Veracel Celulose is a joint venture formed by Brazilian company Fibria (50%) and the Swedish-Finnish Stora Enso. Since 2005, this company produces about 1 million tons of bleached wood pulp per year at its plant in the municipality of Eunapolis, Bahia.
This factory production is for export. Industrial workers and communities located in areas where the company operates has denounced irregularities in the production, environmental management, in the environmental licensing or violations of labor laws.
Local social movements claim that the company sponsors election campaigns of politicians of various parties to ensure support for this production. For example, in a report published in 2008, the Centro de Estudos e Pesquisas para o Desenvolvimento do Extremo Sul da Bahia (CEPEDES) denounced that the companys support to the electoral campaign of President Luiz Inacio Lula da Silva in 2002 was related to a loan of more than 1 billion reais (nearly 500 million dollars) granted by Banco Nacional de Desenvolvimento Economico e Social (BNDES, a State-owned bank) to company in December 2003.
In August 31, 2006, various entities related to the Rede Brasileira de Justia Ambiental (RBJA) released note in which denounced that the company was causing rural exodus, unemployment and increased of the urban periphery in cities near to Eunpolis.
The company was also accused of planting eucalyptus trees in the lands of the Indians Pataxo in Monte Pascoal. According to Frente de Resistencia e Luta Pataxo, Veracel would be coopting the indigenous leaders for allowing this plantation. At least 1700 hectares of eucalyptus trees were planted in those areas. The Indians claim that the company is deforesting their land and contaminating the soil and water with pesticides.
Environmental NGOS, such the Friends of the Earth, disapproved a company initiative named Forest Dialogue, so consider this initiative as a way of pressing local environmental institutions. The report of CEPEDES, previously cited, also claims that many environmental NGOS are being co-opted by the company through this initiative. NGOs would work as enabling agencies to obtain green seals.
The municipality of Santa Cruz Cabralia was the only municipality in the region to prevent planting eucalyptus in your territory. This culture was considered irregular by the strategic plan previously approved in the city. Councillors in the city have accused the company of causing social chaos in the their city with the expulsion of small farmers from their traditional land.
In 2007, a public campaign kept by local groups argued that the company could not receive the Green Seal awarded by the Forest Stewardship Council (FSC). Several Brazilian and international entities took part in the campaign.
In 2008, the company announced that it will invest 1 billion dollars to expand the productive plant in Eunapolis, increasing its production capacity to 1.4 million tons of pulp per year. In the same year, the Ministerio Publico Federal (MPF) ordered to the company to pay a fine of 10 million dollars for environmental damage done between 1990 and 1993. The Federal Court also considered null the environmental licensing done by Conselho Estadual de Protecao Ambiental (Cepram), which authorized the planting of eucalyptus without conducting environmental impact studies. The same decision ordered the company to cut 96 thousand hectares of eucalyptus planted in Santa Cruz Cabralia, Belmonte, Porto Seguro and Eunapolis, forcing it to restore the native vegetation.