Banks, Pulp and People

EoF News / 08 August 2007

A Primer on Upcoming International Pulp Projects

(A report by urgewald)

(, 6 August 2007) -- Over the next five years, the pulp industry is planning to increase production capacity by more than 25 million tonnes. The vast majority of this expansion is planned to take place in Uruguay, Brazil, Indonesia, Australia, China and Russia. The pulp mills are to be fed by vast monocultures of fast-growing industrial tree plantations (or forests in the case of Russia).

Even allowing for closures of pulp mills in the North, the proposed increase in capacity is unprecendented. For comparison, over the past decade the industry has increased at about one million tonnes a year.

Twenty years ago, Indonesians were promised that the expanding pulp industry would bring prosperity, that it would provide jobs and that it would save the forests by providing and economic use for wood. The reality is that the industry has brought a few jobs but at the cost of social conflicts, land rights conflicts, pollution and the destruction of vast areas of forests. It also produced the biggest debt default in emerging markets when Asia Pulp and Paper stopped repayments on its US$14 billion debt in March 2001.

The new report, "Banks, Pulp and People", with case studies from seven countries, documents how industrial tree plantations impact on local communities' water supplies and cause streams and rivers to dry up. Plantations increase deforestation by replacing forests with monocultures. They increase rural poverty and create few jobs. Pulp mills consume large amounts of energy and spew out pollution into the air and water. The report describes structural problems with the pulp industry: overproduction, overconsumption and a reliance on subsidies.

Building on the work of the Center for International Forestry Research, the report notes that banks conduct minimal due diligence when considering supporting the pulp industry - particularly regarding the source of raw material for proposed pulp mills.

In many countries in the Global South, from Brazil to Thailand, from South Africa to Chile, local communities are protesting the impacts of the pulp industry and the vast areas of industrial tree plantations that provide the raw material for the pulp mills. In Brazil, the world's largest land rights movement, the Movement of Landless Peasants (Movimento dos Trabalhadores Rurais Sem Terra, MST), has repeatedly targeted pulpwood plantations in its land occupations.

The pulp industry is planning a dramatic expansion of capacity in the South. The result will be increased poverty, loss of livelihoods and environmental destruction. This report is an attempt to hold the financiers of the pulp industry accountable.

Urgewald has also set up a new website:, to document the problems caused by the pulp industry's operations around the world. The website will inform the public, financiers and decision makers about upcoming pulp projects and the problems associated with these projects. We hope it will also be a useful tool for social and environmental activists campaigning against the destruction caused by the pulp industry and its monoculture tree plantations.

ownload Banks, Pulp and People report