Lack of consultation: The company claims to have held 52 meetings and 349 interviews with community members, but peasant organisations from La Orqueta and Guaraní Indigenous representatives have made clear that they have not been fully informed about the project or its potential costs or benefits. The Environmental and Social Impacts Assessments (ESIAs) and other relevant documents have not been fully translated into Spanish or Guaraní, which is an official language in Paraguay used by around 80% of the population. A joint CSO report outlines the impacts of the project, based on interviews with representatives of these local communities, in which they stressed that they did not want to see the expansion of the industrial eucalyptus plantations since there is no direct benefit to them. They would rather use the land to promote reforestation based on traditional knowledge and promoting local food autonomy.

Lack of Free, Prior and Informed Consent: In the region of Paracel’s operation, there are at least ten Indigenous communities of the Pai Tavytera and Mbya guarani ethnic groups. IDB Invest’s Environmental and Social Review Summary (ESRS) states that FPIC has been obtained in writing from each of these communities, however there is no documentation that supports this claim. An investigation into Paracel’s consultations to obtain FPIC for this project interviewed representatives from a number of the affected Indigenous communities. It found that communities received no warning of the potential negative impacts of the project, meetings were confusing, no written documentation was provided and they felt pressured into signing documents without knowledge that they were effectively consenting to the project. Requests to review the consultation documentation after the meetings were denied by the company. FPIC is an ongoing process that continues throughout the project lifecycle but the company has not made clear how consent will be maintained throughout the development of the project.  

Furthermore, the existing eucalyptus plantations have been developed on former cattle ranches that had previously been established on Indigenous land without consent. There is no evidence that Paracel has assumed responsibility to remediate these past harms in line with the Accountability Framework Initiative, meaning the company must consult with affected communities to start the process of remediation. 

Employment: Paracel claims that the project will create 4,000 new jobs in the region. The company has stated that it has not yet established collective bargaining agreements with local labour unions for the construction or operation of the pulp mill and it has not set a deadline to do so. The number of jobs estimated to be created is misleading since eucalyptus plantations do not require many workers, especially in comparison to the amount of jobs that may have been available in subsistence farming in the area had it not been converted to plantations.

Biomass: The pulp mill will be powered by a biomass power plant which is considered by the company to be “renewable”. However, energy from wood biomass emits more CO2 per unit of energy than coal, is linked to forest and biodiversity destruction and threats to public health. In December 2022, an open letter by 650+ scientists was sent to world leaders urging them to stop presenting the burning of biomass as carbon neutral. This claim of neutrality depends on planting trees that will add to future long-term carbon storage, which will not be the case for trees that are planted only to be processed for pulp.

Deforestation: The mill will be located in the district of Concepción on the border of a so-called “deforestation front”. This is an area mapped by WWF as being at a high risk of deforestation, with forest edges being more prone to fire and more susceptible to human intervention due to higher accessibility. Between 2002 and 2020, Paraguay lost 6.2 million hectares of forest cover, including 1.06 million hectares of humid primary forest, and the total area of humid primary forest in Paraguay decreased by 31% in the same period. In the districts of Concepción and Amambay, the total area of humid primary forest decreased by 21% and 37% respectively between 2002 and 2020. In order to meet the expected pulp production capacity of 1.5 to 1.8 million metric tons a year, Paracel will likely require more eucalyptus plantations than they currently own in the region, meaning that the company will likely encroach on natural forests in the area and further exacerbate deforestation. During the last 20 years, deforestation alone caused 1.51 gigatonnes of CO2 emissions in Paraguay.  

Biodiversity, wildlife and protected areas: Paracel intends to plant eucalyptus on its plantations, which is known to be an aggressive invasive species. There is a strong risk that it will spread into, and come to dominate, existing natural forests and harm both biodiversity and ecosystem function. This is especially worrying since the plantations will be located adjacent to two Important Bird Areas (IBAs) that are internationally recognised as Key Biodiversity Areas (KBAs) for avian conservation and will also overlap with the buffer zone of the Cerrado del Rio Apa Biosphere Reserve and the Pas Bravo National Park. The ESRS outlines that a full “Critical Habitat Assessment” has not yet been conducted for species flagged as potentially impacted by the project and that the company will “develop a comprehensive Invasive Alien Species Management Plan”, but no further details are provided on either of these documents. 

Water sources and pollution risks: Eucalyptus plantations have a severe impact on water resources. In order to grow rapidly, a single eucalyptus tree needs 30 litres of water a day. As a result, areas where eucalyptus are planted intensively become dry and fire-prone. Several scientific studies, for example in Uruguay, Argentina, India, and South Africa, show the negative impacts eucalyptus plantations have on the water table. A recent study also analysed the negative impacts on the water table when pasture land was converted to eucalyptus plantations in Brazil, in a similar environment. The project region is already dealing with higher temperatures and scarce precipitation due to climate change, with Concepción being identified as highly vulnerable to climate disasters. The entire rural population relies on water from local community-owned or privately-owned wells for drinking and irrigation and are deeply concerned by the risk of the water table further deteriorating.    

The mill will use a bleaching system, common in papermaking, that discharges effluents including chlorine dioxide, sulphuric acid and chlorinated organic compounds. These compounds are a great hazard to the environment and human health. Paracel will discharge these effluents via pipeline into the Paraguay river around 20 kilometres upstream from the city of Concepción and from the drinking water catchment location. Here the effluents will undergo a biological treatment, however there is significant risk posed by accidents where untreated effluents may be released into the river and contaminate the drinking water. 

Wildfires: Eucalyptus plantations increase fire occurrence by draining the soil of water. The manner in which they are planted also fuels forest fires because they are large homogenous blocks densely planted with young trees and have dry undergrowth. In addition, the bark of the eucalyptus is very flammable and aerodynamic, allowing burning embers to travel great distances in strong winds and cross over fire-break trenches built to stop fires from expanding.