Pulp mill profits trickle down to Brazil's poor

Bahia cities already arguing over tax revenues from new Stora Enso cellulose plant

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By Jyrki Iivonen in Belmonte, Brazil
     
      Cities in the Brazilian state of Bahia are already arguing among themselves over the tax revenues of the Veracel pulp mill, even though the plant has yet to deliver so much as a kilo of its estimated annual production of 900,000 tons of cellulose to customers. Bahia, along Brazil's Atlantic coast north of Rio de Janeiro, is among the country's poorest regions, so there is no shortage of takers for the money.
      Veracel is a joint venture between the Finnish-Swedish conglomerate Stora Enso and Aracruz Celulose of Brazil, a major producer of bleached eucalyptus pulp. The plant went onstream last Tuesday.
     
Veracel has nothing against the division of the spoils, since the company wants to come across as an upstanding corporate citizen.
      It has set aside EUR 6 million for social work - towards education, health, and urban development. Last year the company paid around EUR 25 million in taxes.
     
The battle for the tax monies has been well and truly joined. The fight is between Veracel's domicile Eunápolis and the neighbouring community of Belmonte. The plant is right on the Belmonte border, but narrowly inside Eunápolis.
      According to the Belmonte city manager Jose Menezez, Belmonte ought to be receiving a larger share of the proceeds, since the bales of cellulose will be heading to customers in the United States and Europe via the port facility in Belmonte. Before that, the trucks carrying the goods drive dozens of kilometres on his city's side of the municipal boundary line.
      "Eunápolis is taking three-quarters of the tax revenue, and we only get a quarter. In our view, Veracel is in Belmonte, and I intend to demonstrate it", says Menezez.
     
Belmonte is suffering from severe unemployment, exacerbated by a crisis in the cocoa growing sector.
      "Cocoa was for a long time the most important source of income for Bahia, but then a virus wiped out the cacao trees. New saplings were planted to replace the diseased trees, but these, too, were hit by the virus", explains Menezez.
     
Veracel provides work for 400 at the plant itself and a further 1,600 jobs in the forestry branch. Menezez does not believe the factory is providing employment opportunities for many of the Belmonte locals, since the citizens' level of education is rather low.
      Belmonte is quite close to the popular resort area of Porto Seguro, and Menezez would like to see tourists straying into his city, too. The process is hindered by the fact that a slow chain-ferry separates the two communities.
     
Tourism and the smell of pulp do not usually make for good bedfellows, albeit that the prevailing winds hereabouts generally blow the fumes inland rather than towards the coast.
      "Initially we were worried about the impact of the plant, that it would bring problems. But having looked at things more carefully I am already more confident", says Menezez.
     
Marcia dos Reis, a lawyer in Porto Seguro, does not share the views of the Belmonte city manager.
      She does not like the pulp mill or the eucalyptus stands that have been planted around it. She feels the forests lack diversity and that they stifle the development of other means of livelihood, for instance the cultivation of sugar and cocoa.
      "Besides, the plant will be dumping its effluent water into the river, and the river flows down to the sea. This will have an adverse impact on the tourism trade."
      Marcia dos Reis does not put much trust in the Veracel management. "Yes, they have arranged a few panel discussions for NGOs. But not all the questions posed got an answer. Plans have been put forward, but concrete actions are missing."
     
With the singular exception of Porto Seguro, the villages along the Bahia coastline look pretty dreadful: abandoned houses, wooden shacks, and potholed streets. And yet there is a television blaring in every ramshackle dwelling.
      In Brazil the sons and daughters of wealthy families are not allowed out into the streets without escort, but the children of the poor can run around freely. There is no point in kidnapping them, as their parents would not be able to find the money to ransom them.
     
Veracel has "adopted" the municipal district of Barrolandia [in Belmonte] and has initiated a number of development projects here. Barrolandia looked after the well-being and thirst-quenching of many of the construction workers while the pulp mill was being erected.
      Barrolandia's dozens of small bars were used by workers on their days off.
      The first resident of Barrolandia who comes to greet us on the edge of the town is a limping dog, dragging its swollen hind leg. In the centre of town, a loudspeaker blasts out music.
      "Our local radio", explains municipal leader Jose Claudio.
     
The streets have been dug up to make way for the building of a sewage and rainwater drainage network. The national government and Veracel are taking part in funding the cost of the venture.
      Decent mains drainage is hoped to be a weapon in the battle to overcome leprosy, which is found in the town. Claudio reports that the Veracel doctors have treated patients and the spread of the disease in Barrolandia has been halted.
     
Another area to which Veracel has been providing support is the 6,000-hectare belt of rainforest known as the Veracruz Station.
      The land, owned by Veracel, is not for cutting, as it is intended for education and research into the local flora and fauna. It has been listed as a UNESCO World Natural Heritage Reserve site since 1999.
      A narrow path leads to the rainforest, but there is little for the eye to see. The trees, large and small, are packed so tightly together.
      Even the animals indigenous to the area have disappeared, something that a local Indian guide blames on the noises and smells of human visitors. "If you want to see them, you must stay quiet for hours on end."
      Close by the Biodiversity Station one can at least look at a threatened harpy eagle, but it is in a cage. The explanation given is that the bird can no longer cope in the wild by itself.
     
Helsingin Sanomat / First published in print 21.5.2005

More on this subject:
 Veracel: Restoring the Atlantic rainforest makes sound economic sense

Previously in HS International Edition:
  Stora Enso pulp mill opens in Brazil - factory said to be most modern in world (18.5.2005)

Links:
  Veracel
  Stora Enso website

JYRKI IIVONEN / Helsingin Sanomat
jyrki.iivonen@hs.fi