Finnish paper giant Stora Enso’s plantation in China has flouted the rights of local workers, some of whom were physically threatened into handing over their land, US researchers charged yesterday.
A study by two groups accused Europe’s largest paper maker, often hailed for its commitment to social responsibility, of turning a blind eye to abuses by middlemen including a board run by the Chinese government.
Stora Enso said it welcomed the report and has already been reviewing how to improve treatment of stakeholders at the plantation in the southwestern region of Guangxi.
Stora Enso launched the project in 2002. According to the report, the firm promised to invest 1.8 billion euros (US$2.5 billion) as it sought 120,000 hectares of land to grow eucalyptus for paper production.
The report said that nearly all of the land has been acquired through middlemen, particularly the government-run Beihai Forestry Investment Company, and accused them of strong-arming -local farmers.
Some farmers, who depend on the land as their main source of income, received less than promised or were unaware their property was transferred, leading to sometimes violent confrontations.
Local authorities, pressed to meet quotas on land transfers, have physically threatened farmers or warned they would call in the police, the report said.
The study was authored by the Washington-based Rights and Resources Initiative and the Seattle-based Rural Development Institute, which both support the global poor’s rights to natural resources.
Andy White, coordinator of the Rights and Resources Initiative, said that Stora Enso has been “willingly oblivious” to the problems caused by middlemen.
“Stora Enso should have been much smarter about this,” White said. “Anybody with any political sensitivity would have known that if you cut a deal with the government in rural China, it’s going to go out and lean on people.”
The report praised the policy direction of China’s central government, which has launched -nationwide reforms to give farmers rights over once collective lands, but also said that the reforms created easy opportunities for abuse by local governments and companies.
Calling the Stora Enso plantation a test case for investors in China, the report called on the company to suspend land purchases temporarily to allow a review and to consider dealing directly with local landholders.
Lauri Peltola, spokesman for Stora Enso, said that the company has been reviewing contracts and made clear that any violence is “totally unacceptable.”
“If we see a conflict, we refuse to lease the land, as simple as that,” he said. “But there is a long history of conflicts attached to land use in China, so it’s not something we can say we will fix overnight.”
Peltola said Stora Enso saw itself as a pioneer in China and would look at the report to see how to improve.
“We’re a different company than many others in our industry. We welcome, actually, this kind of research,” he said.
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