In Chile, Arauco, the country’s second largest pulp producer, has started building a new 1.56 million tonnes/year pulp line at its Horcones mill, in the Biobío region. This project, called MAPA, is problematic as it is likely to fuel land conflicts, especially with the indigenous Mapuche people. It is also expected to lead to an expansion of tree plantations, thereby increasing the risks for wildfires, which in 2017 alone engulfed 600,000 ha.

A major flaw of this project is that its Environmental Impact Assessment did not specify where the company will be sourcing its fibre from, let alone did it analyse the impacts of the plantations that will likely be required to feed the mill. These are well documented to have the potential for serious social and environmental impacts.

Chile has a long history of conflicts over land between pulp companies and the indigenous Mapuche people, which dates back to the 1970s, when the military dictatorship distributed hundreds of thousands of hectares to pulp companies, without consulting or compensating the traditional owners of these lands, many of which were Indigenous Mapuche people. The regions that were converted to pine plantations are now among the poorest of the country, whereas the pulp company owners are among the richest people of South America. After Chile returned to democracy, the Mapuche have started to revendicate the return of their lands. This has led to strong tensions between the Mapuche and plantation companies including Arauco, to which the government has responded by militarizing certain regions, leaving little space for dialogue. The MAPA project will lead to an expansion and/or more intense use of its plantations, which is expected to intensify these conflicts. Last month for example, local media reported on an attempt by Arauco to evict a Mapuche community.

The environmental impacts of the large monoculture plantations that are used to feed pulp mills include strong negative impacts on biodiversity, pollution from fertilizers and pesticides, reducing water availability, which severely affects local communities, and the increased risk of wild fires. As discussed in a recent briefing by EPN, large scale monoculture plantations are tinder boxes, and climate change is exacerbating this problem.

Due to these and other impacts, EPN and its partners have published the MAPA dodgy deal* on BankTrack’s website. We recommend international banks and other financial institutions to refrain from providing funds or support for the construction of the MAPA project, until Arauco transparently shares:

·       Written proof that it obtained Free, Prior and Informed Consent from affected communities;

·       Credible figures proving without reasonable doubt that the company has enough wood fibre to feed all its plants for the coming years, worldwide, factoring in the potential risk of plantation area reduction due to fires and climate change;

·       A written compromise to not engage the local police into raids against Mapuche families or communities that are revendicating their civil right of land usage.

 

* Dodgy deals are projects with potential high social, environmental and governance impacts, and which therefore pose significant risks to investors. BankTrack keeps track of some of the most problematic deals that NGOs are campaigning on. For more pulp mill dodgy deals visit: www.banktrack.org.