[04-23-10] Eucalyptus in the South, Control in the North

by Hanna Nikkanen

Stora Enso, a Finnish-Swedish giant of the "forest" industry, is conquering Brazil at high speed. The action involves multiple problems, but neither the shareholders nor consumers seem to even bother. Could South America be the Wild West for the paper industry, based on eucalyptus? For nearly a decade, the exotic eucalyptus was the magnet that attracted the western giants of the forest and paper industry to the heat of land disputes, corruption and accusations of environmental crimes in South America and the Far East. The desire was quick profits.

The production moves to the South, but the center of the decisions is far in the North. In this arrangement, it is impossible to control every link in the chain of production. There are always blind spots. The information about problems in the plantations of the South almost never comes to activists or the media in the North. When this happens, the lack of context makes it impossible to initiate necessary actions. Politicians, shareholders and consumers in the North are unable to act. This disconnect has made the South, for a decade, the Wild West in the reforestation industry. When the laws were violated or local tensions turned into conflict, there was in the headquarters country, risks of resignation of directors or of consumer boycotts.

Stora Enso, a Finnish-Swedish company, is one of many large companies that migrated south in search of cheap raw materials. It is also a major company to have to face the fact that the times of the Wild West are the ending. And Finnish and Swedish NGOs are joining forces for the public opinion of both countries which are preoccupied with the image of companies. Stora Enso responded with an aggressive campaign to launder its image. With the enormous growth of plantations dedicated to the production of cellulose, it is unlikely that disputes between peasants and corporations will die down. However, these disputes in the last decade, involved much more than local disputes in the South or the North. They relate to an ongoing battle over control of what attracts media attention in the North and what actually happens in the South Storalandia, Brazil In southern Brazil, the Nordic reforestation company reigns.

Conflicts in the plantations, elections for the state government and violence against small farmers are wires in the same conduit. International Women's Day, 2008. State of Rio Grande do Sul, Brazil. Workers in latifúndios [Brazilian land estates] are protesting eucalyptus plantations of Stora Enso. According to the MST, the company dodged the laws of the country to buy vast tracts of land for their crops. At the end of foreign acquisitions, two executives of the company became the two largest landowners in the state. Through a front company, they possessed 45,000 hectares of land that Stora Enso could not legally acquire. The demonstration ends with an attack by military police. Nearly one hundred rural workers are injured by rubber bullets and bombs. The operation is headed by sub commander Lauro Binsfeld, head of the security staff of Governor Yeda Crusius. The incident is highlighted in the newspapers of Europe. Stora Enso apologizes in the Finnish media, but remains silent in Brazil. August 2009. São Gabriel, Rio Grande do Sul [southern Brazilian state] At least thirty landless who had occupied a property are injured in an attack by the military police.

There were similar cases in the area before, but this time the violence is even more brutal. Inmates say the PM [military police] fired on them with weapons that produce electric shocks and forced them to pass through a gauntlet where they were beaten. Many of the detainees exhibited broken bones when they were freed. The operation, as with others in Tarumã [indigenous area in the Amazon] in the previous year, was led by Lauro Binsfeld, the governor's security chief. March 2010. Costa Dorada, Bahia [northeastern state] The armed security team of the company Fibria opened fire on two small farmers who collected firewood. Henrique Pereira de Souza, 24, dies. Osvaldo Pereira Bezerra has a broken arm. Fibria is a partner of Stora Enso in southern Bahia. With the growth of eucalyptus plantations, small farmers end up collecting firewood in the neighboring land owned by paper companies. In its press release about the death of Henrique, Fibria expressed its concern to the authorities of the state government with the increase of "theft of wood" in the area, and required actions to restrict these "illegal activities". Yeda Crusius, Governor of Rio Grande do Sul, is known for giving support to the mega-firms and by repressing the protests by rural workers. It is sure that in Tarumã, Lauro Binsfeld received the governor's order to attack and it is very likely that the same has occurred in São Gabriel. The situation in the state is explosive. There are many unemployed rural workers and about 2,500 families live in tents. At the same time, the areas of acquisitions by large companies are reducing the land used for cultivating food. For the activists, these land purchases, made through front companies, are illegal. The company claims they are a necessary step, until the permits are granted for outright purchase.

Pulp mills that Stora Enso and associated companies are planning in border areas of Brazil, Uruguay and Paraguay will require enormous plantations of eucalyptus trees. Companies have enormous economic influence in the area and lobby for permanent changes in the law allowing it to acquire the land directly. From this point of view, the support of politicians like Yeda is gold. A concrete example: In 2006, Stora Enso and its partner company, Aracruz, donated to the campaign of Crusius, according to official figures, around R$ 300,000 [approximately $150,000]. Yeda Crusius is only one, among the many Brazilian politicians supported by Stora Enso. According to official data from the TSE [Superior Electoral Court], the company donated in 2006, along with Aracruz and Veracel (which is the result of partnership between Aracruz and Stora) about R$ 1.2 million to Brazilian political campaigns. Donations of Stora Enso are concentrated in Rio Grande do Sul. The Veracruz Company has funded politicians in Bahia, the state where it is charged with environmental crimes (Later, Veracel was convicted of illegal deforestation in the southern state and is being accused of payments of bribes in the case.) In 2009, the ethics of donations by Stora Enso to Brazilian politicians was finally questioned in an array of businesses - unfortunately, at the same moment as a scandal over the financing of elections in Finland. The situation was made even more uncomfortable by the fact that the Finnish state, with 30% of the capital of Stora Enso, is its largest shareholder. The scandal in the Nordic countries was so strong that it got something not achieved by the movements that denounce Stora Enso in Brazil. The company said it will stop donations to political campaigns in Brazil. Yeda Crusius continues to rule Rio Grande do Sul See the list of donations to political campaigns and their partners in Brazil in 2006 at http://www.voima.fi/tiedostot/StoraE.pdf and http://www.voima.fi/tiedostot/veracel.pdf and http://www.voima.fi/tiedostot/Aracruz.pdf.

Forests, lies and audiotapes

A few years ago, Stora Enso was a giant of the forest industry and a clumsy conservative, whose strategy of corporate responsibility was to remain silent. Now everything has changed. The media circus mounted last year between the company and Brazilian NGOs says something not only on an aggressive campaign of image laundering, but also about the blind spots of the European media. August 2009. Helsingin Sanomat, the leading Finnish newspaper, published in its Sunday supplement, a long article on the actions of Stora Enso in Brazil. The reporters did a great job. But then, something surprising. The article quotes João Paulo Rodrigues, representing the MST, when he met with Eija Pitkänen [Stora Enso's Corporate Director], responsible for sustainability of the company, a month before. "If Stora Enso continues its project, the MST will cause more conflict, violence and even deaths, which cause negative international publicity for the company," which according to the newspaper, Rodriguez reportedly said. The image constructed by the text clashes with my experience with representatives of the MST. Threats to cause conflict and sacrifice small farmers are not in tune with anything I've heard from them before. What would have made Rodrigues talk this way?

In the following weeks, Stora Enso often used the quote in their public declarations. When the company is criticized for his actions in Brazil, it wields the alleged threats of violence by their opponents. Helsingin Sanomat published a response of Jouko Karvinen, chief executive of the company, in which he attacks a Finnish researcher who studied the subject. Obviously, the text suggests that the scientist is on the same side of violent terrorists. Until then, the Finnish people did not have a clear idea of what the MST is, but now the movement is gaining a fast and notorious reputation. It is presented as a terrorist group. A few weeks later, I get a message from Brazil. The news about the sudden Finnish media attention reached the MST activists. The author of the message cannot understand where the Helsingin Sanomat obtained the quote. I was assured that Rodrigues said nothing similar during the meeting. By mutual suspicion, the MST, like Stora Enso, recorded the meeting without disclosing the recording to the other party. Both parties had promised that there would be no writers and nothing would be mentioned in discussions with third parties. Since the promise of silence had been broken, I ask the MST and Stora Enso to provide me with their recordings. That way, the truth could be verified. The MST immediately sent me an audio tape. Stora Enso refused to do the same. The Head of Corporate Communications at Stora Enso, Lauri Peltonen, is new in his post. He was recruited in 2009 by a company severely attacked for negative publicity. The transfer of pulp production to the South provoked critical acrimony on both ends of the process. The communication from the company during the crisis was poor throughout the process. Therefore, Stora Enso bet on Peltonen, hoping for radical changes.

Peltonen played the role well. I saw his performance later in a seminar on communications, which made a presentation on "Stora Enso - one of the most responsible companies in the world." The audience consists of colleagues, whose open admiration makes me feel a little uncomfortable. After the arrival of Peltonen, two things have undergone drastic changes. First, the remarkable increase in attention to ethics and ecology. The old Stora Enso did not care much about it. Peltonen changed that when the aloof-chief executive, Jouko Karvinen, flew to China to meet families of farmers - in front of cameras, of course. The influence of the head of communications is also remarkable when Karvinen concluded an agreement with Greenpeace activists to protect forests in Lapland. The victory of public relations did not require much effort. It was only a matter of converting the bad news about factory closures and rising unemployment into pleasant “green" facts about the protection of forests. The second change is the growing aggressiveness of the crisis communications of the company. The incident of the tape is a good example. "We are a publicly traded company," said Peltonen, when I ask him to provide me with the audio of the meeting in Sao Paulo to determine if the quote from the Helsingin Sanomat was correct. "A public company cannot lie. However, our opponents are not subject to such restrictions." Peltonen seems to be a friendly guy, but on the phone, now he seems super-aggressive. It must be the personal characteristic of speaking to me. I was placed on its blacklist, and he now suddenly seems to become a collector of information dedicated to their work, not a head of communications. I also think: if I were not so convinced I am following the right track, I would give up. The confidence of Peltonen is impressive. I am not authorized to hear the recording. The excuse is poor. He says the tape is in Brazil and has to be shipped to Finland. While controlling me from saying something provocative about the introduction of modern technology in the Southern Hemisphere when I get, in the same instant, an electronic message containing the recording of the MST. Although it is long, I find the words used in the threatening citation published in Helsingin Sanomat. It's all clear now. João Paulo Rodrigues says nothing about the MST "provoking more conflict." He will propose a truce. If the company accepts a delay in quadrupling of cultivation, there will more time to resolve land disputes in progress and environmental problems. Otherwise, the situation will get worse, says Rodrigues. "The conflict in Rio Grande do Sul has nothing to do with the military police. The conflict is about eucalyptus," Rodrigues said on the tape. "It will have serious environmental consequences." We publish the recordings and the translation of key points on the same day. In the following-weeks, the tape will be heard by Helsingin Sanomat and Stora Enso. Both parties publish their own translation of the excerpt. Nobody is able to find Rodrigues saying anything about provoking violence against anyone. Stora Enso does not admit it lied. In its press release, the company accuses all the other parties of lying, but does not detail the charges. Later, the Helsingin Sanomat reporters admitted they had not really listened to the tape before writing the article. They had relied on the report of Lauri Peltonen about the conversation between Pitkänen and Rodrigues. This means that the newspaper published a quote it got from Peltonen, without mentioning they had not heard the recording and that they had obtained it from a source not free in the dispute between the two parties.

After the first publication, the lie was repeatedly cited in the pages of that newspaper, until the Finnish debate finally reached the ears of a Brazilian activist. It's very worrisome for two reasons. First, are we witnessing a darker side of image cleansing? When a director of the company, located in the Nordic country and nasty conflicts occur in southern Brazil, finds it is cheaper to defame Brazilian opponents in the Scandinavian media than give up profitable but questionable projects. It is easy to start a lopsided fight. What can a rural worker from Rio Grande do Sul do to clear his reputation in Europe, having to face the communication sector of a large company? Second reason: the checking of sources in the mainstream media of Europe is so weak as to become vulnerable to shameless strategies like this? The recording of João Paulo Rodrigues in the meeting with Stora Enso is located at: http://www.voima.fi/tiedostot/MST-lyhyt.mp3 ________________________________________________

Hanna Nikkanen was born in Helsinki, Finland in 1981. She is the editor of fifi.voima.fi, a Finnish-language political/cultural web magazine. She has worked as a news editor and has written about issues in developing countries and world politics. She has played an active role in civil movements and within this she has participated in the development of open Internet publishing. She is the recipient of the 2009 Special Award: Discrimination and Poverty from EU Journalist Award – Together against discrimination! Now in its seventh year, the EU Journalist Award honors online or print journalists in the EU who, through their work, contribute to a better public understanding of the value and benefits of diversity and the fight against discrimination in Europe. [Material in brackets] is from the website editor.