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URUGUAY: Forestry Industry Boom Brings Jobs and Challenges

PAYSANDÚ, Uruguay, Jan 6 2010 (IPS) - “After work, when I’m on my own, I’m bored to death. If you want amenities, you have to bring them yourself,” says young forestry worker Alejandro de Leiva, who works on a tree plantation in the western Uruguayan province of Paysandú, where he lives and works for 10 to 12 days in a row, with just two days off.

When he goes to the city of Paysandú, the provincial capital, he visits his son, who lives with his ex-wife. He also visits his girlfriend, who he hopes to start a family with soon, he tells IPS.

De Leiva works near the town of Gallinal, 490 km northwest of Montevideo, the capital of this small South American country wedged between Brazil and Argentina.

Forestal Oriental SA, a subsidiary of the Finnish forestry industry company Botnia, has one of its many forest plantations outside of Gallinal.

De Leiva is housed nearby, and works with roughly 300 other workers, only seven of whom are directly employed by the company, while the rest are hired by subcontractors.

Forest engineer Eduardo van Hoff, citing a study on the strategic plan for the development of Paysandú up to 2015, says the demand for lumber "will increase considerably since the investment by Botnia alone will consume two million cubic metres a year of the forests owned by Forestal Oriental SA, equivalent to 60 percent of the required raw materials."

The Uruguayan forestry company Colonvade has planted more than 100,000 hectares of forest, 20 percent of it in the northern part of Paysandú province. One of the five sawmills that the firm plans to build will begin to operate next year.

The report on development in Paysandú also points out that several of the existing companies plan to expand their operations.

"Major investments in chipboard factories are also expected, which should make Uruguay a large supplier of parts for the global furniture and construction industries in the future," Van Hoff added.

Paysandú's industrial park, where 29 factories now operate, is expected to expand. The companies are all certified as meeting international environmental, quality, safety and occupational health standards.

In the western provinces of Salto, Paysandú, Río Negro and Soriano alone (Uruguay is made up of 19 provinces or “departments”), which are separated from Argentina by the Uruguay river, there are 206,000 hectares of plantation forests, with a volume of timber of three million solid cubic metres a year.

The construction of Botnia’s enormous pulp mill in the Uruguayan town of Fray Bentos on the banks of the Uruguay river, which has the capacity to produce one million tons of pulp a year, has had major economic and social impacts.

Construction of the plant in 2006 involved an investment of 1.2 billion dollars, the largest in Uruguayan history. The company has also provided a significant number of jobs in this country of 3.3 million people.

But it was the environmental aspect that drew the most attention at the national and international levels. Residents of the Argentine city of Gualeguaychú, located 22 km away from the plant along a tributary of the Uruguay river, have been holding protests since 2006, worried about the risk of pollution posed by the mill and the potential impact on tourism and fishing.

Another issue that has come up is that the plant’s smokestack can be seen from Gualeguaychú’s most picturesque beach resort, Ñandubaysal, across the Uruguay river.

Although the Gualegaychú movement against the pulp mill has waned, smaller groups of protesters continue to sporadically block one of the three international bridges that connect Argentina and Uruguay over the Uruguay river every summer, causing major problems for the tourism industry in this country and hassles for the large numbers of people who cross the border in the summer months.

The two governments are waiting for the International Court of Justice (ICJ) in The Hague to hand down within the next few months a ruling on the legal action brought by Argentina accusing Uruguay of violating the bilateral treaty governing the use of the border river.

But the Gualeguaychú activists say they are not interested in the ICJ decision and will continue their protests and roadblocks.

In the meantime, Stora Enso, a Finnish–Swedish pulp and paper manufacturer, set off a media bomb when it recently announced that its planned pulp mill would be built near the Botnia plant.

However, president-elect José Mujica told business leaders that the plant would not be built there, and later said he had received a call from Stora Enso officials who assured him that the pulp mill would not be built in Fray Bentos, and that they had other sites in mind.

But there have been various other business moves afoot in the forestry industry in Uruguay. A few weeks ago, UPM, a Finnish paper company, acquired Botnia’s pulp production and forestry operations in this country. It now owns a 91 percent share in the Fray Bentos plant and a 100 percent share in Forestal Oriental SA’s forestry operations.

The Forestal Oriental workers who spoke to IPS are optimistic about the latest development. “They’re going to buy more fields, and we’re expecting more jobs and work, and maybe they’ll pay us more. Perhaps they’ll even let us leave on the weekends…” one said with resigned sarcasm.

Botnia is currently the sixth largest exporter in Uruguay, and with its transfer to UPM, it is expected to move up in the ranking.

Economic authorities in Uruguay expect exports to surpass 4.5 million cubic metres of wood this year.

The forestry industry has had a major impact on Uruguay, which has a territory of 176,000 sq km. Prior to the 1987 passage of a law promoting investment in the sector, there were only 100,000 hectares of plantation forests. That total had soared to nearly one million hectares in 2009, of the 3.3 million hectares approved for forest plantations by the Agriculture Ministry. Protected native forests, meanwhile, cover 750,000 hectares.

But the growth of the industry and the influx of foreign investment, especially encouraged by the left-wing government of incumbent President Tabaré Vázquez, have been criticised by local environmentalists, who point to damages to the soil and depletion of water reserves caused by large monoculture plantations of fast-growing eucalyptus and pine trees.

In the 1990s and early 2000s, the industry also drew fire from trade unions, when it was revealed that many forest plantation workers were subject to violations of their labour and human rights and poor working conditions – problems that have been successfully combated by stricter new laws and improved government oversight and inspections, according to the workers who spoke to IPS.

Labour unionists told IPS that the arrival of the left-wing Broad Front to the government for the first time in 2005 paved the way for the fulfillment of longstanding demands for improved conditions for forestry workers. But they say greater controls for subcontractor firms are still needed, especially for plantation operations located far from towns and cities, where violations of workers’ rights still occur.

The industry already employs some 6,000 workers in the western border provinces alone. But within the next four years, another 2,000 jobs are expected to be generated – a significant number in a country this size. And new investment projects are in the pipeline, so the prospects are for steady growth.

Progress on the labour front

The government of conservative President Julio María Sanguinetti established labour, security and occupational health standards in a 1999 decree, but they only began to be enforced at all rigorously in 2004. Companies, government agencies, workers and NGOs took part in drafting the decree.

In July 2004, a “good forestry practices” code was approved, described by experts as a tool for the “transformation and modernisation of labour relations in the area.” But trade unionists say the real improvement arrived in December 2008 with a new law that set an eight-hour workday, with a 30-minute break, for all rural workers.

De Leiva said conditions for forestry workers have improved significantly in the last few years. But he added that there are still problems in terms of getting days off. Many workers, like de Leiva, work 12 days in a row, with just two off. They also have the option of working for an entire month, with four days off. Their supervisors, on the other hand, work Monday through Friday, with weekends off.

At least the workers no longer live in tents in the middle of the countryside, in subhuman conditions, as they did until a few years ago.

Outsourcing

Despite the improvements in their working conditions, forestry workers have suffered the problem of the mushrooming of outsourcing firms, which often fail to respect the law, or stand in the way of unionisation by threatening to cut jobs, for example.

Workers in tree nurseries, sawmills and utility poll manufacturing plants are represented by the Union of Wood Industry Workers, while pulp and paper mill factory workers are grouped in the Paper Federation. Both form part of Uruguay’s sole labour federation, the PIT-CNT.

The forestry industry generates one job for every 30 to 35 hectares. By comparison, agriculture and livestock raising – traditionally the main engines of the Uruguayan economy – employ one person for every 500 hectares.

Transnational corporations typically outsource to subcontractors, which are required to make the obligatory social security payments for their employees.

The firm doing the outsourcing pays the subcontractors for each specific task, such as planting trees, pesticide spraying, fertilisation or fence building, as well as 2.5 percent of production. The workers who stay on the tree plantations are given room and board in installations equipped with electricity and running water.

The latest case of labour irregularities that was detected was in the central province of Tacuarembó, where forestry workers were living in tents in the middle of the countryside in semi-slavery conditions, were not enrolled in the social security system, and were receiving no social benefits.

“If the forestry company finds out that in the outsourcing firm there are workers in the black economy (not on the payroll), they fire the subcontractor, period,” because under the new law, the company doing the outsourcing is also held accountable for irregularities, one of the workers told IPS.

He also said that is one of the reasons the workers themselves often do not report the situation, to avoid losing their jobs.

Workers are paid according to their specialty. For example, a plantation worker earns 500 Uruguayan pesos (25 dollars) a day, while the person who applies the fertiliser earns twice that – a considerable sum compared to the minimum wage of eight dollars a day. But although forestry industry workers earn better on average than other agricultural labourers, most of the work is seasonal, mainly in autumn and spring.

Continued growth

In the western provinces alone, future investment in the industry is expected to be higher than 2.5 billion dollars, besides spending on infrastructure like roads, railways and ports, as announced by president-elect Mujica, who also belongs to the left-wing Broad Front.

After cancelling plans to build a pulp mill similar to Botnia’s in Fray Bentos, Spanish pulp, paper and energy group Ence sold its 120,000 hectares of forest plantations to Stora Enso and the Chilean firm Forestal Arauco, which are partners in the investment.

Although continued growth of forest plantations is projected, non-timber forestry products, like tourism, biodiversity reserves and carbon sinks, are also steadily developing as part of an integral use of native and plantation forests, according to a study on the strategic plan for the development of Paysandú up to 2015, carried out by the local government in conjunction with social and educational organisations and production associations from the province.

 
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