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    Petrobras and Petroecuador have signed a joint performance MOU for a technical, economic and legal viability study to develop joint projects in biofuel production and distribution in Ecuador. The project includes possible joint Petroecuador and Petrobras investments, in addition to qualifying the Ecuadorian staff that is directly involved in biofuel-related activities with the exchange of professionals and technical training. PetroBras - April 5, 2007.

    The Société de Transport de Montréal is to buy 8 biodiesel-electric hybrid buses that will use 20% less fuel and cut 330 tons of GHG emissions per annum. Courrier Ahuntsic - April 3, 2007.

    Thailand mandates B2, a mixture of 2% biodiesel and 98% diesel. According to Energy Minister Piyasvasti Amranand, the mandate comes into effect by April next year. Bangkok Post - April 3, 2007.

    In what is described as a defeat for the Bush administration, the U.S. Supreme Court ruled [*.pdf] today that environmental officials have the power to regulate greenhouse gas emissions that spur global warming. By a 5-4 vote, the nation's highest court told the U.S. Environmental Protection Agency to reconsider its refusal to regulate carbon dioxide and other emissions from new cars and trucks that contribute to climate change. Reuters - April 2, 2007.

    Goldman Sachs estimates that, in the absence of current trade barriers, Latin America could supply all the ethanol required in the US and Europe at a cost of $45 per barrel – just over half the cost of US-made ethanol. EuroToday - April 2, 2007.

    The Kauai Island Utility Cooperative signed a long-term purchase power agreement last week with Green Energy Team, LLC. The 20-year agreement enables KIUC to purchase power from Green Energy's proposed 6.4 megawatt biomass-to-energy facility, which will use agricultural waste to generate power. Honolulu Advertiser - April 2, 2007.

    The market trend to heavier, more powerful hybrids is eroding the fuel consumption advantage of hybrid technology, according to a study done by researchers at the University of British Columbia. GreenCarCongress - March 30, 2007.

    Hungarian privately-owned bio-ethanol project firm Mabio is planning to complete an €80-85 million ethanol plant in Southeast Hungary's Csabacsud by end-2008. Onet/Interfax - March 29, 2007.

    Energy and engineering group Abengoa announces it has applied for planning permission to build a bioethanol plant in north-east England with a capacity of about 400,000 tonnes a year. Reuters - March 29, 2007.

    The second European Summer School on Renewable Motor Fuels will be held in Warsaw, Poland, from 29 to 31 August 2007. The goal of the event is to disseminate the knowledge generated within the EU-funded RENEW (Renewable Fuels for Advanced Powertrains) project and present it to the European academic audience and stakeholders. Topics on the agenda include generation of synthetic gas from biomass and gas cleaning; transport fuel synthesis from synthetic gas; biofuel use in different motors; biomass potentials, supply and logistics, and technology, cost and life-cycle assessment of BtL pathways. Cordis News - March 27, 2007.

    Green Swedes want even more renewables, according to a study from Gothenburg University. Support for hydroelectricity and biofuels has increased, whereas three-quarters of people want Sweden to concentrate more on wind and solar too. Swedes still back the nuclear phase-out plans. The country is Europe's largest ethanol user. It imports 75% of the biofuel from Brazil. Sveriges Radio International - March 27, 2007.

    Fiat will launch its Brazilian-built flex-fuel Uno in South Africa later this year. The flex-fuel Uno, which can run on gasoline, ethanol or any combination of the two fuels, was displayed at the Durban Auto Show, and is set to become popular as South Africa enters the ethanol era. Automotive World - March 27, 2007.

    Siemens Power Generation (PG) is to supply two steam turbine gensets to a biomass-fired plant in Três Lagoas, 600 kilometers northwest of São Paulo. The order, valued at €22 million, was placed by the Brazilian company Pöyry Empreendimentos, part of VCP (Votorantim Celulose e Papel), one of the biggest cellulose producers in the Americas. PRDomain - March 25, 2007.

    Asia’s demand for oil will nearly double over the next 25 years and will account for 85% of the increased demand in 2007, Organization of Petroleum Exporting Countries (Opec) officials forecast yesterday at a Bangkok-hosted energy conference. Daily Times - March 24, 2007.

    Portugal's government expects total investment in biomass energy will reach €500 million in 2012, when its target of 250MW capacity is reached. By that date, biomass will reduce 700,000 tonnes of carbon emissions. By 2010, biomass will represent 5% of the country's energy production. Forbes - March 22, 2007.

    The Scottish Executive has announced a biomass action plan for Scotland, through which dozens of green energy projects across the region are set to benefit from an additional £3 million of funding. The plan includes greater use of the forestry and agriculture sectors, together with grant support to encourage greater use of biomass products. Energy Business Review Online - March 21, 2007.

    The U.S. Dep't of Agriculture's Forest Service has selected 26 small businesses and community groups to receive US$6.2 million in grants from for the development of innovative uses for woody biomass. American Agriculturalist - March 21, 2007.

    Three universities, a government laboratory, and several companies are joining forces in Colorado to create what organizers hope will be a major player in the emerging field of converting biomass into fuels and other products. The Colorado Center for Biorefining & Biofuels, or C2B2, combines the biofuels and biorefining expertise of the University of Colorado, Colorado State University, the Colorado School of Mines, and the Colorado-based National Renewable Energy Laboratory (NREL). Founding corporate members include Dow Chemical, Chevron, ConocoPhillips, and Shell. C&EN - March 20, 2007.

    The city of Rome has announced plans to run its public bus fleet on a fuel mix of 20 per cent biodiesel. The city council has signed an accord that would see its 2800 buses switch to the blended fuel in order to cut greenhouse gas emissions and local air pollution. A trial of 200 buses, if successful, would see the entire fleet running on the biofuel mix by the end of 2008. Estimates put the annual emission savings at 40,000 tonnes of carbon dioxide. CarbonPositive - March 19, 2007.

    CODON (Dutch Biotech Study Association) organises a symposium on the 'Biobased Economy' in Wageningen, Netherlands, home of one of Europe's largest agricultural universities. In a biobased economy, chemistry companies and other non-food enterprises primarily use renewable materials and biomass as their resources, instead of petroleum. The Netherlands has the ambition to have 30% of all used materials biobased, by 2030. FoodHolland - March 19, 2007.

    Energy giants BP and China National Petroleum Corp, the PRC's biggest oil producer, are among the companies that are in talks with Guangxi Xintiande Energy Co about buying a stake in the southern China ethanol producer to expand output. Xintiande Energy currently produces ethanol from cassava. ChinaDaily - March 16, 2007.

    Researchers at eTEC Business Development Ltd., a biofuels research company based in Vienna, Austria, have devised mobile facilities that successfully convert the biodiesel by-product glycerin into electricity. The facilities, according to researchers, will provide substantial economic growth for biodiesel plants while turning glycerin into productive renewable energy. Biodiesel Magazine - March 16, 2007.

    Ethanol Africa, which plans to build eight biofuel plants in the maize belt, has secured funding of €83/US$110 million (825 million Rand) for the first facility in Bothaville, its principal shareholder announced. Business Report - March 16, 2007.

    A joint venture between Energias de Portugal SGPS and Altri SGPS will be awarded licences to build five 100 MW biomass power stations in Portugal's eastern Castelo Branco region. EDP's EDP Bioelectrica unit and Altri's Celulose de Caima plan to fuel the power stations with forestry waste material. Total investment on the programme is projected at €250/US$333 million with 800 jobs being created. Forbes - March 16, 2007.

    Indian bioprocess engineering firm Praj wins €11/US$14.5 million contract for the construction of the wheat and beet based bio-ethanol plant for Biowanze SA in Belgium, a subsidiary of CropEnergies AG (a Sudzucker Group Company). The plant has an ethanol production capacity of 300,000 tons per year. IndiaPRWire - March 15, 2007.

    Shimadzu Scientific Instruments announced the availability of its new white paper, “Overview of Biofuels and the Analytical Processes Used in their Manufacture.” The paper is available for free download at the company’s website. The paper offers an overview of the rapidly expanding global biofuel market with specific focus on ethanol and biodiesel used in auto transportation. It provides context for these products within the fuel market and explains raw materials and manufacturing. Most important, the paper describes the analytical processes and equipment used for QA testing of raw materials, in-process materials, and end products. BusinessWire - March 15, 2007.

    Côte d'Ivoire's agriculture minister Amadou Gon has visited the biofuels section of the Salon de l'Agriculture in Paris, one of the largest fairs of its kind. According to his communication office, the minister is looking into drafting a plan for the introduction of biofuels in the West African country. AllAfrica [*French] - March 13, 2007.

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Wednesday, April 04, 2007

A closer look at Social Impact Assessments of large biofuel projects

Our bioenergy future will rely on large-scale energy farming. Many of the projects will be located in the Global South where they are set to have both positive, negative and ambiguous impacts on the environment as well as on the socio-economic fabric of the communities that host them.

Whenever large infrastructure and development interventions are carried out - from the construction of dams and pipelines to mining projects or indeed the establishment of biofuel plantations - it is absolutely critical to assess these potential impacts thoroughly before the project is implemented. Failure to do so may result in unwanted and irreversible consequences that threaten the viability of the project over the long-term.

Traditionally, so-called 'Environmental Impact Assessments' (EIA) are undertaken to this aim. The relationship that is analysed in such studies is one of human interventions versus natural ecosystems. But of course, nature and ecology aren't mere inanimate systems, they are social constructs too, imagined, lived, valued and actively used by people and communities. For this reason, 'Social Impact Assessments' (SIA) are now seen as equally, if not more important than EIAs. After all, even if a large project is predicted to have low environmental impacts, it may still fail because of direct social resistance or because of unintended socio-economic changes and perceptions.

Broadly defined, SIA includes the processes of analysing, monitoring and managing the intended and unintended social and cultural consequences, both positive and negative, of planned interventions (policies, programs, plans, projects) and any social change processes invoked by those interventions. Its primary purpose is to bring about a more sustainable and equitable biophysical and human environment. SIAs form the basis of further investment decisions and public policies.

A substantial academic literature has developed around the techniques and the application of SIA, and it is widely taught and practiced. SIA differs from 'monitoring and evaluating' (M&E), in that it typically takes place before a project is implemented. SIA experts have diverse academic backgrounds but most often they include anthropology, applied sociology, geography, development studies, and planning. Companies, investors and governments alike have come to understand that SIA is a cost-effective method of mitigating risks. For this reason, the analysis has become an integral part of the planning stage of large-scale projects (EIAs are integrated with SIAs into ESIAs).

So what would a SIA look like in the context of bioenergy projects? And what is the breadth of such a study? We have an interesting example written by experts from the United Nations Development Program for Stora Enso, a major Finnish forestry company that has entered the biomass industry, and that wants to establish a large (120,000 ha) Eucalyptus plantation project in Guanxi, southern China. At its peak, the project is expected to affect over 650,000 people or 130,000 households. Obviously, with projects of this scale, an in-depth SIA is no luxury:
:: :: :: :: :: :: :: :: :: :: :: ::

SIA and EIA experts from the UNDP's China office were called on to write a thorough ESIA report that presents a prototypical analysis of the potential impacts. It is the first such study ever carried out in China's plantation sector. Even though Stora Enso's plantation project is aimed at producing wood pulp for the paper industry, the basic analyses are roughly the same for large-scale, plantation-based bioenerrgy projects. The ESIA offers several recommendations that, if implemented, could address and mitigate the challenges that can be expected to occur once the project is implemented.

The ESIA must be situated within the broader context of China's development strategy:
The People's Republic's accelerated growth has raised new challenges such as increasing income gaps among people and environmental degradation. The links between human well-being and threats to the ecosystem are complex. Environmental sustainability is a major concern in China and is itself exacerbated by poverty.
The current fragility of China’s ecosystems may well pose serious challenges to sustaining high levels of growth into the first decades of the 21st century. In response to such challenges, China’s new development policy in 2002 called for building a 'well-off society' ('Xiaokang') in an 'all around way' by 2020. This vision for China’s future is very much in line
with the historic compact of the Millennium Declaration and its Millennium Development Goals (MDGs) adopted by world leaders at the United Nations in 2000.

In March 2004, the National People’s Congress of China adopted a scientific concept of development around five balances: (1) balancing urban and rural development, (2) balancing development across regions, (3) balancing economic and social development, (4) balancing development of man and nature, and (5) balancing domestic development and opening up to the outside world.

Within this framework, large-scale development projects cannot do without a thorough SIA and EIA analysis. In this piece, we focus on the UNDP's SIA only, because EIAs are more standardized and deal with relatively easily measurable phenomena (such as the analysis of effects on soil, water, biodiversity, pests, and so on). However, in practise, both kinds of analysis are often inseparable (the UNDP's report clearly demonstrates this, as it is divided into three parts: (1) EIA, (2) SIA, and (3) the integration of the two.)

The social assessment used two main methods: (1) an extensive questionnaire-based survey of stakeholders and (2) in-depth interviews of stakeholders conducted by an expert team of ethnographers and sociologists at provincial, county, and community levels. The integrated social-environmental analysis consisted of three main components: (1) analysis of affected communities’ concerns about environmental impacts of eucalypt plantation (based on the social survey), (2) a cost-benefit analysis, and (3) scenario analysis. For the cost-benefit analysis, a simplified matrix of potential beneficial and adverse impacts was developed. The scenario analysis presents two scenarios: (a) with Stora Enso and (b) without Stora Enso. It then evaluates each of these scenarios at the national, provincial, and local levels.

At its anticipated peak of operation, the project would affect over 130,000 households in land leasing alone. This presents income-generating potential for those choosing to lease out their land, which could bring significant improvements in livelihood. The degree to which households benefit depends, in large part, on the contractual terms of that leasing arrangement and alternative land lease options available to them. In terms of employment, as many as 30,000 individuals will gain income-generating work opportunities.

Some of these will be local residents, others will be migrant laborers coming to Guangxi to look for work. The team did not discover any major “show-stoppers” or social or environmental disasters in-the-making having the potential to jeopardize Stora Enso operations in Guangxi. The ESIA, however, did find major challenges in the social dimensions, while environmental impacts are much more related to plantation operations and therefore can be mitigated through rigorous and disciplined management.


Need for communication and social engagement
Stora Enso’s plantation program directly involves more than 10 different types of local affected groups (e.g. farmers renting land, migrant labour, state farm staff, etc). When functioning fully it will affect a population on the order of 650,000 people in 130,000 households through land rental alone. While offering potential income opportunities, especially on formerly unproductive wasteland or slopeland, this project also offers substantial challenges in engaging and communicating effectively.

Poor initial engagement with affected communities could present considerable risks to Stora Enso’s plantation business. Should communities refuse to rent land, or offer labour or, in the worst case, prevent Stora Enso from conducting its legitimate operations through civil disobedience, the business attraction of the Guangxi project will be diminished.

Information Flow and Gap
A critical need exists to improve the flow of information from the company to its "village rental" and other stakeholders and to ensure greater transparency in the process. A striking finding of the survey is that stakeholders have a strong desire for information on the company and its plantation project.

Survey results also show that while stakeholders do have some information on the project, they rarely get it directly from Stora Enso. Information relating to land rental must reach those who use the land, not simply village and community leaders.

Although the scientific review and expert testimonies conducted do not suggest negative environmental impacts, the large scale survey and expert fieldwork found that people appear genuinely worried about the environmental impacts of eucalypt on human, animals, crops, soil, and water. Local communities and households should be given the information they need to alleviate their fears. In addition, some of the ecological concerns voiced may actually have been a means of indirectly expressing overall dissatisfaction with the rental, in which case the roots of this dissatisfaction (e.g rental terms, participation, etc., as discussed elsewhere) must be addressed.

Land Rental Decision Making Process
In terms of village land use rights, land rental in village areas includes both private and collective land. The ESIA found participation in the decision to rent collective land to be weak. The majority of project village households surveyed indicate a small group of people had represented their community in making the collective rental decision, while only about 30 percent indicated that the collective had followed the legal procedure of at least two-thirds vote for the decision of collective land rental. Some village households renting private land also expressed a feeling of not having been given a choice in the matter.

These results are likely linked much more closely to the traditional practices of public decision-making in the areas involved than to any special characteristics of Stora Enso’s project. While it would be difficult and inappropriate for Stora Enso to attempt to directly influence the collective decision-making process, both the company and the government should make greater efforts to ensure that private land rental is in all cases fully voluntary and transparent.

Generally, findings suggest that farmers have made a rational choice to rent out their land, despite the possibly lower income per mu relative to other options, because of certain constraints such as the financial strength, know-how, and economies of scale needed to develop the alternatives. Farmers, however, lack an advocate in the rental process to help them make decisions and consider the longer-term implications. Also, while findings do not indicate that middle-persons (either those that “introduce” rental opportunities to the company or those that rent land from others and then re-rent to the company) benefit excessively from their role, there is a need to monitor their benefits.

Ideally, given increasing divisions (in terms of income) in rural China, Stora Enso would cooperate directly, to the extent possible, with those renting out their land, so as not to promote such divisions.

The ESIA team also revealed that dissatisfaction with the rental process on collective land could originate not in actions made by the company, but in the decisions over whether or not to rent collective land and how collective rental income is spent. In contrast to findings on private land rental, in which households are indeed the final decision-makers, the analysis found participation in decisions over community land to be weak. These decisions are made completely separate from the company, and separate to the company’s lease terms, but might influence overall impression of the company and the desire to lease land in the future. This conflict is best resolved at the local village level, but could be moved along with support and encouragement from the company given the stake that all entities have in making land leasing a win-win situation.

Stora Enso also rents land from state forest farms. Results indicate that state farm staff in project areas, as a group, do not strongly support land rental to Stora Enso, are not involved in the decision (though their involvement is not legally required) to rent, and are not very aware of rental terms. Interestingly, however, 83% of state farm households who participate in work on Stora Enso plantations and who responded to the surveys revealed that their annual cash income had increased by 2872.2 yuan. Findings suggest a need to explore further the issue of participation of state farm workers in rental decisions or at least ensure they are informed and benefit from the rental.

Results suggest the poorest in the community still depend on fuelwood collected from collective and private use forest land. Fieldwork uncovered perceptions that these people will be denied access to fallen woody branches or woody harvesting residues in areas under Stora Enso’s management. Discussions with Stora Enso managers suggest that, while the company wishes to keep leaf and bark residues on site for soil protection, nutrient recycling, and water conservation, it is willing to allow collection of fallen woody branches and woody harvesting residues for fuelwood. This important message has not yet reached the affected people.

Records of Village Stakeholders
Accessible records of village stakeholders will be an important tool for the company as it strengthens its contacts with village and community stakeholders. Computer-based systems will be very useful and the company should upgrade its information systems to accommodate a database including, to the extent possible, the name, location, and nature of rental of each and every household involved in the project. The database might also keep a record of company liaison with and information flow to each of these households.

Perceptions of Slowness
Some villagers are concerned about Stora Enso being "slow" to develop the land. They worry they will not receive rental payments. Particularly, when Stora Enso does not develop the land for some time after rental, their concerns tend to grow. Findings indicate that in some cases rental payments have been delayed because of slowness in determining exact land area and borders, while, these issues are not unique to Stora Enso, and are typical of land boundary issues in rural China.

Employment, minority populations, gender perspective
Stora Enso plantation work presents an opportunity near to home for those locals that do not wish to outmigrate, though may not offer as many months per year of work as out-migration. Across survey groups, results indicate that respondents are not dissatisfied with their working conditions as compared to the alternatives, but nor do they believe their working conditions are particularly good compared to other options.

Employment Opportunities
Full-scale plantation employment generation once operations have reached steady state is estimated to be between 12,400 and 14,400 full-time jobs. A rough industry standard for all direct and indirect jobs, both related to plantations and the pulp mill itself and based on the scale of the planned mill, is 30,000 to 35,000 full-time jobs.

Work Contracts, Wage, Emergency Services, and other Employment Issues
The survey and expert fieldwork indicate that most employment on Stora Enso plantations (handled by contractors that develop the plantations for Stora Enso) is in compliance with local labor regulations and that serious employment problems have not emerged. Yet, there are a number of key areas with regard to employment that Stora Enso may wish to be aware of. First, contractors rarely have formal written contracts with the workers that they employ and have verbal agreements instead.

According to officials at the Guangxi Labor Bureau, if work is both for over three months and for 30 or more hours per week, then, contractors should be providing work contracts. Based on wage rates quoted in fieldwork, the minimum wage level set by the Labor Bureau is in most cases being met by Stora Enso contractors. Labor disputes have not become an important issue for workers involved in Stora Enso plantation development, though Stora Enso should be aware that such disputes do occur in the plantation contracting business. Serious on the job health and safety problems are uncommon among those working on Stora Enso's Guangxi plantations, though one important issue identified in the field is workers' lack of access to emergency services for cases such as urgent illness, injury, or exposure to natural disasters.

Lacking permanent local accommodation, most migrants live in simple work sheds or tents near the work site. Living conditions, while typical for this type of work, are poor.

Overall, work opportunities on the company's plantations do not appear to be higher for women than for men. Women, however, may appreciate the benefits from the project for different reasons: Some women, particularly those with children, do not want to out-migrate for work and appreciate the flexibility of plantation opportunities.

Also, through increased income, their role in decision making is strengthened. A negative impact of involvement on women would be higher work burdens, as most women will still have to perform their traditional household and agricultural activities in addition to their newly found work.

Ethnic Minorities
The proportion of minorities involved in village land rental to Stora Enso is small, but the counties and districts in which Stora Enso currently leases village land or may lease village land in the future have a minority population of about one million, or about nine percent of the total population of these areas. The main minorities in current and future Stora Enso village project areas are Zhuang, Yao, and Jing.

Minorities appear to be much more prevalent among migrant workers on Stora Enso plantations than among land renters. The ESIA team discovered well-integrated relations between Han and minorities.

Poor Households
The large role of migrant labour in the project and the significant proportion of migrants from Northwest Guangxi imply the project areas not to be the poorest within Guangxi. Guangxi has 4,060 "poverty villages." From 2005 to 2010, the province plans to conduct a poverty alleviation program for all these villages in three phases. The first phase will include 1,731 villages. Altogether, there are a total of 150 of these phase one "poverty villages" in the Stora Enso areas, making up about nine percent of phase one poverty alleviation targets.

Poorer households may be more willing to rent land to Stora Enso than others for reasons of: lacking financial resources to invest in their land, insufficient household labor to work on their land, urgent capital requirements for a particular reason, or desire to use the rental money as core investment for shifting themselves out of poverty. Thus, this group deserves special attention from Stora Enso.

Natural and cultural heritage
No major structures or sites of natural or cultural heritage significance were identified in the project area. Tombs and burial sites within plantations are believed a common issue to be addressed. While during the field visits and discussions with field managers and villagers, the team did not observe any evidence of conflicts on such an issue. It is believed, future graves can be an issue.


Local development needs
The ESIA team analysed the most important development needs of the surveyed groups, and used those findings to make recommendations to Stora Enso on how it can integrate its plantation into the local socio-economic fabric so that it addresses these needs and contributes to satisfying them.

The main needs of the local populations were found to be: irrigation, roads, medical services and drinking water.

These priorities provide indications to how Stora Enso might integrate its plantations (e.g. through road development) or non-project development work (e.g. work in healthcare, irrigation, or drinking water) to address the most pressing community development needs.

Results further indicated that interest in getting a loan is high among affected groups in project areas and higher than the proportion that believe they can get a loan through existing channels.

Health Services and Education
Health services and education are priorities for large proportions of project area respondents. The improvement of community medical services could be integrated into Stora Enso's corporate policy for its field workers’ health and safety. Education is also a sector in which needs in the area are strong and which is conducive to development projects.

Rural Tele-centres
While village respondents put a low priority (among other options) on telecommunications and the internet, an idea that would combine the company's needs to communicate with stakeholders with a development project is village tele-centres. The concept would call for the installation of a computer with internet connection (when possible) in project area natural villages. Villagers could use the centre to access information on Stora Enso, communicate with the company, and view materials on eucalypt plantations. Meanwhile, these centers could also function as a social gathering venue for entertainment, market information for their household agricultural and other products, information on employment opportunities, etc.

Small-scale Eucalypt Plantations
The survey and fieldwork indicate that some local people would like to develop their own eucalypt plantations, but lack the necessary funding, knowledge, and technology.

Development Initiatives in Migrant Communities of Origin
Stora Enso may also wish to consider a non-profit development initiative in migrant villages of origin, keeping in mind their top-reported priorities of roads, water supply, medical services, and housing.


Awareness Campaign, Participation and Engagement with Society
The SIA team identified as top priority for communications work that:

• The company should strengthen its communication practices with local communities and seek expert advice on means through which more effective and transparent flow of information to all levels of affected communities can be achieved.
• The company should address, as a matter of urgency, issues surrounding clarity and transparency of rental agreements, fuelwood collection, and community perceptions of slowness. As a specific module in its communication program, the company (and its Government supporters) should not leave the eucalypt rumors within the communities unaddressed. Brochures, field demonstrations, and face to face meetings with concerned communities should all be a part of a program that seeks to reinforce the environmental credentials of the eucalypt program. Many problems in communication and lack of participation stem from the actual rental process itself, one that operates within already established local power frameworks that exist largely independent of Stora Enso, While recognizing this, relationships created between the company representatives, middlemen, decision makers in collectives, local government, and laborers also influence the degree to which households can benefit from new opportunities, on the one hand, or avoid negative impacts of the project on the other. In this light, the company may also wish to employ a number of additional means to support better awareness and participation, such as:
• Maintaining a greater presence of national and foreign staff in the field to help explain the project directly to people.
• Development of peer support groups within villages.
• Establishment and support for forest plantation associations, which include land users and managers, contractors, and other stakeholders.
• Expansion of the functions of the company’s Hotline.
• A strengthened schools' program and additions to the curricula.
• Development of tele-centres (web-based information systems) as a part of the school computer program or general village out-reach.
• Regular excursions organized for local communities to plantation sites. In the longer term, an annual opportunity to visit the pulp mill.
• Introduction of communications approaches with sensitivity for gender, ethnicity, and poverty.

There is a difference between what is legally acceptable for establishment of plantations in rural Guangxi and the Corporate Social Responsibility (CSR) principles of Stora Enso. To maintain a position as an employer of choice for plantation workers in southern Guangxi, Stora Enso should offer a safe and healthy work environment. The following recommendations are offered:

• Stora Enso provides clear guidelines for minimum working conditions and wages to its contractors, and makes these publicly available to the local communities and migrant workers.
• A comprehensive monitoring system is introduced for contractors to ensure that the legal requirements for minimum wages are met and that they follow corporate guidelines.
• The company works with contractors to improve the living conditions of migrant workers, taking into consideration supply of minimum standard temporary accommodation and drinking water.
• Whilst migrant relationships with local communities are wider problems best dealt with by local governments, Stora Enso sets an example through encouragement of its staff to treat migrants well through a corporate culture that encourages respect.
• The company, in consultation with local authorities, develops processes to resolve labor disputes should these arise (especially important given the general absence of written labor contracts between workers and the contractors).

Development Initiatives
Stora Enso has expressed an interest in continuing to pursue development projects in affected communities. Stora Enso is not a specialized development agency itself. At the same time, in the spirit of Public Private Partnership, Stora Enso may consider cooperating with and engaging international and national development agencies, government institutions, and NGOs to meet priority needs of social and environmental development in its project areas.

The ESIA results indicate that top development priorities of stakeholders in village areas are irrigation, roads, medical services, and drinking water, while for forest farm communities these are medical services, roads, provision for the aged, and improvement of living environment. Education is also an important area for a large proportion of respondents in both groups.

A social development fund could be conceived as an umbrella mechanism to meet these above priorities of development needs of the project communities.


Whilst the Environmental and Social Impact Assessment of Stora Enso’s eucalypt plantation project in Guangxi has an obvious focus upon the company’s operations, other needs were identified during the fieldwork and surveys. Three such needs which deserve attention from Government administrations are:

Revenues and Tax
The study has demonstrated that the Stora Enso project will deliver substantial revenues through taxes, fees, levies and other administrative imposts from local governments. The current ESIA analysis could not identify actual future allocation and expenditure of such tax and revenues. In particular, it is unclear how large a proportion of government revenues from the project will be returned to the plantation
communities for environmental and social needs. It is critical that the investment will directly generate sound social and environmental results, while pro-poor redistribution of the tax revenue is fundamentally important for equity and quality service delivery to vulnerable groups and communities.

In the past, a significant part of the mill door delivered cost of wood in Guangxi was taxes and fees. While these have been reduced substantially, there is still some lack of clarity with regard to taxes and fees. Earlier studies in Guangxi in 2003 identified some 30 different taxes, fees, government charges, and other levies, which were due between harvesting and delivery to the mill gate. In Jiangxi, similar studies have identified some 14 “unofficial forestry fees” imposed by county, prefecture, township and village administrations. Whilst these taxes could potentially benefit the broader community, they have in the past also acted as a serious disincentive to growers of commercially grown wood and successful and competitive wood processors. The issues surrounding tax on commercially grown eucalypt wood in Guangxi are far from clear and there is a pressing responsibility for Governments and administrations at all levels to provide clear and unambiguous rulings.

Advocacy for Viable Land Use Options
As do most plantation companies, Stora Enso disseminates information about the benefits of plantation forestry as a viable land use alternative. Following government priorities to promote the plantation industry, the provincial government and administrations at city, county and collective levels also disseminate information that is pro-plantation. The ESIA study could not identify any source of impartial advice for farmers and communities wishing to assess and discuss land-use options for their private and community lands. The benefits of impartial, third-party information include better-informed land-users with a greater commitment to the land-use choice they have made. Such an impartial information source would avoid land-users placed at a disadvantage due to lack of information, especially when discussing and negotiating land lease contract terms with companies or forestry bureaux. The ESIA team suggests that such a mechanism be put in place.

Support for Stora Enso’s CSR and sustainable plantation policies.
Whilst Stora Enso has a corporate commitment to CSR and to transparency, these worthy principles can only be delivered within the context of China and Guangxi. If Guangxi is to benefit from Stora Enso’s high technical, environmental and social standards, then the Government should be encouraged to work with the company to facilitate achievement of these standards. Examples where such dialogue and cooperation might be required are via accurate mapping of natural habitats not suitable for conversion, equitable and transparent systems for land acquisition, treatment of migrant workers and exchange and transfer of hybrid clones. This issue should remain a regular item of discussion between the company and the Guangxi authorities and is critical in the possible absence of media coverage or supportive NGOs.

Maintenance of Landscape Diversity
In promoting and expanding the substantial eucalypt plantation base in Guangxi, maintenance of landscape diversity will remain an important consideration in sustainability for all plantation growers.
There is a role for the Provincial authorities to offer coordination in southern Guangxi to balance the legitimate commercial needs of Stora Enso, Asia Pulp and Paper, Guangxi Oji Plantation Forest Co and other growers with the needs to maintain healthy landscape diversity.

Need for Monitoring and Adaptive management
Finally, both the Government and Stora Enso will need to monitor and respond to issues which might affect productivity, the environment or the community. Monitoring systems will provide the data against which Stora Enso’s own commitments to Corporate Social Responsibility and sustainable plantation management will be judged. An environmental and social monitoring plan is important and would be integrated with the regular monitoring of plantation productivity and should logically incorporate the elements of maintenance and improvement of site productivity, clone performance, issues relating to soils, quality and quantity of water and biodiversity at species, ecosystem and landscape levels, social issues relating to skills development, poverty, access to infrastructure and services, quality of life, gender and levels of community consultation and participation. Mechanisms should be put in place to provide guidance to plantation managers based on the results of monitoring, so that management practices can be adapted as needed.

This basic overview of issues, opportunities and recommendations resulting from the Social Impact Assessment demonstrates that large-scale bioenergy projects are set to permeate a great variety of aspects of social life and local economies. Land ownership issues and land-lease traditions, labor issues and migration patterns, local political decision making strategies and traditions, gender effects and the impact on ethnic minorities, income and inequality effects, development needs and the impacts on cultural heritage, perceptions about communication, economics and social relations... most of these dynamic social phenomena can be measured and projected if strong analytical frameworks and good ethnographic research is utilised.

Together with general government policies on social sustainability criteria for bioenergy (earlier post), SIAs will determine how a particular project fits into the dense cultural and social fabric of local communities. SIAs not only give private companies an overview of what they can expect once they implement their project, they also offer local, regional, national and even international governments, NGOs and development agencies insights into which practises and projects work and which don't. SIAs can be the basis of social and economic policies.

More information:

United Nations Development Program, Energy & Environment: Environmental and Social Impact Assessment, Stora Enso Plantation Project in Guanxi, China [*.pdf] - Publication Date: Feb 2006, UNDP China, 208 pages.

Stora Enso: UNDP and Stora Enso - developing local communities to reduce poverty - March 14, 2007

Biopact: An in-depth look at Brazil's "Social Fuel Seal" - March 23, 2007

Biopact: A closer look at sustainability criteria for biofuels - March 07, 2007


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