Cellulose and Forestation: Two Sides of a Predatory Model

This is why Galeano was cautious: "Before making a decision that seems grave to us and that might imply the poisoning of the river and reduction of what little humus we have left on earth, that will rot the waters and dry up the land according to the sad experience of cellulose factories in Chile and Argentina, before making a decision … think carefully about what you are going to do."

However, the government of Tabaré Vázquez decided to authorize construction of the facilities of the Spain-based Ence and Finland-based Botnia corporations. Not only did he not listen to the social organizations, labor unions, and environmental, professional, and university groups that demanded time and dialogue to extend the environmental impact studies, but he also did not listen to the Argentine government, whose country will also be harmed by the installation of the plants. The diplomatic conflict between Uruguay and Argentina has been dragging on for three years, but in recent months has generated strong disputes between the governments of Néstor Kirchner and Vázquez.

There are signed agreements between the two countries, including the Uruguay River Statute, regulated by a binational Administrative Commission that stipulates that if either of the parts plans works that affect navigation, the river’s ecosystem, or water quality, it must advise the Commission. If both countries do not reach an agreement, the case can be taken to the International Court of Justice. But Uruguayan officials never brought the matter to the Argentineans, because they were aware that the answer would be negative. In any case, they preferred to violate international agreements rather than possibly forgo the investments that cellulose companies promise.

On September 14 a Uruguayan prosecutor presented a lawsuit to the Ministry of the Environment that demands the prohibition of the Botnia facility for

"Omitting the enforcement of its duty to protect the environment, and to prohibit the plant’s installation and operation."1 The prosecutor claimed that the environmental rights of Uruguayans will be violated by what will be the cellulose factory "with the biggest production volume in the world."2 

Forest monoculture

Ten percent of Uruguay’s farm land is planted with trees for the production of cellulose. Eucalyptus monoculture displaced the important cereal production (wheat, barley, linen, and sunflower) that had become one of the country’s main export sectors.

The forestry fever started 16 years ago, pushed by the neoliberal model and pushed by policies of the World Bank and the Interamerican Development Bank (IADB). At that time, a ton of pulpable lumber was worth $60 on the international market and demand was high. In the view of financial institutions, the indiscriminate felling of pulpable lumber, at a worldwide rate of 15 million annual hectares, required replacing tropical forests as the main source for paper and cardboard production.

Uruguay, among other third world countries, seemed like a good candidate for the production of pulpable wood, and, starting in 1998, national governments followed the recommendations of international institutions to the letter. One was to offer massive state subsidies to the growing sector: 50% of the cost of planting, very low-interest credits with a grace period of up to ten years, exoneration from national and municipal taxes, and the construction of infrastructure (bridges, ports, roads, and railways) to facilitate the transport and export of wood. In barely 12 years the Uruguayan state invested over $500 million (between direct disbursements and uncollected taxes) in support of monoculture planting, almost 4% of the country’s annual internal gross product.3 

The results of the investment, which was made at the cost of reducing Uruguay’s education and health expenditures, have been clearly negative. Since many countries followed the recommendations of the IADB and the World Bank, the world supply of pulpable wood grew and prices dropped to less than half of what they were when massive forestation was promoted as a "safe, profitable and reliable" business. Now, with the price oscillating between $23 and $28 per ton, many small private investors have not been able to recoup their investment.

Meanwhile the large corporations apply a double pressure: to make the government build large infrastructure works (one 45-ton truck carrying wood arrives in the port of Montevideo every five minutes) and to build cellulose factories to compensate for the fall in the price of raw wood. The biggest foresters are the ones planning to install the large factories: the U.S.-based Weyerhaeuser owns 130,000 hectares of forest monoculture, the Finland-based Botnia has 57,000, and Spain’s Ence has another 50,000 in the country.

Studies reveal that tree monocultures generate serious problems for the country. Tree plantations expel the rural population, since they occupy last place in job creation per hectare, employing just four workers for every one thousand hectares , compared to six in the case of intensive cattle grazing, eight for rice, and at the opposite extreme, 133 workers for every 1,000 acres in horticulture, 165 in viticulture, and 211 for poultry. Besides, the growth of tree plantations keeps farmers from farming their lands because these species of trees dry up surrounding soils that end up unusable for agriculture as sources of water disappear.

For the few who do find employment, Uruguay’s Association of Labor Inspectors (AITU) carried out an investigation that shows that some 6,000 forestry workers live in semi-slavery conditions on tree plantations. A specialized chainsaw worker-who has to pay for the saw out of his own pocket-earns barely five dollars a day and is the highest paid of forestry workers. The inspectors conclude: "It is practically a slavery system. Months and months pass without receiving hardly anything, in a cycle in which they cut and sleep, send food to their families and don’t see one peso. They sleep in infrahuman conditions, under tents almost always made from simple pieces of cardboard and on a floor of dirt."4

As for the impact of the plantations on soils, a study done by a team of researchers from the Sciences faculty of the University of the Republic holds that after 25 years of forestation with eucalyptus the results are grave.5 The soils become highly acidic: while Uruguayan prairies have a Ph of 6.5 to 6.8, the parcels that have tree plantations showed levels of 3.8 to 4.0. Eucalyptus extracts great quantities of calcium from the soil, lowering the Ph level, causing the soil to be less permeable because of the proliferation of fungus and mycelia, which in turn keeps water from penetrating the land and increases erosion. Other results, according to the study, are reduction in fertility, of organic matter content, and irreversible changes in soil texture and structure.

A study carried out in Chile shows that forestry regions are the most impoverished in the country. Between 1994 and 1998 some zones with high forestation impact have registered a growth in poverty and homelessness of up to 29%.6 Chile, with over two million forested hectares, has been defined as the "forestry model" to follow. However, the study reveals that municipalities where the increase in poverty has been highest are those in which besides tree plantations there are also cellulose and paper factories, like the Comuna de Constitución and the Comuna de Nacimiento, in southern Chile.

Both the Uruguayan Ministry of Livestock, José Mojica, and of Labor, Eduardo Bonomi have declared the need to limit forestation. Mujica pointed out that forestation degrades soils and declared himself opposed to continuing to provide facilities to forestry multinationals through generous subsidies. Bonomi denounced the irregular work conditions, the "irresponsible outsourcing and subcontracting" observed in the sector, and assured that the state will start to control the work in that sector.7 

Cellulose and Pollution

During the 2004 electoral campaign that carried Tabaré to the presidency, the left (Encuentro Progresista-Frente Amplio) did not want to debate in public about the construction of the two cellulose plants. In 1996, the Movement for Life, Work, and Sustainable Development began in the city of Fray Bentos, where the two factories will be located. Its main leaders are militant women from the left. Vázquez never agreed to receive them and refused to debate the issue during the campaign.

Although 60% of Uruguayans oppose the cellulose plants, the majority of the inhabitants of Fray Bentos (some 23,000) are in favor because the 600 jobs that the factories would create would be a relief from the high unemployment they suffer. However, environmentalists argue that the pollution will affect the 2,000 people who live off tourism in the zone, as well as fishing in the Uruguay River. They are more than unfounded fears: in Chile the government decided to close the Arauco cellulose plant upon finding that it was responsible for the death of 2,000 black-necked swans which are a tourist attraction in the zone.

The truth is that a single one of the cellulose factories would pour 200 tons of nitrogen and 20 tons of phosphorous into the river annually . In addition, it would emit dioxins and furans into the air.8 Greenpeace Argentina compiled a list of recommendations to promote the clean production of paper, which includes the elimination of chlorine in the process of bleaching the paper pulp and its substitution by oxygen, eliminating the amount of polluting effluents by recycling them within the process, increasing the percentages of recycled paper in the paper to be sold, and demanding the sustainable exploitation of forest resources.9 None of these recommendations has been considered.

What is remarkable is that in spite of the evidence, Uruguay’s Environment Ministry approved-without any observations-the installation of the Ence and Botnia facilities. Even more dismaying is that president Vázquez had agreed to meet with Botnia executives but has never met with environmentalists and grassroots movements opposed to the factories. This is a key point that shows that center-left governments in the region do not have the slightest interest in taking serious steps toward abandoning the neoliberal model.

For Uruguayan economy minister Danilo Astori, the $1.1 billion that Botnia will invest implies growth of 1.6% in the Gross Domestic Product but, above all, it sends a positive signal to international investors the government aims to attract in order to solve the country’s economic crisis.10 However, at least half of the total "investment" is money that will never leave Finland because it corresponds to investments in imported machinery.

Ecological economics professor Carlos Pérez Arrarte estimates that the only "added value" that the cellulose plants will contribute are some 270 jobs each. He estimates that the price the factories will pay eucalyptus growers will be the same or lower than that paid on the international market; that to the extent that the companies are in "duty-free zones" they will not pay taxes; that the inputs and services they will demand, including energy, are of international origin; that they will not require port services either because the plants have their own port terminals. In sum, they will not nourish other value-added industries and therefore "there will not be any meaningful linkages and synergies" that may contribute to energize other productive sectors.11 Lastly, the profits, as usually happens, will be transferred to fiscal havens or safer places than those of the third world, or repatriated.

Deepening the neoliberal model

"The future of cellulose plants is in Asia, South America, and probably Russia," commented Sweden-based Stora Enso’s director general earlier this year. Stora Enso has eucalyptus plantations in the third world as well as cellulose plants.12 Everything indicates that this observation is correct. While in Scandinavian countries, for example, wages and taxes are high and environmental restrictions severe, in the third world many countries have become "forestry paradises" that offer many facilities and scarce obstacles to the paper business. But just like in the Northern countries where environmentalists have played an outstanding role in imposing restrictions to the industry’s pollution, in the South we are seeing the birth of movements that are starting to question the forestry model.

In Brazil, Stora Enso, partnering with the Brazil-based Veracruz in the Veracel joint venture, displaced thousands of peasants and 37 of the zone’s 40 indigenous peoples by buying thousands of hectares in the poor and rural northeast. In September 2004, the Landless Workers’ Movement occupied lands belonging to Veracel, cut down the eucalyptus trees and planted peas to show that these lands are fit for agriculture. It’s the only alternative left to those displaced by the model so as not to find themselves expropriated from their means of survival.

The Uruguayan government hopes to receive more investments linked to cellulose, as pointed out by the Industry Minister after the recent United Nations summit in New York. As a matter of fact, the American firm Weyerhauser, which already possesses 130,000 forested acres, intends to invest up to $1 billion in expanding its business in Uruguay.

Finland’s Botnia alone will produce one million tons in 2007, a sum that tops the annual production of the 60 existing cellulose plants in Argentina.13 In late January, in the World Social Forum celebrated in Porto Alegre, Galeano and Nobel peace prize laureate from Argentina Adolfo Pérez Esquivel, signed a collective letter to Tabaré Vázquez that affirmed that the monoculture forestry model "has deepened social exclusion, concentration, and denationalization of the land and environmental degradation." They added that the construction of the cellulose factories will consolidate that model and will "displace local jobs in the sectors of agriculture, tourism, and fishing, and will also impact the health of the Argentinean and Uruguayan local populations." Though it might seem ironic, progressive governments elected in part on the basis of public opposition to the neoliberal model, are now the ones in charge of deepening it. This certainly seems to be the case in Uruguayan forestry policy. One of the dramas faced by the social movement is its enormous solitude. Faced with a lack of employment, the population tends to support the installation of any source of work without much concern for the middle-term consequences. Also, and this point is especially delicate, the arrival of new governments sensible to the people’s problems creates more and more difficulties for movements that are small and locally based.

Until now, as Greenpeace points out, "the governments of both countries have bet that the polemic will peter out and lower its intensity. That seems to be the more popular environmental policy: wager that the people will not find out or mobilize."14 But in late April some 40,000 Uruguayans and Argentineans carried out the largest demonstration yet against the paper companies-an "embrace" that joined the two shores of the Uruguay River along the bridge between Gualeguaychú and Fray Bentos, a short distance away from the plants’ location. Apparently this is the only language that governments-whether rightwing or progressive-understand.

Raúl Zibechi is a member of the council of the weekly newspaper Brecha in Montevideo, teacher and researcher on social movements in the Franciscan Multiversity of Latin America, and adviser to various social groups. He is a monthly collaborator of the IRC Americas Program www.ircamericas.org, where this article first appeared. Photo is from uruguay.indymedia.org

For More Information

Asamblea Ciudadana Ambiental de Gualeguaychú (Argentina): www.noalapapelera.com.ar

Brecha , "Uruguay país forestal: Un modelo en rojo," Claves de Brecha, November 19 2004, in www.brecha.com.uy

CLAES (Latin American Center for Social Ecology): www.ambiental.net/claes/

Greenpeace Argentina: www.greenpeace.org.uy

Grupo Guayubirá: www.guayubira.org.uy

World Rainforest Movement: www.wrm.org.uy

REDES-Friends of the Earth: www.redes.org.uy

UITA (Unión Internacional de Trabajadores): www.rel-uita.org

Government sites:

División Nacional de Medio Ambiente (DINAMA): www.dinama.gub.uy

Ministerio de Vivienda, Ordenamiento Territorial y Medio Ambiente (MVOTMA): www.mvotma.gub.uy


1. The complete name is Ministry of Housing, Territorial Order, and Environment.

2. Búsqueda, September 15 2005, p. 112.

3. Brecha, November 19, 2004.

4. Carlos Amorin, "Trabajo esclavo en las plantaciones forestales," in www.brecha.com.uy

5. Grupo Guayubirá, "Comunicado de prensa, 5 de mayo de 2005," in www.guayubira.org.uy

6. "Chile: forestación y celulosa generan pobreza e indigencia," in www.wrm.org.uy

7. Grupo Guayubirá: "Trabajo forestal: algo ha empezado a cambiar," in www.guayubira.org.uy

8. Carlos Amorin, "¿Quién necesita a Botnia?," in www.brecha.com.uy

9. Greenpeace Argentina: "Plantas de celulosa sobre el río Uruguay. Nueva amenaza de una industria sucia," in www.greenpeace.org.ar

10. Sergio Israel, "Visiones del desarrollo," in www.brecha.com.uy

11. Carlos Pérez Arrarte, "¿Cuánto valor agregado suman a la vida nacional," in www.brecha.com.uy

12. Albérico Lecchini, "Un futuro latinoamericano," in www.brecha.com.uy

13. Paula Bustamante, "Las papeleras plantean un dilema a América del Sur," AFP, Septembr 8 2005.

14. www.greenpeace.org.ar