Dr David Fi g Independent environmental policy analyst davidfig@iafrica.com

1. Not worth the paper… The social and environmental impact of the Brazilian pulp industry on the Atlantic ForestPresentation to the conference on BEYOND CSR? BUSINESS, POVERTY AND SOCIAL JUSTICENational Liberal Club, London, 22 May 2006. Dr David Fig Independent environmental policy analyst davidfig@iafrica.com

2. Issues covered • Sensitivity of the Brazilian Atlantic Forest • Political economy of the Brazilian pulp and paper industry • Impact on soil, water, communities • Corporate CSR claims • Contestation by social movements • Exploring the gaps

3. The Atlantic Forest

4. Endangered biome • Originally 1.3m km2, 15% surface • Now 99,000 km2, 7.5% of original • 120m people • 2nd to Amazon in terms of biodiversity importance • 20 000 vascular plant species • 171/202 animal species threatened with extinction

5. Pulp and paper industry • One of the largest in the world • 7m tons of wood processed per year • Massive investment to 2008 • Trees faster growing at fraction of the cost of planting in EU/N America • Fragmented institutional control • Oligopoly – 5 major firms with intersecting ownership • Mix of Brazilian and foreign capital

6. Aracruz pulp mill and eucalyptus fields

7. Focus on Aracruz Celulose SA • By far the largest producer • 375,000 ha (154,000 in E.Santo) of which 247,000 under eucalyptus • Further 56,000 ha planted by outgrowers • 126,000 ha in other owned companies • Norwegian and Brazilian capital • Significant environmental claims • Likely to be acquired by StoraEnso

8. Environmental damage caused by eucalyptus monoculture • Soil degradation • Desiccation of watercourses • Devastation of indigenous forest • Impact on biodiversity – creation of “green desert” • Appropriation of regional water supplies • Pollution – pesticides, effluent, air quality • Alienation of land

9. Social impacts • Compromised food security • Violation of the rights of indigenous communities • Postponement of land reform • Impact on livelihoods of fisherfolk, landless people, quilombolas • Buying of politicians, media and academics • Exemption from taxation

10. Demarcation of territory by Tupinikim and Guaraní peoples 2005

11. CSR record… on the one hand • Pressures - mainly from Europe - for better environmental controls from around 1991 • Move away from chlorine bleaching • Other innovations to improve environmental impacts (off a low base) • Attempts to gain certification • Hiring SustainAbility to advise on CSR strategy • Strong claims to sustainabilty as a guiding principle

12. … on the other • Continued denial that eucalyptus monoculture has harmful environmental and social impacts • Persecution of indigenous community when it has attempted to demarcate its lands • Forcing an ‘agreement’ on indigenous chiefs • Dubious methods of land and water acquisition • Use of security forces to eject protestors • Legal challenges to local decrees on eco-zonation • Hiring of public relations firms like Burson-Marsteller

13. Challenges • Fragmentation of regulatory institutions • Authoritarian and suspect methods to gain land and resources • Fiscal irresponsibility • “Clean development” mechanism • Violation of constitutional rights • Strong civil society responses • Export-led macro-economic policy

14. Ultimately… • How do we address the gap between “mainstream” CSR practices and the record of social and environmental damage? • What mechanisms can be put in place to ensure corporate accountability and reverse corporate abuse? • Do consumers have options? Do we need to consume so much paper and packaging? Do our preferences shape the macro-economic models applied by developing countries?