Movimiento Mundial por los Bosques Tropicales

Briefing on Finnish Consultancy Firm Jaakko Poyry

Solo disponible en inglés –

By Larry Lohmann

Forest degradation is associated with the activities of loggers, timber consumers, paper companies, and multilateral agencies. Often overlooked is the role of a much lower-profile set of actors: forestry and engineering consultancy firms.

This small group of companies, based largely in Europe, North America, Australia, New Zealand and Japan, produce no wood or paper themselves and are seldom to be found wielding a bulldozer or chainsaw. Their business is merely to help other firms promote, investigate, plan, design and set up pulp and paper mills and logging and plantation operations. Yet these consultancies exercise global clout out of all proportion to their size and numbers. With comfortable links to universities, aid agencies, machinery and paper firms, and government bureaucracies, they have helped blaze trails through the forest world from Tasmania to the arctic tundra.

The company

Preeminent among such firms is the Nordic-based Jaakko Poyry Oy, the largest forestry and engineering consulting company in the world, with an estimated 40 per cent of the forest industry consultancy market worldwide and a turnover of more than US$300 million in 1994 alone. Poyry, which absorbed the large Swedish consulting firm Interforest, has over 60 offices in 25 countries around the world -11 in Brazil alone- and thousands of employees, and has been involved in hundreds of major commercial forestry and pulp and paper projects in the last two decades across the Americas, Africa, Asia, Oceania and Europe (1).

Poyry’s work acts as a growth hormone for industrial forestry. Wherever possibilities for commercial exploitation beckon, the firm’s consultants are likely to be on the scene early, lobbying governments, evaluating forest and land resources, lining up contracts from close colleagues in aid agencies, subcontracting lucrative work out to potential local allies, doing feasibility studies or market surveys, mapping out logging roads, establishing tree nurseries, and designing or engineering factories. Relying on contracts both from state and international agencies and from the private sector, Poyry has served as a crucial go-between linking the interests of international and national business and officialdom and bringing together machinery and techniques with land and forests.

 Moving South

Historically, Poyry’s bread-and-butter contracts have come from industrialized countries, but what with an increasingly globalized paper industry, some of the company’s most destructive recent activities have been carried out elsewhere.

Indonesia, with its many new pulp mills feeding off native forests and exotic monoculture plantations, is one example. A 1984 contract with the World Bank and the Indonesian government to analyze the country’s paper and pulp possibilities helped Poyry land over 30 subsequent contracts to plan or implement public and private sector projects to supply mills with pulpwood from natural forests or plantations. In addition, the company has picked up scores of contracts — some of them subsidized by Finnish taxpayers through Finnish Export Credit and FINNIDA — to plan or engineer pulp or paper mills for Indonesian clients or do market surveys for Western machinery manufacturers such as Ahlstrom, Valmet-Tampella, Kvaerner Pulping and Sunds Defibrator. Small wonder, then, that when a gigantic pulping operation like Raja Garuda Mas’s recently-completed Riau Andalan goes up, it is to a plan formulated by Poyry, and often under Poyry supervision. Small wonder, too, that Poyry continues to benefit from smaller agreements, as when Finnish Export Credit and FINNIDA granted a 13-year interest-free loan worth US$4 million for a forestry development and training centre for Indorayon in Northern Sumatra (2).

 A subsidized company

Poyry has built its power and prosperity partly on handouts from governments. Finland’s FINNIDA and Sweden’s SIDA have been particularly generous in channeling tax revenues to Poyry for plans and technical services for pulping, logging and plantations in the Third World. Among the countries affected by this largesse have been the Philippines, Thailand, Sri Lanka, Tanzania, Nepal, Zambia, Kenya, Viet Nam and Mozambique (3).

Other government subsidies for Poyry have been transferred through multilateral agencies such as the Asian Development Bank (ADB), African Development Bank, Inter-American Development Bank (IDB), the European Bank for Reconstruction and Development, and the World Bank. The sums involved can be large. The World Bank alone provided US$1.416 billion in cheap finance for the establishment of 2.9 million hectares of mainly commercial tree plantations between 1984 and 1994. In addition to helping Poyry plan the buildup of Indonesia’s pulp and paper industry (1984 and 1987-8, involving the World Bank and ADB), multilateral agencies have funded Poyry studies of investment opportunities in Latin America, Viet Nam and Nepal (1981-2, 1990-1, and 1986-present, involving IDB and ADB) and forestry development plans for Cameroon, Central African Republic, Congo, Ethiopia, Ghana, Nigeria, Sudan, Bangladesh, Bhutan, Laos, Nepal, Pakistan, Papua New Guinea, the Philippines and Sri Lanka (4).

 Valuable links

Helping Poyry scoop up its share of the thousands of consultancy contracts put out yearly by international borrowers are close personal and ideological links between its staff and various official bodies (5). These links are forged through shared backgrounds, education and experience as well as through mutual attendance at meetings industrialized-country governments sponsor to bring their country’s firms together with multilateral financiers. In 1994, for example, Poyry, which had no previous experience in India, was selected over 15 Indian bidders to carry out World Bank forestry projects in Kerala and Uttar Pradesh. The person in charge of Bank forestry programmes in India was a former vice-president of the Jaakko Poyry Group, Christian Keil. India’s Inspector General of Forests, A. K. Mukerji, meanwhile, who had recently been a guest of Jaakko Poyry in Finland, was reportedly preparing to open a branch of the firm in India upon his retirement from the civil service (6).

In countries where such channels are lacking, Poyry has not been shy about intervening in national politics. In Thailand, the Poyry consultant leading the formulation of a contested Forestry Sector Master Plan openly admitted that his activities were aimed at bringing Thailand’s “institutional and social frame into shape” in a way which would allow the wider application of Western techniques of industrial forestry (7).

Few official or professional sanctions exist in Poyry’s home country of Finland which might be applied against such questionable practices. Although Poyry’s Forest Policy explicitly commits the company to maintaining species biodiversity and to advocating that “any natural forest area which demonstrates untouched unique ecosystems be set aside for conservation even if it has been assigned for industrial forestry”, the firm is involved in (for instance) several projects in Indonesia which are expressly designed to start up by feeding off mixed tropical hardwoods from native forests (8).

 Public relations and espionage

In maintaining and defending its networks, Poyry is skilled at adjusting to the times. Official gatherings such as the 1992 Earth Summit in Rio de Janeiro provide rich opportunities for the firm to lobby for the diversion of public funds to itself in the guise of ‘environmental aid’. In 1993, it began to publish a confidential quarterly report on environmentalist thinking and activities, aimed at a clientele of wealthy forestry companies, and based partly on information gathered by monitoring NGO publications, watching environmentalists’ electronic mail conferences, and sending queries to environmental groups (9).

Poyry is also confident of its ability to deal with the Nordic media. When Poyry Chief Executive Officer Henrik Ehrnrooth and Poyry Consulting Division president Jouko Virta were publicly criticized in Finland about Poyry’s involvement in a plantation project in the Dominican Republic, they simply denied that the firm had even been in that country, despite being shown Dominican newspaper clippings and photographs reporting Virta’s negotiation of a Dominican plantation contract (10).

 Poyry at work

Poyry’s Thai Forestry Sector Master Plan (TFSMP) offers one interesting illustration of how the company attempts to work its way into a position of influence in a country’s forestry practice.

In the mid-1980s, the firm had found it difficult to make inroads into the highly personalized world of Thai officialdom. But with the help of a Swiss-born local timber expert named Nat Inthakan, introductions were finally arranged between Poyry Consulting Division chief Jouko Virta and top businessmen, bureaucrats and politicians. Virta then sketched out terms of reference for a plan for developing Thai forestry. Approved by then Prime Minister Prem Tinsulanonda in 1988, the plan was funded by FINNIDA through the United Nations Development Programme, which promptly selected Poyry as plan consultant (11).

The Thai Forest Department, however, resisted working with Poyry from the start (12). In addition, some 205 NGOs involved in rural development objected that Poyry’s plan would strengthen state and industrial control over forests at the expense of local communities and their commons.

To overcome these difficulties, Poyry began a major effort to lobby bureaucrats and mollify malcontents. Thai forestry faculty were hired as plan consultants, and two NGOs were persuaded to serve on the plan’s steering committee; one soon afterwards received an unusual US$20,000 grant from FINNIDA. In the voluminous newsletters and briefings put out by the master plan team, meanwhile, the TFSMP was presented as an infinitely self-correcting “rolling process” capable of accommodating any criticism from any actor, whether villager, bureaucrat, or businessperson.

NGOs, nevertheless, continued to object, pointing out that Poyry, in proposing repeal of the popular 1989 logging ban, was engaged in political subversion. Poyry’s claim to support customary land rights and local control, NGOs added, was at odds with the company’s recommendation to “accelerate out-migration from the forest lands” and its acquiescence in official top-down managment schemes.

Frustrated with such criticisms, the Poyry team stopped presenting itself merely as a “technical” appendage supplying facts to policymakers. Instead, it began advertising itself as a political facilitator of a compromise “national vision” of Thai forests. Poyry’s adoption of this openly political role only provoked further sarcasm. As one NGO leader noted in 1993, “‘national values’ as perceived by the master plan team bear little resemblance to the values local people place on collectively managing community forests”. An emotional Jouko Virta countered that only two or three “anarchists” in Thailand were critical of Poyry’s planning. Any problems with the plan, other Poyry staff claimed, were due to NGOs’ refusal to participate.

In the end, the relative indifference of Thai officialdom was instrumental in stymieing Poyry’s bigger ambitions of redrafting Thailand’s forest policy and reforming its practice. The Thai cabinet never approved the completed TFSMP, nor did any state bureaucracies rally round its banner. Predictably, the plan wound up, in words which anthropologist James Ferguson has used to describe development projects in Lesotho, like a “bread crumb thrown into an ant’s nest” (14). It remained a component in a larger machine, treated largely as a “shopping list” from which various bureaucracies and companies within Thailand could choose isolated items which could benefit their own circles. As one important side effect, however, the plan did help build new and no doubt enduring links between Poyry and the country’s pulp and paper interests.

REFERENCES (all from Carrere and Lohmann, Pulping the South)

 (1) Financial Times 8.3.95; Jaakko Poyry 1994, n.d. a, b, c, d.

(2) Jaakko Poyry n.d.; Down to Earth 1991.

(3) Jaakko Poyry n.d. b, c, d; Interforest n.d. a, b, c.

(4) Jaakko Poyry n.d. b, c, d.

(5) World Bank n.d., Treasury News 18.11.93, DTI 1994.

(6) Nation (Bangkok) 27.11.94; Statesman (New Delhi)16.9.94.

(7) Laitalainen 1992.

(8) Poyry n.d. e; PPI, various issues.

(9) Ikonen 1994, Orton 1994.

(10) Wallgren 1994.

(11) Usher 1991.

(12) Inglis 1991.

(13) Wallgren 1994.

(14) Ferguson 1994.