Indonesia:
Trouble at the mill. UFS to open new wood chip mill
Later this year, United Fiber Systems
plans to open a new 700,000 tonnes a year wood chip mill at Alle-Alle
on the island of Pulau Laut. The mill is the first step of UFS’
proposed pulp developments for Kalimantan. The wood chips will
be exported to feed pulp and paper mills in China.
For more than a year, UFS has been involved
in negotiations to take over the 525,000 tonnes a year Kiani Kertas
pulp mill in East Kalimantan. In July 2005, UFS signed a deal
to manage operations at the heavily indebted pulp mill. “Our takeover
bid for Kiani Kertas is still under discussion with the owners,”
UFS director, Wong Vun Khi, told WRM. UFS also plans to build
a 600,000 tonnes a year pulp mill at Satui in South Kalimantan.
“The development work for the Satui pulp mill project is in principle
ready, but the start-up date for the construction of the mill
has not yet been decided upon,” said Wong.
A new report, “No Chip Mill Without
Wood”, written by Betty Tio Minar and published by Down to Earth,
documents the problems related to UFS’ wood chip mill and proposed
pulp plans in Kalimantan. Betty Tio Minar and Deddy Ratih from
Walhi South Kalimantan recently visited Europe to discuss the
proposed projects with NGOs, members of the public and potential
financiers of UFS in Germany, Austria and the Netherlands.
At a meeting in Berlin organised by
Watch Indonesia!, Minar explained that local NGOs have been unable
to obtain copies of the EIA for UFS’ wood chip mill. UFS needs
permission from the Ministry of Forestry to build the mill and
from the Ministry of Transportation to build a port linked to
the mill. UFS has received none of these permits. “The Governor
of South Kalimantan has not yet given his recommendation for the
project,” said Minar.
She added that local fisher folk have
already seen the impacts of the wood chip mill, as coral reefs
around the island have been used to construct the port.
Deddy Ratih explained that UFS paid
less than the market rate for the land for the wood chip mill.
Of the 320 jobs in the mill, only 30 are going to people from
the island of Pulau Laut and only six from the village of Alle-Alle.
“People who sold their land for the wood chip mill expected jobs,”
Ratih said. “Now they have no land and no jobs.”
UFS claims that it will only use timber
from plantations to feed its operations. I asked UFS for copies
of independent studies of where the wood will come from. “All
forestry studies prepared by independent consultants engaged by
UFS are confidential documents,” company director Wong Vun Khi
replied. Down to Earth comments that “UFS’ inability to provide
data on the potential source of timber supplies indicates the
likelihood that natural forests in South Kalimantan and further
afield will be destroyed - legally or illegally to meet their
needs.”
Down to Earth has calculated the area
of plantations that would be needed to feed each of UFS’ proposed
pulp operations. The wood chip mill will require an area of 85,895
hectares. The existing Kiani Kertas mill needs about 170,000 hectares
of plantations to run at capacity. UFS’ proposed Satui pulp mill
would require almost 200,000 hectares of plantations.
State-owned plantation company Inhutani
II has a 50,000 hectare acacia plantation on Pulau Laut, which
could potentially supply part of the chip mill’s wood. But in
May 2006, Inhutani II joined the Global Forest and Trade Network,
WWF’s scheme to promote “eco-friendly” timber to international
buyers. The World Bank’s International Finance Corporation has
been working with Inhutani II for almost three years, providing
technical assistance and advice.
WWF’s Darius Sarshar explained that
at present about 20 per cent of Inhutani II’s production is of
saw log quality. This is likely to increase. “Pulp log prices
will not ever reach those of sawlogs, if they did, any pulp mill
would likely quickly go bust,” he said. “It is therefore in Inhutani
II’s commercial interest to maximise its production of sawlogs,
and we believe that they will continue to do so.”
Through a subsidiary, PT Hutan Rindang
Buana (PT HRB), UFS has a plantation concession covering about
250,000 hectares. UFS director Wong Vun Khi told WRM that PT HRB
has planted 75,000 hectares. But forestry consultant Jaakko Pöyry
estimates that only about 60,000 hectares is planted. Down to
Earth quotes a local NGO as saying that only 15,000 hectares is
in good enough condition to supply raw material.
“It’s a bit like the magician’s trick
with three cups and a coin,” said Down to Earth’s Liz Chidley.
“UFS tries to create the illusion that it has enough plantations
for all three ventures, but when you look carefully, it hasn’t.”
Down to Earth makes a series of recommendations,
including an immediate independent review of the sustainability
of wood supplies for all of UFS’ proposed developments. “UFS must,
as a matter of priority, work on mitigating the environmental
and social impacts of its Alle-Alle chip mill and no permit should
be issued for the Satui pulp project,” states the report.
But the problem is not just a lack of
plantations. Large-scale plantations are in themselves environmentally
and socially destructive. As the report makes clear, pulp investments
are at the expense of local people’s livelihoods. Down to Earth
recommends that instead of “prioritising the interests of investors”,
the Indonesian government should “support community-based forest
management initiatives which are sustainable both from an environmental
and a livelihoods perspective.”
Down to Earth’s report “No chip mill
without wood” is available in English or Bahasa Indonesia here:
http://dte.gn.apc.org/camp.htm,
or as a hard copy from dtecampaign@gn.apc.org
(English) or dteindocamp@gn.apc.org
(Bahasa Indonesia).
By Chris Lang, e-mail: http://chrislang.org,
www.chrislang.blogspot.com
