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Home › Dodgy Deals ›
Dodgy Deal
KlabinBrazil

Company – On record

This profile is no longer actively maintained, with the information now possibly out of date
Contact:

nature@banktrack.org

Last update: 2020-11-22 00:00:00
Klabin's Monte Alegre pulp mill. Photo: Wikimapia

Company – On record

This profile is no longer actively maintained, with the information now possibly out of date
Contact:

nature@banktrack.org

Last update: 2020-11-22 00:00:00
Why this profile?

Why this profile?

Klabin is planning to build a large pulp mill, Puma II, in the state of Paraná in Brazil, requiring some 100,000 hectares of plantations. The company has not provided any information on what timber it will source or what communities may be affected.

About
Sectors Pulp, Paper and Paperboard Mills
Headquarters
Ownership
listed on Brazil Stock Exchange

As of June 2019, Klabin's three largest shareholders are Monteiro Aranha (7.97%), The Bank of New York (7.45%) and BNDES (6.82%).

Subsidiaries
Website https://www.klabin.com.br/en/

Klabin, founded in 1899, is the largest paper producer, exporter and recycler in Brazil, and the country's second largest pulp producer. Klabin owns four pulp mills: the Correia Pinto Mill, the Otacílio Costa Mill, the Telemaco Borba/Monte Alegre mill and the Puma mill. Its total pulp capacity is 3.1 million tonnes a year.

In 2016, Klabin opened its Puma mill, which has a total capacity of 1.5 million tonnes per year and is located on the Tibagi river, downstream from the company's Telemaco Borba mill. In 2018 the company started to prepare for the development of a new mill, Puma II, on this site.

What must happen

Banks and other investors should refrain from financing the Puma II project and from providing further financial support to Klabin until it:

  • Publishes an Environmental Impact Assessment for Puma II, that includes an evaluation of the impact of the expansion of monoculture plantations, that will be driven by this project, as well as an analysis of the cumulative impacts caused by the planned mill and the two already existing mills at the Tibagi river;
  • Publishes a detailed plan for the prevention, mitigation and compensation of environmental and social impacts;
  • Provides information about the Free Prior and Informed Consent (FPIC) process for affected communities, covering both the project and the impact mitigation and compensation plans;
  • Publishes geo-referenced maps of identifying where it will source timber from; and
  • Commits to only use Totally Chlorine Free (TCF) bleaching technology with closed water cycle.
Impacts

Social and human rights impacts

Project affected communities Klabin is planning to build a new mill, Puma II, in the state of Paraná, which will have a capacity of almost one million tonnes per year. The company has not made and Environmental Impact Assessment for the Puma II pulp mill, even though the project will almost double the capacity of the mill. No information was found regarding public consultation for this project, neither on Klabin's website, nor in that of the state's licensing agency IAP (as of June 2019).

There are several indigenous lands within the proximity of the Puma mill, which could be impacted by the expasion of the plantations. The company has not yet provided information about its process for seeking the Free Prior and Informed Consent (FPIC) for affected communities.


Environmental and climate impacts

No Environmental Impact Assessment for Puma II pulp mill In April 2019 Klabin obtained an installation license for Puma II, without having done an Environmental Impact Assessment. Puma II pulp mill will require approximately 100,000 hectares of eucalyptus and pine plantations. Since the company argues this is an expansion of its existing mill, Klabin did not make an Environmental Impact Assessment for the project, although it will almost double the capacity of the mill. In the Preliminary Environmental Report it does not provide any detailed information on where it will source the required fibre from.

The new pulp line and paper machines will be located on the Tibagi river, where already two other Klabin mills are located. The Preliminary Environmental Report does not provide any detailed information on where the mill will source the required timber from, and also does not analyse the cumulative impacts of these three mills.


Other impacts

In 2017, Klabin issued USD 500 million of green bonds, followed by another USD 500 million in 2019. These bonds are marketed as providing an opportunity for investors to finance "green" projects. However, a study by EPN (2019) found that these bonds were largely used to finance business as usual activities such as "sustainable forest management", which includes the management of plantations and the acquisition of wood to feed the mill, and that they do not initiate a change towards a sustainable economy, but at best only make existing practices less harmful to the environment.

Financiers

In November 2018 Klabin established financing via a revolving credit facility amounting to USD 1.1 billion (International Financing review). In the first quarter of 2019 Klabin contracted a five year revolving credit facility of USD 500 million (Klabin Q1 2019 Report). In addition, several financial institutions have provided underwriting services to the company, see below for more details.

In October 2019 IDB Invest led a USD 800 million loan to Klabin meant for financing Klabin's Puma II project. IDB Invest financed USD 180 million. A group of financial institutions - IFC, China Cofinancing Fund, IFC MCPP, Santander, Rabobank, HSBC, Sumitomo Mitsui Banking Corporation, Crédit Agricole, BNP Paribas, Sumitomo Mitsui Trust Bank, KEB Hana - co-financed USD 620 million. See below for more details.

Institution type
Finance type
Year
Governance
Bank policies
The following bank investment policies apply to Klabin:
Citi
2013-12-31 00:00:00

Sustainable Forestry Standard

Bank policy
2013-12-31 00:00:00 | Citi
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Brazil pulp and paper company Klabin touts ‘green’ image despite mining interests

2023-04-04 | Mongabay
BankTrack news BankTrack blog Partner news Partner blog

Two sides of the same coin: How the pulp and paper industry is profiting from deforestation in the Amazon rainforest

Agriculture and cattle ranching are the notorious drivers of deforestation in the Brazilian Amazon. But the cattle and soy industry are only one side of the coin, with pulp & paper companies refusing to carry the blame because they do not directly burn the land – other industries do that for them. In Brazil, pulp & paper companies Suzano, Eldorado Brasil and Klabin own the largest pulp mills and should face their responsibilities for the destruction of the Amazon forest.
2020-09-22 | Environmental Paper Network
Blog
BankTrack news BankTrack blog Partner news Partner blog

Two sides of the same coin: How the pulp and paper industry is profiting from deforestation in the Amazon rainforest

2020-09-22 | Environmental Paper Network
BankTrack news BankTrack blog Partner news Partner blog

Klabin projeta investimento de R$ 4,7 bilhões em 2020

Klabin plans to invest BRL 4.7 billion in 2020
2019-11-22 | Brazil | sunoresearch
BankTrack news BankTrack blog Partner news Partner blog

IDB Invest Leads $800 Million Financing to Klabin and Supports Growth and Improved Productivity of Brazil's Pulp and Paper Industry

2019-10-31 | Brazil | IDB Invest
BankTrack news BankTrack blog Partner news Partner blog

Setor florestal estima investir R$ 32 bilhões até 2023

Forestry sector estimates USD 5,7 billion investment till 2023
2019-09-27 | Brazil | Global
BankTrack news BankTrack blog Partner news Partner blog

Klabin closes second TIMO deal in seven months; to promote forestry expansion

2019-07-30 | Brazil | Risi
BankTrack news BankTrack blog Partner news Partner blog

Klabin recebe licença de instalação do Projeto Puma II

Klabin obtains installation license for Puma II project
2019-04-26 | Brazil | Klabin press release
BankTrack news BankTrack blog Partner news Partner blog

UE dá aval e fusão de Suzano e Fibria fecha em janeiro

Antitrust authorities allow Suzano - Fibria merger, on the condition that the 900,000 tonnes a year trade deal between Fibria and Klabin is ended.
2018-11-30 | Brazil | Valor
BankTrack news BankTrack blog Partner news Partner blog

Klabin fará novas operações para alongar a dívida

2018-11-30 | Brazil | Valor
BankTrack news BankTrack blog Partner news Partner blog

Em Ortigueira: IAP realiza audiência pública para conceder licença da fábrica da Klabin

2012-07-02 | Brazil | Government of Ortigueira
Resources
Documents
Images
Links
2020-11-22 00:00:00

Letter from Forests & Finance to JPMorgan Chase on JPMorgan Chase' forest-risk financing

Correspondence
2020-11-22 00:00:00 | Forests & Finance
2020-11-22 00:00:00

Letter from Forests & Finance to BNP Paribas on BNP Paribas' forest-risk financing

Correspondence
2020-11-22 00:00:00 | Forests & Finance
2019-05-01 00:00:00

Industrial Tree Plantations and Green Bonds

NGO document
2019-05-01 00:00:00 | EPN
2019-05-02 00:00:00

Klabin Q1 2019 Report

Company document
2019-05-02 00:00:00 | Klabin
2019-08-01 00:00:00

Code of conduct

Date listed represents date as accessed on website
Bank policy
2019-08-01 00:00:00 | Klabin
2019-08-01 00:00:00

Sustainability policy

Date listed represents date as accessed on website
Bank policy
2019-08-01 00:00:00 | Klabin
2019-05-14 00:00:00

Green bonds used to finance damaging industrial tree plantations

NGO document
2019-05-14 00:00:00 | Environmental Paper Network
2017-08-30 00:00:00

Klabin Green Bond - Second Opinion by Sustainalytics

Company document
2017-08-30 00:00:00 | Sustainalytics
2019-03-27 00:00:00

Relatório Ambiental Preliminar da Ampliação da Unidade Puma

Company document
2019-03-27 00:00:00 | Klabin

Overview of Puma II pulp mill

2019-08-05
Location of the planned new Puma II pulp line

Klabin's sustainability reports

Environmental Licensing page of IAP

SPOTT - ESG policy transparency assessments

IDB invest on Puma II

IFC on Puma II

IFC on Puma I

JICA on Puma II

Business & Human Rights Resource Centre

FSC Watch

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