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Building up responsible operations in Guangxi

Stora Enso’s operations in Guangxi consist of tree plantation operations and the ongoing construction of a consumer board mill in the municipality of Beihai. We see responsible operations as a prerequisite for the success of our investments in Guangxi. Our overall vision for Guangxi is to become a leading example for sustainable forestry globally.

Stora Enso’s operations in Guangxi:

Tree plantation operations and a construction of a consumer board mill in the municipality of Beihai.

After the start-up of the consumer board mill scheduled for 2016, a decision on the investment in a pulp mill will be made.

Stora Enso owns 83% of the project. The International Finance Corporation has a 5% shareholding, and the remainder is owned by Guangxi Forestry Group Co. Ltd. and Beihai Forestry Investment and Development Company Ltd.

Stora Enso currently leases a total of 85 768 hectares of land in various regions in Guangxi. Eucalyptus trees are grown on 73 000 hectares of this land.

The plantations provide pulpwood for the planned pulp mill. Before the mill is up and running the wood will be sold locally on the open market.


Forestry is one of the major industrial sectors in Guangxi Province in southern China. Stora Enso’s operations in Guangxi consist of tree plantation operations and the ongoing construction of a consumer board mill in the municipality of Beihai.

We see responsible operations as a prerequisite for the success of our investments in Guangxi and our aim is to help create an advanced forest industry cluster in the region. The raw material supply, human capital and other vital criteria for success are dependent on how the local communities see us. 

 

Responsible construction of industrial operations

We have duly identified the possible sustainability impacts of our mill construction in order to manage and mitigate them. The mapped sustainability issues include:


 

The environmental impacts of the mill construction, including dust and noise from construction work and traffic

Construction employees’ working conditions, living conditions and social impacts

Stakeholder relations with the local community and government representatives

Business practices of contractors and partners

Since 2012 we have assigned our staff working in the area around the mill site to communicate with local people and community leaders, and we have held regular meetings to discuss issues and gather feedback. We also use a variety of ways to disseminate information to local people, including websites, automated SMS communications, an electronic reader board and a notice board displaying printed bulletins by our office in the relocation village.

Our field staff and social engagement officers talk with local people on a daily basis, informing them about Stora Enso’s operations, and asking them about their concerns or suggestions. We work constantly to ensure that this work promotes gender inclusivity, and that less vocal villagers are also consulted.

 

Resettlement Action Plan for relocated people

As a result of local industrial development, approximately 6 000 people have been relocated from their previous homes to nearby locations, with local authorities offering the relocated communities new housing and compensation. Out of these people approximately 1 530 were displaced from Stora Enso’s mill construction site and from adjoining areas acquired by the authorities for road-building.

Even though Stora Enso is not directly involved in the relocation process, we support people who have been relocated in areas close to the mill site. We have maintained a continuous dialogue with the people most affected and offered them support through a Resettlement Action Plan aims to help relocated people to improve their livelihoods. We implement the plan together with local authorities and the Beihai Citizen Volunteers Association, a non-governmental organization.

The Resettlement Action Plan and currently has three main focuses:

Promoting the education of local children and young people by financially supporting a kindergarten and subsidising local schoolchildren and students aged 6–21

Helping people to improve their livelihood by providing job training, hiring locally and supporting local business development

Giving Relocated People security of land tenure by providing them with documentation


Land contracting and contract correction

Stora Enso has been leasing lands in Guangxi since 2002. One key element of our community interaction is ensuring that the land contracts are legitimate. This has been a concern for Stora Enso and our local stakeholders in Guangxi for several years.

The lands Stora Enso leases consist of both state lands and are mainly leased from village collectives and households, though they also include limited areas belonging to local state-owned farms. The collectively owned lands have often previously been sub-leased, sometimes repeatedly, resulting in chains of sub-leases. In many cases the original owners of land use rights have not benefited from the subsequent increases in land rental prices.

After discovering irregularities in the chains of local land lease contracts in 2009, we started an extensive legal screening and correction process covering all contracts for social forestlands.

One important approach to contract correction involves reducing the numbers of intermediaries in land lease chains for the benefit the original holders of the land rights. In cases of irreconcilable conflict that our contract correction procedures cannot resolve, we terminate the contracts in a responsible way. This involves identifying the risks involved in the termination process, trying to settle historical claims or issues in the contract chain, deciding how to deal with any timber belonging to Stora Enso on the land concerned, and finding ways to minimise our losses.

During 2014 the global non-profit organization Business for Social Responsibility reviewed our contract correction process, the existing grievance mechanism, and the whole conflict resolution process. We have taken action on the basis of the review to implement a better tracking system or grievances. We are also developing further our approach to free, prior and informed consent (FPIC) on forestry and land contracting issues in cooperation with Forest Stewardship Council  (FSC®)* and The Netherlands Centre for Indigenous People.



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Creating shared value

Our overall vision is to contribute to making Guangxi region a leading example for sustainable forestry globally. As a part of this vision we aim to explore and identify new opportunities to create shared value with local communities in the long term through our operations in Guangxi, which means improving our competitiveness while simultaneously meeting the needs of local communities.

We have capacity building projects in placetargeting selected local contractors aiming to help them improve the safety, quality and efficiency of their forestry operations by increasingly utilising mechanized harvesting techniques.

We are also running a joint project with the global chemicals company Kemira to promote responsible water management and community engagement. The project aims to find new solutions for responsible water management through stakeholder surveys, community work and water related capacity building. This includes addressing specific concerns such as sewage treatment, drinking water supply, livelihood support, irrigation water supply and community water plant management.

Meeting local workers' needs

Our mill construction project will result in an influx of workers that will peak at approximately 4 000 people. Our focus is on promoting local employment as much as possible, both to maximise the positive economic impacts of the construction work for the local community, and to reduce negative social impacts related to the influx of workers.

We strive to provide competitive wages and benefit schemes for all of our employees in Guangxi. Salary levels are regularly benchmarked to ensure that all of our own staff and our contractors’ employees are paid wages above the stipulated minimum levels.

The considerable influx of workers creates potential for negative social and health impacts. Therefore we have commissioned The International SOS organisation to conduct a health impact assessment to help us plan activities to control the possible health risks caused by the incoming labour force. Such activities range from the provision of high quality medical services accessible to all contractor labour working on-site and information and communication campaigns realised in partnership with local health authorities.


Responsibility for contractors’ employees

Most of the workers in our forestry operations and on the construction site are contractors’ employees. Our responsibility agenda in Guangxi prioritises the health and safety of contracted employees, as well as their human and labour rights. The guiding principle is that our contractors’ employees should be treated as well as our own. Therefore contractors must adhere to Stora Enso’s responsibility requirements, safety standards and procedures with no exceptions allowed.

To improve contracted employees safety, and especially to address accident risks in manual harvesting, loading and transportations, we have launched  Project Transform. This programme aims to establish stronger forestry site supervision, to increase our forestry managers’ presence in the field, and to improve their capabilities to take appropriate action where working conditions are observed to be unsafe.

According to our statistics safety awareness has clearly raised in the field, and our managers now run operations with safety more clearly as a top priority. However, in 2014 two fatalities occurred involving contractor workers in manual tree felling. Due to this we are improving our preventive measures that help and encourage everyone to notice and take action on unsafe practices and processes through timely reporting and follow-ups on corrective actions.

We have also taken action to increase our understanding of the social backgrounds, needs and conditions of our forestry contractors’ employees. In 2014 we initiated a project with the Chinese Center for Child Rights and Corporate Social Responsibility (CCR CSR), who submitted us recommendations including proposals to establish child-friendly spaces in selected camps for contract workers’ families wishing to live at the forestry site and to arrange awareness workshops on child rights for key personnel.

 

 

 

* Stora Enso Global Communications’ FSC® trademark license number is FSC-N001919.