Brazil: Handouts for Repression as Usual

In a carbon project in Minas Gerais, eastern Brazil, carbon trading institutions have also used and exacerbated coercive power relations in still another attempt to produce an imaginary carbon commodity. As in Ecuador (see previous posting), the Forest Stewardship Council (FSC) has played a big role and, as in South Africa (see previous posting), the World Bank as well.

-- Q. I take it this is another tree plantation project like those established in Ecuador and Uganda?

Partly, but it’s a good deal more complicated. The company claiming to be saving carbon and helping the climate is a pig iron-producing and plantation management company called Plantar S.A..

-- Q. How is Plantar helping the climate? Is the pig iron it makes produced by solar energy? Or is it perhaps used to make solar cells?

Alas, no. The iron is produced by burning charcoal and releasing carbon dioxide to the atmosphere, and is actually is used to make things like cars, which of course release yet more carbon dioxide.

-- Q. In that case, how can Plantar claim that it deserves carbon credits? It sounds like it’s an active part of the industrial system that is accelerating climate change.

Good question. Plantar and its World Bank associates have tried many lines of argument. At first, they said that without carbon finance, there would be an “accelerated reduction in the plantation forestry base in the state of Minas Gerais, within the next decade, caused by harvesting of existing forests (now in the last cycle of their rotations) and lack of investment into replanting”. In the absence of carbon finance, Plantar and the Bank insisted, “the company would not invest in the replanting of its forests for the [sic] pig iron production, abandoning them after the final harvest of the existing plantations”. When reminded that CDM rules do not allow credit to be provided for “avoided deforestation”, the Bank rewrote its design documents to emphasize other justifications.

-- Q. Which were – ?

First, that Plantar was not avoiding deforestation but rather preventing an otherwise necessary switch in the fuels for its pig iron operations from eucalyptus charcoal to more carbon-intensive coal or coke.

-- Q. Let me get this straight. This company said it deserved carbon credits for not doing something?

That’s correct. Plantar claims that without carbon money, the company would switch over from using charcoal to using fossil fuel. It’s called an “avoided fuel switch”. Because the carbon dioxide released by the charcoal is supposedly mostly absorbed by the new trees grown for new charcoal, less carbon enters the atmosphere than would enter it from the burning of coal.

-- Q. But why would Plantar switch over to using coal? Isn’t there enough charcoal to go around?

Plantar claims that without extra carbon finance for a 23,100-hectare plantation scheme, the charcoal fired pig iron industry faces a “supply bottleneck”. It says current plantations are being depleted and the lack of forest incentives will render new plantations financially unfeasible without World Bank carbon financing. Plantation land will be “converted to pasture or agricultural land”.

-- Q. Is that true?

Well, it does strain credulity. Plantar is saying that carbon credits for its 23,100 hectare project are the only thing that can ensure charcoal supplies, even though Minas Gerais alone boasts two million hectares of eucalyptus plantations. Plantar itself owns rural properties covering more than 180,000 hectares, mainly devoted to eucalyptus for charcoal and almost all located in Minas Gerais, and provides management services for more than 590,000 hectares of plantations for itself and other companies in Brazil spread across 11 large units. The firm also has large investments in the development and production of high-yielding clonal eucalyptus varieties and is reported to be producing over 40 million clonal seedlings per year,6 with yields of 35-42 cubic metres per year, contributing to its reputation as a committed, low-cost and highly competitive producer of charcoal and many other plantation timber products. Plantar has recently also gone to the trouble of getting plantations it uses to produce barbeque charcoal certified by the FSC. Why should the failure to get carbon credits for only four per cent of the total area under the firm’s management and 13 per cent of its own direct holdings result in a failure to invest in replanting? If the financial prospects for new plantation development are so poor, why did Plantar purchase the lands in question only four years ago, before it was considering carbon finance?

Some 143 local groups and individuals put it more strongly in a letter to the CDM Executive Board of June 2004:

"[T]he claim that without carbon credits Plantar . . . would have switched to coal as an energy source is absurd. . . . Yet now [Plantar] is using this threat to claim carbon credits for continuing to do what they have been doing for decades – plant unsustainable eucalyptus plantations for charcoal . . . It is comparable to loggers demanding money, otherwise they will cut down trees . . . [the CDM] should not be allowed to be used by the tree plantation industry to help finance its unsustainable practices."

Even the project’s validator, DNV (see posting on Thailand above), admitted to being sceptical of Plantar’s claim that Plantar would not invest in replanting in the absence of the CDM project, “given Plantar SA’s relatively strong investment capabilities as one of the major eucalypt seedling producers in Brazil”.

-- Q. How did DNV check Plantar’s claim?

They simply went to Plantar and asked them if it was really true or not. Unsurprisingly, Plantar executives assured them that the “internal rate of return for planting new trees is today is not attractive in absence of the sale of CDM credits”.

Meanwhile, the World Bank and its consultants admit that there are several possible “land management scenarios for the Curvelo ranch in the absence of the carbon project".

-- Q. That means that there are several possible baselines with different carbon profiles.

Yes.

-- Q. That means that there are several different figures for how much carbon the project might save.

Yes.

-- Q. That means that there can be no single number of carbon credits generated by the project.

No, there can’t.

-- Q. Doesn’t that bother the project accountants?

No. They simply choose the baseline scenario they claim is “most plausible” and discard the others.

-- Q. So there’s actually no scientific basis for assigning any particular number of carbon credits to the project?

No.

-- Q. So this whole thing is a fraud.

That's correct. The accounting is essentially arbitrary, or to be more precise, unavoidably rigged against the interests of local people. What’s more, even if Plantar could prove that it was avoiding the use of a quantifiable amount of coal in Minas Gerais, it would still have to prove that the coal would not be used somewhere else for 10, 50, 100 or 300 years. Or it would have to quantify the extent to which its local avoidance of fossil fuels was helping indirectly to build an alternative, non-fossil energy economy worldwide. In the end, it’s anybody’s guess how Plantar’s carbon credits are related to climate.

Revealingly, even those technocrats who are committed to the idea of carbon-saving projects are beginning to be uneasy about companies’ demands to be given carbon money for what they are doing already. In May 2003, the CDM Methodologies Panel rejected the claim of another “avoided fuel switch” carbon project located adjacent to Plantar’s that it was an improvement on “business as usual”. In November 2003, faced with a resubmitted accounting methodology, the Panel went on to express concern that to assertions that carbon-saving projects that merely continue current practice are ‘additional’ throws up technical problems of “moral hazard”.

-- Q. “Moral hazard”? What does that mean?

It’s a term often used in the insurance business. By insuring houses, for example, an insurance company, if it’s not careful, can create an incentive for its customers not to take proper precautions against fire. Similarly, offering businesses a way of getting subsidies for what they’re doing already, without any way of verifying their claims about what would happen otherwise, creates incentives for them not to make any improvements.

-- Q. Are there other justifications Plantar cites for getting carbon credits?

Three, in fact. Plantar has also looked to get carbon credits for afforestation, improvements in charcoal production that minimize methane releases, and rehabilitating cerrado, the biome it itself has had such a hand in depleting.

-- Q. What do local people make of all this?

They find it hard to believe that Plantar could secure extra finance for anything that falls under the rubric of “environment” or “development”. “We were surprised and bewildered by the news,” a group of over 50 trade unions, churches, local deputies, academics, human and land rights organizations and others protested in a letter of 26 March 2003. They see the company as having illegally dispossessed many people of their land, destroyed jobs and livelihoods, dried up and polluted local water supplies, depleted soils and the biodiversity of the native cerrado (savannah) biome, threatened the health of local people, and exploited labour under appalling conditions (see Plantar vs. Local People: Two Versions of History, below).

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Plantar: Local People Speak

“Plantar has planted all over, even up to the Seu Zé do Buritim river spring. Thirty-five thousand hectares of land . . . they sprayed pesticides with a plane. There used to be deer and other animals in the area. The native fauna lived together with the cattle. But since they applied the pesticide, every one of them got killed. . . . The eucalyptus planted over here is meant for charcoal. It is a disaster for us. They say it provides jobs, but the maximum is six hundred work places in a plantation of 35,000 hectares. And, whenever everything has been planted, one has to wait for six years. So, what work does it generate? . . . We used to produce coffee – the Vera coffee – and pasta and cotton. Several different little factories in their suitable regions. Nowadays, there is only the eucalyptus. It has destroyed everything else. . . . Why do they come to plant in the land suited for agriculture instead of more suitable areas? Because there it takes ten to twenty years and over here only seven. All the best pieces of land went to the eucalyptus plantations, pushing the small producers away and destroying the municipalities. . . . These companies don’t want unions. They immediately co-opt the union leaders and they begin to make part of their inner circle of managers and directors. . . . The eucalyptus gives the water back to the earth after some years. But when it is time to give it back, they plant a new one that will absorb the water returned by the old one. This new plantation will develop really quickly, because, besides the rainwater, it will receive the water from the old eucalyptus. . . . they are using the carbon credits to plant these eucalyptus that will grow very quickly.”

--Local man who asked for anonymity out of fears for his safety

“Eucalyptus has been grown with blood.”

--Antonio, local farmer

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-- Q. So they see the carbon scheme as shoring up an unjust and destructive social arrangement.

Yes. But local residents oppose not only the way Plantar is trying to get paid for using former cerrado and farmland for a carbon dump. They also oppose the way the carbon project appropriates alternative futures that they are pressing for. In a letter, many local representatives said that:

“The argument that producing pig iron from charcoal is less bad than producing it from coal is a sinister strategy. . . . What about the emissions that still happen in the pig iron industry, burning charcoal? What we really need are investments in clean energies that at the same time contribute to the cultural, social and economic well-being of local populations. . . . We can never accept the argument that one activity is less worse [sic] than another one to justify the serious negative impacts that Plantar and its activities have caused. … [W]e want to prevent these impacts and construct a society with an economic policy that includes every man and woman, preserving and recovering our environment.”

-- Q. In the face of all this opposition, how does the project go forward?

Well, an executive of Rabobank of The Netherlands remarked at a recent business conference in London that getting involved in financing for the project was like "stepping into a stream full of piranhas". The scheme probably couldn’t have got off the ground without the help and sponsorship of the Prototype Carbon Fund (PCF) of the World Bank, which would feed any credits it generates to its roster of Northern corporate and government clients. Plantar was the Bank’s first carbon sink project and the Bank expects it to “prepare the ground for similar projects in the future". 2002 Project Appraisal Document. Plantar’s carbon scheme also gets legitimacy from the involvement of the FSC.

-- Q. Why is the World Bank involved in such projects?

In brief, to shore up and license the continuation of the fossil fuel economy, to please Northern governments, to build a new field of operations for itself as an institution, and to make money for itself. That’s why it helps firms like Plantar do the initial work on a project and promises to provide buyers for the credits.

-- Q. And what if Plantar can’t deliver the credits? Suppose the plantation burns down or the project verifiers find problems with the carbon accounting?

If less than 70 per cent of the CERs are delivered on time to one of the project’s buyers, The Netherlands, then it’s the Brazilian “supplier” who has to pay a penalty, not the Bank.

-- Q. But doesn’t the involvement of the World Bank, as an internationally reputable development institution, at least guarantee certain environmental standards and provide safeguards against abuse of local people?

On the contrary. Many local people feel that the Bank’s involvement merely legitimises environmental damage and the intimidation that Plantar uses to control local people – intimidation which, as in Thailand, is nowhere acknowledged in carbon project documents. Many local residents are afraid to let interviewers cite their names. Some receive death threats. When a representative of the Rural Union of Workers of Curvelo went to the climate negotiations in Milan in December 2003 to raise awareness about the negative environmental and social effects of Plantar’s operations (which won a special ironic NGO award there for "worst CDM sinks project"), the company’s directors bullied other union members into signing a letter of support for the company, threatening massive layoffs if carbon credits were not forthcoming – although one longtime union opponent of the expansion of eucalyptus plantations in Minas Gerais managed to insert an “under pressure” beside her signature.

Unbowed, the local movement has subsequently appealed directly to European investors not to put money into the Plantar carbon project. Peasant and trade union representatives travelled to Cologne to intervene in the Carbon Expo trade fair held there in June 2004, in which the Bank participated.

Throughout the disputes over the carbon project, the World Bank has taken the side of Plantar. For example, in 2003 it posted on its website a letter from Plantar to PCF investors replying to dozens of local groups, without posting the original letter to which it was a reply.

-- Q. What about FSC? How are they involved?

FSC has certified only 32,232 hectares of Plantar’s operations – less than 18 per cent of its landholdings.18 These hectares are used to produce barbeque charcoal. However, Plantar has not hesitated to announce on its website that certification “ensures that our forest is managed in an environmentally responsible, socially beneficial and economically viable way”, giving the impression that FSC’s certificate is valid for all of the company’s plantations. It also claims in a letter to PCF investors that “100 per cent of the Project Area is being and will be certified”. As in Ecuador (see earlier posting in this series), FSC thus has a hand, if only an indirect one, in producing a fictitious commodity claiming to be “carbon”.

PLANTAR VS. LOCAL PEOPLE: TWO VERSIONS OF HISTORY

LOCALS: Before the advent of giant eucalyptus plantations, the geraizeiros of northern Minas Gerais used the cerrado (savannah) for crops, cattle, wild foods, medicines and crafts. Small and medium-sized companies relied on cerrado products to manufacture pasta, leather, saddles, shoes, cotton oil, textiles, castor oil, textiles, sweets, and liquor and other products of the native pequi fruit. Rice, beans and maize were planted and traditional dairy farming and livestock raising was practiced. Under the dictatorship, however, lands that the geraizeiros had traditionally used and claimed ownership over, but which were not formally titled and were under the jurisdiction of the state (devolutas lands), were leased fraudulently for 20 years to eucalyptus-planting firms, who also received financial incentives. Many rural dwellers were expelled from the land, while others were persuaded to abandon it by promises of jobs and better living conditions; still others sold up after becoming isolated and seeing their water supply dry up or become contaminated with pesticides. The cerrado was cut down, fields were fenced and consolidated, and agriculture, stockraising and livelihoods and food products factories that depended on the biodiversity of the cerrado collapsed, leaving many unemployed. Through dispossession and impoverishment, residents have been forced to accept low wages and dangerous working conditions, often as illegal out-sourced labor, or flee to favelas on the outskirts of cities, where they are also trapped in a cycle of poverty. Exactly how much of today’s Minas Gerais monoculture eucalyptus plantations are on devolutas lands is disputed. We believe that most land used by corporations such as Plantar is devolutas. An investigative commission of the Minas Gerais parliament found that iron and steel companies as were granted “a large part of the devolutas lands in northern Minas Gerais”. Whatever the exact figure, however, the question must be investigated, since according to Brazilian law, corporations cannot acquire this type of land, only peasants. By right, such lands should be given back to rural dwellers and used for land reform, food production, and restoration of the cerrado. Many geraizeiros have brought a case against the state over their explusion from their lands when they were expropriated and leased to the companies. They want to convert plantations back into native cerrado.

PLANTAR: Plantar has never owned nor used any so-called devolutas lands. It has never contributed to the eviction of indigenous peoples. Plantar has never placed any constraints on the commercialization of cerrado fruits, on which a few families may rely to earn their living, or on those who collect fruits for subsistence purposes. It is very hard to imagine how a company that does not occupy more than 4.5 per cent of the Curvelo Township area could cause a crisis in the fruit-collecting economy. Besides preserving both legal reserves and permanent conservation areas, Plantar also contributes to the conservation of traditional species of the cerrado. Anyway, the areas where Plantar works are not economically dependent on cerrado products but on cattle-raising. This has heavy environmental impacts, adds little value, and creates fewer employment opportunities than are created by the forestry industry. For example, in Felixlândia, Plantar acquired a former cattle-raising farm which did not provide more than 20 jobs. In the same area, we currently have almost 300 permanent employees. In Curvelo, Plantar provides more than 1000 direct jobs, not to mention indirect figures. Plantar has not caused massive job layoffs and has significantly expanded due to forestry management services provided to third parties.

LOCALS: The 4.5 per cent figure doesn’t include other companies’ eucalyptus plantations in Curvelo, including those of V&M Florestal and Cossisa. In, any case knowing that Plantar has covered 4.5 per cent of the municipality with eucalyptus does not change the plantations’ impacts on the lives of people nearby. Plantar’s comparison between the 20 workers on a former cattle ranch and the 300 workers working there now is misleading. No local people were in fact hired, increasing unemployment in Felixlândia. In addition, while eucalyptus plantations may provide employment during the first two years in preparation of the land, planting, pesticide application, or irrigation, they provide very little work during the subsequent five years before cutting.

It’s true that local people do not use cerrado areas under Plantar’s control for fruit collection. These areas are very small and offer little. But local communities have suffered from the Plantar’s restrictions on their tradition of letting their cows graze freely. Plantar has put cattle in fenced areas or taken them away to another area without informing the owner. This has led to cases of lost cattle. Land reform and small-scale agriculture are the only ways of creating a future for the Brazilian rural population. Yet tree plantations only worsen the unequal distribution of land in the country. In Espirito Santo, eucalyptus plantations expelled thousands and thousands of people into the poor neighbourhoods of urban centres and an uncertain future. Converting the 23,100 hectares of the Plantar project to small-scale diversified and ecological agriculture would create at least 23,100 more human-friendly jobs, with salaries at least four times higher than those of the majority of Plantar workers, according to the concrete experience of the local Movimento dos Pequenos Agricultores (Movement of Small Peasants). The Movimento is also developing an alternative reforestation project, using not eucalyptus but tree species with multiple uses and local environmental value.

LOCALS: What with the eucalyptus industry’s transformation of local rural economies, people often have no economic options other than small scale charcoal production, and build clay ovens in the cerrado for the purpose. Collecting commercial eucalyptus is against the law, however, so independent producers often burn what’s left of native trees, and the resulting charcoal is often eventually purchased by the corporations. Companies still use around 15-20 per cent native cerrado charcoal. They deny this in spite of the existence of receipts showing their purchase of charcoal made from native wood.

PLANTAR: The use of charcoal made out of native vegetation is a reality that bothers pig iron manufacturers, environmentalists and authorities. That’s why it’s a goal of the Plantar project: to establish sustainable plantations, capable of supplying 100 per cent well-managed eucalyptus plantation charcoal for pig iron manufacturing, thus curbing negative impacts brought by the use of native vegetation.

LOCALS: Plantar also continues to destroy cerrado directly in order to use the land for plantations. For instance, Plantar bought cerrado lands in the Campo Alegre and Paiol communities and planted eucalyptus on it. As late as 2000, Plantar was felling cerrado in Lagoa do Capim.156 In December 2002, Plantar land was also cleared at the river spring of Pindaíba. Native tree trunks can still be seen there. Dozens of municipalities have declared a state of emergency over water. Near Paiol de Cima, one stream has completely dried up after having previously flowed 11 months of the year. In Felixlândia, a spring called Cabeciera do Buriti is degraded. Flows in the Buriti river are down and herbicides have been applied without consultation with local people, killing fish and birds. Plantar has planted eucalyptus at river springs, drying them up and also contaminating them with pesticides that kill animal life in the streams. Plantar’s contamination of local drinking water sources with pesticides has also caused the death of many emas, large land birds related to ostriches. The communities of Cobú, Paiol de Cima, Canabrava and Boa Morte have been forced to dig artesian wells. Cattle ranching does not cause such negative impacts on water, and produces a greater diversity of goods, including meat, milk, leather and manure.

PLANTAR: We have been accused of drying up rivers, but in fact some streams dry up naturally for a few months, due to the seasonality of rainfall normal to the cerrado. They recover later. Of course, as with any fast-growing species, eucalyptus needs underground water. Nevertheless, scientific studies have shown that, as long as proper management is carried out, as Plantar does, eucalyptus plantations do not reduce water supply to specific regions. Many traditional cultures, as well as careless grazing practices, are more harmful to hydrological systems than eucalyptus plantations.

LOCALS: A Minas Gerais Parliamentary Investigation Commission found in 2002 that Plantar was practicing illegal outsourcing of labour that negatively affected the safety and livelihoods of charcoal workers. It cited “precarious labor relations, abominable working conditions, slave and child labour and deforestation of the cerrado” as well as “infamous” wage levels. It also found problems with housing, hygiene, drinking water, food, transport and noted that Plantar was in breach of International Labour Office provisions regarding freedom of trade union organizing. The Federal Public Ministry of Labour has sued Plantar for illegal subcontracting and forced it to sign an agreement to change its behaviour, which was subsequently found to be not in compliance. During the 1990s, the Montes Claros Pastoral Land Commission, a church-related organization, also verified the existence of slave labour on Plantar property. In March 2002, the Curvelo Regional Labour Office (DRT) issued Plantar with a summons for using slave and child labour in timber extraction and charcoal production and fined the company after finding 194 workers without any registration on its plantations in Curvelo.20

PLANTAR: Plantar has never used child nor slave labor. Our working conditions are in complete accordance with labor laws. Besides complying with Forestry Stewardship Council standards, the company is frequently audited under its ISO certified quality management system and is certified by ABRINQ Foundation as a “company friend of children”. Representatives from the Intergovernmental Panel on Climate Change have visited Plantar’s facilities. Plantar may have been cited over working conditions by a Parliamentary Investigation Commission (along with every other company in the sector), but no irregularities were found. The company is a benchmark for providing benefits for its employees including occupational health care, half scholarships for all employees from basic education to graduate degrees, free meals and food supply kits to lower-income employees, etc. Instead of undertaking a legal dispute with the Curvelo Regional Labour Office (DRT) after being cited over outsourcing, Plantar has already agreed to manufacture charcoal with its own workforce.

LOCALS: Plantar’s agreement to manufacture charcoal with its own workforce needs to be evaluated to see whether it is really improving conditions for workers, who in general earn a maximum of only US$100/month. As unemployment is rife, most workers are frightened of mentioning any problem that occurs, including the creation of new contracting companies nominally part of Plantar with names like Plantar Energética. Plantar charcoal workers are continuously exposed to smoke containing toxic gases as well as pesticides and are at a high risk for accidents. In Espirito Santo, the Attorney General for Workers Conditions opened a confidential investigation in 2001 after the death of several former Plantar workers. One, Aurino dos Santos Filho, died with a pump filled with pesticides on his back while working on a eucalyptus plantation in Espirito Santo in 2001; he was only 34 years old. Aurino´s family has not received any compensation from the company. Plantar does nothing for workers who become disabled as a result of their work for the company; many have already died. Plantar makes labour organizing difficult by rotating workers among far flung sites. Worker leaders are registered as “urban labourers” to prevent them from becoming rural union members.

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Jorge, a former Plantar worker: “When I started working at Plantar I was OK. One day I fainted after lunch. I was already applying the insecticides, fungicides. I had headaches, I felt weak. My superior told me, ‘I am firing you because you don’t know if you are sick or not.’ Six or seven people died. Plantar said it was heart failure. Now I’m unable to work. I don’t dare eat the fish from the streams here.”

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LOCALS: When it built a new tree nursery, Plantar, without consulting local inhabitants, diverted a road that has always been used by the communities of Paiol de Cima, Meleiros, Cachoeira do Choro, Paiol de Baixo, Canabrava, Gomos and others, extending travel distances for local inhabitants, including 900 students from the Serfio Eugenio School, by more than five kilometers. Plantar also dammed up the local Boa Morte river to supply the nursery with water, as well as polluting water with fertilizers and other agrochemicals, causing complaints from downstream water users. A local leader of an environmental NGO received anonymous death threats over the telephone after criticizing Plantar.

PLANTAR: The detour has not caused any damage to local people. The original route is still there and can be used by pedestrians, cyclists and horse riders. Vehicle traffic has been diverted to prevent seedlings from being affected by dust, and drivers prefer to take the detour anyway because the road is of better quality. Public and school buses no longer get stuck in the mud during rainy periods.

LOCALS: In 2003, the old road was fenced off, making it impossible even for pedestrians to use. Even for anyone daring to jump the fence, the road is unusable, since it is blocked by the company’s nursery. School buses never had problems with the old road.

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Conducting research into the story of Plantar have been Marcelo Calazans and Winnie Overbeek of the Brazilian NGO FASE-ES in Espirito Santo, assisted by an international team working on carbon trading including Tamra Gilbertson, Adam Ma’anit and Heidi Bachram of Carbon Trade Watch, Jutta Kill of Sinks Watch, and Ben Pearson of Clean Development Mechanism Watch (and now with Greenpeace Australia). With the help of Carbon Trade Watch, those affected by Plantar have learned how to film their struggle to share with outsiders, including communities near a BP refinery in Scotland. The carbon credits BP obtained from Plantar and other carbon projects would allow it to maintain high levels of fossil fuel pollution in Europe.

by: ProfMKD @ 5:44 pm