Montes del Plata, a 50/50 joint venture between Stora Enso and the Chilean company Arauco, runs a state-of-the-art, eucalyptus pulp mill with an annual capacity of 1.2 million tonnes at Punta Pereira in southwestern Uruguay, together with associated eucalyptus plantations. The mill started production in June 2014.
Montes del Plata's sustainability approach is based on the company's management policy and values, which are in line with Stora Enso's Global Responsibility approach, as well as international standards and principles including the UN Global Compact, which our joint venture signed in 2010.
Analysis of potential impacts
During 2013 Montes del Plata has been completing the construction of the mill and preparing to launch pulp production operations. The potential impacts of the construction project and the mill's future operations have been assessed in detail in the mill's economic and social impact analysis.
This study listed positive impacts such as employment and commercial development, as well as some negative impacts such as increased traffic, health risks, and social problems relating to the presence of a transitory population. The presence of temporary workers understandably created concerns among
the local inhabitants, since there were more than 6 000 workers employed at the pulp mill site during the peak of construction, and the surrounding communities are quite small.
Montes del Plata's approach and programmes are designed to leverage full advantage from the business's positive impacts, and to mitigate any negative impacts. The company is working closely with the local community, the authorities and various organisations.
Capacity building among the local workforce
The Montes del Plata project has a significant positive impact on the GDP of Uruguay as well as regional employment. Members of the local workforce are recruited as much as possible, and the
aim is also to create opportunities for other local developments in communities near the mill.
During 2012 Montes del Plata recruited 26 young people aged 18-25 from neighbouring areas for the company's Young Talents programme, which will provide training enabling them to work in various parts of the company's operations. Montes del Plata also works with local suppliers, providing training to encourage them to form small enterprises, and runs a forum for local development initiatives involving many local stakeholders, NGOs and the authorities. During 2013 Montes del Plata also continued to work with the National Institute for Professional Training (INEFOP) in order to develop strategies for strengthening local enterprises.
In 2012 Montes del Plata recruited, selected and trained young people without any related experience to work in the company's harvesting operations, with priority given to youngsters from six nearby towns. These 400 recruits have subsequently been given officially approved training by the Institute of Road Safety (ISEV) on the safe operation of heavy vehicles.
Productive integration with local farmers
Montes del Plata is one of the biggest landowners in Uruguay. The Production Integration Programme (PIP) aims to enhance the efficiency of land use and the sharing of benefits with neighbouring
farmers. The programme works in two main ways: by getting local farmers involved in the tree plantations to complement their main livelihood; and by enabling non-planted areas belonging
to the company to be used by third parties. In order to increase its purchases from independent tree farmers without the need to acquire land, Montes del Plata helps local farmers to start growing
eucalyptus in areas that are not suitable for other farming activities. Some 120 000 hectares of land are rented out to local farmers and honey, dairy and beef production cooperatives.
During 2013 Montes del Plata started working within the PIP to support existing programmes run by Juventud Agraria (the Movement for Agrarian Youth), aiming to train young farmers and enable them to stay in rural areas and earn decent income by giving them land for grazing. One example is the Ovine
Programme through which young farmers get 10 to 20 calves as a kind of "bank loan" on which they will make repayments plus a total of 20% interest within five years. The movement also helps young farmers to deal with banks, the authorities and other parties.
Major concerns at the construction site
During 2013 safety measures at the construction site were further improved, resulting in fewer lost time accidents. However, four fatalities occurred related to the construction project in 2013. In January a contractor worker died after falling from a great height during installation work in the mill's evaporation
plant, due to incorrect usage of the compulsory safety line. In July 2013 three contractor workers died in two separate fatal road accidents. These accidents took place while the contractors were returning from the construction site to their accommodation.
During 2013 strikes involving some or all of the construction workers at the site occurred on a total of 174 days adding up to more than 1.4 million person-hours lost. The main causes of these strikes were irregularities in the labour status of foreign companies' workers, either in relation to Uruguayan labour laws or collective agreements and safety issues. Towards the end of the year the situation improved, and most strikes were connected to national collective bargaining procedures.
Addressing the impacts of increasing traffic
One major stakeholder concern is the increase in heavy traffic both during the construction phase, and when deliveries of wood to the mill commence. Montes del Plata will transport 50% of the pulpwood coming to the mill by barge on the Uruguay River. Three of the four barges to be used were built in Uruguay, helping the local shipbuilding industry, and promoting river transport in general. This will reduce the risk of traffic accidents and benefit the environment by substantially reducing air emissions and fuel consumption.
During 2013 Montes del Plata and the local authorities completed the construction of the extension to Route 55 that will redirect heavy traffic away from the town of Conchillas. Montes del Plata also ran a detailed study of potential black spots along wood transportation routes, including more than 70 schools. The company also donated traffic signs, evaluated optimal routes, and organised traffic safety lessons for schools and other groups such as local taxi-drivers.
Montes del Plata also conducted traffic surveys around the potential black spots and established a communication system for effectively handling any complaints or concerns related to the company's trucks, which are clearly identified. A process designed to prevent or manage any conflicts between truck drivers and local communities has also been set up. In cooperation with a specialised NGO, Montes del Plata is also addressing issues that could arise in relation to the high numbers of truck
drivers, including violence, prostitution, child abuse and sexually transmitted diseases.
During 2013 two fatalities occurred in connection with Montes del Plata's wood transportation. In July a contractor's truck became stuck in the mud on a public road, and one of the contractor workers who were helping the driver was fatally electrocuted as result of his vehicle touching a power line. In November one fatality occurred when a subcontractor's timber truck hit a pedestrian.
Traffic safety will remain a very high priority in 2014 with efforts stepped up further when the mill starts operating.
Large influxes of workers in small communities
During the entire construction period Montes del Plata has worked together with the authorities and many organisations to realise programmes designed to improve traffic safety, promote healthy living habits, and combat alcohol and drug abuse, domestic violence, prostitution and sexually transmitted
Special camps were built in the town of Carmelo and at the mill site to accommodate over 2 500 workers. Each camp had its own social workers, and free-time activities were organised for the workers. Some 150 houses were also built in the nearby town of Colonia. After construction work ends, these houses and camps will be donated to local communities who may use them for social housing or as summer camps for children. Special attention was also given to workers' de-mobilization, including the monitoring of legal compliance with contract and employment termination procedures, conducted jointly with an independent law firm. A survey was set up to assess how many workers return to their places of origin. Contractors must demonstrably provide transport to enable terminated workers to return to their homes. Possible irregular dwellings were also monitored together with the local authorities to quickly detect any cases of people staying in Colonia in irregular conditions.
Montes del Plata maintains active dialogues with neighbouring communities. This is done with the help of face-to-face meetings, through the national and local media, and by utilising bulletin boards and personal contacts. The company produces a weekly TV programme which is aired on all local channels and also accessible online. The Local Development Forum and the Comisión de Seguimiento Ambiental (Commission of Environmental Follow-up), organised by the environmental authority Dinama, are the main forums for face-to-face meetings with the wider community.
Montes del Plata additionally has several well publicised channels in place to enable local communities to raise their concerns, ranging from phone numbers and web access to open house offices and postboxes in suitable locations. All contacts are registered in the company's Communications Registry System and tracked until their resolution. Response times have been reduced by 20% compared to 2012.