Pulping the South:
Industrial Tree Plantations in the World Paper Economy
Ricardo Carrere and Larry Lohmann

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Chapter 12

Thailand:
From 'Reforestation' to Contract Farming

Incentives for establishing commercial pulpwood plantations are as strong in Thailand as in Indonesia: a booming economy, good geographical location, lavish subsidies, and local and foreign elites eager to invest. But competition for available land and forest, a less repressive political climate, and, most of all, heavy resistance, have so far prevented a plantation boom on the scale of that in Indonesia. Continuing pressure from the paper and pulp industry and its allies, however, has led to a seesaw battle for high stakes across large areas of the country between plantation promoters and local villagers and environmentalists.

Manufacturing and export growth

Much of the impetus for establishing new plantations stems from the Thai economy's growth rate, one of the highest in the world over the past decade. Rises in paper and paperboard demand, however, are driven not simply by aggregate economic expansion, but by manufacturing and export growth in particular. Packaging, for example, accounts for a staggering two-thirds of the paper used by the country. Revealingly, moreover, the 1994 paper and paperboard demand increase of over 14 per cent matches increases in exports (16 per cent) and in manufacturing (12 per cent) more closely than the increase in Gross Domestic Product (eight per cent). Between 1985 and 1990, paper manufacture shot up from 294,000 to 889,000 tonnes, reaching 1.66 million tonnes in 1994, with around 3 million tonnes expected in 1997 (Apichai 1992, P&PA 11.94, PPI 10.93, 7.1995). Pulp production, meanwhile, doubled in the decade to 1993, to about 200,000 tonnes per year, and is expected to reach 815,000 tonnes per year by 2000 (Rajesh 1995).

Among the companies recently making large new investments in pulp and paper have been the Soon Hua Seng Group, one of Thailand's leading rice traders. In late 1995 the firm's subsidiary Advance Agro brought a new 217,000 tonne-per-year Mitsubishi-Beloit paper machine on stream in east Thailand, with an integrated 175,000 tonne-per-year Sunds Defibrator eucalyptus kraft pulp mill following shortly thereafter. Finance for the US$670 million installation was raised largely in the US and Europe. The firm has also ordered another 200,000 tonne-per-year paper machine from Mitsubishi Heavy Machinery. The Siam Cement Group, a company associated with the Crown Property Bureau and which holds eleven companies producing paper and pulp, has meanwhile recently boosted its production capacity to around one million tonnes per year of pulp, paper and converted products, with three new machines slated to come on line by 1997. Hiang Seng and Panjapol have also added new capacity (Nation 14.4.1994; BP 13.7.1994; PPI 8.1995, 11.1995; Rajesh 1995; Papermaker 12.1994). Nationwide, overinvestment pushed containerboard capacity to 50 per cent over demand in 1994, and net paper self-sufficiency is expected to climb to around 117 per cent in 1997, when the country will be producing far more short-fibre (eucalyptus) pulp than its papermakers require (Adul 1993; P&PA 11.1994; PPI 10.93, 7.95; Rajesh 1995). Fresh long-fibre (conifer) pulp, however, cannot be produced in large quantities in the country and will continue to be imported.

As in Indonesia, foreign machinery suppliers are important beneficiaries of the boom, with Nordic, Japanese and North American suppliers again dominating the market. Foreign investment is also significant. Phoenix Pulp and Paper, currently Thailand's largest producer of pulp, with 200,000 tonnes per year, is a venture of Ballarpur, India's largest pulp and paper manufacturer _ which holds over 13 per cent of the shares _ and the European Investment Development Corporation based in Luxem-bourg. In good years, Phoenix exports over a third of its pulp to such countries as India, South Korea, the Philippines, Japan and the US. Asia Tech, a firm partly owned by the New Zealand-based multinational Brierly Investments (see Chapter 8), is meanwhile laying the groundwork for pulp and paper mills by promoting contract farming of Acacia mangium pulpwood trees over 32,000 hectares in four provinces of Thailand's Northeast. Taking advantage of local government connections, Asia Tech has also illegally seized over 500 hectares of public seasonally-flooded forest on the banks of the Songkhram River to plant eucalyptus. Japanese and Taiwanese firms, for their part, have formed consortia to produce wood chips and pulp. Itochu, for example, has entered into a joint venture with Sahapattanapibul Group to export eucalyptus chips, and New Oji has ties with Advance Agro, which will export jointly-branded products to the Japanese market. The US's Kimberly-Clark, in addition, has invested in Thai tissue capacity and Korea's Shin Ho in a 100,000 tonne-per-year newsprint mill using recovered materials. Banks such as the UK's Barclays meanwhile help advise firms such as Soon Hua Seng on debt finance and share offerings (PPI 11.1995, Lang 1995).

Anticipated future growth in both exports and domestic production, together with the need to keep machines running even in times of surplus, has compelled industry to push for more and more of the country's land area to be planted to pulp trees. Eucalyptus camaldulensis, known since the early 1970s to be easily adaptible to Thailand's wide range of habitats, and increasingly attractive to paper manufacturers, has been the tree of choice since the appearance of cheap seed on the market in 1978. By 1992 around 80,000 hectares of eucalyptus had been planted by a wide variety of firms and private owners, mainly in the Northeast and Central regions, and industry has continually lobbied the government for further land, recently claiming it needed another 128,000 hectares under fast-growing trees by 2002. With its eye on increasing exports, the industry association has also requested soft loans with grace periods of six years, reductions in corporate income tax, waivers on sales tax, suspension of import duty on pulp- and paper-making chemicals and machinery, more government-underwritten training and infrastructure, and state collaboration in plantation ventures (Apichai 1992, BP 1.2.93, P&PA 11.1994, Rajesh 1995).

Official collaboration

Until confronted by massive popular resistance, government officials, by and large, have been only too willing to cooperate. In the late 1980s, government agencies were calling for 4.3 million hectares of commercial tree plantations in National Reserve Forests (or over eight per cent of the country's land area), with communities and the government planting an additional 1.85 million hectares. This eagerness caused some head-scratching among corporate consultants, who, try as they might, could not locate a prospective market for the products of more than ten per cent of such a huge plantation area (Sargent 1990, Prachachart Thurakit 4-6.1.1989).

Such official enthusiasm for commercial eucalyptus plantations, however, is not as mysterious as it may look. The Royal Forest Department (RFD) has been overwhelmingly oriented toward commercial exploitation during its entire 100-year history. When logging was banned in 1989, it was only natural that it should turn its attention to promoting commercial plantations. This bias has been reinforced by the associations many RFD bureaucrats enjoy with eucalyptus nursery owners or brokers and the equally close collaboration the state Forestry Industry Organization has forged with the private pulp and paper sector (Apichai 1992).

Promoting commercial plantations has also allowed the RFD to portray itself as discharging its responsibility to 'reforest the country' in the wake of the catastrophic logging of the past 30 to 40 years. This is particularly important in that most RFD officials have consistently held that conservation and restoration of forest cover are beyond the abilities of local villagers, and can only be made possible through state or commercial projects. The RFD has in addition been eager to regain control over large areas of National Reserve Forest land, which, following decades of commercial logging and official promotion of upland export crops such as kenaf, maize, sugar cane and cassava, fell into the de facto possession of peasant 'encroachers' (Usher 1990a). Just as the RFD once granted timber companies cheap logging concessions, it subsequently began to grant even cheaper concessions to eucalyptus firms in the hope that they would help drive out the settlers that the logging concessions had helped attract.

The parastatal Forest Industry Organization (FIO), too, has been casting about for a new role for itself since logging was banned, and as a result has become involved in pulpwood schemes, including commercial plantations on state land, as well as pulp mills. One such mill was mooted for Sri Sa Ket until local opposition forced the FIO to shift the projected site to Ubon Ratchathanee; another is planned for Sakon Nakhon.

Both foreign and domestic eucalyptus-growing firms, moreover, have been linked with political parties responsible for powerful ministries. Soon Hua Seng, for example, whose board chairman is Narong Mahanond, a former Director General of the Police Department, has helped finance the Democrat Party, which for years held the portfolio of the Ministry of Agriculture and Agricultural Cooperatives, which is responsible for the RFD. Asia Tech's land grabs in upper northeast Thailand, similarly, have reportedly been facilitated by politicians in the New Aspiration, Chart Pattana, Nam Thai and Chart Thai parties (Krungthep Thurakit 15.2.96).

As in Indonesia, in addition, planting trees may not be the only thing tycoons have had in mind when they demand access to more land for pulpwood plantations. While natural forests are not a leading source of pulp raw material in Thailand, businesses have often hired or encouraged villagers to clear forest so that it can be categorized as 'degraded land' legally eligible for planting with eucalyptus. The timber has then been sold illegally for lumber. On occasion, a forest which is not 'degraded' at all may be earmarked for plantations in order that it may be logged (Nation 20.1.1996). By putting on a show of interest in pulp and paper, moreover, some business figures have attempted to amass land with potential for profitable uses such as golf courses or tourist resorts. RFD officials and politicians who stand to share the benefits have often been only too happy to play along.

Influenced by Western models, Thailand's official institutions are structured in a way which has helped to subsidize the plantation industry. The Royal Forest Department, for example, has legal jurisdiction over approximately 40 per cent of the country's surface area in the form of National Reserve Forests (NRFs), many of which are forested in name only. Until recently, transferrable land documents could not legally be granted in NRFs, even in the 5.6 million hectares which are estimated to be currently under cultivation, though many NRFs were gazetted in areas already occupied by villagers. In the 1980s and early 1990s, this arrangement enabled the government to label the more than 10 million people who live in the NRFs _ some of whom have been present since before the NRFs were gazetted _ as 'illegal encroachers'. Accordingly, the land they were occupying could be given away to plantation or other businesses at the derisory rate of US$2.50 per hectare per year, little more than five per cent of the (already low) typical going market rate (Apichai 1992). In theory, the Director-General of the RFD can still authorize the rental of up to 16 hectares of NRF per company, the Minister of Agriculture up to 320, and the Cabinet, still larger areas. In September 1994, the Minister of Agriculture was even given authority to allow state agencies to use parts of protected areas without cabinet approval 'if their projects involve national and economic security'.

Other apparatuses have been set up for granting special privileges to pulpwood plantations which no other agricultural crop enjoys. In the late 1980s, the RFD set up a separate office devoted specifically to promoting commercial tree farms, complete with a public relations budget of over US$24 million, and in 1994 asked for approximately US$130 million from the 1995 fiscal budget to subsidize private sector plantations and other 'reafforestation' projects, including one in which farmers in National Reserve Forests are given soft loans to plant fast-growing trees. The Board of Investment has meanwhile granted some firms tax holidays and exemptions from duty on imported machinery and raw materials (Apichai 1992, Usher 1990b, Nation 9.4.1990, Tunya 1990, BP 31.8.94).

Foreign subsidies

Providing additional subsidies are foreign governments. Particularly prominent, unsurprisingly, are those of Japan, Canada, and Finland, three of the countries which are likely to benefit the most either from sales of machinery and consultancies or (in the case of Japan) also from imports of Thai chips and pulp.

As long ago as 1981, the Japan International Cooperation Agency set up a trial eucalyptus plantation in Northeast Thailand to foster research and training in the field, and in the early 1990s funded a nursery project growing 20 million tree seedlings yearly. Japanese taxpayers' money has also been channeled through the Overseas Economic Cooperation Fund to support farmers' participation in the Thai-Japan Reforestation and Wood Industry Co., which was designed to supply raw materials to a consortium of Japanese papermakers (Nectoux and Kuroda 1989, Tunya 1990, Masaki 1995). CIDA, the Canadian 'aid' body, has helped finance the Canadian consultant H. A. Simons' work with Soon Hua Seng as well as tree plantation research by the Thai Development Research Institute. Britain's Commonwealth Development Corporation, which draws money from the British 'aid' programme, has also provided loans and debt finance to Soon Hua Seng. And the Swedish Board for Investment and Technical Support has hired the Swedish consulting firm Swedforest to help FIO's attempted transition from a logging to a plantation-managing agency (Usher 1994, Rajesh 1995).

The struggles of the 1990s

In the early 1990s, plantation proponents and opponents alike had to struggle for purchase on a slippery, constantly changing political field. In May 1990, then Prime Minister Chatichai Choonhavan prohibited all commercial 'reforestation' in National Reserve Forests following the arrest of 156 Soon Hua Seng employees for logging a plantation site in Eastern Thailand. (In accord with normal practice, Soon Hua Seng had been allowed unofficially to have access to the forest in order to 'degrade' it before negotiations for the concession were concluded, but political intrigue against the company's president led to exposure.) In February 1991, however, a military coup d'tat paved the way for a massive official programme, which, with a budget of hundreds of millions of dollars, was aimed at evicting five million residents of National Reserve Forests in order to free up approximately 1.37 million hectares for private-sector tree plantations. Within a year, perhaps 40,000 families were forcibly displaced in the Northeast, with repression especially severe in areas targeted by the military as hotbeds of resistance (Sanitsuda 1992, Phuu Jatkaan Raai Sapdaa 16-23.9.91).

When a broad-based popular movement overthrew the military junta in May 1992, resistance to pulpwood plantations emerged again in force. Following major demonstrations by Northeastern villagers, including the blockade of the region's principal highway, and prolonged negotiation with farmer leaders, the government scrapped the military's eviction programme, suspended 'reforestation' with eucalyptus, and imposed a ceiling of eight hectares on any type of commercial tree plantation.

The protests of the last decade have made Thailand a watchword in the industry for conflict over raw materials. This has discouraged both foreign and domestic investment, particularly in giant export schemes such as those to be found in Brazil and Indonesia. Shell, for example, was forced to drop plans to plant 12,500 hectares of eucalyptus in east Thailand in 1990 after violent conflicts and scandals forced delays in governmental approval for the project. Soon Hua Seng, Birla, and other firms have also been compelled to abandon ambitious plantation or pulp schemes out of fears of local opposition or subsequent rejection by the government. Phoenix's mill, meanwhile, lost 141 production days during 1992-4 due to controversies over pollution releases which have damaged local fishing livelihoods, while investors including Panjapol and Siam Pulp and Paper have run into problems with licensing authorities. Such difficulties have increased investors' reluctance to move out of the Bangkok area, with its good infrastructure, consumers, and easy access to waste paper for raw material (P&PA 11.1994).

In September 1993, under pressure from the pulp and paper industry and its allies, Thailand's economic ministers decided once again to open National Reserve Forests to commercial reforestation. In practice, however, grassroots resistance and public opinion have ensured that the conversion of state land to pulpwood plantations remains difficult. In 1994, for example, local opposition to a eucalyptus-planting RFD development programme in Roi Et become so strong that district officials had no choice but to express support for villagers who chopped down over 300 hectares of the Australian tree in order to replace it with community-conserved forests of native species (BP 27.3.95). By 1995, village networks in the province were attempting to eliminate eucalyptus from their areas altogether, forcing the RFD to suspend its eucalyptus operations over a wide area. Responsibility for existing plantations, meanwhile, was passed to other authorities, whom villagers have pressured through a variety of channels to cut the eucalyptus and distribute the profits locally. Throughout their campaigns, Northeastern villagers and their NGO allies have researched and publicized multi-purpose native alternatives to eucalyptus which are responsive to the diversity of food, construction, medicinal and ecological needs of different localities; launched supplementary plantings of native trees on degraded sites; and posted new areas as community forest.

Increasingly, government agencies are conceding both the necessity of granting land rights to occupants of NRFs and the problems of large-scale eucalyptus cultivation. In 1994, a new 'land reform' programme called Sor Por Kor was instituted to distribute over 600,000 hectares of NRF land per year to farmers before it was derailed by high-level abuses. A scheme in which private corporations and state enterprises are being invited by the Ministry of Agriculture and Agricultural Cooperatives to help cover at least 540,000 hectares of land with trees between 1994 and 1996 to mark the 50th anniversary of the King's coronation has meanwhile specified that the plantings must be for conservation purposes, must use native trees, and must not evict occupants of the land affected -- although whether these goals are achievable is open to question (BP 20.1.95).

From planting leased land to contract farming

Facing clashes with landless farmers or governmental vacillation or opposition in its efforts to take over NRF land outright, the industry and its official allies have turned increasingly to contract farming as a second-choice strategy. Here the industry, instead of dispossessing peasants directly, contracts with them to grow pulpwood trees on their own land, often distributing free seedlings and promising to purchase their harvest years hence at a guaranteed price.

Although this approach can be unwieldy, requiring pulp or chip firms to deal with thousands of smallholders scattered across a large area, it is unlikely to provoke the type of organized resistance to plantations which has followed on from attempts at outright eviction, and may even encourage farmers to clear new areas to plant trees. Thus by early 1996, Asia Tech had convinced farmers in Thailand's Northeast to plant acacia on 16,000 hectares of their own land, half what the firm requires to feed its projected 150,000 tonne-per-year pulp mill in Nong Khai. Soon Hua Seng's Advance Agro, meanwhile, is promoting contract farming among over 4,000 farmers near its mills in eastern Thailand. And Phoenix contracts with over 10,000 farmers within a radius of 150 kilometres for bamboo and eucalyptus supplies; in the area surrounding the company's plant, farmers hard-pressed to find lucrative crops for their sandy soil have been successfully wooed with offers of cash stipends of US$125 per year per hectare for looking after eucalyptus plantings on their land (PPI 11.1995, Anuchit 1995b).

While contract tree farming can be more expensive in many respects for pulp firms than plantations on leased land, it too is capable of attracting substantial state subsidies. The Sor Por Kor land reform programme, for instance, was associated with a programme providing soft loans for farmers planting fast-growing trees on their new land (Nation 15.2.94). Asia Tech, meanwhile, can rely on the assistance of the government's Agricultural Extension Department in persuading farmers to switch to tree crops. Contract farming, in addition, is capable of displacing considerable risk onto farmers themselves. Dependent on plantation or pulp firms for seedlings, materials and cash, small farmers may well find out too late that eucalyptus is economically unviable for them and be pushed into foreclosure (Usher 1990b, Phuu Jatkaan 3.5.95, PRED 1996). Plantation or pulp firms may then simply be able to buy up their land at bargain prices.

In the long term, indeed, the types of social and economic control inherent in the contract farming system may well engender new forms of popular opposition to industrial pulpwood cultivation. Over 90 per cent of surveyed farmers participating in the contract farming package Phoenix has recently pioneered on 325 hectares near its mill in Khon Kaen, for example, already want the project to be suspended (Anuchit 1995a). The package, dubbed 'Project Green' by the company, was conceived partly as a way for Phoenix, plagued by accusations of water pollution, to reduce the amount of (supposedly fully treated) waste water released into the Pong River by using it instead to irrigate the eucalyptus crops of nearby contract farmers. Participating farmers, who were approached as individuals rather than collectives in order to undercut village unity, were entitled to the benefits of the programme -- including a guaranteed price of US$32 per tonne for the five-year-old trees -- only if they accepted the effluent as irrigation water. Although according to the terms of the contract (of which the only copies are held by the company), participating farmers were to have complete control over the water releases themselves, in reality a team of Phoenix employees circulate among farmers' fields, ensuring that pipes remain open around the clock. As a result, the effluent has not only contaminated and salinated the soil on which eucalyptus was growing, but has also seeped into lower-lying rice fields of non-participating farmers, killing seedlings, full-grown plants, and trees. While the company has been forced to hand over compensation of US$100,000 to villagers, calling it fully to account for the permanent damage it may have done to smallholders' land is difficult (BP 12.7.1995, 30.7.1995, 9.8.1995; Anuchit 1995a, 1995b; Wannasri 1994).

Given the problems connected with both contract farming and establishing plantations on state land, it is hardly surprising that some firms have found it advantageous to grow pulpwood trees on land they already own, or to buy up smallholdings now used for other crops. Siam Cement Group, for example, which is the parent company of Siam Pulp and Paper and Siam Cellulose, has recently acquired 1,600 hectares in the north of the country, and Soon Hua Seng has for many years been buying parcels of land from indebted cassava or sugar cane farmers in the east to supplement its contract farming and other plantation efforts. Phoenix's raw materials chief, meanwhile, confesses that he would rather the company buy up smallholders' land adjoining its mill than continue with the Project Green contract farming scheme (Suppachai 1996).

Moving abroad

Another strategy for Thai pulp and paper investors facing domestic resistance is to move abroad. Phoenix, for example, working with the Asian Development Bank (ADB), Jaakko Poyry, and the Finnish government, plans eventually to tap a 9,600-hectare plantation in Laos. Some 70 per cent of the ADB loan for the project will go to the private sector -- which the Lao state is ill-equipped to monitor -- with only 30 per cent to small farmers. Finnish taxpayers are subsidizing the planning and political manipulation essential to the move through a US$5.8 million grant for technical assistance. The grant supports the World Bank's so-called Forest Management and Conservation Project in Laos, which will lead to tens of millions of dollars being poured into a sector where government officials' salaries are around US$30 per month (Malee 1994). Siam Pulp and Paper, meanwhile, has approached the Laotian government about a possible $250 million project involving a 150,000 tonne-per-year pulp mill and 32,000 hectares of plantations.

Asia Tech, too, has ambitions to invest in plantations in Laos and Burma. A 16,000-hectare Pinus radiata plantation planned for Laos's Bolovens Plateau, according to Asia Tech's own estimates, will displace nearly 5,000 people, for whom no new land has yet been found. A bit over US$1 per person will be allocated during the project's first year toward finding new livelihoods for the evictees. Huge quantities of pesticides, herbicides fungicides, and chemical fertilizers will be used on the project area, including glyphosate, Pulse, Simazine and Gardoprim. A mere US$3 per hectare will be paid in annual rent to the state during the first ten years of the project (Bannan 1995). Asia Tech is also planning to cooperate with the Lao government in another, even larger plantation project in Khammouane province (Krungthep Thurakit 15.2.96).

Meanwhile, like Indonesia's Sinar Mas and Raja Garuda Mas, Soon Hua Seng has moved into China, investing hundreds of millions of dollars in joint ventures to plant over 220,000 hectares of eucalyptus in Canton and set up chip, pulp and paper mills. Led by the Ministry of Agriculture and Agricultural Cooperatives, the Thai government has also signed a cooperation pact on industrial forestry science and technology with China which is aimed at, among other things, supporting that country's policy of planting 6.5 million hectares of fast-growing trees such as eucalyptus and poplar by the year 2000 with investment from Japan, New Zealand, Australia, Indonesia and Thailand (BP 23.6.1993, Rajesh 1995).

Siam Pulp and Paper, in addition, is taking advantage of Indonesia's 'huge wood resources' by buying into a US$1 billion, 350,000 tonne-per-year pulp joint venture in East Kalimantan with the Astra International Group (FT 4.1.96). Siam is also investing in a kraft paper mill in the Philippines with Phinma Group (Nation 1.3.96).

The Thai Forestry Sector Master Plan:
a case study of international pulp and paper politics

Jaakko Poyry's Thai Forestry Sector Master Plan (TFSMP) offers an interesting illustration of the attempt by the international pulp and paper industry and its allies to build up support networks, rewrite policy, and manage resistance in an intercultural context.

Much of the original impetus for the TFSMP, like that for other national Forestry Master Plans, came from the Tropical Forests Action Programme (TFAP), a gigantic scheme which had originated in an early 1980s conversation in a Washington bar between the World Bank forester John Spears and a colleague, who were brainstorming ways of getting more international development funding for professional forestry consultants in the new atmosphere of concern in world capitals for tropical forests. As developed by the World Bank, FAO, the United Nations Development Programme (UNDP) and the World Resources Institute, the plan encourages each tropical forest country to join donor agencies such as CIDA, FINNIDA or the World Bank in setting up missions to review the state of its forests. Management plans are then formulated -- usually highly commercially-oriented -- whose components can attract funding from international or bilateral agencies (Colchester and Lohmann 1990).

A second set of interests behind the TFSMP was Poyry's consultancy business (see Chapter 4). Having helped to establish Poyry as a key player in several Asian countries, including the Philippines, Indonesia and Nepal, Jouko Virta, President of the firm's Consulting Division, was hard at work in the mid-1980s trying to make inroads into the highly-personalized Thai government system. Virta's way was smoothed by a fortuitous meeting with a Swiss named Nat Inthakan, who had been living in Thailand for several decades and had Thai nationality and an intimate knowledge of the local timber industry. Nat arranged introductions for Virta to Snoh Unakul, a businessman and Secretary General of the National Economic and Social Development Board; General Harn Leenanonda, then Minister of Agriculture and Agricultural Cooperatives, which had jurisdiction over the Royal Forest Department (RFD); and Phairote Suwannakorn, then Deputy Director of the RFD. Virta then wrote up terms of reference for a Master Plan for Thai forestry development which Nat, now acting as representative of Poyry in Bangkok, used to brief then Prime Minister Prem Tinsulanonda. On a 1988 visit to Finland, Prem signed an agreement whereby FINNIDA would fund a Thai master plan along TFAP lines. Since Thailand's per capita Gross National Product was too high for the country to qualify technically for Finnish bilateral aid, FINNIDA's funds were channeled through UNDP. UNDP duly selected Poyry as plan consultant. Rauno Laitalainen, who had been in charge of Poyry's master-plan team in Nepal, arrived in Bangkok in July 1990 with a tax-free annual salary of US$240,000 (Usher 1991).

Despite Prem's imprimateur, Laitalainen faced immediate problems in creating a plan which could satisfy the various bureaucracies, state enterprises, businesspeople and speculators with interests in the forests -- to say nothing of farmers' groups, non-governmental organizations and environmentalists. Having had prior experience with FAO and UNDP, and aware of the controversy over TFAP, the Forest Department's planning division at first refused to work with Poyry, and as late as August 1991, an FAO official found that 75 per cent of Forest Department staff remained opposed to the plan (Inglis 1991). Some 205 NGOs involved in rural development, meanwhile, noting Poyry's unconcealed interests in promoting commercial plantation development, objected to the plan on the grounds that it would strengthen state and industrial control over forests at the expense of local communities and their commons. Under pressure, Laitalainen agreed to sign a statement stipulating that the plan's Terms of Reference be rewritten after consultations with NGOs working with village communities.

Laitalainen and his team then began to devote considerable time to learning the political ropes, lobbying for a coordinated approach to industrial forestry, making elite alliances, distributing consultancies, starting up publications, mollifying malcontents, and lining up potential supporters for a plan many of whose details would be left for the future. Knowing that the more participants he brought in on the side of the plan, the easier it would be to accuse others of 'marginality' and 'obstructionism' and to hide behind the authorities, Laitalainen went out of his way to make the TFSMP seem capable of answering the needs of all actors. When speaking with the government's Forest Department, he suggested that TFSMP could help increase the country's forested area and wood industries. When speaking with business, Laitalainen stressed the need for the government to subsidize private investment in plantations through provision of land and other necessities. Trying to integrate NGOs into the planning process, he praised grassroots efforts to conserve forests; acknowledged the need for land reform, popular 'participation', and grassroots benefits; and claimed to be in a unique position to intervene with the government on the side of ordinary people. Photographs of village groups sitting in conclave or planting trees under the tutelage of officials began to feature in TFSMP documents. The TFSMP was presented as an infinitely self-correcting 'rolling process' capable of accommodating any objections from any actor. Criticisms were consistently dismissed as 'premature' and critics invited to participate in succeeding stages.

These efforts had some effect. The TFSMP's ability to hire consultants eventually attracted many Thai forestry faculty. Although most Thai NGOs stuck to their demand that the Terms of Reference of the plan would have to be revised before they would consider any invitation to participate in the planning process, two NGOs agreed to serve on the steering committee in the spring of 1991. One of these soon afterwards received an unusual US$20,000 grant from FINNIDA.

Pressure nonetheless built from the majority of NGOs, who pointed out that Poyry, in providing supposedly 'neutral' information about economic demand and forest resources and uses, promoting 'correct' management techniques and environmentally-friendly technologies, trying to integrate land managment into global wood-fibre supply systems, and proposing repeal of the popular 1989 logging ban, was in fact already engaged in political subversion against land reform and many village ways of life. The planners' profession of support for customary land rights and local control meant little, NGOs noted, given that, under the plan, villagers' own systems of knowledge and organization were to be subordinated to technocrats' schemes and 'measures undertaken to . . . accelerate out-migration from the forest lands'. Jaakko Poyry consultants' 'bottom-up' planning, they added, was bottom-up in name only, since in fact it consisted merely in officals' 'outlining' their management plans in the presence of villagers.

Partly out of reaction to such pressures, and partly out of a typically corporate frustration with Thailand's existing 'institutional and social frame', the master plan team moved further and further away from presenting itself as a mere 'technical' appendage supplying facts to a unified body of forward-looking policymakers. Instead, it was forced to begin advertising itself as a political facilitator of a compromise 'national vision' of Thai forests, a reservoir of expertise on democracy and 'participation', and a redrafter of policy. Predictably, this stance roused even sharper sarcasms. As one NGO leader noted in a 1993 letter to the Bangkok Post, 'oNational valueso as perceived by the master plan team bear little resemblance to the values local people place on collectively managing community forests and commons within cultural, social and economic contexts of local communities throughout the Kingdom'. In the end, the company was forced to cut its losses with NGOs. On the suggestion of Heikki Rissanen, forestry adviser to FINNIDA, Laitalainen broke his promise to sign the recommendations coming out of the February 1991 meeting (Wallgren 1994). Jouko Virta, although aware that the bulk of Thai NGOs involved in rural work opposed the TFSMP, went on record claiming that only two or three marginal and 'extremist' individuals -- 'I think they are anarchists' -- were critical of Poyry's planning exercises. The claim began to be heard that it was 'too late' to influence the plan and that if there were problems with it they were due to NGOs' refusal to participate.

Yet Thai officialdom proved hardly more willing than NGOs to indulge Poyry's pretence of being able to redraft Thailand's entire forest policy and reform its practice from top to bottom. The cabinet never approved the completed TFSMP; nor did any state bureaucracies rally round its banner. Predictably, the plan wound up, in words which anthropologist James Ferguson has used to describe development projects in Lesotho, like a 'bread crumb thrown into an ant's nest' (Ferguson 1994). Instead of providing a blueprint for a brand-new, comprehensive and coherent forest management regime, the plan remained a relatively small component in a larger machine, treated at most as a 'shopping list' from which various actors could choose isolated items which could benefit their own circles.

Poyry's ability to pursue the master plan at all, and thus to carve out an at least slightly more spacious niche for pulp and paper interests, was due partly to the fact that it could successfully conceal from the Finnish public the scale of resistance its schemes were experiencing in Thailand. In this it was helped not only by the physical distance between the two countries, but also by the fact that the Finnish public shared many of the Poyry consultants' assumptions. To many Thai observers it was merely common sense that Poyry, in laying out the master plan, was seeking commercial benefit and that it was unaccountable to the people whose livelihoods it was threatening. In Finland, where the belief in the 'neutrality' of corporate consultants and their 'objective expertise' remained strong, such claims, if they could be heard at all, often sounded like paranoia. Similarly, to many Thais, the idea that Finnish foresters could provide a neutral forum in which the goals of (say) transnational corporations, Thai government ministries, local politicians, and Northeastern villagers could be reconciled under centralized authority seemed fanciful. In Finland, however, it was given solemn credence. Finally, while in Thailand it was common knowledge that millions of rural residents depended for their livelihoods on the type of commons regimes commercial eucalyptus schemes were disrupting, such regimes seemed simply quaint or economically marginal to many Finns.