispute resolution and stakeholder consultation.” The document is to be produced by the company. The certifying body is to monitor the Social Management Plan. The danger is that this could easily further exclude local people from the certification process. Instead of listening to local people, certifying bodies will refer to the Social Management Plan, regardless of the realities faced by local people.

The Board of Directors proposes a new criterion 7.6: “Forest and plantation management shall proactively implement and document appropriate public consultation and communication processes with affected and interested parties.” Once again, the risk is that certifying bodies will check what the company says it does, rather than speaking to local people to find out what it is actually doing. In a situation where communities are living in fear of a plantation company which has taken over their land, local people are unlikely to risk speaking in public to a certifying body hired by the company, any more than they would risk speaking to the company itself.

In its final report, the Plantations Review Policy Working Group recommended that “FSC develops one integrated set of common Principles and Criteria for all types of management units rather than the current structure with a common set of nine principles and an additional Principle 10 for Plantations.” The Board of Directors decided to ignore this recommendation, to allow FSC members and “stakeholders” to “be given the opportunity to comment on this proposal before embarking on such a restructuring of the P&C”. The result of this is that six years after the motion passed at the General Assembly, no concrete proposals have been made for any amendments to the most problematic of FSC’s Principles (apart from changing the word “should” to “shall”).

Bizarrely, given that the Policy Working Group recommended abolishing Principle 10, one of the Plantations Review Technical Expert Teams is looking at the 1994 cut-off date for conversion of forests to plantations. This is covered in Criterion 10.9, which states that if a plantation manager has cleared forest in order to establish plantations since November 1994, then that operation cannot “normally” be certified under FSC. There are problems with this, since it does not exclude certification of plantations established since 1994 on grasslands, for example. An improvement would be, for example, prohibiting the conversion of grasslands and other ecosystems to plantations.

The Policy Working Group proposed another review to look at conversion, which will consider other ecosystems. However, the Policy Working Group also suggested that the review should reconsider the 1994 cut-off date, partly on the grounds that the current system “may exclude responsible managers who had never heard of FSC in 1994 and converted from natural forest to plantation in good faith, but who are now locked out of the certification process.” Asia Pulp and Paper is among the companies that has been lobbying for this change.[654]

In its vision for FSC, the Plantations Review Policy Working Group hopes to see a “significant demand for certified forest [sic] products” within ten years. In the context of a Plantations Review this is an extraordinary statement. Many industrial tree plantations provide raw material for the pulp and paper industry. The Policy Working Group is therefore hoping for a “significant demand” for paper products. This undermines both local struggles against industrial tree plantations and NGO campaigns in the North aimed at reducing the consumption of paper.

The Policy Working Group did not raise the bar, it lowered FSC’s standards. This is an inevitable result of its wish for a “significant demand for certified forest [sic] products”. FSC is far too keen to pander to the industry that it is supposed to be regulating (albeit on an entirely voluntary basis).

During an NGO meeting in 2004, FSC’s Sofia Ryder explained how FSC was trying to make things easier for the industry:

655

Many of the NGOs present at the meeting questioned whether FSC was actually trying to strengthen its standards. Bringing more FSC products into the market and strengthening standards are not easily compatible goals. Rather than worrying about sales of FSC-certified products, FSC needs to concentrate on the standards that it is supposed to uphold. It should be the industry’s responsibility to change to meet these standards and to sell its products, rather than FSC’s responsibility to adapt its standards and labels to meet the demands of the industry.

The Plantations Review Technical Expert Teams currently working on the recommendations suggested by the Policy Working Group include several representatives of the industry that FSC is supposed to be regulating. Stora Enso, Potlatch and Timbercorp have a seat at the table.[656]

So far, then, FSC’s Plantations Review has been a colossal waste of time, at least for anyone who thought that it might change the way that FSC certified industrial tree plantations. The Plantations Review process has made no difference whatsoever to the way FSC certificates are issued. In October 2005, WRM wrote to FSC demanding a “moratorium on the certification and re-certification of industrial timber plantations”, until the Plantations Review was completed. FSC’s board responded that “The main reason for deciding not to seek a moratorium on the certification of large-scale (or ‘industrial’) tree plantations was that we were not convinced this would be supported by the broad majority of the FSC membership.” They were right. A motion put forward by Robin Wood at the 2005 FSC General Assembly requesting a similar moratorium was rejected by FSC’s members.

FSC currently anticipates that its Review of the Principles and Criteria will be completed by the end of 2009.[657] Meanwhile, as the Plantations Review and the Review of the Principles and Criteria continue, so do the problems with FSC certification of industrial tree plantations. For many, the certification of Veracel in March 2008 was the final straw. WRM called it the death certificate for FSC.[658] The following section looks at some of the controversies raised by FSC certification of industrial tree plantations.

Veracel, Brazil

Veracel is perhaps the most egregious of FSC’s current plantation certificates, although it is certainly not the only one that should be withdrawn. It was certified by SGS in March 2008. SGS issued the certificate just before a team from Accreditation Services International visited Veracel’s operations to carry out an audit of SGS’s assessment.

Since Veracel established its monoculture eucalyptus plantations in the south of Bahia state, rivers, streams and springs have dried up. As the company expands its area of eucalyptus, the area of land planted to food crops is decreasing. Rural people have lost work and moved to cities to look for work, where many end up living in the favelas surrounding Brazil’s cities.[659] In July 2008, Veracel was fined for clearing areas of Atlantic rainforest and ordered to cut down its plantations and replace them with native trees.[660] Veracel’s FSC certificate remains in place. The certification process produced no benefits whatsoever for local communities. On the contrary, it undermines their struggle against Veracel.

Valourec & Mannesmann, Brazil

In February 2007, armed guards employed by Valourec & Mannesmann shot and killed Antonio Joaquim dos Santos in front of his 16 year-old daughter. He was collecting firewood. A year before the shooting, a local community submitted an international complaint, pointing out that the destruction of the native cerrado (savannah) vegetation has left the community without access to firewood and fruits and has led to the drying up of the Cana Brava River. V&M’s response was to increase the pressure on the community.

The problems with V&M’s operations are well documented. In 2002, WRM published a report documenting the problems for local communities living near to V&M’s plantations.49 The report found the following problems with SGS’s assessment:

“They did not make an in-depth study of the context surrounding the companies planting eucalyptus and neglected a series of important social, economic and environmental aspects;
“They listened to only a few ‘stakeholders’ and then only to the least critical ones. They did not listen to the most important ‘stakeholders’ and therefore, did not obtain essential information on a series of serious problems involving the companies;
“It was not clear whether the conditions and recommendations in fact reverted the evident lack of compliance with certain FSC principles and/or criteria and whether an adequate follow-up regarding compliance with these conditions and recommendations is being carried out;
“They did not disseminate the public certification summary for the knowledge of local and regional civil society and the public bodies. SGS did not even place a version of the public summary in Portuguese, the official language of Brazil, on the internet.”[662]

WRM’s researchers did not name the people interviewed in their report, and emphasised their “concern over the fear these interviewees feel”. The researchers pointed out that “Certification firms should not be fostering such an atmosphere on repression and fear.”[663]

In 2006, a villager told activist and journalist Heidi Bachram that “The threat to workers and people here is great. Shots have been fired on people by the armed guards. They feel prisoners within their own lands.”[664]

In September 2006, WRM demanded the withdrawal of the V&M certificate, together with those of Suzano and Plantar. “The social and environmental impacts of these three companies are so well documented that it is obvious that the FSC must immediately withdraw its certificate[s],” said Marcelo Calezans of the Brazilian Alert Against the Green Desert Movement.[665]

A few weeks after the murder of Antonio Joaquim dos Santos, V&M announced its “voluntary decision to leave FSC after 8 years of very close relationship”. FSC took no action against the certifying body, SGS.

Smurfit Cartón de Colombia

The impacts of this company in Colombia are well documented.[666] The company has deforested large areas and had serious impacts on local communities. WRM visited the company’s plantations in November 2003 and interviewed local people. “The plantations have finished off the water,” a villager said. Another noted that “spraying has finished with everything there was in the soil.” Other villagers told WRM that “there is hardly any fauna left,” that there used to be “clouds of birds” and that now “only in the summer does some bird appear, but not in winter time,” and that “there are no fish left either.”[667]

Villagers also complained about working conditions and the fact that it is outsourced. “All the work is seasonal,” one villager said. “The contract implies working for two and earning for one.” There is no trade union and “he who grumbles is out,” a villager said.

Astonishingly, given the record of the company, Smurfit’s Victor Giraldo represented the company on FSC’s board of directors. None of FSC’s members complained about this. Smurfit’s operations in Colombia were certified by SGS. SGS is due to re-assess the company in December 2008.

ENCE, Spain and Uruguay

In June 2008, ENCE lost its certificate issued to its Spanish subsidiary NORFOR. Three years previously, the Association for the Defence of the Galicia Estuary (Asociación pola defensa da Ria de Galicia) sent a letter to FSC’s representatives in Spain demanding the urgent cancellation of NORFOR’s certificate. The letter was accompanied by a detailed 85-page report, which documented how the company was in breach of FSC’s standards.[668] A coalition of NGOs in Spain campaigned for the certificate to be withdrawn, pointing out NORFOR’s “indiscriminate use of herbicides such as glyphosate, practices of excessive damage to subsoil and consequent increase in erosion, clear-cuttings of more than 20 hectares, and the complete lack of promotion of the use of native species in their plantations”. Several NGOs left the FSC in protest about the certification of Norfor.[669]

ENCE’s Uruguayan subsidiary Eufores is also FSC certified. In August 2008 Eufores was caught destroying 80 hectares of forest, which is strictly protected under Uruguayan law.[670]

A 2007 report by the Latin American Network of Action on Pesticides and their Alternatives (RAP-AL) Uruguay found that working conditions in ENCE’s nurseries were poor and that two chemicals were used which are banned under FSC’s pesticides policy.[671]

FSC has taken no action, either against Eufores, or against SGS, the certifier. Indeed, when WRM sent a copy of its 2006 report, which documents the impact of the plantations on rural communities in Uruguay, including those of Eufores, FSC responded by issuing a statement claiming that “FSC guarantees peace of mind,” for consumers in the North.[672]

Coillte, Ireland

Coillte has about 450,000 hectares of pesticide-laden monoculture plantations in Ireland.[673] After seven years of complaints about the certification of Coillte, Accreditation Services International (ASI), which is supposed to ensure that certifying bodies are upholding FSC’s standards, carried out an audit of Soil Association’s Woodmark assessment of Coillte.[674]

ASI found a series of breaches of FSC standards. Woodmark had “closed out” its Corrective Action Requests against Coillte without documenting why it had done so. ASI also found that Woodmark had “kept open” other Corrective Action Requests for long periods, in breach of FSC’s rules. As a result, notes ASI, “non-compliance with relevant FSC Criterion is likely to be ongoing for a few years”. Nevertheless, Coillte remains certified. FSC has taken no action against the certifying body, Woodmark.

Sappi and Mondi, South Africa and Swaziland

An area of just over 1.6 million hectares of industrial tree plantations has been certified in South Africa.[675] The plantations have dried up streams, destroyed grasslands, taken over people’s land and introduced exotic tree species which are invading ecosystems outside the plantation areas. Every year thousands of hectares of the monocultures burn, with devastating consequences for local communities, especially when their villages are completely surrounded by plantations. Last year, dozens of people were killed in the fires.

As Philip Owen of the South African NGO Geasphere points out, “Plantation management operations destroy grassland’s multiple products and services – thereby undermining economic viability and a wide range of environmental and social benefits.” Owen points out that SAPPI’s plantations above the Sudwala caves in Mpumalanga are “contributing to the un-natural and excessive drying out of the [cave] system”. Geasphere has made a formal complaint to Woodmark about the certification and is demanding that SAPPI removes the trees above the caves and allows the grassland to recover.[676]

In Swaziland, Woodmark ignored the impacts of SAPPI’s plantations on water supply to neighbouring farms, despite the fact that one of the farmers is suing SAPPI because of these impacts. Fires in Swaziland in 2007 were declared a national emergency and this year a contractor died in the fires.[677]

Asia Pulp and Paper, Indonesia

In December 2007, FSC announced its “dissociation” from pulp and paper giant Asia Pulp and Paper. FSC issued a statement saying that it has “a duty to protect the good will and integrity associated with its name and logo for consumers and for our trusted partners and members.”

FSC noted that “Reports from WWF, Greenpeace, Eyes on the Forest and many other independent sources suggest that APP is actively conducting forestry practices contrary to FSC Principles and Criteria.”[678]

The dissociation became necessary after “APP gained certification for products produced at an Indonesian mill from FSC certified pulp purchased on international markets. The company has used this partial certification to associate itself more generally with FSC,” according to a statement by FSC Australia.[679]

Another FSC statement about APP, available on FSC Canada’s website, states that

680

FSC produced a draft “Policy for the Association with FSC”, which it circulated to members in October 2007. Since then, the draft Policy seems to have disappeared without trace, and the dissociation from APP remains a one-off for FSC.

Stora Enso’s operations in Brazil, Argentina and Uruguay

Stora Enso has some of its operations certified by FSC, including its share of Veracel. FSC’s rules are supposed to prevent companies from greenwashing their operations by certifying one part but carrying out socially and environmentally destructive activities elsewhere.

Earlier this year, about 900 women from the International Peasant Movement, Via Campesina, were violently evicted by the Military Police from an area of 2,100 hectares of Stora Enso’s plantations in Rio Grande do Sul, Brazil. According to a statement from Via Campesina about 60 women were badly injured and 800 were arrested. The women were protesting against Stora Enso’s monoculture eucalyptus plantations, which the company is currently establishing in Rio Grande do Sul.[681]

In August 2008, the Movement of Landless Peasants (MST) and Via Campesina in Brazil launched an international campaign against Stora Enso, in protest against the company’s expansion of its plantations in Brazil, Uruguay and Argentina. Predictably, Stora Enso’s response was to question the information that Via Campesina and MST provided. FSC has taken no action against Stora Enso, or against the certifying bodies that have certified Stora Enso’s operations.[682]

FSC’s goal, according to the introduction to the Principles and Criteria, is “to promote environmentally responsible, socially beneficial and economically viable management of the world’s forests.”[683] FSC should not certify industrial tree plantations, for the simple reason that they are not forests. Industrial tree plantations are neither environmentally responsible nor socially beneficial. They are often not even economically viable, at least not without generous government subsidies. FSC should therefore not certify them.

Section 4 »

References

[349] “Jaakko Pöyry (1924-2006) Founder and Chairman Jaakko Pöyry Group Consulting Engineers Vantaa, Finland”, Paper Industry International Hall of Fame.
“Jaakko Pöyry 40 years in Sweden”, Know-How Wire, Jaakko Pöyry Magazine, June 2002.

[350] “Heikki Malinen appointed president and CEO of Pöyry”, Pöyry press release, 22 January 2008.

[351] “Jaakko Pöyry, August 6, 1924 – September 8, 2006, Biography”, Pöyry website.

[352] “Heikki Malinen appointed President and CEO of Pöyry”, Know-How Wire, Pöyry Client Magazine, 1/2008.

[353] “Heikki Malinen appointed president and CEO of Pöyry”, Pöyry press release, 22 January 2008.

[354] “Heikki Malinen appointed president and CEO of Pöyry”, Pöyry press release, 22 January 2008.

[355] “Jaakko Pöyry Group At a Glance”, Pöyry website (accessed 18 October 1999).

[356] “Pöyry Business Review 2007”, Pöyry Plc.

[357] Pöyry’s website.

[358] “Heikki Malinen appointed president and CEO of Pöyry”, Pöyry press release, 22 January 2008.

[359] “Jaakko Pöyry Group adopts Pöyry brand”, Pöyry press release, 7 March 2006.

[360] Tove Selin (2004) “Jaakko Pöyry and the Fin(n)ished Forests of the Mekong Region”, Watershed, Vol. 9, No. 3, March-June 2004.

[361] Know-How Wire, Jaakko Pöyry Magazine, December 2002.

[362] “FFIF says Finnish pulp & paper sector must adjust to globalization”, RISI, 20 December 2005.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[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.

[383] Mario Retamal (2002) “Aracruz Fiberline C on stream”, Know-How Wire, Jaakko Pöyry Client Magazine, December 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.

[387] Tove Selin (2004) “Jaakko Pöyry and the Fin(n)ished Forests of the Mekong Region”, Watershed, Vol. 9, No. 3, March-June 2004.

[388] Larry Lohmann (no date) “Briefing on Finnish Consultancy Firm Jaakko Pöyry”, World Rainforest Movement.

[389] Larry Lohmann (no date) “Briefing on Finnish Consultancy Firm Jaakko Pöyry”, World Rainforest Movement.

[390] “Jaakko Pöyry Group At a Glance“, Pöyry website (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.

[392] Tove Selin (2004) “Jaakko Pöyry and the Fin(n)ished Forests of the Mekong Region”, Watershed, Vol. 9, No. 3, March-June 2004.

[393] “Pöyry reports pre-tax profit of Euro 53.2 million in 3Q 2007”, Pöyry press release, 30 October 2007.

[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”, Know-How Wire, Pöyry Client Magazine, 2/2007.

[396] “Jaakko Pöyry Group awarded EUR 10 million engineering assignment for UPM-Kymmene’s new fine paper machine in China”, Jaakko Pöyry Group Stock Exchange Notice, 9 January 2003, accessed 3 February 2003.

[397] Kim Lucander (2008) “Mission completed”, Know-How Wire, Pöyry Client Magazine, 2/2008.

[398] “A glance at Asia”, Know-How Wire, Pöyry Magazine, 1/2007.

[399] Floyd Cowan (no date) “Pekka Hemmi’s Nordic Adventures in Asia Pacific”, Asia Paper Markets.

[400] Floyd Cowan (no date) “Pekka Hemmi’s Nordic Adventures in Asia Pacific”, Asia Paper Markets.

[401] “A glance at Asia”, Know-How Wire, Pöyry Magazine, 1/2007.

[402] Pöyry (no date) “Experience in Asia Pacific”, Jaakko Pöyry International, 2-7(10).

[403] R.A. Pappens (1993) “Sinar Mas: Growth won’t stop at home”, Pulp and Paper International, Vol. 35, No. 8, August 1993, page 21.

[404] The interview was carried out as part of the research for my MSc thesis: see Chris Lang (1996) “Reforestation in Vietnam in the context of the globalization of the pulp and paper industry ”, MSc thesis, Oxford Forestry Institute, Oxford University, September 1996.

[405] Groome Pöyry (1993) “Institutional Strengthening for Timber Plantation Development”, Asian Development Bank Advisory Technical Assistance 1244-INO, January 1993.

[406] Emile Jurgens, Christopher Barr and Christian Cossalter (2005) “Brief on the planned United Fiber System (UFS) Pulp Mill Project for South Kalimantan, Indonesia”, Forest Governance Programme No. 3, CIFOR and Forest Trends.

[407] See Daniel Hausknost (2006) “The ‘United Fiber System’ (UFS) Case: How Austrian companies help to destroy the Last Indonesian Rainforests”, Global 2000, May 2006.
Betty Tio Minar (2006) “No Chip Mill Without Wood: A Study of UFS Projects to Develop Wood Chip and Paper Pulp Mills in Kalimantan, Indonesia”, Down To Earth, August 2006.
Emile Jurgens, Christopher Barr and Christian Cossalter (2005) “Brief on the planned United Fiber System (UFS) Pulp Mill Project for South Kalimantan, Indonesia”, Forest Governance Programme No. 3, CIFOR and Forest Trends.

[408] This is not intended to be an exhaustive list, it is intended to give an impression of number and type of contracts that Pöyry has carried out in Russia.

[409] Chris Lang (2008) “Pöyry wins contract for Mondi’s Syktyvkar pulp mill”, Pulp Inc., 10 April 2008.

[410] “Poyry awarded board machine rebuild contract in Russia”, Pöyry press release, 16 August 2006.

[411] “Arkhangelsk probes deaths at Russian mill”, Paperloop, 19 October 2004.

[412] “Finland’s Stromsdal plans joint venture with Syassky of Russia”, Paperloop, 10 November 2003.

[413] Pöyry (no date) “Experience in Forestry Project Planning and Implementation”, and Pöyry (no date) “Experience in sectoral development of forestry and forest industry”.

[414] Enrique Tessier (1989) “Exporters’ cause for concern – Problems for Finnish manufacturers”, Financial Times, 13 December 1989.

[415] Enrique Tessier (1989) “Exporters’ cause for concern – Problems for Finnish manufacturers”, Financial Times, 13 December 1989.

[416] Elisa Peter (2001) “On Jaakko’s Tracks”, Taiga Rescue News, Issue 37, Winter 2001, page 5.

[417] Elisa Peter (2001) “On Jaakko’s Tracks”, Taiga Rescue News, Issue 37, Winter 2001, page 5.

[418] Mike Eckel (2008) “2 fight to save world’s deepest lake in Russia”, Associated Press, 10 August 2008.

[419] Elisa Peter (2001) “On Jaakko’s Tracks”, Taiga Rescue News, Issue 37, Winter 2001, page 5.

[420] “Coca-Cola refuses to acquire Russian pulp-and-paper plant”, RosBusinessConsulting, 21 April 2008.

[421] “Russia’s Baikal pulp mill launches closed water cycle”, Novosti, Russian News and Information Agency, 29 September 2008.

[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.

[424] “Baikal pulp mill set to cut staff amid supply problems”, Russian News & Information Agency, Novosti, 6 October 2008.

[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”, Know-How Wire, Pöyry Client Magazine, 1/2008.

[428] “Heikki Malinen appointed president and CEO of Pöyry”, Pöyry press release, 22 January 2008.

[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.

[432] “After Bali – What’s Next?”, Know-How Wire, Pöyry Client Magazine, 2/2008.

[433] Nicola Bullard (2008) “Who is Harald?”, New Internationalist, Issue 412, June 2008.

[434] “After Bali – What’s Next?”, Econ Pöyry website.

[435] “After Bali – What’s Next?”, Econ Pöyry website.

[436] Nicola Bullard (2008) “Who is Harald?”, New Internationalist, Issue 412, June 2008.

[437] “Possible activities to support negotiations on a post-2012 climate change regime”, Econ Pöyry, Report 2007-118, 9 January 2008.

[438] “Climate negotiations post-2012”, Econ Pöyry website.

[439] Sari Siitonen and Michael Haslinger (2007) “Global Carbon Market”, Know-How Wire, Pöyry Client Magazine 1/2007.

[440] Sari Siitonen (2006) “Innovative Clean Energy Solutions in Practice , Carbon Consultancy and Emissions Reductions ”, Pöyry Energy Oy company presentation, Nairobi, 12 November 2006.

[441] Graham Ferreira (2005) “Richards Bay expansion: Higher capacity, improved environmental performance”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2005.

[442] “Project 0966: Mondi Richards Bay Biomass Project” UNFCCC website.

[443] One tonne of coal contains 746 kg carbon (see http://bioenergy.ornl.gov/papers/misc/energy_conv.html). The molecular weight of carbon dioxide is 3.667 times that of carbon. Therefore the amount of carbon dioxide emitted from the Richards Bay pulp mill is 70,000 x 0.746 x 3.667 = 191490.74. (This calculation method came from George Monbiot’s article, “Leave It In The Ground“, The Guardian, 11 December 2007, footnote 5.)

[444] Sebastian Kankkonen, Esa Vakkilainen and Jukka Suutela (2004) “More bioenergy and electricity from pulp mills”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2004.

[445] Chris Lang (2006) “The pulp industry and the biofuels boom”, World Rainforest Movement Bulletin 112, November 2006.

[446] Peter Fabritius (2007) “Increased energy production based on biomass in the pulp and paper industry”, Know-How Wire, Pöyry Client Magazine, 2/2007.

[447] Zennie Lamarre and Otto von Ubisch (2007) “Oil-dependence sparks bio-energy boom in North America”, Know-How Wire, Pöyry Client Magazine, 2/2007.

[448] For more information on Electrowatt-Ekono’s record, see Chris Lang and Nick Hildyard (2003) “Dams Inc 2: Electrowatt-Ekono”, 21 January 2003.

[449] Patrick von Essen (2007) “Services and solutions for the fight against climate change”, Know-How Wire, Pöyry Client Magazine, 2/2007.

[450] See for example, Patrick McCully (1996) “Silenced Rivers: The Ecology and Politics of Large Dams”, Zed Books.
For a critique of Electrowatt-Ekono’s involvement in the hydropower sector see: Chris Lang and Nick Hildyard (2003) “Dams Inc. 2: Electrowatt-Ekono”.

[451] Gordon Floe (2004) “Joint energy seminar by Jaakko Pöyry NLK and BC Hydro ”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2004.

[452] Hannu Hynnönen (2008) “Planting the future”, Know-How Wire, Pöyry Client Magazine, 1/2008.

[453] Rob de Fégeley (2004) “Australian forestry coming of age”, Know-How Wire, Jaakko Pöyry Client Magazine, June 2004.

[454] Sari Siitonen (2006) “Innovative Clean Energy Solutions in Practice , Carbon Consultancy and Emissions Reductions ”, Pöyry Energy Oy company presentation, Nairobi, 12 November 2006.

[455] George Monbiot (2006) “Selling Indulgences”, The Guardian, 18 October 2006.

[456] “Energy intensive industries need clarity soon in EU ET”, Confederation of European Paper Industries, press release, 24 January 2008.

[457] “Energy intensive industries need clarity soon in EU ET”, Confederation of European Paper Industries, press release, 24 January 2008.

[458] CEPI’s flyer for the side event in Bonn.

[459] Hans Verkerk’s powerpoint presentation at the side event.
Pieter J. Verkerk, Giuliana Zanchi and Marcus Lindner (2008) “Impacts of Biological and Landscape Diversity Protection on the Wood Supply in Europe”, European Forest Institute, Technical Report 27.

[460] The quotations of presenters at the side event are from my notes taken during the side event.

[461] “LCA of Distribution in Paper Sacks. Executive Summary”, Eurosac and CEPI Eurokraft, 2000, page 11.

[462] Anna Ryberg, Tomas Ekvall and Lisa Person (2000) ”Life Cycle Assessment of distribution in four different distribution systems in Europe. Third party report”, Chalmers Industriteknik, October 2000, page 4.

[463] Anna Ryberg, Tomas Ekvall and Lisa Person (2000) ”Life Cycle Assessment of distribution in four different distribution systems in Europe. Third party report”, Chalmers Industriteknik, October 2000, page 4.

[464] “LCA of Distribution in Paper Sacks. Executive Summary”, Eurosac and CEPI Eurokraft, 2000, page 4.

[465] “ETAPS School Pack”, CEPI Eurokraft website.

[466] CEPIFINE’s website.

[467] “Instore communication, brochures and catalogues”, PrintSells brochure.

[468] “Magazines”, PrintSells brochure.

[469] CEPI’s paperonline website.

[470] “Environmental issues”, CEPI’s paperonline website.

[471] To prevent global warming exceeding 2°C, the world needs to cut emissions to about 15% of the volume in 2000, according to the Intergovernmental Panel on Climate Change. This would require cuts of 94.4% in the UK and 97.7% in the US. For an explanation of the figures, see George Monbiot (2007) “What is Progress?”, Guardian, 4 December 2007.

[472] “Welcome to European Paper Week”, CEPI website.
European Paper Week 2008 is planned for 25-28 November 2008.

[473] “Confederation of European Paper Industries (CEPI) Disagrees with ‘Shrink Waste and Recycle’ Campaign by NGOs in Europe”, CEPI Press Release, 12 June 2008.

[474] “Key Statistics 2006 European Pulp and Paper Industry”, CEPI, June 2007.

[475] “Energy intensive industries need clarity soon in EU ET”, Confederation of European Paper Industries, press release, 24 January 2008.

[476] “Energy intensive industries need clarity soon in EU ETS”, Confederation of European Paper Industries, press release, 24 January 2008.

[477] “Energy intensive industries need clarity soon in EU ETS”, Confederation of European Paper Industries, press release, 24 January 2008.

[478] “Our Vision – an Asia and Pacific Free of Poverty”, Asian Development Bank website.

[479] “ADB Basics Asian Development Bank Profile”, Asian Development Bank brochure, May 2008.

[480] The ADB’s charter states that the president must be from a regional member country. All the Bank’s past presidents have been men from Japan. “Membership and Staffing”, Asian Development Bank website.

[481] Javed H. Mir (2006) “A 5900–REG: Regional Study on Forest Policy and Institutional Reforms, Project Completion Report”, Asian Development Bank, Manila.

[482] “Technical Assistance for the Regional Study on Forest Policy and Institutional Reforms”, TAR:STU 33119, Asian Development Bank, Manila, December 1999, page 2.

[483] “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation Office, August 1994.

[484] “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation Office, August 1994.

[485] Thai See Kiam (2000) “Forest plantation development in Malaysia and the potential of rubber wood as an important source of timber in the future”, in the Proceedings of the International Conference on Timber Plantation Development, 7-9 November 2000 in Manila, Philippines.

[486] “Project Performance Audit Report on the Forestry Development Project (Loan No. 677-PHI) in the Philippines”, Asian Development Bank, July 1997.

[487] “Project Performance Audit Report on the Forestry Development Project (Loan No. 677-PHI) in the Philippines”, Asian Development Bank, July 1997.

[488] Alastair Fraser (2000) “The Role of Financial/Banking Institutions in Timber Plantation Development”, Proceedings of the International Conference on Timber Plantation Development, Manila, Philippines, 7-9 November 2000.

[489] “Project Performance Audit Report on the Upazila Afforestation and Nursery Development Project (Loan 956-BAN[SF]) in Bangladesh”, Asian Development Bank, September 2001.

[490] “ADB Programs in Forestry Sector in Bangladesh: Identifying Critical Issues for Changes in ADB policy”, presentation by the Asian Indigenous & Tribal Peoples Network at the Indigenous Peoples Forum, 33rd Annual Meeting of the Board of Governors, Asian Development Bank, Chiang Mai, Thailand, 4-8 May 2000.

[491] “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation Office, August 1994.

[492] “ADB Programs in Forestry Sector in Bangladesh: Identifying Critical Issues for Changes in ADB policy”, presentation by the Asian Indigenous & Tribal Peoples Network at the Indigenous Peoples Forum, 33rd Annual Meeting of the Board of Governors, Asian Development Bank, Chiang Mai, Thailand, 4-8 May 2000.

[493] “ADB Programs in Forestry Sector in Bangladesh: Identifying Critical Issues for Changes in ADB policy”, presentation by the Asian Indigenous & Tribal Peoples Network at the Indigenous Peoples Forum, 33rd Annual Meeting of the Board of Governors, Asian Development Bank, Chiang Mai, Thailand, 4-8 May 2000.

[494] “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation Office, August 1994.

[495] “Sector synthesis of post-evaluation findings in the forestry sector”, Asian Development Bank, Post-Evaluation Office, August 1994.

[496] “Project Completion Report Timber Plantation Project (Indonesia) (Loan No. 1000-INO)”, Asian Development Bank, 11 December 1998.

[497] “Project Completion Report Timber Plantation Project (Indonesia) (Loan No. 1000-INO)”, Asian Development Bank, 11 December 1998.

[498] “Project Completion Report Timber Plantation Project (Indonesia) (Loan No. 1000-INO)”, Asian Development Bank, 11 December 1998.

[499] “Project Completion Report, LAO: Industrial Tree Plantation Project, Project Number: 20067, Loan Number: 1295”, Asian Development Bank, November 2005.

[500] “Sector Assistance Program Evaluation for the Agriculture and Natural Resources Sector in the Lao People’s Democratic Republic, SAP: LAO 2005-17“, Operations Evaluation Department Asian Development Bank, December 2005.

[501] Chris Lang and Bruce Shoemaker (2006) “Creating Poverty in Laos. The Asian Development Bank and industrial tree plantations”, World Rainforest Movement, April 2006.

[502] “Sector Assistance Program Evaluation for the Agriculture and Natural Resources Sector in the Lao People’s Democratic Republic, SAP: LAO 2005-17″, Operations Evaluation Department Asian Development Bank, December 2005.

[503] Eva Lindskog and Chansamone Phengkhay (2003) “Livelihood Conditions Report”, Appendix I, page 143 in “Tree Plantation for Livelihood Improvement Project: Appendices – Final Report Volume I”, TA No. 3794-LAO, MIDAS Agronomics, Champa Lao Consulting, Scandiaconsult Natura, CIRAD Foret, October 2003.

[504] Email from Robert Paul S. Mamonong (Sr. Public Information & Disclosure Coordination Asst., Public Information and Disclosure Unit) Asian Development Bank, 17 January 2008.

[505] “Regional Study on Forest Policy and Institutional Reforms”, Asian Development Bank.

[506] “Forest Policy (Working Paper)“, Asian Development Bank, June 2003, page 3.

[507] Javed Mir (2002) “Presentation of Proposed ADB Forest Sector Strategic Framework”, presentation at Regional Study on Forest Policy and Institutional Reforms. Regional Workshop on Review of ADB Forest Policy, ADB Headquarters, Manila, Philippines, 14-15 February 2002.
I’m deliberately ignoring the double-negative in Mir’s statement. I’m sure that Mir isn’t really suggesting that the Bank should continue to repeat its mistakes.

[508] “IFC at a glance”, International Finance Corporation Annual Report 2007.

[509] “International Finance Corporation”, Bank Information Center.

[510] “International Finance Corporation”, Bank Information Center.

[511] Chris Lang (2005) “Open for business: How the International Finance Corporation subsidises the pulp and paper industry”, World Rainforest Movement Bulletin 95, June 2005.

[512] “The CIS Packaging Summit 14th – 16th June 2005”, Conference brochure, Adam Smith Conferences.

[513] This list was generated by a search for “International Finance Corporation” on 17 June 2005 on RISI’s website paperloop.com (now risiinfo.com). The list was updated with an additional search for “pulp” on IFC’s website.

[514] Chris Lang (2007) “Kenya: Pan Paper plans to expand its polluting operations”, World Rainforest Movement Bulletin 123, October 2007.

[515] Machteld Spek (2006) “Financing Pulp Mills. An Appraisal of Risk Assessment and Safeguard Procedures”, Center for International Forestry Research (CIFOR), Bogor, Indonesia, page 22.

[516] Amanda Marcus (1993) “Chile: Smooth production for a rough climate”, Pulp and Paper International, August 1993.

[517] “Bahia Pulp S.A. (Brazil)”, a report by Ivonete Gonçalves de Souza (CEPEDES) and João Luiz Monti (CDDH-Tx.de Freitas), April 2007.

[518] “Annual Report – Investment Portfolio 1999”, International Finance Corporation.

[519] Robert Ryan (2000) “Shinmoorim speeds up as market slows down”, Pulp and Paper International, Vol. 42, No. 11, November 2000.

[520] “United Pulp and Paper Company Inc., project number 9339”, IFC Summary of Project Information.

[521] “United Pulp and Paper Company Inc., project number 9339”, IFC Summary of Project Information.

[522] “EBRD and IFC to finance the restart of paper production at Stambolijski”, European Bank for Reconstruction and Development press release, 22 March 2002.

[523] “Investment in Plovdiv mill”, CEE Packaging, 18 December 2006.

[524] “Croatian mill ups capacity”, Pulp and Paper International, June 1998.

[525] “Ipek Kagit wins IFC loan”, Pulp and Paper International, Vol. 43, No. 12, December 2001.

[526] “Unicell Paper Mills Caribbean Ltd. (UPMCL) project number 10168”, IFC Environmental Review Summary, 14 July 2000.

[527] “Intercell-expan. project number 20601”, IFC Environmental Review Summary, 5 May 2003.

[528] “IFC to invest $216 million in Copamex as part of a refinancing program”, IFC press release, 1 July 2003.

[529] “Carvajal bags IFC financing for expansion”, Paperloop, 22 July 2004.

[530] “Andhra Pradesh gets all-clear for investment scheme”, Paperloop, 6 July 2004.

[531] “IFC signs loan for expansion of Kyrgyz packaging producer”, Paperloop, 25 May 2005.

[532] “Packages of Pakistan seeks funds for expansion”, Paperloop, 4 March 2005.
“Packages, project number 23526”, IFC Summary of Project Information.

[533] “IFC and MIGA Board Approves Orion Pulp Mill in Uruguay: 2,500 Jobs to Be Created, No Environmental Harm”, IFC press release 21 November 2006.

[534] “IFC helps identify opportunities for growth in Ukraine’s pulp and paper industry”, IFC press eelease, 29 May 2007.

[535] “Sino-Forest signs $25 million financing agreement to expand in China”, Paperloop, 9 February 2001.

[536] “IFC confirms financing package for Shandong Chenming expansion”, Paperloop, 7 December 2004.

[537] “Stora China-II”, IFC Summary of Proposed Investment.

[538] “Sino-Forest signs $25 million financing agreement to expand in China”, Paperloop, 9 February 2001.

[539] “Stora Enso signs loan agreement with International Financing Corporation”, Stora Enso press release, 10 June 2005.

[540] “Field Report: Pan African Paper – Webuye, Kenya”, Global Community Monitoring, 22 September 2007.

[541] Michael Ochieng Odhiambo (2007) “Industrialization, environmental pollution and public health: Must communities bear the cost while the Nation reaps benefits?“, Mazingira Magharibi, Newsletter of the Western Kenya Environmental Law Centre (WK-ELC), Issue 1, 2007.

[542] “Panafrican Paper Mills Ltd. project number 7206”, IFC Summary of Project Information, 7 December 1995.

[543] “Panafrican Paper Mills Ltd. project number 7206”, IFC Environmental Documents, 6 December 1995.

[544] “Kenya – Pan African Paper Mills”, Compliance Advisor Ombudsman website, last updated 18 March 2008.

[545] “World Bank and International Finance Corporation (IFC) investment in the company Aracruz Celulose S.A.”, Letter to the President of the World Bank: Mr. James Wolfensohn, 4 April 2005.

[546] Chris Lang (2005) “Open for business: How the International Finance Corporation subsidises the pulp and paper industry”, World Rainforest Movement Bulletin 95, June 2005.

[547] “Action Alert about violent police action against the Tupinikim and Guarani”, Alert Against the Green Desert Network, 23 January 2006.

[548] Chris Lang (2005) “Brazil : World Bank loan to Aracruz is in breach of Bank forest policy”, World Rainforest Movement Bulletin 92, March 2005.

[549] Heather Stewart (2008) “The shadowy bank that has loaned £150bn of your cash”, The Observer, 2 March 2008.

[550] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007.

[551] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007, page 5.
Counter Balance comprises members of CEE Bankwatch Network (Central and Eastern Europe), France: Les Amis de la Terre, Germany: urgewald and WEED (World, Economy, Ecology & Development), Italy: Campagna per la Riforma della Banca Mondiale (CRBM), Netherlands: Both ENDS, United Kingdom: Bretton Woods Project.

[552] aroslava Colajacomo (2006) “The EIB in the South: In whose interest?”,Friends of the Earth International, Campagna per la Riforma Banca Mondiale, CEE Bankwatch Network, World Economy, Ecology and Development, January 2006.

[553] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007, page 5.

[554] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007, page 13.

[555] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007, page 8.

[556] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007.

[557] Jaroslava Colajacomo (2006) “The EIB in the South: In whose interest?”,Friends of the Earth International, Campagna per la Riforma Banca Mondiale, CEE Bankwatch Network, World Economy, Ecology and Development, January 2006, page 4.

[558] Janneke Bruil (2005) “The European Investment Bank: Surrounded by secrecy”, World Rainforest Movement Bulletin 95, June 2005.

[559] “Citizen’s guide to the European Investment Bank”, Counter Balance, 2007, page 15.

[560] Janneke Bruil (2005) “The European Investment Bank: Surrounded by secrecy”, World Rainforest Movement Bulletin 95, June 2005.

[561] Jaroslava Colajacomo (2006) “The EIB in the South: In whose interest?”,Friends of the Earth International, Campagna per la Riforma Banca Mondiale, CEE Bankwatch Network, World Economy, Ecology and Development, January 2006, page 5.

[562] Heather Stewart (2008) “The shadowy bank that has loaned £150bn of your cash”, The Observer, 2 March 2008.

[563] “European Investment Bank lends EUR 64 million for increasing paper production in Slovakia”, European Investment Bank press release, 26 June 2003.

[564] “The IFC’s ‘no’ to controversial Slovak paper mill followed by the EIB’s ‘yes’”, Bankwatch Mail 21, 7 June 2004.

[565] Machteld Spek (2006) “Financing pulp mills: an appraisal of risk assessment and safeguard procedures”, Center for International Forestry Research (CIFOR) , page 25.

[566] “SCA Hygiene Product and Packaging RDI”, EIB website, 25 July 2008.

[567] “SAICA Venizel”, EIB website, 17 December 2007.

[568] “Portucel Ambiente”, EIB website.

[569] “Czech Republic: 170 m EUR to Myllykoski Corporation for construction of paper mill”, EIB press release, 28 June 2006.

[570] “EUR 200 million for magazine paper machine in Borlänge, Central Sweden”, EIB press release, 29 June 2005.

[571] Machteld Spek (2006) “Financing pulp mills: an appraisal of risk assessment and safeguard procedures”, Center for International Forestry Research (CIFOR), page 26.

[572] Machteld Spek (2006) “Financing pulp mills: an appraisal of risk assessment and safeguard procedures”, Center for International Forestry Research (CIFOR), page 26.

[573] “China Climate Change Framework Loan – Forestation projects”, EIB website, 26 September 2008.

[574] “NFC Forestry Project”, EIB website, 17 April 2008.

[575] “Uganda: UK Blue Chip HSBC Secures Equity Investment in Country”, The Monitor, 25 September 2008.

[576] The New Forests Company website.

[577] “NFC to invest up to $80 million in reforestation-for-energy project in Uganda”, Biopact, 29 January 2008.

[578] Machteld Spek (2006) “Financing pulp mills: an appraisal of risk assessment and safeguard procedures”, Center for International Forestry Research (CIFOR), page 26.

[579] Jaroslava Colajacomo (2006) “The EIB in the South: In whose interest?”,Friends of the Earth International, Campagna per la Riforma Banca Mondiale, CEE Bankwatch Network, World Economy, Ecology and Development, January 2006, page 41.
I wrote the section about Veracel’s pulp mill in the report.

[580] “FAO’s net loss in credibility over global forest resources assessment”, World Rainforest Movement Bulletin 100, November 2005.

[581] George Marshall (1991) FAO and Tropical Forestry, The Ecologist, Vol. 21 No. 2, March/April 1991, page 66.

[582] “FAO: The First Forty Years”, Food and Agriculture Organisation, 1985, page 59.

[583] J.D. Matthews (1964) “General Introduction – FAO/IUFRO meeting on forest genetics”, Unasylva, Vol. 18 (2-3), No. 73-74.

[584] “Proceedings of the World Consultation on Forest Genetics and Tree Improvement, FAO, 1964”, Unasylva, Vol. 18 (2-3), No. 73-74.

[585] “Proceedings of the World Consultation on Forest Genetics and Tree Improvement, FAO, 1964”, Unasylva, Vol. 18 (2-3), No. 73-74.

[586] “Proceedings of the World Consultation on Forest Genetics and Tree Improvement, FAO, 1964”, Unasylva, Vol. 18 (2-3), No. 73-74.

[587] “Proceedings of the World Consultation on Forest Genetics and Tree Improvement, FAO, 1964”, Unasylva, Vol. 18 (2-3), No. 73-74.

[588] Ken King (1975) “It’s time to make paper in the tropics”, Unasylva, 1975, number 109, page 5.

[589] Ken King (1975) “It’s time to make paper in the tropics”, Unasylva, 1975, number 109, page 5.

[590] Ken King (1977) “The political economy of pulp and paper”, Unasylva, 1977, number 117, page 2.

[591] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[592] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[593] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[594] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[595] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[596] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[597] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[598] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[599] “Are eucalypts ecologically harmful?”, Unasylva, Vol. 38 No. 152, 1986.

[600] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[601] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[602] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[603] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[604] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[605] See Ricardo Carrere (1999) “Ten Replies to Ten Lies”, World Rainforest Movement, August 1999.

[606] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[607] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[608] FAO (2006) “Responsible management of planted forests: voluntary guidelines”, Planted Forests and Trees Working Paper 37/E, UN Food and Agriculture Organisation.

[609] See Larry Lohmann (editor) (2006) “Carbon Trading: A Critical Conversation on Climate Change, Privatisation and Power”, Dag Hammarskjold Foundation, Durban Group for Climate Justice and The Corner House, October 2006.

[610] Jeanette Clarke and Moenieba Isaacs (2004) “What role for forestry in reducing poverty in South Africa? Case studies of contractors in the forestry sector”, International Institute for Environment and Development, May 2004.

[611] I wrote to Linda Rosengren (with copies to FAO’s Peter Holmgren and Jim Carle) on 9 June 2008 and again on 3 September 2008. I asked for a response by the end of September 2008.

[612] L.M. Rosengren and A.P. Vuorinen (2007) “Responsible management of planted forests: Voluntary Guidelines Preparation for action – the methodology” FAO, Working Paper FP/39/E, July 2007.

[613] FSC’s documents are available on the FSC website.

[614] FSC lists its on-going policy review and development processes on its website.

[615] In November 2006, Simon Counsell, Hermann Edelmann and I set up FSC-Watch, a website aimed at documenting some of the controversies raised by FSC certification.

[616] “Who are we?” FSC website accessed 27 October 2003 .

[617] Actually a motion passed eleven months previously, at the 2002 General Assembly allows FSC to accept money from private and public companies “as long as no restrictions are attached which would affect the independence or integrity of FSC”.
“Final Motions and Results from the FSC General Assembly 2002”, FSC, 2002.

[618] See www.writingthefuture.org

[619] “Support the FSC General Assembly 2008”, Forest Stewardship Council.

[620] “Forest Stewardship Council – Seeing the Wood for the Trees”, Ethical Consumer, Issue 100, January/February 2008.

[621] “The Forest Stewardship Council Aims Principles and Criteria: A Critical Examination Predicting its Failure”, Rettet den Regenwald, 30 September 1993, cited in Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 22.
Of course, parts of the timber industry were also opposed to the establishment of FSC. In 1992, Terence Mallinson, director of the UK timber industry Forests Forever campaign, wrote twice to the Oxford Forestry Institute stating that FSC “could rebound on us all” and “We do not approve of the FSC and its charter, since it is clearly in breach of sovereignty and defies any current or proposed forest management programmes”. Cited in Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 37.

[622] According to a search for SGS-issued certificates on http://www.fsc-info.org. When I asked about this, SGS’s Gerrit Marais told me that “The moratorium came into place on 29th May 2008, however at this point, SGS obviously had already signed contracts for certification services which have to be concluded and it stands to reason that certificates would still be issued post this date.” (Email from Gerrit Marais to Chris Lang “FW: Information Request – FSC-Watch”, 3 September 2008.)

[623] I wrote to Patricia Dudeck in FSC’s Communications Department on 3 September 2008. FSC’s announcement of the moratorium stated “For further information, please contact the FSC Communications Program at p.dudeck@fsc.org.” The contact address has since been changed to communications@fsc.org. “SGS moratorium on new FSC forest management certificates”, FSC website, 4 July 2008.

[624] “Forest Stewardship Council – Seeing the Wood for the Trees”, Ethical Consumer, Issue 100, January/February 2008.

[625] Accreditation Services International

[626] “Accreditation Services International: A watchdog with neither bark nor bite”, FSC-Watch.
Chris Lang (2008) “Uganda: Thousands of Indigenous People evicted from FSC-certified Mount Elgon National Park”, World Rainforest Movement Bulletin 131, June 2008.

[627] Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 50.

[628] George Monbiot (2003) “The Age of Consent: A manifesto for a new world order”, Flamingo, page 56.

[629] Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 3.

[630] Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 4.

[631] Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 5.

[632] FSC (2008) “Global FSC certificates: type and distribution”, FSC Presentation, 17 April 2008.

[633] Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 19.

[634] This point was raised with FSC in 2002, by IMO, one of FSC’s certifying bodies. Six years later it remains true, although this may be about to change, as a result of FSC’s Plantations Review, which started in 2004.
Wolfram Kotzurek, Karl Büchel and Thomas Papp-Váry (2002) “Requirements for certified plantations. Interpretation of FSC – P&C”, Institut für Marktölogy forestry division.

[635] This critique is based in part on the following:
“Comments on the FSC’s Principle on Plantations”, World Rainforest Movement Bulletin, Special Issue on FSC certification of plantations, February 2001.
“Certifying the Uncertifiable: FSC Certification of Tree Plantations in Thailand and Brazil”, World Rainforest Movement, August 2003.

[636] This point was raised with FSC in 2002, by IMO, one of FSC’s certifying bodies. Six years later it remains true.
Wolfram Kotzurek, Karl Büchel and Thomas Papp-Váry (2002) “Requirements for certified plantations. Interpretation of FSC – P&C”, Institut für Marktölogy forestry division.

[637] This point was raised with FSC in 2002, by IMO, one of FSC’s certifying bodies. Six years later it remains true.
Wolfram Kotzurek, Karl Büchel and Thomas Papp-Váry (2002) “Requirements for certified plantations. Interpretation of FSC – P&C”, Institut für Marktölogy forestry division.

[638] “Stop GE Trees Campaign seeks clarification of FSC’s position on GM trees”, FSC-Watch, 12 October 2008.

[639] Christian Cossalter and Charlie Pye-Smith (2003) “Fast-Wood Forestry. Myths and Realities”, Center for International Forestry Research (CIFOR), Bogor, Indonesia, page 44.

[640] “Comments on the FSC’s Principle on Plantations”, World Rainforest Movement Bulletin, Special Issue on FSC certification of plantations, February 2001.

[641] “Wildlife slaughter and fires take corporate gloss off FSC General Assembly”, FSC-Watch, 4 September 2008.

[642] “Comments on the FSC’s Principle on Plantations”, World Rainforest Movement Bulletin, Special Issue on FSC certification of plantations, February 2001.

[643] Timothy Synnott (2002) “Review of FSC Plantation Policies: An FSC discussion paper. Clarification of FSC’s position on plantations”, Forest Stewardship Council, Draft, revised 18 July 2002.

[644] “Final Motions and Results from the FSC General Assembly 2002”, FSC, 2002.

[645] “Presentation by Sofia Ryder, FSC at Forest Movement Europe meeting”, 24 April 2004, Helsinki.

[646] It is worth noting where the use of “percentage based claims” (which later became the “mixed sources” label) within the FSC system comes from. In September 1995, FSC’s executive director, Tim Synnott, visited the Caperboard factory in Scotland. Here’s his account of the visit:
“The manager explained that his raw materials came from hundreds of municipal and industrial recycling schemes, from thinning operations in thousands of different properties, and waste from countless sawmills, all derived from a long list of forests that varied every year. He recognized the public concerns about forest management quality, and also the right of industries to seek evidence of good management, but he knew that several years would pass before most of these forest properties would be certified. He was willing to start down this road, but only if he could get some recognition for the progress made towards fully certified raw materials, while continuing to use some raw materials from uncertified forests. After this visit, a policy for Percentage-Based Claims was a priority, that came into operation two years later.” Timothy Synnott (2005) “Some notes on the early years of FSC”, 19 November 2005, page 39.

[647] “Presentation by Sofia Ryder, FSC at Forest Movement Europe meeting”, 24 April 2004, Helsinki.

[648] “Global FSC certificates: type and distribution”, FSC, 17 April 2008, page 7.
N.B. These figures ignore plantations included under FSC’s category of “Semi-Natural and Mixed Plantation and Natural Forest”.

[649] “Expert Teams for the Technical Phase of the Plantations Review”, Forest Stewardship Council, 13 December 2007.

[650] “Did the FSC Plantations Policy Working Group get it right?”, Timberwatch, 2006.

[651] “The FSC Plantations Review Policy Working Group Final Report”, Forest Stewardship Council, 20 October 2006.

[652] At the 2005 General Assembly, a series of motions were raised relating to the Principles and Criteria. Instead of voting on each one separately, FSC members passed a statutory motion to set up a working group to analyse these motions a make recommendations. FSC’s members were to subsequently vote on whether the working group’s recommendations should be implemented or not. Instead of setting up a working group, “Given the high level of legitimacy required in this process, the Board of Directors decided as the working group for the P&C group.” (“FSC-STD-01-001 Version 5-0 Draft 1-0 EN FSC Principles and Criteria”, FSC International Center, 30 April 2008.) FSC is currently requesting applications from members to join a working group to revise the Principles and Criteria.

[653] “FSC-STD-01-001 Version 5-0 Draft 1-0 EN FSC Principles and Criteria”, FSC International Center, 30 April 2008.

[654] At the 2004 meeting to launch FSC’s Plantations Review, one of the people who questioned the 1994 cut-off date was Arian Ardie, then-director for sustainability at Asia Pulp and Paper. Obviously APP had an interest in changing this cut-off date, given the vast area of forests that the company has cleared since 1994.

[655] “Presentation by Sofia Ryder, FSC at Forest Movement Europe meeting”, 24 April 2004, Helsinki.

[656] “Expert Teams for the Technical Phase of the Plantations Review”, Forest Stewardship Council, 13 December 2007.

[657] “Announcement: Expanded Review and Revision of FSC Principles and Criteria (FSC-STD-01-001 Version 4-0)”, Forest Stewardship Council, 3 September 2008.

[658] “Veracel: FSC’s ‘Death Certificate’”, World Rainforest Movement, March 2008.

[659] See, for example:
Chris Lang (2006) “Veracel pulp mill, Brazil: The impact of industrial tree plantations on land rights and livelihoods”, in “The European Investment Bank in the South. In whose interest?” CRBM, CEE Bankwatch Network, Friends of the Earth International and WEED, February 2006.
“FSC Certification of Veracel: A turning point or business as usual?”, “Brazil: The impossible certification of Veracel”, and “The reasons why Veracel cannot be certified, seen from the standpoint of society”, World Rainforest Movement Bulletin 121, August 2007.
Ivonete Gonçalves (2007) “Brazil: Response to Veracel’s attempt to obtain the FSC label for its plantations”, WRM Bulletin 119, June 2007.
“Brazil: Veracel’s deceitful practices”, WRM Bulletin 115, February 2006.

[660] “Millions of FSC certified trees to be uprooted as Brazilian court condemns Veracel”, FSC-Watch, 14 July 2008.
“Controversy deepens over Veracel certification”, FSC-Watch, 26 August 2008.

[661] Marco Antônio Soares dos Santos André, Rosa Roldán, Fábio Martins Villas, Maria Diana de Oliveira, José Augusto de Castro Tosato, Winfried Overbeek, and Marcelo Calazans Soares (2003) “Evaluation report of V&M Florestal Ltda. and Plantar S.A. Reflorestamentos, both certified by the Forest Stewardship Council”, in “Certifying the Uncertifiable: FSC Certification of Tree Plantations in Thailand and Brazil”, World Rainforest Movement, August 2003.

[662] Ricardo Carrere (2006) “Certification of tree plantations by SGS and SmartWood: A history of controversial certifications”, World Rainforest Movement, March 2006.

[663] Marco Antônio Soares dos Santos André, Rosa Roldán, Fábio Martins Villas, Maria Diana de Oliveira, José Augusto de Castro Tosato, Winfried Overbeek, and Marcelo Calazans Soares (2003) “Evaluation report of V&M Florestal Ltda. and Plantar S.A. Reflorestamentos, both certified by the Forest Stewardship Council”, in “Certifying the Uncertifiable: FSC Certification of Tree Plantations in Thailand and Brazil”, World Rainforest Movement, August 2003, page 116.

[664] Heidi Bachram (2006) “Carbon credits and the green desert”, Red Pepper, September 2006.

[665] “Organizations from eight countries demand the FSC to withdraw its ‘green label’ to several plantation companies”, World Rainforest Movement press release 1 September 2006.

[666] Joe Broderic (1998) “El imperio de cartón: impacto de una multinacional papelera en Colombia”, cited in “Colombia: The uncertifiable plantations of a member of the FSC Board of Directors”, World Rainforest Movement Bulletin 77, December 2003.

[667] “Colombia: The uncertifiable plantations of a member of the FSC Board of Directors”, World Rainforest Movement Bulletin 77, December 2003.

[668] Ricardo Carrere (2006) “Certification of tree plantations by SGS and SmartWood: A history of controversial certifications”, World Rainforest Movement, March 2006.

[669] “ENCE loses one certificate in Spain. Soon to lose another in Uruguay?”, FSC-Watch, 22 August 2008.
“Another NGO quits FSC in protest against NORFOR plantations“, FSC-Watch, 29 May 2008.

[670] “ENCE loses one certificate in Spain. Soon to lose another in Uruguay?”, FSC-Watch, 22 August 2008.

[671] “Banned chemicals used in FSC-certified nurseries in Uruguay”, FSC-Watch, 4 October 2007.

[672] “Certified plantations in Uruguay: Can the FSC really guarantee peace of mind to consumers?”, WRM Bulletin 108, July 2006.

[673] John Vidal and David Adam (2008) “Timber hitch”, Eco-soundings, The Guardian, 30 April 2008.

[674] “How Accreditation Services International (FSC-ASI) allows certifiers to break FSC’s rules and issue certificates to non-compliant companies”, FSC-Watch, 16 March 2008.

[675] According to a search for Forest Management certificates in South Africa on “FSC registered Certificates”.

[676] “The ‘many wrongs’ of FSC in South Africa”, FSC-Watch, 20 July 2008.

[677] “Fires kill Sappi Usutu contractor”, RISI.

[678] “FSC dumps Asia Pulp and Paper – but who was to blame?” FSC-Watch, 10 January 2008.

[679] “FSC steps up action to block greenwash”, FSC Australia, 9 November 2007.

[680] “Asia Pulp & Paper (APP) – FSC Trademark Notice”, FSC Canada.

[681] “Police repress peasant women to protect Swedish-Finnish company Stora Enso’s illegal plantations”, World Rainforest Movement press release, 7 March 2008.
“Women of the Via Campesina occupy area of Stora Enso in the Rio Grande do Sul state”, Via Campesina press release, 4 March 2008.

[682] “International Campaign against Stora Enso”, Pulp Inc. 19 August 2008.

[683] From the Introduction to “FSC Principles and Criteria for Forest Stewardship”, FSC-STD-01-001 (version 4-0) EN, Forest Stewardship Council.