Lessons from Fray Bentos: forest industry, overseas investments and discursive regulation

Abstract

Globalisation in the forest industry has its own particular characteristics which are due to a high degree of capital intensity and limits in raw material supply. Investments in new capacities are expensive and the rate of forest regeneration
is slow in the traditional resource areas in the conifer dominated forests of the global North. The supply problem has lead forest companies to establish tree plantations and pulp mills in the temperate and tropical zones. This has largely
modified global forest-industrial relations. I examine here how and why the establishment of the Fray Bentos pulp mill in Uruguay by a Finnish company, Metsä-Botnia, turned into an international conflict. I also show how the political reactions to the mill planning in fact relied on and further developed the international mechanisms of forest-industrial regulation. The partners of the mill project were forced to prove that the fears expressed by critical parties would not come true. The article ends with some suggestions to improve social sensitivity
of forest-industrial projects by studying more systematically the dependencies between the forest industry and the environing society.