Stora Enso accuses rival UPM of pressuring office employees during cartel investigation

Competitor claims UPM threatened to sack those making the wrong kinds of statements

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The pulp and paper manufacturer Stora Enso has accused its rival UPM of threatening its own employees with serious consequences if they said the wrong things during the investigation into allegations of a wood buying cartel.
      UPM gave the impetus for an antitrust investigation in which Stora Enso is a key focus of attention.
      Stora Enso also says that the Finnish Competition Authority has not acted impartially, and has encouraged UPM employees to give officials statements that are convenient from the point of view of the final outcome.
      Stora Enso's claims come out in a response that it submitted to the Market Court. Metsäliitto, which has also been named in the investigation, also sharply criticises UPM and the Competition Authority, although its criticism is a degree milder than that of Stora Enso.
      UPM and the Finnish Competition Authority have not commented on the views expressed by Stora Enso. The Competition authority is currently drawing up its own statement that will be submitted to the Market Court later this month.
     
The Finnish Competition Authority is calling for the imposition of a fine of EUR 30 million on Stora Enso, and EUR 21 million on Metsäliitto for operating a cartel for wood purchases in 1997-2004. Officials say that the banned activities were both long-term and nationwide.
      Stora Enso denies the charges in their entirety, while Metsäliitto admits to a minor violation, and says that the fine should be reduced to EUR 7.5 million.
      The third member of the cartel is UPM itself. The Competition Authority is not calling for any fines against UPM because it came forward and revealed the cooperation, which it suspected was illegal.
      A condition for the amnesty was full cooperation with officials.
      Issues of free competition are dealt with by the Market Court, which is expected to start dealing with the matter in the autumn. It is most probable that the matter will move on to the Supreme Administrative Court, which means that no final decision is expected for many years.
     
In its response to the charges, Stora Enso says that the statements by UPM employees are unreliable, and that UPM's only aim is to use "any means possible" to avoid consequences that are called for by the law on free competition.
      "Individuals who have given information have, in their description of the course of events, been led on by their interviewers, exaggerated the matter and have thus given a distorted image of communications and their content that does not correspond with the truth", says Stora Enso in its statement.
      Stora Enso does not name any individuals it thinks may have pressured the employees go give out appropriate information. The interviews at the Finnish Competition Authority took place in the spring of 2004 and the spring of 2005.
     
Stora Enso criticises the way that the interviews of UPM personnel were conducted. As a party to the dispute, Stora Enso was given access to the recorded interviews.
      According to the Stora Enso statement, the recordings of the interviews showed that a significant number of the questions asked were leading questions.
      "When the answers that were given were not the ones that had been hoped for, the same leading question was repeated numerous times after breaks, if necessary."
      When the results of the investigation by the Finnish Competition Authority were made public a year ago, Helsingin Sanomat asked to be allowed to listen to the taped interviews of the UPM employees. The authority rejected the request, saying that this could jeopardise future investigations of serious antitrust violations; if the recordings were made public, others might be afraid to come forward.
     
Stora Enso and Metsäliitto are especially critical of two highly-placed UPM employees Hannu Vainio and Jorma Saarimaa, whom the companies consider extremely unreliable. Vainio has retired, but Saarimaa continues to work for UPM, and is responsible for the company's own forests and the use of its land.
      "To please his employer, or under pressure from UPM, Saarimaa has deliberately or unwittingly exaggerated and/or distorted his story, and therefore, the results of the investigation are erroneous", Stora Enso claims.
     
Stora Enso suspects UPM of trying to entrap the other companies, so that it might have the grounds to seek immunity and avoid a fine. In this matter Stora Enso refers to the actions of Saarimaa.
      Stora Enso notes that UPM began to prepare for applying for immunity in the spring of 2003, and in January 2004 it decided to blow the whistle on the other companies.
      At the same time, the company allowed Saarimaa to maintain contact with regional directors of other companies. According to Competition Authority documents, he continued to meet with representatives of competitors as late as April 2004.
      "The actions of UPM and certain company officials could even be illegal, and in any case it has been immoral, and indicates how UPM acts in a purpose-oriented manner in this", Stora Enso says.


Previously in HS International Edition:
  European Commission drops paper cartel investigation (17.11.2006)

Helsingin Sanomat