Stora Enso Global Responsibility Report 2012 - GlobeNewswire

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Tree plantations and local communities
Stora Enso has commercial-scale plantations in Brazil, Uruguay and
China, as well as trial plantations in Laos and Thailand. The environmental
and operational aspects of these tree plantations are covered
in the report’s Sustainable forestry section on pages 36–39. In this
section of the report we concentrate on our work on social responsibility
and sharing value with local communities in the regions where
we have tree plantations.
Sustainably managed tree plantations have an increasing strategic
importance for Stora Enso. At the moment tree plantations still account
for less than 10% of our total fibre use, but this share will grow in coming
years due to our joint venture pulp mill project in Uruguay and our future
integrated eucalyptus pulp and paper board mill in Guangxi, China.
Our joint ventures in Latin America form part of Stora Enso’s Biomaterials
Business Area. Veracel is a 50/50 joint venture with the Brazilian
company Fibria, and Montes del Plata is a similarly structured
joint venture with the Chilean company Arauco. Both of these joint
ventures are governed by boards of directors where each partner is
equally represented. These boards oversee management and make all
important decisions related to the operations of these joint ventures,
including issues related to sustainability. The sustainability approaches
of both of these joint ventures are in line with Stora Enso’s Global
Responsibility approach. For more information on how sustainability
issues at our joint ventures are included in Stora Enso’s sustainability
reporting see page 8.
The report concludes that our project has a wide range of potential
positive impacts, but also some potentially negative impacts on the
natural and social environment. Key benefits particularly relate to
local employment and the potential to improve industrial practices
and employees’ skills in forestry operations. The report also confirms
our views that we must continue to engage with local communities,
address land contract issues, and ensure that we meet our environmental
responsibilities regarding the impacts of large-scale forestry
operations. The full report can be downloaded on our website at
www.storaenso.com/responsibility.
Correction of land leasing contracts
Stora Enso first started to establish eucalyptus plantations in Guangxi
in 2002. Over the last 10 years the local economy has developed
rapidly. The demand for wood and land has increased, as has the
value of the land.
During this period local lands have often been sub-leased, sometimes
repeatedly, resulting in chains of sub-leases, usually at progressively
higher rents. In many cases local communities have not benefited from
the increases in land values and rents, and are no longer satisfied with
rental decisions and agreements they may have made a considerable
time ago, when land values were significantly lower.
Stora Enso is involved in more than 1 500 land lease contracts related
to collectively owned land in Guangxi.
We are aware that different stakeholders may have varied land use
interests due to local history and traditional practices. Our engagement
with local stakeholders is based on shared planning, clearly defined
models for cooperation, and mutual learning and development.
We work according to the same standards everywhere in the world,
guided by our Code of Conduct and key policies including our Wood
and Fibre Sourcing, and Land Management Policy, which are available
at www.storaenso.com/sustainabilitypolicies. Our mills are designed
and constructed using Best Available Technologies, and the strictest
standards are set for their impacts on the surrounding environment.
Guangxi, China
Stora Enso’s operations in southern parts of Guangxi Province, China,
consist of eucalyptus plantations and a projected integrated board
and pulp mill in the city of Beihai. The investment decision on this
integrated mill was announced in March 2012. This was followed by a
thorough review of our local sustainability agenda.
An integrated environmental and social analysis report on our operations
in Guangxi was published in 2012. This report summarises earlier
studies, assessments and specialist reports carried out with regard to
our operations in Guangxi. The report was commissioned by United
Nations Development Program China (UNDP) on behalf of Stora Enso
to obtain third party consolidation of the findings of past studies and
an independent review of our operations in Guangxi.
Land use rights related to agricultural and forest lands in China have
changed several times since the 1950s. Problems related to the mapping
and documentation of land rights have also led to confusion in
many areas. Some current land lease contracts signed by Stora Enso
have been affected by such factors. In addition, various contractual
practices related to collectively owned lands in Guangxi have been
criticized by our stakeholder groups.
Stora Enso first noticed irregularities in the complex chains of local
land lease contracts in 2009. We responded by starting a legal screening
and correction process covering all contracts for collective lands.
During 2012 Stora Enso continued to work with village committees
and villagers to correct these contracts.
In order to avoid long contract chains Stora Enso will wherever possible
sign agreements directly with the owners of collective lands. To enable
this, Stora Enso must negotiate with the other parties currently involved
in the contract chains about fair compensation levels they would receive
for leaving the chain. This approach to new land leases will also be
applied retroactively to the existing contracts. To carry out these tasks,
Stora Enso has now appointed dedicated teams, consisting of experienced
line managers supported by lawyers, who will focus exclusively
on land leases and improvements to existing contracts.
By the end of 2012 all land contracts for collective lands had been
reviewed, and contracts with identified defects will continue to be
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