How can Suzano, the world’s biggest eucalyptus pulp corporation, attract “green finance”?
How can Suzano, the world’s biggest eucalyptus pulp corporation, attract “green finance”?
Suzano calls its monoculture industrial tree plantations “forests” and practices exclusionary conservation on thousands of hectares of Indigenous Peoples’ and quilombolas’ territory
Brazil’s Suzano S.A. is the world’s biggest producer of hardwood pulp. Late last year, the International Finance Corporation, the private sector arm of the World Bank, approved a US$725 million loan to Suzano to build a massive new pulp mill in Mato Grosso do Sul.
The pulp mill will produce 2.3 million tons of pulp per year. Suzano plans to convert a total area of 300,000 hectares into industrial plantations of fast growing eucalyptus to feed the mill. Another 300,000 hectares will be used for “conservation”. Suzano is hoping to get carbon funding for this conservation area.
Suzano owns 1.4 million hectares of eucalyptus plantations and has a further one million hectares of land set aside for conservation. Suzano prohibits communities from entering these conservation areas.
Suzano has also developed genetically engineered trees that are resistant to the pesticide glyphosate. In November 2021, Brazil’s National Technical Commission on Bio-security approved Suzano’s GE trees for commercial planting.
In December 2022, more than 40 environmental and civil society organisation sent a letter to the IFC, urging the directors of the IFC to vote against the Suzano loan. The letter states that,
The expansion of pulp plantations to feed the mill is leading to decline of species richness and out-compete the remaining Cerrado stands. These plantations will also cause deforestation by using land previously converted by the cattle ranch industry and pushing it towards the deforestation frontier.
“No agreement”
Last week, Deutsche Welle, the German news broadcaster, reported from Brazil about the impact Suzano’s plantations are having on local communities and Indigenous peoples who live in the area of the company’s monoculture plantations.
DW’s journalists, Sarah Sax and Mauricio Angelo visited the community of Curvelândia in the north-eastern state of Maranhão. Suzano built a road on the community’s land.
Sandro Lucio told DW that the company just turned up with heavy machinery.
“There was no agreement. They didn’t pay anyone anything. They removed the fence from my land, and the truck ran over and killed my horse.”
DW investigated eight ongoing socio-environmental conflicts as a result of Suzano’s operations. The journalists spoke to officials, community leaders, and union representatives who told them about at least 40 more conflicts.
Brazilian journalist Antenor Ferreira reports that about 70% of Suzano’s plantations in Maranhão involved land grabbing.
Sax and Angelo write that,
According to documents Suzano is required to submit to the US Securities and Exchange Commission, the company is facing 262 possible and probable civil and environmental proceedings, and 2,449 probable and possible labor proceedings.
Claims against the company range from indiscriminate use of pesticides and pollution of waterways to land grabbing and failure to consult with traditional communities on infrastructure projects.
Despite these problems, Suzano has attracted billions of dollars in “green” investments.
French banking group Credit Agricole, Norway’s Government Pension Fund, and the Netherland’s pension fund Dutch Pensioenfonds Zorg en Welzijn are among Suzano’s funders.
Ward Warmerdam, is a senior financial research at Profundo, a research organisation in the Netherlands. He told DW that bank and other investors should practice better due diligence when considering financing. But most of them don’t.
Wardman told DW that,
“That's one of the biggest issues. All the financial institutions that are developing policies are doing so on a voluntary basis, which means there are no standards, there are no regulations, there is no monitoring of this.”
Suzano issued its first “green bonds” in 2016. Four years later the company started issuing “sustainability-linked bonds”.
A recent report by the Alert Against the Green Desert Network explains how Suzano turns its debt into new money by selling “green bonds”.
The company calls these bonds “green,” because it claims that its plantations are “forests” and that it has many conservation areas – ignoring the destruction that its plantations have caused. This is how Suzano obtained new loans from international banks, raising US$1.5 billion in 2021 to buy more land and expand its plantations in Brazil.
Suzano commits environmental racism
Celio Pinheiro Leocadio heads the Volta Miuda quilombo in the state of Bahia. Quilombolos are descendents of African people who escaped slavery. Their communities are quilombos. Brazil abolished slavery in 1888. By then 5.5 million slaves had been brought from Africa.
Leocadio told DW that he’s stunned that Suzano can attract green finance.
He told DW that,
“Suzano commits environmental racism. It disregards and disrespects the history of our people, our black ancestry and the suffering we carry and experience.”
While quilombos have rights to their ancestral territory under the Brazilian constitution, very few communities have official land titles.
Today, about 90% of the Volta Miuda community’s territory is covered with eucalyptus plantations, feeding Suzano’s pulp mill.
Community members told DW that the plantations have resulted in lower groundwater levels, and agrochemicals sprayed on the monoculture have polluted their waterways. Suzano is now constructing a road through Volta Miuda and two other quilombos.
Pinheiro Leocadio told DW that,
“This whole region, it was once rich in everything. Everything changed the moment eucalyptus arrived. The springs started to disappear. We lost the forests.”
Sad stuff. Thank you for raising awareness. I can't help feeling we're going over the cliff as I breathe smoke from Canada.
This is such a sad story of environmental degradation and colonial capitalism and human rights abuse.
Not to mention that Amazon soils are generally rather poor and you will not get many "plantation crops" before the soils are exhausted and then begin to look just like the corresponding land across the Atlantic: The Sahara. Is this what you call "developing" a country? This is another venture that gives Progress a very bad reputation.