Evaluation report of V&M Florestal Ltda. and Plantar S.A. Reflorestamentos, both certified by FSC - Forest Stewardship Council
Brazil, November 2002 (*)

index

Chapter 1
SOME COMPANY FEATURES

V&M Florestal Ltda.

V&M (Vallourec & Mannesman) Florestal Ltda. (hereinafter V&M), located in the city of Curvelo (State of Minas Gerais), was founded in the year 2000, three years after the Mannesman Ltda. Company, founded in 1969, mainly with German capital (Mannesmanröhen-Werke AG), entered into partnership with the French Vallourec group, setting up V/M Tubes, located in Europe. Its representative in Brazil is the Grupo V&M de Brasil, of which V&M Florestal Ltda. is part.

The main objective of V&M is to produce timber for charcoal. When it was founded, the company's objective was to substitute the use of coal at the V&M Brazil steelworks in Barreiro, Bello Horizonte. Today, V&M Brazil are self-sufficient regarding their charcoal, supplied by V&M and annually produce some 450 thousand steel tubes.

The Public Summary (PS) of the certification data, show that V&M has 235,886 hectares of land in the State of Minas Gerais in four different districts, seen in the table here below, which also indicates the average charcoal production for each district.

Source: Public Summary (PS) of V&M Florestal certification (SGS Forestry)

The 235,886 hectares belonging to the company are located in 25 properties of sizes varying from one thousand to 36 thousand hectares and, according to the company, cultivated lands averaging 25 hectares each are used. In the cultivation zones, the company has planted various kinds of eucalyptus (E. camaldulensis, E. urophylla, E. cloeziana, E. citridora, E. grandis and E. pellita). Recently the original plantations have been substituted by cloned plants that ensure greater homogeneity and productivity and increase the efficiency of this activity, in regard to the policy of the new owners of the company, the Vallourec Group, who want to make an annual reduction of between 10% and 15% in production costs. Each property, except the two smallest ones, has a charcoal stack on its own grounds. The production of charcoal has traditionally been made in small round ovens, (see photos 2 and 2a). In 1998, the company still had 1,500 ovens of this type but in the Public Summary (PS) by the SGS it is stated that the ovens were being gradually substituted by large ovens which they called "modern" (see photo 3) and in 1998 there were already 300 of these, following the trend to substitute the traditional ovens. Once produced, the charcoal is transported to the V&M Brazil factory, covering a distance of 364 km.

There is no concrete data on the area of 107,560 hectares that are not planted with eucalyptus. According to the PS by SGS, the company has close on 60 thousand hectares of native reserves, although there is no indication of where such zones are located and the rest of the areas still has to be differentiated and specified, such as those areas where eucalyptus was planted unsuccessfully and others having natural forage.

Due to the failure of the first eucalyptus plantations, the company decided to set up its own research centre totally geared to research on the cultivation of eucalyptus species.

Over all these years, the company has always endeavoured to lower costs to ensure profitability of the business. A strategy that has shown to be extremely effective is the automation of work, for example the use of machinery in extraction and transportation of timber. One such machine substitutes close on 70 chainsaws. The introduction of new charcoal ovens has also left the great majority of these workers out of a job. Another important strategy to lower costs is the outsourcing of timber extraction and charcoal production activities, increasing productivity. With these strategies, the total number of workers has dropped considerably since the eighties, while the number of outsourced workers today far exceeds the number of stable workers. See the following table:

Source: Public Summary (PS) for V&M Florestal certification (SGS Forestry)

Outsourcing frequently makes work precarious, and is combated by the company through the adoption of the so-called "minimum models" that must be followed by the outsource companies. According to the PS, V&M has always supported campaigns against child labour, a problem in the zone and specifically in charcoal production activities.

The company is installing in all the properties 25-metre wide corridors with native vegetation. There are 500 metres of eucalyptus between one corridor and the next. These corridors are an important advertising weapon for the company as it would seem that it is the only company, of the dozens of companies in the same sector operating in Minas Gerais, which has installed them.

According to the company's Website on Internet (www.vmtubes.com.br), V&M "employs labour in the field, taking development to the rural areas of Minas Gerais and even contributes considerably to the reduction of the greenhouse effect." This is stated because it uses charcoal in steel production. Charcoal is considered as a source of energy contributing less to global warming than coal.

Plantar S.A. Reflorestamentos

Plantar S.A. Reflorestamentos (hereinafter Plantar), founded in 1967, is a corporation of closed national capital and the shareholders are members of the Moura family. The Plantar Group undertakes three different kinds of activities:

- Provision of forestry services to major companies, mainly in the cellulose sector (presently the company is planting trees in an area of over 350 thousand hectares in various States in Brazil);

- Cast iron metal works

- Plantation of eucalyptus on their own lands

The company has some 15 plots of land totalling 280 thousand hectares, and its main activity is eucalyptus cultivation, aimed at the production of charcoal to supply its own iron works. Forest management on such lands has the same basic features as other companies such as V&M:

- It was installed at the same time and, partly, in the same zones;

- It has chosen monoculture tree plantations of a single species, eucalyptus (the company produces annually around 10 million plants, increasingly as clones);

- It has adopted short term rotation cycles;

- Its main activities are timber extraction and charcoal production;

- It prefers to outsource its main activities.

Recently the company has started producing charcoal for barbecues that has had a good reception in the domestic market.

In 1997, unlike V&M, Plantar requested the FSC certificate for only a part of its plantations, that is to say, some 9,419 hectares in the municipality of Curvelo. In the year 2000 another 3,868 hectares were added, totalling 13,187 hectares, that is to say, 4.8% of the area is certified. This represents a minimum percentage if it is compared to the total area belonging to the company.

Certified eucalyptus only serves to produce charcoal for barbecues. In this respect, the certification is an interesting option for the company as it ensures an increase in the price of the product sold. It should be noted that in the case of Plantar, certification may be of a strategic nature, given the company's concrete attempts at getting its plantations recognised as a Clean Development Mechanism (CDM), and at selling the so-called "carbon credits."

However, the fact that the company has only certified a small part of its plantations does not prevent it from announcing in its Website on Internet (www.plantar.com.br) the following: "The Green Seal - this certificate ensures that our forest is well managed, according to FSC principles and criteria, that is to say, it is managed in an environmentally responsible, socially beneficial and economically viable way." It would seem, according to this declaration, that the certificate is valid for all the company's cultivations, which does not correspond to the truth.

Chapter 2
THE CERTIFICATION PROCESS THROUGH SGS AND SCS

In this chapter, we intend to question some aspects of the certification process carried out by SGS in the case of V&M, and SCS in the case of Plantar. On analysing the Public Summaries (PS), we observe that the certifying companies follow certain steps in their work, that is to say there is a certain sequence of activities, for which they use manuals, checklists, itineraries and/or defined methodologies. This leads us to believe that the problems noted tend to occur in other certifications made by such companies. Here below we will look at some problems worth noting.

The composition of the certifing group and content of the assessment

In the case of Plantar, the SCS group comprised a specialist in Forestry Resource Planning and Management and another specialist in Environmental Planning and Management. It is worth mentioning that there was no one from the social and/or economic area in the group. This may explain, but not justify, why in the PS no study has been made of the local economy, the workers' situation, the situation of the local communities and other aspects that are not directly related with silviculture itself, but that are extremely important in the assessment of FSC Principles and Criteria (see chapter 03). Furthermore, the members of the SCS group did not sufficiently analyse the environmental history of the area, which underwent a violent process of destruction of the native, Cerrado vegetation, although they were specialists in Forestry Resources and Environmental Management.

In the case of V&M, the SGS group involved more people (five members) and was more balanced: a SGS-Qualifor coordinator, a forestry engineer, an expert in ecology, a sociologist and a university professor in the area of silviculture and environment. Even so, it may be criticised for the same reason as the SCS PS: it lacks a sound study of local socio-economics, the workers' situation, the local communities' situation and the environmental situation of the zone.

The absence of these studies seriously compromises a complete assessment that takes into consideration in a balanced way, all the principles and criteria formulated by the FSC for the certification of forestry plantations.

Participation of the interested parties in the certification process

The PS referring to the assessment for certification of the V&M company enumerates various "interested parties" with which, according to SGS "meetings and discussions were held" (PS by SGS: page 30), without commenting, at least briefly, on the results of such meetings and discussions. It is worth mentioning that during our fieldwork we heard the trade union members mentioned in the list of "interested parties" consulted by SGS state that they certainly had not been taken into account during the certification process in 1998. Some members of a specific trade union even stated that they had only learnt that the company had obtained the FSC seal during collective bargaining meetings, at the headquarters of the company in Curvelo, when they saw posters on the wall advertising certification of the company by FSC.

Regarding Plantar, the PS states that: "the group contacted various companies providing sub-contracted services to Plantar, local leaders and NGOs." Among the "main contacts and comments" (SCS PS: 2.3, page 4) briefly mentions the result of the meetings with a single NGO (AMDA) and a local leader (the mayor of Curvelo), both having a favourable opinion towards the company. It does not mention any service supplying company among the "main contacts and comments" (PS SCS: 2.3, p. 5). SCS even states that: "it did not contact the Rural Workers Trade Union in the zone because there is none in activity in the city of Curvelo" (SCS PS: 2.3, page 6) with no further comments. The fact that there was no trade union in that place and at that time is a surprising piece of information that SCS should have thoroughly looked into, because of the inhuman nature of the activities being carried out by the workers as we will see further on. A simple initiative would have been to contact the Minas Gerais Federation of Rural Workers' Trade Unions (FETAEMG), in Bello Horizonte or the Federation directly representing the working class in the eucalyptus zones: the Minas Gerais Extractive Industry Workers Federation (FITIEMG).

Furthermore, it is worth noting that some important leaders and entities that we identified during our fieldwork are not among the "interested parties" presented by SGS and SCS. These are:

- The (Federal) Public Ministry of Labour (MPT) of Bello Horizonte (MG) which for years has been investigating and prosecuting for illegal activities practically all the companies taking part in charcoal production and practicing outsourcing, including V&M and Plantar;

- The Regional Labour Office (DRT) which recently, in March 2002, prosecuted some 50 companies, among which Plantar and V&M, for illegal outsourcing of labour and for not respecting the labour environment;

- The Parliament of the State of Minas Gerais, which over the past 12 years has set up at least 3 Parliamentary Investigation Commissions (CPI) to investigate the practices of forestry companies, including those of V&M and Plantar;

- The Extractive Industry Workers Federation of Minas Gerais (FITIEMG) in Bello Horizonte (MG), which represents and defends the interests of the category of wage earners and salaried employees who work in forestation activities and charcoal production and which has denounced illegal sub-contracting and slave child labour in the charcoal stacks of companies planting eucalyptus;

- The Federation of Agricultural Workers of the State of Minas Gerais (FETAEMG) that represents the rural workers trade unions in that state;

- The Montes Claros (MG) Pastoral Land Commission (CPT), an organisation originating in the Catholic Church, which is very much respected due to the fact that it defends the peoples' right to the land. It followed closely the first Parliamentary Investigation Commission (CPI) set up in 1994 against the forestation companies, including V&M (which was Mannesman at that time) and Plantar, verifying the practice of slave labour on the companies property;

- the state deputy, Rogerio Correia, author of the so-called Pequi Law (Law 13965/01) promoting cultivation, extraction, consumption and marketing of pequi*, a typical fruit from the savanna zones, in addition to other typical fruit;

- The Montes Claros Centre for Alternative Agriculture (CAA) which is fully aware of the impacts of eucalyptus cultivation on the savanna and which develops activities aimed at the sustainable use of the savannas by the local communities, verifying their economic, social and environmental sustainability;

- The State University of Montes Claros (UNIMONTES) which, since the Pequi Law (Law 13965/01) has become a reference centre with a view to coordinating research, maintaining a database, preparing and disseminating teaching materials, promoting recovery and valorisation of the local culture and other activities related to the pequi and other fruit and native Cerrado products.

The rational of conditionning

The two companies that granted the FSC certificate to V&M and Plantar adopted similar systems to correct the companies' lack of compliance with a certain FSC criterion and/or principle. The SGS uses the terms "Major Corrective Action (MajorCA), which must be adopted in the short term (at the most some months), if the certification is not to be disqualified, and "Minor Corrective Action" (MinorCA) that the company must also adopt, although it does not disqualify certification. In turn, SCS uses the term "conditioning," equivalent to the SGS MajorCA and the term "recommendation," equivalent to the SGS MinorCA.

The rationale applied by the certifying organisations is not clear when they decide on MajorAC or Minor AC, or on a conditioning or on a recommendation. In the case of V&M, the fact that there was no fauna survey and therefore no monitoring plan warranted a MajorAC by the SGS. The fact that the company had not adopted any attitude over the mass dismissal of its workers over the last 15 years, contributing to an alarming situation of unemployment, warranted a MinorAC by SGS. To judge from this example, the problem of unemployment is less important, although the FSC states on the one hand that "Forest management operations shall maintain or enhance the long-term social and economic well-being of forest workers and local communities" (FSC: p. 4) and, on the other hand, maintains that "Forest management should include the research and data collection needed to monitor, at a minimum the following indicators: {…} c) composition and observed changes in the flora and fauna" (FSC: p. 8.c2). At no time does FSC clarify what would be more important: caring for the flora and fauna in their areas or the care of thousands of former workers that the company has dismissed over the past 15 or 20 years.

Finally, what calls our attention - and we will refer to it further on in this report - is that it would seem that nothing prevents certification. When in the case of V&M, the SGS verified that there was no management plan for the non-cultivated zones (45% of the certified area!), it was sufficient for V&M to submit a programme for a survey of the flora and fauna in the zone and, based on this, prepare a management plan to avoid the certification being delayed or abandoned. In practice, regarding this and many other fundamental aspects, it takes years for the company to adapt to the FSC Principles and Criteria. In many cases of actions that the SGS required of V&M, it was sufficient for the company to submit plans or programmes without showing any evidence of concrete and monitored actions, to correct the problems of the company's inadequacy. In the case of unemployment mentioned earlier on, the MinorAC, demanding that the company provide concrete support to generate alternative employment, was no longer in force following the first monitoring, without the generation of a single alternative job having been verified (see chapter 04 - Principle 05: Benefits from the forest). Moreover, there are other examples in the report. In this respect, it is worthwhile asking the following:

- Can a company be certified based on a "conditioning" that depends on a series of conditions and recommendations, the number of which in turn depends on the total of the problems observed?

- What is the point of imposing conditions and recommendations if they are not sufficiently monitored and if concrete evidence of the problem having been solved is not demanded?

- Shouldn't there be real evidence that the companies have abided by all the FSC principles and criteria before granting them the FSC certificate?

Public access the the Public Summary (PS)

None of the "interested parties" we visited had knowledge of the Public Summary (PS) made by SGS on V&M, and by SCS on Plantar. The trade unions that SGS listed as entities consulted during the process are to be found on this list. Furthermore, there is a lack of general information on what the FSC is, that is to say, what this type of forest certification means.

In addition to this, before carrying out our fieldwork, we were able to observe that the PS that is to say the first and second monitoring visits by SGS referring to certification of V&M, were only available in English in the SGS-Qualifor Web page on Internet. The report of the third monitoring visit made in December 2001 suddenly appeared in Portuguese, the official language of Brazil! This means that SGS did not place the PS on certification in Portuguese in the most indicated means of communication for publication and dissemination at the present time (Internet), making public access to the information leading to certification of the V&M plantations even more difficult for the extremely important "interested parties" such as the trade unions, in a country where very few people know English.

It should be noted that, contrary to SGS, SCS placed a Portuguese version of the Plantar certification on the Internet, with comments on the monitoring visits. However, it should also be emphasised that the report it published is more concise than the version on V&M that SGS made available in English.

Chapter 3
REGARDING THE REGION'S SOCIAL, ECONOMIC AND ENVIRONMENTAL CONTEXT

An enormous gap in the "public summaries" of the FSC certifiers (SGS and SCS) is related to the general socio-economic context of the territory where the certified management units are located, both in the case of Plantar and of V&M. References are lacking, even minimum ones, on the inhabitants of the locality, of the hinterland or surrounded by plantations, their spatial dynamics and their historic temporality. It is impossible to assess the real impact of eucalyptus monoculture on nature and on regional society, rural or urban, without a minimum context that makes interpretative references possible.

How do you assess the impact of the plantations without a temporal cut and comparison with what the previous situation was? How do you measure benefits and damages unless you insert them in the regional socio-economic fibre, comparing them with those of other sectors, cultures and land uses? How do you calculate economic viability of certified management projects without a detailed study of the central, state and municipal public policies, tax incentives, lines of credit, funding, tax exemption, research and all the State investment?

The SGS Public Summary made in January 1999, certifying V&M, devotes about three paragraphs to the subject of "contexts," on referring to Land Use History (page 5) and to Social Aspects (page 7).

"MAFLA's (read V&M) plantation area is made up of many small farms (fincas) scattered over a large area. Most of these farms have been planted with eucalyptus for some time, with many areas already being replanted after three rotations. The farms were purchased by the company from farmers who had generally cleared the land for pasture or planted eucalyptus." (SGS PS: page 5)

Using a general and imprecise language - scattered with words such as many, large, most, some time, generally - the summary makes it impossible to undertake a careful interpretation of the real land use history, as it lacks spatial, temporal and quantitative references. Basic information is missing, on both the regional micro and macro-territory: the dynamics of the rural zones, the society that lives around the plantations, their organisations and institutions, traditional communities, the little villages, rural exodus, family agriculture, community grazing land, the importance of Cerrado species for medicine, cooking, handicrafts and the construction of housing.

On the social aspects, the report limits itself to state that:

"Due to the very dispersed nature of the plantations, there are several communities within the area covered by MAFLA's (read: V&M) plantations including Curvelo, João Pinheiro, Bocaiúva, Brasilândia, Paraopeba and other smaller communities.

The area is largely agricultural, although there is a large hydro-eletric power station. Mannesman is an important employer and also contributes significantly to local tax revenues." (SGS PS: p.7-8)

No reference is made to urban zones, cities and districts around the plantations where the charcoal workers and their families live, the places where the city infrastructure is concentrated, the outpatients clinics, schools, churches, the various civil associations, the trade union premises, the handicrafts and small trade geared to the local market, the feasts and most important dates for major concentration of people, or to what the communities' main problems are. None of this has warranted a single word by the auditors, or their attention while they were there.

The public summary written by SCS in 1998 when it certified the Plantar Company, maintains the same silence over characterisation of the zone's socio-economic context. The five paragraphs devoted to the regional context (article 1.4 Characterisation of the environmental and socio-economic context) are limited to making a superficial analysis of Brazil in general, commenting on the 1965 forestry law, a line on the 1967 to 1988 tax incentives, the Minas Gerais State Forestry Institute (IEF) and IBAMA. It locates by coordinates and altitude the municipality of Curvelo, where the plantations are located, and even classifies the original vegetation, and that is all!

This is very little to enable FSC to be able to interpret sufficiently the context where the plantations are located. The public summaries and monitoring reports say more through their gaps and omissions that what is written in them. A proof of this is that there is no mention in any of them of the long struggle by the (Federal) Public Ministry of Labour against the illegal sub-contracting made by various companies planting eucalyptus, either to produce charcoal or cellulose, among them V&M and Plantar, surprised in flagrante, explicitly infringing the law. The auditing carried out does not write a single line on the legal procedure lodged by the Regional Labour Office (DRT) in March 2002, when slave labour and child labour was being controlled and the two companies were summonsed once again. Nor do the summaries say anything about the Investigation Commissions (CPI) set up over the past eight years in the Parliament of Minas Gerais, where the two companies were again mentioned. Can these "facts" be ignored? What about the mobilisation of people, technicians, promoters, trade unions, inspectors, delegates, deputies, senators and journalists? Between 1998 and 2002, the issue was addressed several times in the main newspapers, television channels and radios in Minas Gerais. How can one ignore all this over all these years of successive monitoring and assessment? The certifiers' disregard for the public context of this state has prevented their access to basic information on the territory where the forestry management units are located. Even "public domain" information went unnoticed in the FSC auditing. This can imply serious consequences regarding the "message" that the seal is transmitting to the final consumers: that this is an environmentally responsible, socially beneficial and economically viable product.

The SGS report on V&M, perhaps out of precaution, does make two comments on these "facts," one on "unemployment and outsourcing" practiced by the company - linking them to the international dynamics of globalisation - and the other affirming the proactive position of the company referring to the eradication of child labour. The SCS summary on Plantar does not even approach the issue, as if nothing was happening around the company or even within it. In this respect, the disregard of the auditors is inexplicable: the Parliamentary agenda, the actions of MPT and DRT, and the mobilisation of civil society, all this was in the pages of the newspapers and was one of the most commented on subjects before, during and even after the certifiers' assessments. How is it possible that this did not warrant any attention or at least a few words? The dates do not lie. All these processes were simultaneous! While the assessment, certification and monitoring of these companies was going on, their illegal operations were public and notorious.

The absence of a careful reading of the socio-economic universe where the plantations are located and the lack of a context, prevent a sound assessment being made of the real impacts of eucalyptus monoculture on the region's society and environment. The reports reveal a subjective interpretation by the auditors, starting with their choice of what they will cover and the priority issues to be analysed, their selection of uncritical interlocutors, going on to the field visit guided by the narrowest interpretive horizon, lacking temporal and spatial territorial references.

We have required of ourselves to devote part of this report to the forgotten "Cerrado," forgotten by the regional public powers and disdained by the certification auditors. Based on an in-depth study of the native ecosystems and their local use, the auditors would have elements to assess, not only the impacts of eucalyptus cultivation, but also the "adaptation" of large-scale eucalyptus monocultures to their environment.

According the the Tropical Database (1995) disseminated by the University of Brasilia, the savannah is the second largest biome in South America, with 200 million hectares, covering a fourth of the area of Brazil. There are various types of savannah: the dense savannah (dense forest and cerrado with trees of between 8 and 15 metres), the savannah (open forest with trees of between 5 to 8 metres), the open savannah (open bushy formations), the rough savannah (grasslands with the occasional presence of bushes) and the clean savannah (grasslands with scant or no bushes or trees).

Over the past years, the number of research works on this unknown biome with surprising biodiversity has increased. It has close on 10 thousand species of trees and plants, 195 species of mammals, and 780 species of fish, 180 of reptiles, and 113 of amphibians. The Cerrado is in danger because it has been invaded by agriculture and silviculture (large-scale plantations of eucalyptus and pine) and by urban spread in some zones. In Minas Gerais alone, almost half of this biome has been destroyed over the past thirty years. The expansion of the agricultural frontier has contributed to new blights and diseases in such monocultures, according to research by the University of Brasilia on the changes in phytonemotoid communities caused by the conversion of natural ecosystems into ecosystems planted with eucalyptus, pine, Soya beans and rice. This explains the need for an intensive use of agrochemicals to guarantee the productivity of forestry plantations in Cerrado zones if monoculture is chosen. According to a survey made by the University of Brasilia, the Cerrado offers various types of services as it has species of timber trees (130), food plants (65), textiles (24), cork trees (18) trees producing oil and fat (29), medicinal plants (170), plants used for handicrafts (32), in bee-keeping (167) and hundreds of species having a potential as forage. This data must be further studied and completed according to various researchers of this biome (University of Brasilia, 2001).

Research work carried out by Carlos Alberto Dayrell at Riacho dos Machados, a Cerrado zone near Montes Claros shows how, over time, the local populations have learnt how to live harmoniously and sustainably with the Cerrado

"The diversity of the native flora is also of capital importance for the geraizeiros (inhabitants of the Cerrado). As we observed, extractive activities contribute up to 42% of the annual gross production and provide, in addition to external income generated by the marketing of some products, food that is rich in vitamins, minerals and proteins, edible oils, soap, remedies, medicinal plants, timber, etc. Furthermore, on studying typical family agro-ecosystems, we saw how they use with certain frequency between 26 and 78 different species of native plants. One of the families surveyed showed a knowledge of 114 different plants: their use (food, medicinal or others), their most common location in the landscape, their form of reproduction (seeds or cuttings) and, in many cases, the month in which they flower or the fruit can be harvested (1)" (Dayrell, 1998)

The Savannah Network of Non-Governmental Organisations is a group of entities and movements that struggle for the survival of this biome, defending recognition of the Cerrado as a "National Heritage," similarly to the Mata Atlântica and the Amazon region, in compliance with Agenda 21 and the Biodiversity Convention. Furthermore, in order to ensure a sustainable use of the savannah, the Network defends the instrumentation of Extractive Reserves and Agro-extractive Settlements.