THE LOCAL IMPACTS OF PULP MILLS

- Brazil: More pulp for export means more exclusion

A new cycle in the increasing of production of eucalyptus pulp for export began in northern Espirito Santo, the southern region of Bahia and north-eastern Minas Gerais, with the opening in 2002 of the new Aracruz Celulose mill. This company increased its annual pulp production from 1.2 to 2.0 million tons, and expects to reach 2.4 million tons. Veracel Celulose, jointly owned by Aracruz and the Swedish-Finnish Stora Enso, is currently building its first eucalyptus pulp mill, the biggest in the world, with an annual production capacity of 900 thousand tons. Bahia Sul Celulose, owned by Suzano Papel e Celulose, will triple its annual pulp production and aims to reach 1.7 million tons. Cenibra, belonging to the Japanese group Japan Brazil Paper and Pulp, will double its annual production to 1.7 million tons.

The region, which already was the biggest producer in Brazil of eucalyptus pulp for export, will thus increase its annual production from 2.7 million tons to 6.7 million tons of pulp.

The pulp mills appear in the region as symbols of development and progress, and their openings are honoured by the attendance of the country’s President. However, there are many remarkable aspects, such as:

- The gigantic amount of public investment in the construction of a pulp mill. The new Aracruz mill used up about a thousand million reales (USD 310 million) from the National Bank of Economic and Social Development (BNDES). The BNDES also lent approximately one thousand five hundred million reales (USD 470 million) to enable Veracel to build its new mill.

- It generates little direct employment, in comparison with the volume of investment. In the new Aracruz mill, extremely automated, only 173 jobs were created in a country with high unemployment rates.

- The promise of jobs in the construction of a pulp mill attracts a great number of workers into the region. Many of them, even jobless, end up staying. Due to the lack of other work options and local infrastructure, social problems such as hunger, violence, drug taking and trafficking, and child prostitution usually increase in communities living in the vicinity of pulp mills.

- The main technologies and machines used in the processes of pulp manufacture and eucalyptus cutting are imported from Norway, Finland, Sweden, Switzerland and Germany, from companies such as Andritz-Ahlstrom, Kvaerner, Metso, Jaakko Poyry, ABB, Siemens and Voith Paper. Therefore, it is not surprising that the European Investment Bank (EIB) and the Nordic Investment Bank (NIB) have funded, for example, the construction of the Veracel mill, respectively with USD 80 million (EIB) and USD 70 million (NIB). It is worth pointing out that about 95% of the pulp that is produced is exported back to the Northern countries, mainly in Europe, and used mostly for disposable paper production.

- Water consumption is very high; for example, the three Aracruz mills consume 248,000 m3 per day. This amounts to approximately the water consumption of a 2.5 million inhabitants city, at an average consumption of 100 litres per capita per day. To obtain it, the company rerouted three rivers in the region and built, in breach of environmental laws, a canal that brings water from an interstate river. And all that without paying a penny for the water.

- In spite of the introduction of environmentally less harmful technologies, in 2002 Aracruz Celulose still produced 203.8 thousand tons of pulp using elemental chlorine to bleach the product, resulting in the production of extremely toxic organic chlorine compounds such as dioxins.

- As pulp exporters, the companies are exempted of the main tax, the ICMS (tax on movement of goods and services), which leads, for example, to a contradictory and worrying situation in Espirito Santo, where the state government owes Aracruz 266 million reales (USD 84 million).

- A new expansion cycle of the eucalyptus plantations in the region was also launched, in order to provide the new mills with raw material. Thus, the monoculture tree plantation prevailed over the so necessary reforestation with native species. Hundreds of rural producers lost their livelihood and employment, because the companies bought the lands where they used to work and live. The land reform was seriously hampered in a region where over 7000 landless families live in encampments and wait for land.

These and other factors show how the large-scale pulp production mainly benefits the eucalyptus plantation companies and a small group of permanent workers, besides European companies, banks and consultants. Local communities are those that suffer the biggest direct and indirect damages. This led to the creation, five years ago, of the Alert Against the Green Desert Network, a movement coordinating local communities, rural movements and aid organizations in their struggle against this new expansion cycle that strengthens the unequal and excluding logic of a development model imposed on the population.

By: Winfried Overbeek FASE/ES, e-mail: winnie.fase@terra.com.br

---

top

- There’s something stinking in southern Chile

Twenty-two months after the beginning of its construction and almost five years behind schedule, the Valdivia mill started operating in the Lakes Region. The announcement was made on 30th January by Alejandro Pérez, General Manager of Celco (Celulosa Arauco y Constitución, forestry subsidiary of the Angelini group), who called this project a “historical investment”. The delay was due to the resistance of citizens’ organizations, environmental activists, indigenous peoples, peasant women and especially the residents of the coastal town Mehuin, who for over three years successfully campaigned to prevent Celco from dumping its effluents into Maiquillahue bay.

Less than a month later, the nearby communities began complaining about the unbearable smell from the mill: San José de la Mariquina in the west (about 10 km away), Lanco and Lancoche in the north (almost 30 km away) and Valdivia in the south (60 km away) were, according to the winds, alternatively aggressed by Arauco’s fetid monster.

The original project was to build and operate an industrial plant for the production of 550,000 tons per year of bleached kraft pulp. This will require 2.24 million m3 of radiata pine and 563,000 m3 of eucalyptus, that is to say about 5,000 hectares per year. The bleaching is to be made by applying the ECF process (Elemental Chlorine Free), misleadingly promoted in order to make believe there is no chlorine implied, and not the TCF process (Totally Chlorine Free). The project will have a productive life of more than 20 years, and an estimate investment of 1,045 million dollars.

The Environmental Impacts Assessment’s results, based on information provided by the company itself, shows the level of the impacts. Air emissions will release daily into the atmosphere 2.4 tons of particulates, 3.04 tons of sulphur dioxide (SO2), 4.69 tons of oxides of nitrogen (NOx) and 0.25 tons of total reduced sulphur compounds (TRS), the malodorous gases typically found during the pulp processing. Liquid effluents include 900 litres per second of industrial liquid wastes (RILES in Spanish) and 250 litres of cooling water, which means a total of 1,145 litres/sec discharged into the River Cruces. Additionally, there are 1,450 m3 per month of sludge from the treatment of liquid wastes and 40,100 m3 per year of other solid waste.

Bad smells are not the only problem. What started with claims about nauseating odours ended in a number of irregularities. Faced with repeated complaints, environmental and health authorities began to set up inquiries, though slowly and rather late. They found categorical evidences establishing that the company had no system for emissions abatement, control and monitoring; besides, it began to operate last February without completing the required municipal procedures, payments and sanitary certificates, obviously in breach of the project’s environmental licence.

Furthermore, additional pipes, not included in the EIA and discharging industrial liquid effluents were discovered in the plant. It is worth mentioning that the mill’s industrial effluents flow into the River Cruces, the main water reserve of the Nature Sanctuary of Río Cruces, a site included in the RAMSAR convention to be protected by Chile’s government.

The company keeps on selling illusions. The following are some of Arauco’s environmental promises in the face of the continuous opposition led since 1995 by citizens’ organizations: “The mill will use the latest technology to produce bleached pulp”, or “The selected technology resolves the problems of liquid effluents, solid wastes and gas emissions”. Other passages are more specific: “the effluent will have no perceptible colour”, “[this will be] a mill without any smell problems”, “TRS emissions will be undetectable to human smell in communities neighbouring the project site” (Environmental Impacts Assessment, Valdivia Pulp project, August 1997). “The Valdivia project will apply the latest and best environmental technology available, thus becoming one of the three major pulp mills in the world” (Mario Urrutia, Engineering Manager, Diario Estrategia, 1996).

Five months after beginning to operate, facts belie the company’s promises and credibility. Two inquiries opened by the Health Department led to a penalty with a 1,000 UTM fine (about US$ 48,000) for infractions of the Sanitary Code, while the Regional Environment Commission (COREMA) fined the company twice, with 500 UTM (US$ 24,000) and 400 UTM (about US$ 19,000) for nonobservance of the Environmental Resolution. Furthermore, the municipal authority of San José de la Mariquina, the community where the mill is located, closed the plant because the company had not the required documentation allowing it to operate in this territory. The closure lasted only a week. Besides, individuals and civil organizations lodged an appeal requesting the cessation of the mill’s activities until the appellants and residents of Valdivia province are given guarantee that the company will comply with the mitigation and monitoring measures against environmental pollution included in the Environmental Impact Resolution. To date the verdict is still pending.

Some conclusions may be drawn from the above:

- Celco goes on lying: what the authorities initially evaluated and accepted was a 550,000 tons per year project, but in starting its operations the company announces a 700,000 tons per year mill, without any changes to the environmental assessment.
- The only way this kind of projects can be legitimated in political and social terms is by means of disinformation and misleading promises about their environmental and social impacts.
- Companies such as Celco are so powerful that they act with complete impunity. They are able to set in motion an investment of more than one billion dollars without having the necessary permits nor respecting environmental engagements and standards. Fines are so derisory that they merge into running costs. In addition, the State allows and facilitates such huge investments but lacks the necessary technical capacity and political will to keep them under control.
- The economic and political factors around these projects make it impossible, once they are established, to mitigate the environmental and social impacts inherent to the business in question.
- This kind of experiences shows that, in Chile, the huge investment projects put the environment, people’s health and sustainability in danger. As for people, they do not trust any more these initiatives whose effects are corroborated as soon as they start operating. The growing opposition manifests itself through the successive conflicts over environmental issues, where economical interests, environmentally unscrupulous, are confronted to communities who refuse to be the victims of environmental injustice.

By: Lucio Cuenca Berger, National Coordinator of OLCA (Observatorio Latinoamericano de Conflictos Ambientales), e-mail: l.cuenca@olca.cl

---

top

- Uruguay: Either with the people or with pulp mills and tree plantations

Uruguay has been one of the countries in the region that has best and fastest fulfilled the duties others have dictated.

Already in 1951, a joint FAO-World Bank mission made a series of recommendations regarding the country’s forestry development, which was the basis for the forestry laws adopted in 1968 and 1987. Their vision implied the promotion of suitable species for the timber industry in the framework of an export model, in which forest management is just another business or manufacturing activity.

In 1985, the Japanese International Cooperation Agency (JICA) came to this country to study the economic and financial feasibility of establishing a Kraft pulp mill. Its influence was so great that the National Forestry Plan adopted by the Government in July 1988 is explicitly based on the “Master plan study for the establishment of tree plantations and use of planted wood [sic] in the Oriental Republic of Uruguay”, published by JICA in March of that same year, promoting the mass plantation of pine and eucalyptus trees.

Later, in 1989, the World Bank provided resources to enable the forestry export model of eucalyptus logs for pulp to take root. This injection of money made it possible to grant a series of benefits to the forestry sector: tax exemptions, partial refund of plantation costs, long-term soft loans, duty cuts on the import of machinery and vehicles, construction of roads and bridges, equal benefits for foreign investors. Investment in the sector soared, at the expense of subsidies paid by the rest of society (today estimated at over 400 million dollars) and the destruction of grazing lands and the few remaining areas of indigenous forest in the hilly areas. Another consequence was the concentration of landholding, in particular by foreigners, added to increased rural migration.

The “green desert” model of tree plantations was installed in Uruguay and the promises of employment were never fulfilled. According to official data from the Agricultural and Livestock Census, it generated fewer permanent jobs that extensive cattle-raising, so far considered to be the least efficient regarding jobs generated per hectare. Furthermore, the few jobs that were created were done so at the expense of those lost in activities that were substituted, and with the same or worse quality working conditions and remuneration.

With this background and in this context, two projects were submitted in 2003 –one by the Spanish company Ence and the other by the Finnish company Botnia working in association with UPM/Kymmene– for the installation of pulp mills on the Uruguay river, on the border with Argentina, at 5 km from the city of Fray Bentos and a little further from the “Las Cañas” tourist centre.

The Ence proposal – with a dubious history of environmental crimes in its country of origin – to install an ECF pulp mill (see in this same bulletin the article on “Obtaining pulp”) has been resisted by Uruguayan and Argentine environmentalists on both sides of the Uruguay River (see WRM Bulletin No. 75). Botnia, with white gloves and an offer to invest 1 billion dollars that, in the devalued and impoverished Uruguay has made more than one mouth water, also proposes to install an ECF pulp mill. In its favour, it has a “cleaner” image, a result of the strict environmental regulations in its own country and a more intelligent approach, with participative trends, that has won it some support. However, conscious of the problems it may have to face, it concerned itself with achieving the adoption by Uruguayan Parliament of an “Agreement with the Government of Finland regarding the promotion and protection of investment”, which is in fact an agreement with Botnia. By means of this agreement, the company ensures the constant support and protection of the Uruguayan Government for its investments, even foreseeing the restitution of possible losses due, among other things, to “demonstrations.”

This is a way of taking shelter before the rain, and this is not in vain. In view of the fear expressed over the possible pollution of the Uruguay River and of the neighbouring area, the company has insisted that the projected pulp mill will be totally innocuous, but it is undeniable that these mega-projects involve major risks. More so in these regions where it is well known that the environmental monitoring by a dismantled State - such as the Uruguayan State - is weak.

The strong point of the companies and those that support them is the promise of creating jobs in a region with a very high level of unemployment. However, the accounting is incomplete, as it does not consider the local sources of jobs that will be lost due to the possible impact of the pulp mills – ranging from the characteristic “rotten egg” smell to the pollution of the river – in the tourist line, fishing, organic horticulture, beekeeping. Furthermore, as stated by the Botnia Company itself, out of the promised 300 jobs, 292 will be held by very qualified personnel, and therefore for most of the population the situation will remain unchanged.

In the meanwhile, local, national and regional society has made its dissenting voice heard. The integration of Uruguayans and Argentines concerned over the possibility of installing one (or two) pulp mills, polluting the water and air in the Uruguay River basin, shared by both countries, has taken shape in the form of a Socio-Environmental Network. Among its many activities, in October last year, the Network organized a meeting between Uruguayans and Argentines, in the middle of the international bridge that joins both countries, near the city of Fray Bentos, to express their rejection of the plant. This action, hindered by the Uruguayan and Argentine authorities, became public knowledge and was even discussed at the Ministries of Foreign Affairs. It was taken up by the media, putting into the headlines an issue that had so far been silenced (see WRM bulletin No. 75).

In turn, a group of Uruguayan organizations, both local and national, are pledged to prevent the installation of these pulp mills and are carrying out various activities with this aim, seeking to generate awareness regarding the impacts they imply. They are also pointing out that this enterprise would help to consolidate and strengthen the present model of monoculture tree plantations that has been so socially and economically harmful to the country and to its people.

In this context, the environmentalists have also established international links with organizations and individuals in Spain, Finland and Sweden, with the aim of exchanging information, obtaining support and coordinating action in the countries where the companies involved have their headquarters.

At the same time, the organizations opposing the pulp mills have suggested alternatives to the 600,000 hectares of monoculture tree plantations resulting from the promotion of plantations by the State. In this respect, they have set out the need for preparing a national plan for the development of the timber industry (ranging from wood products to the construction of wooden houses), generating stable workstations to provide the people who today most need it with work and better living conditions. Which is precisely what these pulp mega-projects cannot offer.

Article based on information from: “Cronología de la lucha desarrollada por diversas organizaciones sociales contra la instalación de la planta de celulosa en Fray Bentos”, Dr. Oscar Galli, http://www.chasque.net/guayubira/mbopicua/crono.rtf ; “¿Qué le deja la forestación a la gente?”, Grupo Guayubira, http://www.chasque.net/guayubira/plantaciones/trabajo.html ; “El papel del Sur. Plantaciones forestales en la estrategia papelera internacional”, Ricardo Carrere and Larry Lohmann, 1996.