Report raises concern about increasing investment in environmentally-harmful pulp mills in Indonesia, Uruguay, Brazil, China, Baltic States

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Article
11 May 2006

Global pulp mill growth threatens forests, may collapse: report

Author: Agence France-Presse

The report...said that false assumptions about the origins and cost of wood used in emerging-market mills has led investors to channel billions of dollars into financially risky and environmentally destructive ventures...CIFOR in particular singled out two Indonesian-based companies, Asia Pulp and Paper (APP) and Asia Pacific Resources International Ltd (APRIL), saying that financial institutions had failed to conduct proper due diligence...APRIL denied the report. "CIFOR's statement is extremely misleading and is based on inaccurate data. There is absolutely nothing risky about APRIL's operations," said president A.J. Devanesan in a statement. He said the company was "a fully sustainable operation" with sufficient acacia plantations and more planned to meet its requirements. "Each year, APRIL plants around 110 million trees. This provides an ongoing source of renewable fiber from which pulp and paper is made."

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Article
11 May 2006

[PDF] Investors Risk Losing Billions by Misjudging Costs, Environmental Impact of Emerging-Market Pulp Projects

Author: Center for International Forestry Research (CIFOR)

False assumptions about the origins and the cost of wood used in emerging market pulp mills has led international investors to channel tens of billions of dollars worldwide into financially risky and environmentally destructive ventures, according to an expert analysis of 67 pulp mill projects...two companies in Indonesia, Asia Pulp & Paper (APP) [part of Sinar Mas] and Asia Pacific Resources International Ltd. (APRIL) are clear instances in which financial institutions failed to conduct proper due diligence on fiber supply....Ongoing efforts by Singapore-based United Fiber System to purchase and expand the PT Kiani Kertas pulp mill could place similar pressures on remaining natural forests in Indonesian Borneo. Merrill Lynch, ANZ Bank, and Cornell Capital are now working with UFS to secure financing for the deal...On the positive side...Dutch banks ABN AMRO and Rabobank agreed not to finance the clearing of primary forest or the purchase of illegally harvested timber. [also refers to Botnia, Sino-Forest. Clarification on CIFOR website says: "CIFOR has no reason to believe that Sino-Forest ever overstated its plantation holdings by providing false information about the extent of those holdings, and we deeply regret any problems that misunderstandings on this issue may have caused."]

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Article
1 January 2006

[PDF] full report: "Financing Pulp Mills - An Appraisal of Risk Assessment and Safeguard Procedures"

Author: Machteld Spek, Center for International Forestry Research (CIFOR)

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