World Rainforest Movement

Brazil: Historic federal court decision sentences Veracel Celulose (Stora Enso-Aracruz) for environmental violations

On 17 June 2008, a federal court in the city of Eunápolis, in the state of Bahia, passed sentence in a public civil suit filed in 1993 by the Brazilian Federal Public Prosecutor’s Office against Veracel Celulose – known at the time as Veracruz Florestal – and the government environmental agencies CRA (Centre for Environmental Resources, responsible for environmental licensing in the state of Bahia) and IBAMA (Brazilian Environmental Institute, the national environmental authority).

Under the federal court sentence, Veracel has been ordered to replant, with native trees, all of the land encompassed by the licences it was granted between 1993 and 1996 to plant eucalyptus trees. This means that an area of 96,000 hectares currently covered by the company’s eucalyptus plantations must be cleared and reforested with tree species endemic to the Atlantic Forest, one of the planet’s most biologically diverse biomes, as well as one of its most seriously endangered. The company was also sentenced to a fine of BRL 20 million (USD 12.5 million) for deforesting areas of the Atlantic Forest with tractors and bulldozers during its first years of operation (1991-1993). Veracel has announced that it will appeal the decision.

Veracel Celulose is a joint venture formed by two of the world’s biggest pulp and paper companies: Swedish-Finnish pulp giant Stora Enso and Brazilian-based Aracruz Celulose, each of which owns 50% of shares in the company. Veracel controls approximately 205,000 hectares of land in the extreme south region of the state of Bahia, with monoculture eucalyptus plantations accounting for around 96,000 hectares. Its pulp mill produces roughly 900,000 tons of pulp for export annually. Half of this production belongs to Aracruz, and the other half to Veracel.

This recent Brazilian federal court decision can be described as historic for a number of reasons:

– The decision means that justice has been done in the struggle waged for the last 15 years by the Socio-Environmental Forum of the Extreme South of Bahia and the Alert Against the Green Desert Network to have Veracel Celulose sentenced for its role in the destruction of the Atlantic Forest in the region. This destruction was documented in a videotape released by Greenpeace, which led then Minister of the Environment Fernando Coutinho Jorge to order a halt to Veracel’s eucalyptus plantation project, despite the company’s attempts to deny and camouflage the environmental damage caused. At the same time, this is the first time ever that a court decision has penalized an environmental violation committed by a large eucalyptus plantation company. While other companies have committed the same crimes, none have ever been sentenced for them.

– The decision means that justice has been done in the struggle waged by the Socio-Environmental Forum and the Alert Against the Green Desert Network, which have always maintained that companies like Veracel have been authorized to operate illegally, without complying with the rules and criteria for environmental impact assessments (EIAs). In 1994, three years after it had begun planting eucalyptus trees, Veracel commissioned an EIA for its plantations and the construction of a pulp mill, under orders from the Ministry of the Environment. The assessment was hastily prepared by the Finnish firm Jaakko Poyry (currently known as Poyry), which subsequently benefited from the plantation project by being contracted for consultancy services. At the time, the EIA was harshly criticized by auditors hired by the CRA and by NGOs. Nevertheless, the CRA granted the licences that the company needed to further expand its plantations and build the pulp mill.

– This decision marks the first time that the courts have stood up against the political and financial power of companies like Veracel and its owners, Aracruz and Stora Enso. These companies seize unlimited control over vast areas of land, finance political campaigns at every level and use their influence over public officials to obtain rules, incentives and financing to facilitate their investments, and hire the best legal firms in the country to avoid culpability for damages in environmental, social and labour-related lawsuits.

It should be stressed that this is not the first time that Veracel has been fined or questioned by the competent agencies for committing illegalities:

– In March 2007, Veracel was fined BRL 400,000 (USD 250,000) by the federal environmental agency, IBAMA, for the illegal use of a toxic substance (the herbicide Roundup) on 31.6 hectares of land in a permanent preservation area.

– In December 2007, the company was fined BRL 360,900 (USD 225,563) by IBAMA for obstructing the natural regeneration of the Atlantic Forest through eucalyptus plantation projects on 1,203 hectares of land within this endangered biome.

– The company has 7,428 hectares of plantations bordering the Monte Pascual and Pau Brasil National Parks, in violation of an explicit recommendation from the Federal Public Prosecutors Office in Bahia for companies to refrain from planting more eucalyptus trees within a 10-kilometre radius of the region’s natural parks, in compliance with federal regulations.

What is most remarkable of all is that, despite these antecedents, in March of this year, SGS QUALIFOR granted Veracel Celulose FSC certification of environmentally appropriate forest management for its monoculture eucalyptus plantations. The certification was issued in spite of severe criticisms voiced by local and international civil society, expressed in a letter signed by 347 organizations in August 2007. Moreover, even though an audit conducted by the FSC’s accreditation agency ASI in March of this year documented various reasons for which FSC certification should never have been granted, the audit report did not recommend revoking the certification.

It is obviously in the company’s interest to enjoy the legitimacy granted by the FSC label, given the fact that it is currently in the process of doubling its plantations and building a new pulp mill. The 2007 annual report of one of its two shareholders, Aracruz Celulose, quoted in the daily A Gazeta on 16 January 2008, states that: “Before the end of 2008, approximately 70% of the forest base needed to double Veracel’s operations will have been acquired. The new production line will have a capacity for 1.4 million tons of pulp annually, which will raise the unit’s nominal production to 2.3 million tons annually (50% for each of the partners, Aracruz and Stora Enso).”

In addition, Aracruz’s own website announced that “USD 65 million has already been invested in the acquisition of 35,000 hectares of land and forests.”(http://www.aracruz.com.br/show_press.do?act=news&id=1000557&lang=1).

This expansion will mean the continuation of the negative impacts on the environment that have long been denounced by local communities living near the company’s monoculture tree plantations. It is extremely troubling when the FSC notes in its own audit report that “the company does not have appropriate procedures for monitoring water and environmental impacts, before, during and after forestry operations…” This in itself is more than enough reason for not certifying the company.

With regard to the doubling of the company’s plantations and the new pulp mill, announced in the official Aracruz annual report, Veracel made this surprising claim: “At the end of the ASI audit, Mr. Alípio (forestry director of Veracel) stated to the ASI and SGS auditing teams that no decision had been made regarding the expansion of Veracel’s activities. He indicated that for the moment the shareholders had only given the green light for initiating a viability and impact study for this project.” (FSC Surveillance of SGS Qualifor in 2008, Forest Management Audit to VERACEL, Brazil, 26-28/03/2008)

Does this mean that the previously quoted statements by Aracruz are false? Or is the forestry director of Veracel lying?

These blatant contradictions, in addition to the facts outlined earlier, should be more than reason enough for the FSC to immediately revoke the certification granted to Veracel Celulose.

At the same time, it is crucial for Brazilian and international civil society to take action to ensure that the Brazilian federal court’s decision is upheld, given its significance for all those who are opposed to the activities of these companies, and its special importance at this time of rapid expansion by Veracel and its owners, Aracruz and Stora Enso, which will mean even more negative impacts on local communities and the environment caused by projects of this kind.

It is for this reason that the Socio-Environmental Forum of the Extreme South of Bahia has formulated a motion of support for the Public Prosecutors Office of Bahia, to congratulate this Brazilian public agency, as well as the Federal Court of Bahia for its ruling in this case. The Socio-Environmental Forum invites everyone to sign this motion, which can be accessed at: http://www.wrm.org.uy/countries/Brazil/motion_support.html

By Winnie Overbeek, Alert Against the Green Desert Network/Brazil