The Pulp Invasion: the International Pulp and Paper Industry in the Mekong Region by Chris Lang

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The Pulp Invasion: the International Pulp and Paper Industry in the Mekong Region by Chris Lang The Pulp Invasion: The international pulp and paper industry in the Mekong Region by Chris Lang World Rainforest Movement Cover design: Flavio Pazos Copyright ©: World Rainforest Movement International Secretariat Maldonado 1858, Montevideo, Uruguay Tel: +598 2 413 2989, Fax: +598 2 418 0762 E-mail: [email protected] Web site: http://www.wrm.org.uy Northern office 1c Fosseway Business Centre, Stratford Road, Moreton-in-Marsh, GL56 9NQ, United Kingdom Tel: +44.1608.652.893, Fax: +44.1608.652.878 E-mail: [email protected] The contents of this publication can be reproduced totally or partially without prior authorization. However, the World Rainforest Movement should be duly accredited and notified of any reproduction. Published in December 2002 ISBN: 9974 - 7608 - 8 - 7 This publication was made possible with financial support from NOVIB (The Netherlands) and with guidance from TERRA (Towards Ecological Recovery and Regional Alliance - Thailand) The Pulp Invasion: The international pulp and paper industry in the Mekong Region Contents: About this publication 5 Introduction 5 CAMBODIA – Land-grabs, logging and plantations 12 1. The land law and the forestry law Land Law Forestry Law 2. Rubber and oil palm plantations 3. A history of fast-growing tree plantations in Cambodia 4. The Pheapimex concession References LAOS – Subsidies to a struggling plantation industry 24 1. Overview of the situation today 2. International support to the industry Asian Development Bank JICA – Forest Conservation and Afforestation Project Sida – Lao-Swedish Forestry Programme 3. Companies BGA Lao Plantation Forestry Asia Tech Burapha Brierley References THAILAND – The fast-growing pulp and paper industry 42 1. Overview of the situation today 2. Thai government support to the pulp and paper industry Royal Forest Department (RFD) Forest Industry Organisation (FIO) Carbon Forestry 3. International support World Bank Asian Development Bank Canada UK Japan Australia Finland Sweden 4. Companies Advance Agro Phoenix Pulp and Paper Siam Pulp and Paper Shin Ho Asia Tech Stora Enso Commonwealth Development Corporation Shell Jaakko Poyry SCC Natura Machinery suppliers 5. Impacts and Protests References Chris Lang VIETNAM - Deforestation, reforestation and industrial plantations 97 1. Introduction 2. Vietnamese Government Programmes supporting plantation development Programme 327 – Regreening Vietnam? Five million hectares reforestation programme Land law Other laws and incentives 3. International support Tropical Forestry Action Plan Food and Agriculture Organisation PROFOR World Food Programme European Union World Bank Asian Development Bank Swedish International Development Cooperation Agency Germany Finland Australia Netherlands Japan 4. Vietnam's Pulp and Paper Industry Bai Bang Viet Tri Tan Mai Paper Company Dong Nai Paper Material Company Kontum Paper Mill Mang Yang Pulp and Paper Company Muc Son Paper Enterprise Binh Duong Haiphong Paper Company (HAPACO) Cau Duong Le Hoa Paper Company NDK Paper Pulp Manufacturing Saigon Paper Company Quy Nhon Plantation Forest Company Ltd Nissho Iwai Oji Paper Itochu Corporation Vijachip Ba Ria-Vung Tau Province Kien Tai Forest Plantations and MDF Production 5. Consultants, Companies and Research Organisations GFA Terra Systems Jaakko Poyry ORGUT Elof Hansson Commonwealth Scientific and Industrial Research Organization (CSIRO) Australian Centre for International Agricultural Research (ACIAR) Commonwealth Development Corporation (CDC) Centre Technique Forestier Tropical (CTFT) References The Pulp Invasion: The international pulp and paper industry in the Mekong Region About this publication: This report was produced in 2000-2001 for the World Rainforest Movement, looking at the current state of the pulp and paper industry in the Mekong Region: Thailand, Laos, Cambodia and Vietnam. The research covers the extent of plantations and their social and environmental impacts in the region, the role of the various institutions in supporting the expansion of industrial plantations, and the patterns of local resistance to ecological damage and loss of livelihood. It was written to encourage debate on the issues raised about the pulp and paper industry and the development of industrial plantations in the Mekong Region. The aim of the report is not to provide "solutions" or "recommendations" but to support the rights of communities to make their own decisions over the management of their rivers, farmlands and forests. Introduction: The last ten years has seen a massive increase in the area of fast-growing tree plantations in the Mekong region. Proponents of plantations often justify them on environmental grounds such as reforestation, or to prevent soil erosion or flooding, or to reduce pressure on native forests, or to alleviate poverty, or to combat global climate change. However, the main beneficiary of fast-growing tree plantations is the pulp and paper industry. As the area of plantations has increased, more and more villagers in the Mekong region have seen their forests, fallows and grazing lands replaced with eucalyptus, acacia and pine monocultures. The large-scale pulp and paper mills in the Mekong region were all built on the advice of northern consultants, funded with northern “aid” and supplied with northern machinery. In addition to a cheap supply of wood, paper production requires huge amounts of chemicals, water and energy. In the Mekong region many of the paper and pulp mills have resulted in high levels of pollution, releasing thousands of polluting substances into nearby rivers, including dissolved chemicals and wood particles. A range of actors works to support policies supporting the promotion of such plantations, including the World Bank, the Asian Development Bank (ADB), export credit agencies, bilateral aid agencies, forestry and engineering consultants, forestry research organisations, suppliers of pulp and paper making machinery, industry associations and alliances and even some NGOs. Perhaps the most notorious forestry consulting firm is the Finnish company, Jaakko Poyry. Since 1958, when Dr Jaakko Poyry founded the company, it has grown to become the world's largest forestry and engineering consulting firm, with 4,500 employees. The company is responsible for more than 350 pulp and paper mill projects, in 100 countries around the world. In the Mekong region Poyry has worked for Siam Pulp and Paper, Phoenix and Advance Agro in Thailand. In Laos, Poyry worked on the ADB's "Industrial Tree Plantation Project". In Vietnam, Poyry played an important role in the development of the Bai Bang pulp and paper mill and recently worked on proposals for a new pulp mill in Kontum province. The impacts of fast-growing tree plantations and of pollution from pulp and paper mills have often been devastating for local communities, their forests and their rivers. In Thailand, farmers have formed networks with NGOs to protest against the spread of eucalyptus plantations, particularly in the northeast of the country. In Cambodia, villagers concerned about losing their community forests have petitioned the government and held meetings with government officials. In Laos, villagers have declared land as communal grazing land and forest in defiance of the company attempting to enclose the land as fast- growing tree plantations. Many of Vietnam's plantations have been damaged by grazing, fire or simply cut down by villagers who need the land. What the government and its advisers see as "barren land" or "degraded land" is in fact often already being used by villagers. 5 Chris Lang CAMBODIA In Cambodia, there are to date few areas of monoculture fast-growing tree plantations. However, the institutional support for plantations is already in place. In recent years, the World Bank and the Asian Development Bank have been involved in rewriting Cambodia's Land Law and Forest Law. The World Bank-supported Draft Forestry Law fails to differentiate between plantations and forests and states that a forest can be "natural or planted". This deliberate confusion between a crop of planted trees and a forest or woodland helps the promotion of plantations in the country. In effect it allows companies to continue logging. Simply by claiming to be in the process of "reforesting", they can disguise the reality: the destruction of villagers' community forests, grazing land, commons and fallows, to be replaced by even-aged stands of one of two species of fast-growing (often alien) trees. During the 1990s, the government allocated a series of large scale logging concessions which reduced villagers' access and rights to forests, and caused massive damage to the forests themselves. NGOs have documented these problems and, as a result, logging concessions have become more and more controversial. In January 2002, the Cambodian government suspended all logging concession operations. In addition to the logging concessions, however, the government has recently granted land concessions covering vast areas of Cambodia. These land concessions provide the concessionaires with control of land and in at least one case the purpose seems to be the establishment of huge areas of fast-growing tree plantations. In 2000, the government awarded a concession for Cambodia's first large-scale tree plantation to the Pheapimex Group, one of the largest and most destructive logging companies in Cambodia. Pheapimex's concession covers 300,000 hectares of "spare forest" land in the provinces of Kampong Chhnang and Pursat. Pheapimex plans to plant eucalyptus and acacia trees
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