Unholy Alliance Under Fire in Finland
5/16/99
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RELAYED TEXT STARTS HERE:
Title: Unholy Alliance Under Fire in Finland
Source: InterPress Service, Inc.
Status: Copyright 1999, contact source for permission to reprint
Date: May 16, 1999
Byline: Linus Atarah
HELSINKI, May 16 (IPS) - For two years Finnish and environmental
activists have been up in arms against UPM-Kymmene, one of the
country's biggest forestry companies, over its activities in
Indonesia.
They are calling for UPM to withdraw from Indonesia, where they say
its partnership with an Indonesian firm, Asia Pacific Resources
International Holdings Ltd. (APRIL), is depleting rain forests and
dispossessing local communities of their land.
But the Finnish company has no intention to withdraw, claiming a
clean record certified by specialised auditing firms. ''There is no
reason why we should (pull off). Our involvement in Indonesia has
introduced changes in the environmental behaviour of APRIL'', Pehr-
Eric Patt, one of UPM's executives told IPS.
The environmentalists' struggle has been condensed in an 88-page book
- 'Calculated Risk - launched last week in Helsinki, which contains
first-hand accounts and data on the damage caused by Finnish
forestry and paper concerns operating in developing countries.
Otto Miettinen, one of the book's two authors, spent one-and- half
months in Indonesia last year, talking to local NGOs, community
groups and environmental activists in Sumatra, where APRIL has paper
mills and logging concessions.
Miettinen and co-author Tove Selin are activists of Friends of the
Earth, an environmental group.
For the past ten years Finnish non governmental organisations (NGO)
working on environmental issues have received a number of requests
from third world organisations for assistance to fight activities of
Finnish companies, activist Thomas Wallgren said.
''The Finnish forestry sector, is one of the greatest players in
global environmental and development politics'', said Wallgren, who
also wrote the foreword to the book.
''Since Finnish forestry companies are becoming more international
and more powerful, it is the responsibility of the Finnish people to
carefully watch what their companies are doing abroad and whether
they are doing a dignified job,'' he said, adding that the companies
do not have a clean bill of records.
The book describes in detail the activities of Asia Pacific Resources
(APRIL), an Indonesian company and one of the biggest paper mill
companies in south-east Asia, operating in the province of Riau in
Sumatra, Indonesia.
Owned by Sukanto Tanoto, an ethnic Chinese who's other business
interests includes mining, agribusiness, banking and insurance, APRIL
signed two years ago a joint venture agreement with Finland's UPM-
Kymmene to operate in Indonesia, the book says.
Both companies jointly own a paper mill factory in China, where most
of the pulp resulting from APRIL's logging in Sumatra goes to, and
they have also reached an understanding - now on hold - to swap
shares in their respective paper divisions.
The core of the business, the book claims, is the destruction of
Riau's natural rain forests to extract pulp, a process in which the
entire ecosystem -included local communities often violently evicted
from their land- are becoming victim.
Some local people have been killed and others have been jailed as a
result of their resistance to the companies' activities, 'Calculated
Risk' says.
APRIL's 280,000-hectare plantation in Riau - acquired through a
government concession - contains rare and valuable forest trees, say
the activists, but they are being cut off and replaced with fast-
growing tree species such as acacia and eucalyptus that cannot
provide a habitat to many endangered plant and animal species.
The activists also dispute APRIL's land concession, which they claim
has been actually confiscated from local communities who were not
consulted in the acquisition process and are often cheated or forced
to take meagre compensation payments.
Although the Finnish corporation is not directly involved in such
activities, nor does it own production facilities in Indonesia, the
book maintains that UPM is the main source of funds fuelling APRIL's
businesses.
Without financial backing from UPM, APRIL would have fallen in the
chain of business failures stemming from the Asian financial crisis,
the book says.
''UPM-Kymmene comes to bear the moral responsibility for APRIL's
actions, especially in Riau because UPM has entered into co-
operation with APRIL and because UPM finances APRIL'', the authors
say.
The alliance is seen as an attempt by the two forestry and paper
giants to increase their market share on a global scale. UPM is a
transnational corporation with a wide presence in other parts of the
world, but it did not have interests in Asia until it begun dealing
with APRIL, they add.
For APRIL, UPM appeared just in time. According to the book, 97 per
cent of APRIL's paper is destined to foreign markets, but as regional
sales were dramatically shrunk by the crisis, UPM provided its
extensive networks in Europe and elsewhere to put the produce.
Patt, vice president of Business Development at UPM's Fine Paper
division, denies that people have been evicted from their land in
Riau. He says land ownership in Indonesia is fraught with
uncertainties and very difficult to settle in land disputes.
He also stressed that APRIL's logging practices are line with a
forestry management plan adopted by the Indonesian government, by
which certain areas are designated for conservation and others for
food production.
The Finnish government also comes in for harsh criticism in the book,
accused of treating the Indonesian government with ''padded gloves.''
According to the activists, president Martti Ahtisaari deliberately
steered clear of human rights issues while visiting Indonesia in
1995, when general Suharto was still in command.
The Finnish president also awarded high state honours to Indonesian
Forestry minister Djamaludin Suryohadikusumo and APRIL's Sukanto
Tanoto when they visited Finland last year. This caused outrage among
environmentalists. Several Finnish artists who had earlier received
official awards returned their medals in protest.
The book charges that the business alliance between APRIL and UPM
could have never been secured without a seal of approval from the
government in Helsinki. ''It would have been simply a surprise if
the business deal in South-Asia had gone otherwise (as) political
and economic stakes were so high'', the activists write.
According to UPM's Patt, however, the company's environmentally-sound
policies are part of a master plan, which is audited by the SociSt,
Generale de Surveilance (SGS), a well- known international auditing
firm also specialised in forestry projects.
APRIL has indicated that it has begun work on improving community
relations. It has also provided funds for an initial micro- business
in various commercial activities that stand to benefit 500 families
in the villages.
However, the activists dismiss these as mere cosmetic dressings.
''APRILs impact on the local population is hardly remembered for its
social development projects but rather for its ruthless methods in
land disputes and the poor treatment of its workers'', they say.