ITP in South America Challenges and opportunities

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1 ITP in South America Challenges and opportunities Jan-Erik Nylund, SLU 2013

2 Major producers of pulp and paper 2010 Source: RISI / BRACELPA 2012

3 Actual and potential productivity of ITP m3/ha/year, Source Pöyry/BRACELPA 2012

4 Obstacles and resistance against land use for ITP Country-specific issues regarding i.a. tenure and land use NGO campaigns against ITP Impact of socio-economic change and landscape transformation

5 Chile 10% of total area in forestry region already under ITP Armed conflict over former indigenous land in Araucanía core area Much remaining land covered by degraded native forest

6 Uruguay Pulpmill ventures seen as economic diversification City people worried over foreign dominance of agribusiness, not over remote tree plantations Very sparse population in most forestry areas Political leadership accepts one or two more pulp ventures Land zoning allows for this without entering contested areas BUT Long (=costly) timber transports ITP changes natural vegetation much than extensive pasture Lowered water tables cause trouble to some rural settlements

7 Brazil Social conflicts People without land rights evicted, end up in favelas Political conflicts Lack of land reform political actors focus on forest plantations, not pastures or cropland Dozens of land occupations at every mill Resistance to landscape change Strong preference for pastoral or farming landscape Water balance massive scale of plantations cause lowered water tables

8 Brazil: Plantation area and export value of processed products of selected crops ha USD mi. USD/ha Soy products Cane / alcohol Coffee Maize Cotton ITP / P&P Source: BRACELPA 2012 from public statistics

9 Argentina 1 major pulp mill, 1,2 mi ha plantations, mostly in Misiones and Corrientes. Foresters claim 20 mi ha are suitable for ITP. Valuable natural and secondary forest reserves in the North-East must be protected Concerns about salinisation and and effects on the Guaraní aquifer National disinterest in forestry Great landowners have traditionally not invested in industry Erratic economic policy provides disincentives for large-scale investments and has discouraged foreign investment After the Fray Bentos conflict, distrust against papeleras has escalated

10 NGO campaigns Unite ecological and social concerns Unconditional no to all ITP Advocates new economic order High organisational and communication skills Combine science competence with biased use of hard evidence Strong point: elucidating social consequences of large-scale tenure land use change Keeps pressure on companies to improve CSR and ecological profile Does not relate criticism to ITP land use to other forms of agribusiness land use.

11 There is a growing distrust against industrial forestry and forest industries worldwide! In South America, changes in the preferred agro-pastoral landscape Transition from subsistence farming to (global) market agriculture In the Nordic countries The gradual change from semi-natural forest to more intensive forest management Everywhere Discontent when powerful companies don t anchor their activities in the local communities

12 Countermeasures? Greenwashing and arbitrary CSR activities not enough! The Nordic experience show that succesful forest business means diversified activities, creating a multi-actor forest cluster, engaging benefitting local/regional society in several ways

13 The Nordic model is threatened as forestry means little to the urban majority, having little connection with or benefit from industrial forestry. Public confidence is still high, but the criticism in media erodes it. The forest industry in Chile & SE Brazil involves many land owners and a variety of industry, and is seen as legitimate The megaton mill ventures create industrial islands with a minimum of local engagement. While the plight of former, already dirt-poor landusers is evident, there are few local beneficiaries to stand up and defend forestry as a legitimate business Is this economically and socially sustainable?

14 Further information on ITP in South America

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16 Brazil: Export pulpmills - Aracruz 1974 (now F) - Jari (1978) / 2004) (Orsa) - Cenibra (1977) 1987 (J) - Bahia Sul 1993 (S) - Guaíba 198x /2008 (CMPC) - Veracel 2005 (F + StoraE) - Tres Lagoas a 2009 (F) - Tres Lagoas b 2013 (Eldorado) - (Maranhão 2014 (S)

17 Pulp and paper production, Brazil Source: BRACELPA 2012

18 Chile: Industrial tree plantations total mean Afforestation ha ha Reforestation ha ha mean mean Small owners ha ha Other owners ha ha Pine annual plantation: : 59% : 57% Pine total area 68% Eucalypt total area 23% Total area of regions VII XI Total plantation area Total forest and ITP area (incl Patagonian regions) ha ha ha

19 Short fibre pulp production cost 2003, USD /t Sweden 397 Canada BC 487 Arauco 269 Arauco 52% pulp export 93% CMCP 48% pulp export 80% (2003 data)

20 Uruguay: existing forest, plantations and possible expansion

21 Uruguay: Forest and ITP areas Natural forest and tree covered areas ha Eucalypt plantations ha Pine plantations ha Total area identified for ITP : 1,5 2 million ha Land use 2006 Beef ha Forestry ha Dairy ha Grains ha National territory, total ha Landsat 2011

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