Banks, pulp and people: The social and environmental impacts of the pulp industry

Over the next five years, the global pulp industry is planning to increase its production capacity by more than 25m t. This capacity increase is unprecedented and would mean a five-fold increase, when compared to the growth rates of the last decade. More importantly, it would mean a dramatic increase in the problems that the pulp sector is already causing for people and the environment in producer countries. “Pulp mills and the industrial tree plantations that feed them have become increasingly controversial”, says Chris Lang, the author of a new report, Banks, Pulp and People – A Primer on Upcoming International Pulp Projects. The vast areas of monocultures required to feed modern mills have severe impacts on biodiversity, forests, water, land rights and livelihoods. And pulp mills themselves are among the most polluting industrial facilities, with grave consequences for the health of local communities and river ecosystems.

Lang, who studied Forestry at Oxford University, has been analyzing the pulp sector for over 15 years. His study gives an overview of the industry’s expansion plans and provides information on individual projects in the pipeline. The bulk of new expansions are slated to take place in only a few countries: Uruguay, Brazil, Indonesia, Australia, China and Russia. “The aim of our report is to inform financial institutions about the impacts and risks of upcoming pulp investments before decisions are made and contracts are signed”, says Heffa Schücking, director of the German environment and human-rights organization Urgewald, the report’s publisher.

“Pulp mills are extremely capital intensive”, says Schücking. “As such the financiers of pulp mills play an important role in deciding which mills get built and where. One only needs to look at countries like Indonesia, to see that financial institutions have yet to begin taking their responsibilities seriously.” In order to hold the financiers of the pulp industry accountable, Urgewald has also set up a new website, www.pulpmillwatch.org. It documents the problems caused by the pulp industry's operations and informs the public, financiers and decision makers regularly about upcoming problematic projects.