Briefing on Finnish Consultancy Company Jaakko Poyry
11/24/97
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Headline: Briefing on Finnish Consultancy Company Jaakko Poyry
Source: WORLD RAINFOREST MOVEMENT
MOVIMIENTO MUNDIAL POR LOS BOSQUES
International Secretariat Oxford Office
Instituto del Tercer Mundo 1c Fosseway Business Centre
Jackson 1136 Stratford Road Moreton-in-Marsh
Uruguay GL56 9NQ United Kingdom
Ph +598 2 409 61 92 Ph. +44.1608.652.893
Fax +598 2 401 92 22 Fax +44.1608.652.878
EMail: rcarrere@chasque.apc.org EMail: wrm@gn.apc.org
Date: 11/24/97
BRIEFING ON THE FINNISH CONSULTANCY COMPANY
JAAKKO POYRY
The following briefing was prepared by Larry Lohmann. We would
like to receive your comments on it, before disseminating it more
widely as a WRM briefing.
JAAKKO POYRY: QUIET PARTNER IN FOREST
DEGRADATION
Forest degradation, we are frequently told, is associated with the
activities of loggers, timber consumers, paper companies, and
multilateral agencies. Often overlooked is the role of a much lower-
profile set of actors: forestry and engineering consultancy firms.
This small, ideologically tightly-knit group of companies, based
largely in Europe, North America, Australia, New Zealand and Japan,
produce no wood or paper themselves and are seldom to be found
wielding a bulldozer or chainsaw. Their business is merely to help
other firms promote,investigate, plan, design and set up pulp and
paper mills and logging and plantation operations. Yet these
consultancies exercise global clout out of all proportion to their size
and numbers. With comfortable links to universities, aid agencies,
machinery and paper firms, and government bureaucracies, they have
helped blaze trails through the forest world from Tasmania to the
arctic tundra.
Preeminent among such firms is the Nordic-based Jaakko Poyry Oy -
the largest forestry and engineering consulting company in the world,
with an estimated 40 per cent of the forest industry consultancy market
worldwide and a turnover of more than US$300 million in 1994 alone.
Poyry, which recently absorbed the large Swedish consulting firm
Interforest, has over 60 offices in 25 countries around the world -- 11
in Brazil alone -and thousands of employees, and has been involved in
hundreds of major commercial forestry and pulp and paper projects in
the last two decades across the Americas, Africa, Asia, Oceania and
Europe (1).
Poyry's work acts as a growth hormone for industrial forestry.
Wherever possibilities for commercial exploitation beckon, the firm's
consultants are likely to be on the scene early, lobbying governments,
evaluating forest and land resources, lining up contracts from close
colleagues in aid agencies, subcontracting lucrative work out to
potential local allies, doing feasibility studies or market surveys,
mapping out logging roads, establishing tree nurseries, and designing
or engineering factories. Relying on contracts both from state and
international agencies and from the private sector, Poyry has served as
a crucial go-between linking the interests of international and national
business and officialdom and bringing together machinery and
techniques with land and forests.
Historically, Poyry's bread-and-butter contracts have come from
industrialized countries, but what with an increasingly globalized
paper industry, some of the company's most destructive recent
activities have been carried out elsewhere. Indonesia, with its many
new pulp mills feeding off native forests and exotic monoculture
plantations, serves as an excellent example. A 1984 contract with the
World Bank and the Indonesian government to analyze the country's
paper and pulp possibilities helped Poyry land over 30 subsequent
contracts to plan or implement public and private sector projects to
supply mills with pulpwood from natural forests or plantations. In
addition, the company has picked up scores of contracts --some of
them subsidized by Finnish taxpayers through Finnish Export Credit
and FINNIDA-- to plan or engineer pulp or paper mills for Indonesian
clients or do market surveys for Western machinery manufacturers
such as Ahlstrom, Valmet-Tampella, Kvaerner Pulping and Sunds
Defibrator. Small wonder, then, that when a gigantic pulping operation
like Raja Garuda Mas's recently-completed Riau Andalan goes up, it is
to a plan formulated by Poyry, and often under Poyry supervision.
Small wonder, too, that Poyry continues to benefit from smaller
agreements, as when Finnish Export Credit and FINNIDA granted a
13-year interest-free loan worth US$4 million for a forestry
development and training centre for Indorayon in Northern
Sumatra(2).
Poyry has built its power and prosperity partly on handouts from
governments. Finland's FINNIDA and Sweden's SIDA have been
particularly generous in channeling tax revenues to Poyry for plans
and technical services for pulping, logging and plantations in the Third
World. Among the countries affected by this largesse have been the
Philippines, Thailand, Sri Lanka, Tanzania, Nepal, Zambia, Kenya,
Viet Nam and Mozambique (3).
Other government subsidies for Poyry have been transferred through
multilateral agencies such as the Asian Development Bank (ADB),
African Development Bank, Inter-American Development Bank
(IDB), the European Bank for Reconstruction and Development, and
the World Bank. The scale of such subsidies can be inferred from the
establishment of 2.9 million hectares of tree plantations between 1984
and 1994, largely for commercial purposes, at a cost of US$1.416
billion. In addition to helping Poyry describe how to build up
Indonesia's pulp and paper industry (1984 and 1987-8, involving the
World Bank and ADB), multilateral agencies have funded Poyry
studies of investment opportunities in Latin America, Viet Nam and
Nepal (1981-2,1990-1, and 1986-present, involving IDB and ADB)
and forestry development plans for Cameroon, Central African
Republic, Congo, Ethiopia, Ghana, Nigeria, Sudan, Bangladesh,
Bhutan, Laos, Nepal, Pakistan, Papua New Guinea, the Philippines
and Sri Lanka (4).
Helping Poyry scoop up its share of the thousands of consultancy
contracts put out yearly by international borrowers are close personal
and ideological links between its staff and various official bodies (5).
These links are forged through shared backgrounds, education and
experience as well as through mutual attendance at meetings
industrialized-country governments sponsor to bring their country's
firms together with multilateral financiers. In 1994, for example,
Poyry, which had no previous experience in India, was selected over
15 Indian bidders to carry out World Bank forestry projects in Kerala
and Uttar Pradesh. Surprise at this remarkable coup was somewhat
lessened by the revelation that the person in charge of Bank forestry
programmes in India was a former vice-president of the Jaakko Poyry
Group, Christian Keil. India's Inspector General of Forests, A. K.
Mukerji, meanwhile, who had recently been a guest of Jaakko Poyry in
Finland, was reportedly preparing to open a branch of the firm in India
upon his retirement from the civil service (6). In countries where such
channels are lacking, Poyry has not been shy about intervening in
national politics. In Thailand, the Poyry consultant leading the
formulation of a contested Forestry Sector Master Plan openly
admitted tha this activities were aimed at bringing Thailand's
"institutional and social frame into shape" in a way which would allow
the wider application of Western techniques of industrial forestry (7).
Few official or professional sanctions exist in Poyry's home country of
Finland which might be applied against such questionable practices.
Similarly, although Poyry's Forest Policy explicitly commits the
company to maintaining species biodiversity and to advocating that
"any natural forest area which demonstrates untouched unique
ecosystems be set aside for conservation even if it has been assigned
for industrial forestry", the firm has not been able to restrain itself
from involvement in (for instance) several projects in Indonesia which
are expressly designed to start up by feeding off mixed tropical
hardwoods from native forests (8).
In maintaining and defending its networks, Poyry is skilled at
adjusting to the times. Official gatherings such as the 1992 Earth
Summit in Rio de Janeiro provide rich opportunities for the firm to
lobby for the diversion of public funds to itself in the guise of
'environmental aid'. In 1993, it began to publish a confidential
quarterly report on environmentalist thinking and activities, aimed at a
clientele of wealthy forestry companies, and based partly on
information gathered by monitoring NGO publications, watching
environmentalists' electronic mail conferences, and sending queries to
environmental groups (9). Poyry is also confident of its ability to deal
with the Nordic media. When Poyry Chief Executive Officer Henrik
Ehrnrooth and Poyry consultant Jouko Virta were publicly criticized in
Finland about Poyry's involvement in a plantation project in the
Dominican Republic, they simply denied that the firm had even been
in that country, despite being shown Dominican newspaper clippings
and photographs reporting Virta's negotiation of a Dominican
plantation contract (10).
Appendix: The Thai Forestry Sector Master Plan:
The recently-completed Thai Forestry Sector Master Plan (TFSMP)
offers an interesting illustration of Poyry's work in attempting to build
up support networks, rewrite policy, and manage resistance in an
intercultural context.
Having helped to establish Poyry as a key player in several Asian
countries, including the Philippines, Indonesia and Nepal, Jouko Virta,
President of the firm's Consulting Division, was hard at work in the
mid-1980s trying to make inroads into the highly personalized Thai
government system. Virta's way was smoothed by a fortuitous meeting
with a Swiss named Nat Inthakan, who had been living in Thailand for
several decades and had Thai nationality and an intimate knowledge of
the local timber industry. Nat arranged introductions for Virta to Snoh
Unakul, a businessman and Secretary General of the National
Economic and Social Development Board; General Harn Leenanonda,
then Minister of Agriculture and Agricultural Cooperatives, which had
jurisdiction over the Royal Forest Department (RFD); and Phairote
Suwannakorn, then Deputy Director of the RFD. Virta then wrote up
terms of reference for a Master Plan for Thai forestry development
which Nat, now acting as representative of Poyry in Bangkok, used to
brief then Prime Minister Prem Tinsulanonda. On a 1988 visit to
Finland, Prem signed an agreement whereby FINNIDA would fund a
Thai master plan along TFAP lines. Since Thailand's per capita Gross
National Product was too high for the country to qualify technically
for Finnish bilateral aid, FINNIDA's funds were channeled through
UNDP. UNDP duly selected Poyry as plan consultant. Rauno
Laitalainen, who had been in charge of Poyry's master-plan team in
Nepal, arrived in Bangkok in July 1990 with a tax-free annual salary
of US$240,000 (11).
Despite Prem's imprimateur, Laitalainen faced immediate problems in
creating a plan which could satisfy the various bureaucracies, state
enterprises, businesspeople and speculators with interests in the forests
--to say nothing of farmers' groups, non-governmental organizations
and environmentalists. Having had prior experience with FAO and
UNDP, and aware of the controversy over the Tropical Forest Action
Program (from which much of the original impetus for the TFSMP
had come), the Forest Department's planning division at first refused
to work with Poyry. As late as August 1991, an FAO evaluator found
that 75 per cent of Forest Department staff remained opposed to the
plan (12). Some 205 NGOs involved in rural development,
meanwhile, noting Poyry's unconcealed interests in promoting
commercial plantations, objected to the plan on the grounds that it
would strengthen state and industrial control over forests at the
expense of local communities and their commons. Under pressure,
Laitalainen agreed to sign a statement stipulating that the plan's Terms
of Reference be rewritten after consultations with NGOs working with
village communities.
Laitalainen and his team then began to devote time to learning the
political ropes, lobbying for a coordinated approach to industrial
forestry, making elite alliances, distributing consultancies, starting up
publications, mollifying malcontents, and lining up potential
supporters for a plan many of whose details would be left for the
future. Perhaps sensing that the more participants he brought in on the
side of the plan, the easier it would be to accuse others of 'marginality'
and 'obstructionism' and to pass responsibility to the authorities,
Laitalainen went out of his way to make the TFSMP seem capable of
answering the needs of all actors. When speaking with the
government's Forest Department, he suggested that TFSMP could help
increase the country's forested area and wood industries. When
speaking with business, Laitalainen stressed the need for the
government to subsidize private investment in plantations through
provision of land and other necessities. Trying to integrate NGOs into
the planning process, he praised grassroots efforts to conserve forests;
acknowledged the need for land reform, popular 'participation', and
grassroots benefits; and claimed to be in a unique position to intervene
with the state on behalf of ordinary people. Photographs of villagers
sitting in conclave or planting trees under the tutelage of officials
began to feature in TFSMP documents. The TFSMP was presented as
an infinitely self-correcting 'rolling process' capable of
accommodating any objections from any actor. Criticisms were
dismissed as 'premature' and critics invited to participate in succeeding
stages.
These efforts had some effect. The TFSMP's ability to hire consultants
eventually attracted many Thai forestry faculty. Although most Thai
NGOs stuck to their demand that the Terms of Reference of the plan
would have to be revised before they would consider any invitation to
participate in the planning process, two NGOs agreed to serve on the
steering committee in the spring of 1991. One of these soon afterwards
received an unusual US$20,000 grant from FINNIDA.
Pressure nonetheless built from the majority of NGOs, who pointed
out that Poyry, in providing supposedly 'neutral' information about
economic demand and forest resources and uses, promoting 'correct'
management techniques and environmentally friendly technologies,
trying to integrate land managment into global wood-fibre supply
systems, and proposing repeal of the popular 1989 logging ban, was in
fact already engaged in political subversion against land reform and
many village ways of life. The planners' profession of support for
customary land rights and local control meant little, NGOs noted,
given that, under the plan, villagers' own systems of knowledge and
organization were to be subordinated to technocrats' schemes and
'measures undertaken to . . . accelerate out-migration from the forest
lands'. Jaakko Poyry consultants' 'bottom-up' planning, they added,
was bottom-up in name only, since in fact it consisted merely in
officals' 'outlining' their management plans in the presence of
villagers.
Partly out of reaction to such pressures, and partly out of a typically
corporate frustration with Thailand's existing 'institutional and social
frame', the master plan team moved further and further away from
presenting itself as a mere 'technical' appendage supplying facts to a
unified body of forward-looking policymakers. Instead, it was forced
to begin advertising itself as a political facilitator of a compromise
'national vision' of Thai forests, a reservoir of expertise on democracy
and 'participation', and a redrafter of policy. Predictably, this stance
roused even sharper sarcasms. As one NGO leader noted in a 1993
letter to the Bangkok Post, '"National values" as perceived by the
master plan team bear little resemblance to the values local people
place on collectively managing community forests and commons
within cultural, social and economic contexts of local communities
throughout the Kingdom'. In the end, the company was forced to cut
its losses with NGOs. Allegedly on the suggestion of Heikki Rissanen,
forestry adviser to FINNIDA, Laitalainen broke his promise to sign the
recommendations coming out of the February 1991 meeting (13).
Jouko Virta, although aware that the bulk of Thai NGOs involved in
rural work opposed the TFSMP, went on record claiming that only
two or three marginal and 'extremist' individuals --'I think they are
anarchists'-- were critical of Poyry's planning exercises. The claim
began to be heard that it was 'too late' to influence the plan and that
any problems with it were due to NGOs' refusal to participate.
Yet Thai officialdom proved hardly more willing than NGOs to
indulge Poyry's pretence of being able to redraft Thailand's entire
forest policy and reform its practice from top to bottom. The cabinet
never approved the completed TFSMP; nor did any state bureaucracies
rally round its banner. Predictably, the plan wound up, in words which
anthropologist James Ferguson has used to describe development
projects in Lesotho, like a 'bread crumb thrown into an ant's nest' (14).
Instead of providing a blueprint for a brand-new, comprehensive and
coherent forest management regime, the plan remained a relatively
small component in a larger machine, treated at most as a 'shopping
list' from which various actors could choose isolated items which
could benefit their own circles.
Poyry's ability to pursue the master plan at all, and thus to carve out an
at least slightly more spacious niche for pulp and paper interests, was
due partly to the fact that it could successfully conceal from the
Finnish public the scale of resistance its schemes were experiencing in
Thailand. In this it was helped not only by the physical distance
between the two countries, but also by the fact that the Finnish public
shared many of the Poyry consultants' assumptions. To many Thai
observers it was merely commonsense that Poyry, in laying out the
master plan, was seeking commercial benefit and that it was
unaccountable to the people whose livelihoods it was threatening. In
Finland, where the belief in the 'neutrality' of corporate consultants
and their 'objective expertise' remained strong, such claims, if they
could be heard at all, often sounded like paranoia. Similarly, to many
Thais, the idea that Finnish foresters could provide a neutral forum in
which the goals of (say) transnational corporations, Thai government
ministries, local politicians, and Northeastern villagers could be
reconciled under centralized authority seemed fanciful. In
Finland,however, it was given solemn credence. Finally, while in
Thailand it was common knowledge that millions of rural residents
depended for their livelihoods on the type of commons regimes
commercial eucalyptus schemes were disrupting, such regimes seemed
merely quaint or economically marginal to many Finns.
REFERENCES (all from Carrere and Lohmann, Pulping the South)
(1) Financial Times 8.3.95; Jaakko Poyry 1994, n.d. a, b, c, d.
(2) Jaakko Poyry n.d.; Down to Earth 1991.
(3) Jaakko Poyry n.d. b, c, d; Interforest n.d. a, b, c.
(4) Jaakko Poyry n.d. b, c, d.
(5) World Bank n.d., Treasury News 18.11.93, DTI 1994.
(6) Nation (Bangkok) 27.11.94; Statesman (New Delhi)16.9.94.
(7) Laitalainen 1992.
(8) Poyry n.d. e; PPI, various issues.
(9) Ikonen 1994, Orton 1994.
(10) Wallgren 1994.
(11) Usher 1991.
(12) Inglis 1991.
(13) Wallgren 1994.
(14) Ferguson 1994.