Casos FDC Copyright© 2004, Fundação Dom Cabral

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CF0402 – June, 2004

ARACRUZ CELULOSE AND THE CONSTRUCTION OF THE LUCIANO VILLAS BOAS MACHADO BARGE-SHIP MARITIME TERMINAL

Cláudio Bruzzi Boechat Nísia Duarte Werneck Letícia Miraglia

Centro Alfa – Campus Aloysio Faria Av. Princesa Diana, 760 – Alphaville Lagoa dos Ingleses 34000-000 – Nova Lima, MG – Brasil Tel.: 55 31 3589-7377 Fax: 55 31 3589-7402 PROIBIDAe-mail: A [email protected] REPRODUÇÃ – www.fdc.org.br Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal

ARACRUZ CELULOSE AND THE CONSTRUCTION OF THE LUCIANO VILLAS BOAS MACHADO BARGE-SHIP MARITIME TERMINAL*

CASE ABSTRACT opposing opinion camps: for some, the news brought hopes that the city – once one of the The case discussed here involves events related most important towns in the southern to the project of a maritime terminal on the portion of the state – would resume growing; coast of the northeastern Brazilian state of for others, there was a concern that the new . The region where it was to be built is company would negatively impact the very close to a National Park comprising islands region's natural environment – among the with reefs, natural pools and vast sea life. wealthiest in . Annually, from June to December, the area is visited by "jubarte" (humpback) whales, The city is located quite near the Abrolhos which come from Antarctica seeking warmer Marine National Park, a set of five islands with waters to reproduce. reefs, natural pools and abundant sea fauna. Every year, humpback whales, leaving The company responsible for the project is Antarctica to seek warmer waters where they Aracruz Celulose, worldwide leader in the can breed, visit the area. production of bleached eucalyptus pulp sold worldwide to manufacturers of tissue, To Aracruz, the maritime terminal project printing and writing, and specialty papers. would represent reduced expenses with Fearing the environmental risks involved in freight. The local community would benefit this case, the company developed different from the creation of some 300 new jobs during activities designed to avoid or at least construction phase, and nearly 600 direct and minimize the possible impacts. Otherwise, indirect- jobs upon the startup of operations. the decision already had been taken: the Furthermore, heavy truck traffic would be project wouldn't leave the drawing board. reduced on roads between Bahia and Espírito Santo, where the company's pulp mill is The case addresses the 7th principle of the located. But the US$51 million investment United Nations Global Compact risked never actually materializing, if ("precautionary approach"). environmental threats were to be confirmed.

What could be done in order to determine the true extent of environmental risks? Was it I - INTRODUCTION possible to prevent or minimize them? What should the company do in order to bring the When Aracruz Celulose announced the community into the discussion process? If construction of a maritime terminal in locals could not be persuaded, even with the Caravelas, Bahia, the population split into two

* Cláudio Bruzzi Boechat, Associate Professor FDC; Nísia Duarte Werneck, Researcher FDC; Letícia Miraglia, Assistant Researcher FDC, developed this case sponsored by Aracruz Celulose, based on data collected from the business reality and for exclusive use as didactic material and as the basis for class discussion rather than to illustrate either effective or ineffecitve handling of an administrative situation. Copyright© 2004, Fundação Dom Cabral. To order copies or request permission to reproduce materials, call 55 31 3589-7250 or e-mail: [email protected]. This publication may not be reproduced without the permission of FDC.

1 Casos FDC – CF 0402 required licenses being obtained, would it be producer. The new Veracel pulp mill is worthwhile building the terminal at all? scheduled to start operations in 2005, with the capacity to produce 900,000 tons/year of It was thus, with so many questions to be bleached eucalyptus pulp. faced, that Aracruz started its work in Caravelas. The first people in charge of Aracruz Celulose's forest areas, located in the answering the questions were Forest Manager Brazilian states of Espírito Santo, , Tadeu Mussi de Andrade, responsible for the Bahia and , cover a total technical and financial feasibility studies, and 363,000 hectares. Of these, 242,000 are Transport and Wood Handling Manager Fábio destined for eucalyptus plantations, while Velloso; they began in 1998 by conducting 121,000 are covered by native forests owned reconnaissance in the small Bahian town. by the company, respecting an internal policy With the studies approved by the Aracruz of maintaining one hectare of native forest for shareholders in November 2001, each two hectares of eucalyptus plantations. Environmental and Industrial Safety Manager Alberto Carvalho de Oliveira Júnior and Ownership control is exercised by the Environmental and Corporate Relations Lorentzen, Safra and Votorantim groups, Director Carlos Alberto Roxo initiated work holding 28% of common shares each, and by to obtain the environmental licence. the BNDES (National Bank for Economic and Social Development) with a 12.5% stake. The company's preferred shares - representing more than 50% of the total shares - are negotiated II – THE COMPANY on the São Paulo, New York and Madrid stock exchanges. Aracruz Celulose (www.aracruz.com.br) is the world leader in the production of bleached Being located in Brazil constitutes a eucalyptus pulp, sold worldwide to competitive advantage for Aracruz. The manufacturers of tissue, printing and writing, country is responsible for more than 50% of and specialty papers. It produces around 20% the bleached eucalyptus pulp produced in the of the world's eucalyptus pulp. About 95% world. And its importance on that market of all that the company produces is exported tends to grow because the productivity of to countries in Europe, North America, Latin tropical forests is significantly higher than tree America and Asia. growth in the northern hemisphere.

Comprising three production lines, its manufacturing complex located in Barra do Riacho (Espírito Santo State) is the world's ARACRUZ AND THE ENVIRONMENT largest single site pulp facility, with capacity to produce 2,000,000 tons/year. The Guaíba The world demand for paper is growing. The (Rio Grande do Sul State) unit is responsible production is made with wood. In the for 400,000 tons/year of the company's overall northern hemisphere, native forests are capacity. Aracruz Produtos de Madeira, a normally used to produce pulp, while in Brazil high-tech sawmill dedicated to the industry uses plantation lumber manufacturing solid wood products, located exclusively. The eucalyptus, due to its fast in Nova Viçosa (Bahia State), and the growth, has always aroused the interest of maritime terminals of Portocel (ES) and companies, but initially it was used only as a Caravelas (BA) complete the company's secondary fiber in paper production. Aracruz production system. The company also has a developed the technology that made feasible 50% ownership stake in Veracel Celulose, the commercial growth of eucalyptus for the which is being built in Eunápolis, Southern production of pulp used on the manufacture Bahia, in partnership with Swedish-Finnish of premium paper. group Stora Enso, the world's largest paper

2 Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal

Because of the high demand of wood and early an Odor Perception Network program, it wood management technologies, the pulp controls gaseous emissions from the mill with industry had a bumpy relationship with help from local dwellers living in areas distant environmentalists. The development of new up to 70 km from the manufacturing site. wood handling and monitoring techniques Further actions are taken to prevent and contributed to a more productive dialogue. control atmospheric emissions, effluent Added to this was a growing awareness of discharges and waste generation, in addition companies about their impact and the need to environmental education activities. to minimize it. According to Aracruz Celulose's Corporate Communication Manager, Luiz Fernando Brandão, the company's challenge is to "be as big as its III – THE ARACRUZ EXPERIENCE IN customers," supporting their growth and CARAVELAS always "supplying the market from sustainably managed forests." We arrived at Caravelas with the mission to get to know and report Aracruz Celulose's Aracruz's Environmental Management experience in the city both before and during System is certified by ISO 14001. The the construction of the maritime terminal. We certificate was achieved in 1999 and sustained were to begin by interviewing Mr. Alberto ever since. In addition to maintaining one Carvalho de Oliveira Filho, the company's hectare of native forest area for each two Industrial Safety and Environmental Manager, hectares planted with eucalyptus, the who had experienced first hand the port company runs biodiversity monitoring implementation process. projects on its reserves. Moreover, since 1993 it has been studying the relationship between "The person who actually had the insight about eucalyptus plantations and the regional this place was Mr. Lorentzen, a great leader and environment, under its Watershed Project. one of the best environmentalists I've ever met," he said, praising one of the company's In the last ten years, investments made in shareholders. "Mill A was built in 1978 from a state-of-the-art equipment and technologies perspective of sustainable development, at a have enabled Aracruz to achieve significant time when few people even knew what that improvement in key indicators of meant. That was a major advance and all eco-efficiency in the production of pulp. The thanks to him. He is often on the mill floor, he company uses steam generated from the knows the engineers well, he has been the burning of eucalyptus and industrial process Chairman of the Board for years, and he's indeed waste as fuel, and it is self-sufficient in electric a man with a broad vision," he proceeded. power generation. "Then he came up with the idea of starting forest plantations here, and bought the land The pulp bleaching process, formerly where Aracruz Celulose's maritime terminal is accomplished by using chlorine, has been located today, already thinking ahead about modified. The old technology was proven to ocean transportation," he reported. cause environmental impacts in other countries where it was used, with resulting The company already possessed some effluents being discharged into closed plantation lands in Bahia when a new law ecosystems such as lagoons and lakes. approved in Espírito Santo forbade any Although no such impacts had been expansions of the company's eucalyptus demonstrated to occur in Brazil, a choice was plantations in the state. The investments made to replace the technology. needed for increasing its productivity in already planted areas and the idea of expanding its Also as part of its Environmental Management Bahia plantations thus gained more System, Aracruz monitors the marine importance. But there was already a concern environment near its facilities and, through about transportation. "One of the risks

3 Casos FDC – CF 0402 involved was the possibility of the federal centers in the world, would be necessary highway being privatized. If tolls had to be because the existing access could only be used paid, the cost of timber would increase a lot. during high tide. Besides, construction of Fiberline C meant an increased demand for wood, with "We felt that the biggest problem would arise transportation by land becoming unfeasible. when the community realized what we were Costs would be high and the road would be going to do. We went talk to the mayor to seriously jammed with almost 500 trucks show the project publicly, because we at transiting everyday, considering only those Aracruz thought that it would be important working for Aracruz," explained Alberto. to do so even before starting the licensing process," said the company's Industrial Safety It was necessary to make an alternative mode and Environmental Manager. feasible, so as to reduce costs, while preventing increases in accident rates and road traffic jams. "We gathered about 400 people at the 'Clube Then, Aracruz realized that it was time to put dos 40' (the town's largest venue for such into practice the idea of maritime events), and off we went to present our case. transportation. In 1998, the Forest Manager But we had just limited information at the Tadeu Mussi de Andrade, responsible for the time. This was perhaps our biggest mistake. project, and the Transport and Wood Handling We should have got better informed ourselves Manager, Fábio Velloso, started the technical before presenting the project," he admitted. and financial studies to verify the feasibility of "For instance, they asked us what would the the maritime terminal in Caravelas. barge's speed be, and we didn't know the answer. Then someone said "48 knots," which Concluded the first stage of the analysis, the is an absurd figure, four times the actual project was presented to the Aracruz speed, and the people attending the meeting shareholders, who approved it. At that point, were really impressed." the environmental licensing process that depended directly on the approval of the nation's But the population did not seem to be much environmental agency was iniatiated. "That was concerned about the barge's speed. "What when I got in the loop," said Alberto de Oliveira. happened was that the population really cheered the terminal as an opportunity for new At that point in the interview, we were jobs to be offered, in addition to representing a interrupted by Ismail, an Aracruz employee new source of tax revenues," according to who carried with him a "budião," a fish Alberto. Councilman Hideraldo Beline Passos commonly found in Southern Bahia, for confirmed the story. "The city was hoping for dinner. Alberto requested that the fish be left something like that, to put an end to apathy marinating in seasoned sauce, while he told and morbidity. In the past, Caravelas had us how the whole story had begun. already been involved with transportation of timber, salt, coffee, it had a port, airport, railway, but, bit by bit, it lost it all. It was doomed to become a ghost town. So, the entire ARACRUZ PRESENTS ITS PROJECT TO population wanted the terminal." THE COMMUNITY "But the NGOs came all over us," Alberto In order to render the maritime terminal remembered, recalling a meeting they had operation feasible, it would be necessary to with the community: dredge a canal linking the Caravelas River to the sea, totaling 3.8 km in length, 90m wide "The Baleia Jubarte Institute (or Humpback and 5m deep. Two dredges would haul out Whale Institute), the IAPA, the Ecological 880,000 m3 of underwater sediment. That Patrol and the Conservation International. work, planned by Danish Hydraulic They came all over us. The Baleia Jubarte Institute(DHI), one of three main water study Institute was especially aggressive. They said

4 Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal the project was unfeasible, for this region was A process then began in order to verify the risks sacred and must be preserved. And we still posed to the region's coral by the dredging did not know what to say, at that point. This works. Upon a suggestion made by Prof. Clóvis was when we started to realize that they, too, de Castro, the coral located north of Caravelas had scarce information, as deeper studies on were also monitored, despite the fact that the the region were lacking. So, Aracruz ocean currents move north-southwards and, committed to providing all the answers to the therefore, coral reefs located south from the questions raised." city in places such as Nova Viçosa and Sebastião Gomes, were under greater threat. Alberto then explained that the NGOs' participation became extremely important, as Monitoring was to be done as follows: a glass they put forward the issues for which Aracruz is placed on the reef, and later it is removed then strove to find consistent, satisfactory and taken to the lab in Rio de Janeiro, for answers. analysis. In case it shows similar sediments as the ones taken from the dredged region, it has been proved that the work would damage the reef. The main NGOs from the South of FIRST CHALLENGE: THE CORAL REEFS Bahia, still skeptically, watched the process from really close up. Initially, the main concern was in regard to the region's coral reefs, which might be When this class about coral monitoring ended, affected by sediments removed during the the hotel waiter came to tell us that the dredging process. First, studies on that issue "budião" was already soaked in marinating were conducted by the Danish Hydraulic sauce and the grill was ready for the fish. He Institute, which designed the canal. After then asked us if we would like anything to that, Aracruz started monitoring the influence drink. "Not now," we said. And proceeded of dredging on local coral. with our conversation.

"If there was any threat to them, we would have given up. One of the NGOs approached Mr. Lorentzen during the process, and he THE PARTNERSHIP WITH THE BALEIA assured them that, if it was demonstrated that JUBARTE INSTITUTE the company would cause any damage, then he would himself take the project away from "The NGOs stood united and it seemed that Caravelas," recalled Alberto. all they wanted was to find arguments against the project," Alberto recounted, visibly with "We then went out looking for the best coral less resentment than pride in his company experts in Brazil. We found two of them: having overcome that challenge. "But, when Professor Zelinda, from the Federal University we brought Prof. Clóvis before them, the of Bahia, and Professor Clóvis de Castro, from Baleia Jubarte Institute saw that Aracruz work the Federal University of Rio de Janeiro. We was serious, and decided they wanted to read went talk to them, and Professor Zelinda said the project," he recalled. that she would agree to review the project, but she would not work for Aracruz, as she "At the time, there were opinions against our wouldn't for any corporation. Professor Clóvis participation, as the image of companies – not de Castro said he accepted it, but he only in Brazil but worldwide – is not too good, demanded guarantees that, whatever his in part due to their own history. But, in findings were, they would be published as he internal discussions, we took the decision to wrote them, without any changes. Aracruz participate," according to Valério Arbex, agreed to his demands and we brought him manager of the Baleia Jubarte Institute. "We to Caravelas," he said. saw that Aracruz had a level of concern beyond the IBAMA requirements, and was

5 Casos FDC – CF 0402 keen to preserve the company's good image. THE LICENSING PHASE Our intention was to help minimize the impact caused by the terminal, for there will "So, with the partnership with the BJ always be some impact," he added. Institute things became easier?" we asked. "No, when we went for the licensing phase, "For us, the important thing is to have things got complicated," he remembered. In independence. We are sponsored by Petrobrás, a meeting with the CRA (Environmental and have already taken position against the Resources Center), a state body, and with the exploitation of some oil blocks that, in our IBAMA (Brazilian Institute of the opinion, would be damaging to the Environment and Renewable Natural environment. Aracruz never asked us to Resources), a federal body, it was decided that change a report, either," Valério assured us. the license for dredging would be up to IBAMA, while the CRA would be in charge The first question raised by the Institute was of licensing the port. in regard to the barges' route. They feared that they would cause discomfort to the On the first project of the terminal delivered whales, or even run over them. Aracruz then to the Environmental Resources Center, a rocky volunteered to finance studies that would dam was scheduled to be constructed, which enable the BJ Institute to determine the best would destroy part of the mangrove swamps route for the barge-ships, and assured them in the region. The technicians from CRA were they would follow the route as indicated. immediately against this and that caused Aracruz, in a partnership with Jaakko Poyry This marked the beginning of a partnership Technologia, the company responsible for the that would help biologists to learn more about port project, to change the idea and replace the the habits of humpback and franca whales, dam with a bridge over the mangrove area. The which annually come to the coastal waters cost was higher, but with that they could of Southern Bahia and Northern Espírito reduce the opposition from CRA's technicians. Santo, from July to December. The humpback is the fifth largest whale species in the world, Once the Environmental Impact Assessment and is currently endangered. (called EIA/RIMA) had been completed, it was registered at the CRA, at IBAMA and with the With investments amounting to R$700,000 Navy, which soon demonstrated its support of (approximately US$240,000) in six months, the the initiative, saying that Brazil needed to researchers had adequate conditions to carry explore its coast more intensively. Two public out a complete study, which included hearings were held in Caravelas, one as part of overflights to count whales and boat trips to the proceedings at the CRA and the other identify each individual from its tails, which, relatively to the request for licensing by IBAMA. for this species, are like a fingerprint. In possession of findings from these studies, the "We attended the hearings and took a lot of Baleia Jubarte Institute could define safe routes pressure from the politicians, who wanted the along which the barge-ships should navigate. company to come to Caravelas by any means," recalled Henrique Horn Ilha, chief of the "It does increase our costs and travel time, but Abrolhos Marine National Park, a body we follow the route strictly. Even knowing subordinate to IBAMA. "They saw it as an that an accident involving whales is a very opportunity to regain their former economic rare event, and that about three thousand relevance, and feared that, should it get too ships cross these waters every month and troublesome, Aracruz would look for other nothing happens, we are taking no chances," alternatives. The population was also in favor Alberto explained. of the project, today the number of local people against it is larger, as some of their initial requests could not be met. At that time, only I was bold enough to oppose it," he

6 Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal reported. "I was attacked on the radio, people the world, calling me insane, bad things were approached me on the streets to complain said about me and Aracruz in various about my attitude, but I was convinced that published articles and reports". Now that the I had to show the company how unique this worst is over, I'm convinced that the region is, and that we must make sure they environmentalists play a crucial role. They understand it. I wanted to be absolutely sure are the ones who raised the difficult that we wouldn't be causing any damages questions, asking, for example: 'Have you either to the coral or to the shrimp." considered that the boats' engines might affect the whales' hearing?' After this question "This licensing phase was hard," said Alberto. was asked, we went about researching the "There were moments when I asked myself: issue. The fishermen also gave their views, 'Is this really going to work?' But then I lifted they actively participated," he recalled. my spirits and said: 'I do believe in this business, and I'll carry it through'. One day Aracruz was granted the Installation License we were summoned to a meeting at CRA that in February 2002. The monitoring of the reefs, looked more like a Parliamentary Inquiry which started a year and a half earlier, still Commission. We stayed there from 9 a.m. to went on during the dredging work. Until now 5 p.m., without a break, explaining the the reports confirm that the sediment is not project. The board started to get fed up. But affecting the reefs. The marine organisms from it was not good. Aracruz had no interest in the region and the shrimp near the region were exercising any political pressure, trying to also being monitored. achieve things through the authorities but losing popular support. It would be worse for The value of environmental compensation the company," said the company's Industrial requested by the CRA was about R$500,000 Safety and Environmental Manager. (US$170,000). Yet IBAMA asked for Aracruz to be a sponsor for works and initiatives totaling some R$1.6 million (US$510,000). A mangrove region, considered the cradle for LOCATION LICENSE marine lifeforms, was recovered and, to assist the recovery of other areas, the Mudas Tadeu Alberto de Oliveira was also pleased when both Mussi Nursery was created, where typical sides managed to reach an agreement. "When mangrove species are cultivated. Furthermore, finally everything was approved, we obtained more than 7,000 native trees were planted in the Location License, which comes with a the area of the maritime terminal. series of conditions and, when all of these are fulfilled, only then you get the Installation Moreover, an IBAMA Visitor Center is being License. Aracruz Celulose's position was built in Caravelas, to be visited both by tourists always one of meeting all commitments made going to Abrolhos and by the city's inhabitants. during the meetings," he stated. On a request by the Institute, the company also hired an independent auditing firm to "After we got the license, the problems were monitor the terminal's activities. over. At the worst moments, it once happened that, as a few colleagues and I sat at a Aracruz also finances the installation, in restaurant table, another group immediately Caravelas, of the CEPENE (Northeast Coast got up and left, ostensibly refusing to share Fishery Management and Research Center), the same room with us. Today, in contrast, a part of IBAMA as well, which will benefit Aracruz Celulose's employees have fit in well some 350 families living on the seashore who among locals, and the company is widely derive their subsistence from the mangrove respected," he commemorated. swamp. Main objectives of the CEPENE include monitoring and management of "I had to put up with many environmentalists natural resources, environmental information calling me names. We got e-mails from all over and education, as well as building associations

7 Casos FDC – CF 0402 of seashore populations and implementing the largest possible number of positions to be community actions towards valuation and taken by locals, as the terminal construction preservation of environmental resources. got under way. The company agreed, but soon realized that, in order to do that, it would have Architect and urbanist Ulisses S. Scofield, a to train the inhabitants of Caravelas, who native of Caravelas, is the project's operational were mostly fishermen. coordinator. He returned to his native town after 27 years, with plans to implement the Through a partnership between the company, Center, and now with help from Aracruz, is the Bahia State Government, the Caravelas seeing his dream come true. "But our aim is Municipal Administration, and the Senai-BA, to remain independent. Otherwise, the the Professional Qualification Program was project will not succeed," he said. created. Since then, 1,416 persons have been trained in 28 courses, 14 of which focusing Installation started with the reform of an old on Aracruz Celulose's needs and another 14 house in Caravelas, which further gained in other fields. lodging quarters to host researchers, and a hall for community meetings, environmental Selection of candidates to the job positions education lessons and professional training. offered at the maritime terminal was effected The project's second phase includes plans for through the SINE (National Employment an area to be used as a support base for shellfish System), without the direct participation of the collectors of the region, featuring a freezer for company. In order to be hired, the candidate storage of the production and processing unit. had to produce proof of residence. In cases "This is important to allow them to become when it was necessary to hire an employee less dependent on profiteering middlemen, from another city, proof had to be produced thus freeing themselves from this modern before a Committee demonstrating that there mode of slavery, which is implied in the fact was no one in the city qualified for the job. that they can only sell to a defined person at a specific price," explained Ulisses.

The Aracruz experience in Caravelas is yet to III – THE LUCIANO VILLAS BOAS bring good things for Southern Bahia. "A local MACHADO BARGE-SHIP MARITIME university praised us for the scientific TERMINAL contribution we made to the region, matched by no one else," Alberto said with enthusiasm. The terminal works, initiated in February 2002, "We are thinking of hiring a firm to organize generated some 400 direct jobs, 70% of which and place all this information at the disposal filled by local people of the Caravelas region. of the society," he added. Inaugurated on April 23, 2003, in Caravelas (BA), the Luciano Villas Boas Machado Barge- At that point, we were politely interrupted by Ship Terminal enables transportation of the hotel receptionist, who came to bring us – eucalyptus wood from the southern tip of quite timely – a repellant spray against Bahia down to the Erling Sven Lorentzen mosquitoes. It was getting dark, the mosquitoes' Barge-Ship Terminal in Espírito Santo. "dinner" time had arrived, and we were their main dish. Duly protected by the repellant, we The two ports (Caravelas and Portocel, at Barra went on to hear the last chapter of the story. do Riacho) are 275 km distant from each other, in a straight line, and the travel time taken by the barges to go from one to the other is approximately 12 hours, at a speed of 12.5 JOB CREATION knots. The barges are 114m long, and can carry an average 5,000 m3 of timber, the Among the community's demands, the main equivalent to nearly 100 truckloads. They are one was the creation of jobs. They wanted propelled by a push-tug capable of

8 Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal accommodating 16 people, and which makes we have equipped their boat – the Tomara – the barge into a ship – hence the name and gave them a plot of land. On the company "barge-ship". side, this is also very good, as the Baleia Jubarte Institute is the spokesperson for the company The name "Luciano Villas Boas Machado Ship- in every issue regarding whales, because it is Barges Maritime Terminal" was chosen in honor constantly monitoring what is done. After of one of the pioneer members of the Aracruz some initial mistrust, we won the Board of Directors from Salvador, Bahia's capital, environmentalists' confidence." who passed away in December 2002. "Aracruz did everything it said it was going to In order to implement the maritime transport do. This is why our word carries weight here project, Aracruz invested US$51 million, of in town, nowadays. We ended up creating which US$31 million was for the twice as many jobs as we had promised. And construction of the push-tug and three barges. the city now boasts a new inn, a new bakery. One further barge-ship and another push-tug It is growing!" will be built. Today, as one barge-ship is loaded at Caravelas, another is unloaded at Portocel, "One just has to walk down Sete de Setembro and a third one is on its way between Espírito street to see how trade is picking up," agreed Santo and Bahia. councilman Beline Passos. "Aracruz was the city's rescuer, it became our "big mamma". Giving continuity to its partnership with the Many of the things we dreamed of already Institute, the company reserves room aboard have become a reality. Now it just needs a their barge-ships' push-tugs for researchers to few adjustments, as some say that it was good accompany every trip, monitoring with sonar for the town, but for them, individually, and binoculars for the appearance of any things haven't changed much. I think that whale. "It is important to continue with this maybe Aracruz could develop our community monitoring, as their route is not rigidly fixed. further, doing small things, like the bridge that For instance, sometimes the whales swim was built by the company and that brought farther away from the coast because of many benefits to the lives of the 40 families storms," explained veterinarian Milton living in the area. Environmental projects are Marcondes, one of the new employees added indeed important, but do not affect the to the Institute's staff thanks to its community directly. There is virtually no one partnership with Aracruz. Created in 1988 as from Caravelas involved in this," he explained. the Humpback Whale Project inside IBAMA, the Institute gained autonomy in 1996, and But then he added: "But it was great that got a major boost with this partnership with Aracruz has come to town, no doubt. We do the pulp company, which practically sustains have problems, but if the company wasn't its environmental education efforts. here, it would be worse. A key person in this whole process was Alberto, as he managed to Whale monitoring continues today, and now talk to people and convince them, but this the company further finances the surveillance was a huge struggle. At public hearings, many of porpoises, found north of Caravelas. less informed people talked a lot of nonsense, "Nobody knows whether our terminal has any attacking the company, and Alberto was influence on these porpoises, but we do the patient enough to deal with all this," he said. monitoring anyway," states Alberto. To Henrique Ilha, Aracruz's ability to establish And he continues: communication with the various stakeholders proved very important at that point. "There "Today, the Institute is one of Aracruz were many participants, many groups of Celulose's partners. Because of this interest, and we managed to arrive at some partnership, they have their own staff, and conclusions. There was the genuine interest

9 Casos FDC – CF 0402 of administrators in solving related problems, company itself: it would discontinue the and the negotiating parties, both at Aracruz implementation at the moment its and at IBAMA, were very experienced people. monitoring system detected any damage to We sought solutions that would be the natural heritage. satisfactory to both sides. The company shared in the concern about environmental The time when companies viewed NGOs as risks. This job gives me a lot of self- troublemakers and NGOs saw companies as satisfaction, as it shows that it is possible to being exclusively worried about their own undertake a large project while at the same image is over. Alberto has already been the time respecting the environment," he added. honored spokesman for a graduating class, a member of a jury in a contest to choose the Aracruz Celulose's Industrial Safety and local Summer Beauty, and is about to be given Environmental Manager assured us that the the title of Honorific Citizen. company's philosophy regarding social and environmental issues significantly helped the But the company still faces another challenge: effort needed to convince the population As how to conduct the relationship with the Alberto related it: community without lapsing into paternalism, while at the same time sustaining good "The company did not have any interest in conviviality. Councilman Beline now wants coming down here and destroying everything, Aracruz to supply water to the community; polluting things, if not for anything else, councilwoman Viviane challenges the because whoever does that today is, in fact, decision of installing a nursery in a district losing money. Everything can be re-utilized which is not the one where she has her one way or another. For instance, we are constituency; the shellfish collectors' project currently studying, in association with the still dreams of sustainability, but has a long University of Uberlândia, a means to turn way to go before that. wood chips leftover on the barges into organic fertilizer. The idea would be to donate the The "budião" was just delicious. chips to the population and teach them how to use the technology so as to make money The following night, after visiting the producing natural fertilizer." Terminal, the NGOs, the City Chamber and IBAMA, we went out to the busiest bar in At that point, we had to end our interview to town, killing time before going to the dedicate ourselves to the "budião." Some of Humpback Whale Festival, thus closing a Alberto's colleagues from Aracruz had arrived, cultural week promoted by Aracruz, the NGOs and the fish was already waiting on the grill. and local schools.

The NGO people were also there; nobody stood up from their tables to walk out, but V – CONCLUSION only to greet Alberto.

The company's consistent environmental policy, along with popular support, enabled Aracruz to confront all questioning raised VI – LIST OF INTERVIEWS: about the implementation of the Luciano Villas Boas Machado Barge-Ships Maritime – Alberto Carvalho de Oliveira Júnior – Terminal. The NGOs became allies to the Enviromental and Industrial Safety project. The risks associated with the project Manager of Aracruz would no longer be incurred by the natural environment, as they were taken over by the – Carlos Alberto Roxo – Enviromental and Corporate Relations Officer of Aracruz

10 Aracruz Celulose and the construction of the Luciano Villas Boas Machado Barge-Ship Maritime Terminal

– Henrique Horn Ilha – Parque Nacional Marinho dos Abrolhos manager

– Hideraldo Beline Passos – Caravelas' Councilman

– Luiz Fernando Brandão – Corporate Comunication Manager of Aracruz

– Milton Marcondes – veterinarian of Instituto Baleia Jubarte

– Ulisses S. Scofield – operational coordinator of the Centro de Pesquisa e Gestão Pesqueira do Litoral Nordeste (CEPENE)

– Valério Arbex – Instituto Baleia Jubarte manager

– Viviane Martins – Caravelas' Councilwoman

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