The sponsor has presented plans to address these impacts to ensure that the proposed project will comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about these plans and specific measures currently being undertaken by the sponsor is summarized in the paragraphs that follow.
- Environmental performance and compliance
Aracruz is currently in material compliance with GoB’s regulations and IFC environmental, health, safety and social requirements. Aracruz operation is based on the state of the art technology. Housekeeping of the two plants are of very high standards. The three pulp lines in the Espírito Santo plant are well laid out despite the 3 decades of expansions. The bleaching process in both plants is 98% ECF (elemental chlorine free), which is environmentally sound and in compliance with the IFC environmental standards. Dioxine in the effluent is so low that it is undetectable. Its effluent sample is sent to a Canadian laboratory. The chemical recovery boiler is odorless. Lean fume gas is scrubbed and thick exhaust gas is burnt in the limekiln or incinerator. The consistency of black liquor at the burner is very high at 82% in the Espírito Santo plant and 72% in the Rio Grand do Sul plant. The high concentration of black liquor improves the energy efficiency of the recovery system.
- Environmental management capacity
Aracruz’s has competent industrial and plantation management, interested in achieving high environmental performance. The company has a number of successful environmental management initiatives such as: a plantation partnership program; watershed research, biodiversity monitoring, environmental management systems, forest certification and forest research. The Aracruz pulp plants are certified under the ISO 9002 since 1993 (the Espírito Santo plant has also ISO 9001 for all its activities), and under ISO 14001standard since November 1999 for Espírito Santo plant and since 1996 for Rio Grande do Sul plant.
- Cleaner technologies and eco-efficiency.
Aracruz’s plant in Espírito Santo is energy self-sufficient (98%) based on bio mass fuel (wood wastes) and the recovery boiler. It needs a small amount of fossil fuel for the lime kiln (about 7% of total fuel requirement). Its plant in Rio Grande do Sul is also self sufficient with electricity (95%). The plant uses coal for the power boiler (for about 46% of total fuel requirement) to supplement the recovery boiler, which operates with black liquor from the pulping process (which is the renewable fuel). Coal is very cheap as it is located very close to large coal resources. To reduce the green house gas emission and transportation cost, Aracruz has developed a barge transportation system for part of the wood transportation. This also improves the traffic jam on the road. One barge transportation saves 100 trucks on the road.
- Sustainable forest management.
Aracruz has launched extensive research on the impact of eucalyptus plantations on biodiversity, water, soil and environment. This has helped to ensure the sustainability aspect of the eucalyptus plantations. Aracruz debarks in the forests and leaves the bark and other wood wastes in the forests for improving the soil quality. This has been practiced in the plant in Rio Grande do Sul for many years. The plant in Espírito Santo is in the transition toward this direction. Aracruz has adopted a policy of certifying 100% of its own plantations by a recognized certification system. Although its plantations in Rio Grande do Sul have already been certified by FSC, it plans to have a double certification by certifying all of its plantations by the national certification system CERFLOR (Brazilian Forest Certification Program).
- Social programs
Aracruz regularly allocates significant resources for social programs. In 2003, the company invested US$3.1 million in projects and donations with focus on education and economic/social development.
- Programs to support indigenous communities
Aracruz supports six neighboring indigenous communities affiliated with the Tupinikim Guarani Indigenous Association (AITG) and the Tupinikim Indigenous Association of Comboios (AITC) located in Espírito Santo (Caieiras, Velha, Irajá, Pau Brasil, Três Palpeiras, Boa Esperança and Piraqueaçu), comprising 463 families, through the following programs:
- Actions Foreseen under the Conduct Adjustment Accord (TAC).
The TAC was signed on April 2, 1998 between the indigenous communities of Caieiras Velhas and Pau Brasil, FUNAI and Aracruz. An identical agreement was signed on June 30, 1998 with the Comboios indigenous community. Under these agreements, Aracruz agreed to contribute to social projects in the communities of Caieiras Velhas, Comboios and Pau Brasil, a total of R$13.5 million (in 1998 values), to be provided over the following 20 years, and increased by either the IPC or IGPM inflation indices, whichever is higher. At the same time, Aracruz donated 184 hectares to the Comboios indigenous community. In 2002, Aracruz and the indigenous communities signed an addendum to the TAC by which the funding by Aracruz to the indigenous communities was increased by R$476,000 per year for projects to generate income to the communities, which at the time totaled R$1.4 million annually. Total funds passed along between 1998 and July 2004 amount to R$8.5 million (US$2.8 million). Funds are passed along two times a year, and deposited directly into the accounts of AITG and AITC. The deposits only take place after approval by FUNAI of the projects that have been presented by the communities.
- Employability Program:
Aracruz is committed to improving the level of employability of the indigenous communities. Initially, to enable this program, a consulting company was hired to conduct a survey of the socio-economic situation of the indigenous population. Through this study of the profile of the communities, and at their own request, Aracruz signed contracts with SENAI/PROCAM and SENAC to teach professional courses in selected areas, which were held in 2003 and 2004. In addition, Aracruz engaged with its service suppliers to hire indigenous workers. So far, Aracruz’s suppliers have hired 37 qualified indigenous workers.
- Scholarships:
Aracruz is committed to offer 35 university scholarships per year for indigenous students. Before Aracruz began offering scholarships, the indigenous students had access to college level courses through FUNAI, in compliance with federal legislation. Upon assuming the commitment that has made it possible for indigenous students to have access to a college education, at FUNAI’s request Aracruz paid half of the agency’s overdue tuition payments with educational institutions.
- Study for Recovering the Sahy and Guaxindiba Rivers:
It involves a technical study that needed the approval of the leaders of the indigenous communities. The company hired Prof. Robson Sarmento of the Federal University of Espírito Santo, considered the leading authority on water resources in the state, along with a team of specialists to conduct the survey. Before the studies were initiated, a Terms of Reference (ToR) was extensively discussed with the communities and their approval was granted on January 26, 2004. The studies currently are underway although they still depend upon authorization on the part of the community leaders for the technicians to carry out their work within the indigenous area itself. For the moment, activities are being conducted on the outskirts of the area, in the Sahy and Guaxindiba basins.
- Plan for Forestry and Environmental Development in the Caieiras Velha Indigenous Lands:
Aracruz is committed to supply native seedlings and technical support to the indigenous communities as part of a reforestation project of the hillsides and banks of the Sauê, Sahy and Guaxindiba rivers. Forestry engineer Álvaro Garcia, president of the Forestry Engineers Association, was hired to carry out the project. The process for preparing the plan involved ample consultation with the communities. The project already has been delivered to the AITG. Currently, the AITG and Aracruz are awaiting an opinion from FUNAI, which has not yet commented on the matter. The native seedlings have been at the disposal of the communities since the project was prepared; the project also foresees the construction of a seedling nursery.
- Voluntary Action. Between 1998 and July 2004, Aracruz voluntarily contributed over R$1.4 million ($479 million) to indigenous communities through a number of programs:
Technical Assistance: With a view toward making the results of the agricultural projects carried out in connection with TAC more effective, Aracruz has been voluntarily helping the indigenous communities through technical assistance (TA) programs. To date, the overall cost of the TA amounts to R$431,020 ($144,000).
Income Generation Projects: In the Comboios community, a cattle-raising project was established for the production of milk. This project was financed in part by the BNDES, but had to be supplemented by Aracruz, which disbursed R$65,000 ($22,000). In addition, a community nursery is currently being set up to supply Aracruz with 50,000 seedlings of native tree and 500,000 eucalyptus seedlings a year; the new nursery will also produce medicinal and ornamental plants.
- Cultural Project: The “Project to Recover the Cultural Materials of the Tupinikim and Guarani Peoples of Espírito Santo” is being executed by the Cidadania em Ação non-governmental organization with the full support of Aracruz, based on a signed agreement. This project started in September 2002 and has run exhibitions and sales of the materials produced, coupling cultural recovery with income generation.
- Diverse Donations: These consist of voluntary actions on the part of Aracruz to satisfy a number of different demands on the part of the indigenous communities.
- Forestry Partners Program.
The Aracruz Forestry Partners Program was created in 1991 and involves partnerships with farmers for the planting of eucalyptus trees and subsequent supply of wood to the company. Aracruz provides advanced funding, supplies the seedlings and fertilizers, offers technical assistance and ensures a minimum price for the purchase of the wood upon the end of the cycle. Program participants can set aside a small portion of the production for their own use. In January 1999, the indigenous communities signed the first contracts with Aracruz and have become the largest independent outside suppliers of wood to the company. The area of the indigenous communities currently covered under the program encompasses 1,814 hectares. Between 1999 and 2004, the program generated R$ 12.3 million (US$4,1 million) in revenues to the communities.
The combined contributions from Aracruz to the indigenous communities between 1998 and 2004 though the programs listed above amounts to R$22.3 million ($7.4 million). These programs are consistent with the requirements of World Bank Operational Directive 4.20 on Indigenous Peoples. IFC is discussing with the company possible ways to support community development efforts through the Corporate Citizenship Facility and/or SME linkage programs.
