Forest certification
Banks, pulp and people: a primer on upcoming international pulp projects
The human, environmental and financial cost of paper
Authors:
C. Lang
Publisher:
Pulp Mill Watch, 2007
This report examines the pulp industry’s current expansion plans as well as the implications of these plans for people and the environment. The report argues that pulp mills have severe impacts on biodiversity, water, land rights and livelihoods. The report provides country case studies and information on problematic pulp projects in the pipeline and it makes recommendations to financiers regarding their future role in this sector.
The report discusses the following:
- the impact of industrial tree plantations and pulp mills
- structural deficits of the pulp industry including overproduction, overconsumption and reliance on subsidies
- financing of pulp mills
- country profiles of pulp expansion in Australia, Brazil, China, Indonesia, Laos, South Africa and Uruguay
- recommendations for the pulp financing
The report points out the role of public and multilateral finance in the pulp industry and highlights the lack of due diligence when reviewing proposals. The multilateral banks most involved in pulp mill investment in the last two decades are the International Finance Corporation (IFC) and the European Investment Bank (EIB). Both have a mandate to lend to the private sector. In Asia, the Asian Development Bank has supported the expansion of the pulp industry through its loans to governments.
The paper makes the following recommendations:
- aid agencies and development banks with the mandate to reduce poverty should stop
such investments and end all subsidies to the pulp and industrial tree plantation sector - banks and other commercial financiers are called upon to develop environmental and social criteria as well as due diligence procedures that cover all of their financial activities including land tenure, the rights of indigenous peoples, environmental and labour standards.
