Our performance in 2009 - Sappi

190
Notes to the group annual financial statements continued
32. Events after balance sheet date
On 22 October 2009, Sappi announced that it will enter into a consultation process with the employee representatives at its
Kangas Mill in Finland. The aim of this process is to identify the best way of improving company profitability, which may
include a full closure of the mill. Kangas Mill has the capacity to produce 210,000 tons of coated magazine paper annually.
On 30 October 2009, Sappi announced that it will begin the process of consulting with staff and all other relevant stakeholders
regarding its intention to close the Usutu Pulp Mill in the Kingdom of Swaziland on 31 January 2010. With the closure of the
mill, Sappi would exit the unbleached softwood flash-dried pulp market served by Usutu Pulp Mill. The mill has a capacity
of 190,000 tons annually. Sappi will continue to seek future beneficiation opportunities for the profitable utilisation of the
Usutu forests. This could include the introduction of new investors.
At the end of September 2009, no provision had been raised in respect of the proposed restructuring above.
33. Environmental matters
We are subject to a wide range of environmental laws and regulations in the various jurisdictions in which we operate, and
these laws and regulations have tended to become more stringent over time. Violations of environmental laws could lead to
substantial costs and liabilities, including civil and criminal fines and penalties. Environmental compliance is an increasingly
important consideration in our businesses, and we expect to continue to incur significant capital expenditures and operational
and maintenance costs for environmental compliance, including costs related to reductions in air emissions including carbon
dioxide and other greenhouse gases (GHG), wastewater discharges and waste management. We closely monitor the
potential for changes in pollution control laws and take actions with respect to our operations accordingly. Sappi spent
approximately US$5 million in the financial year ended September 2009 (September 2008: US$15 million) on capital projects
that control air or water emissions or otherwise create an environmental benefit.
Sappi Fine Paper North America is subject to stringent environmental laws in the United States. These laws include the
Federal Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act and their respective state counterparts and implementing regulations. On
29 June 2009, the State of Maine, Department of Inland Fisheries and Wildlife, issued a decision requiring Sappi Fine Paper
North America to install a fish passage at its Cumberland mills dam on the Presumpscot River. A second hearing that began
on 18 November 2009 to determine further fishway requirements, including design and operation, has been continued until
January 2010, and a decision is expected during the second quarter of 2010. The installation of a fishway on the Cumberland
Mills dam will trigger the obligation to install fishways at Sappi Fine Paper North America’s dams upstream of the Cumberland
Mills dam as well, to allow natural fish migration and thus promote the restoration of native species to the river. The total cost
of all these projects is estimated to be in the range of approximately US$18 million to US$28 million, part of which is
expected to be incurred in the near future and part of which will be incurred over a number of years. Because the proceedings
regarding fishway design and operation are still pending, we do not know when the construction phase at the Cumberland
Mills dam will begin, or the precise timing for incurring related costs.
We closely monitor state, regional and Federal GHG initiatives in anticipation of any potential effects on our operations.
Although the United States has not ratified the Kyoto Protocol, and has not yet adopted a Federal programme for controlling
GHG emissions, Congress is considering comprehensive Federal legislation regarding climate change. In addition, the US
Environmental Protection Agency has proposed several rules relating to emissions reporting and reductions, and various
regional initiatives regarding climate change are in effect or proposed. The nature, scope and timing of such climate change
legislation is highly uncertain and, currently, we do not know what effect, if any, such legislation will have on our financial
condition and operations.