The FINANCIAL — IFC, a member of the World Bank Group, today signed an advisory services agreement with Stora Enso Lao Co., Ltd. to help the company improve its social risk management in Lao People’s Democratic Republic.
IFC and Stora Enso will work together on stakeholder identification and engagement planning, including free, prior, and informed consent in the company’s operating procedures. As part of the agreement, IFC will guide the company on the Government of Lao PDR’s requirements for land acquisition and concession licensing processes to improve land management.
“Stora Enso Lao wants to implement best practices to assess and manage environmental and social risks and impacts,” said Helena Axelsson, Deputy Chief Operating Officer of Stora Enso Lao. “With IFC’s support, we will further strengthen our outreach program to farmers and improve our community engagement according to international best practice. This will include strengthening grievance mechanisms and communications planning.”
IFC’s Forestry Investment Program in Lao PDR supports development of business models for community-based reforestation of degraded and underutilized land. The Forest Investment Program is a targeted multi-donor fund and program within the framework of the Climate Investment Funds. IFC, through community-forestry partnerships with companies such as Stora Enso, aims to enhance technical skills of farmers to improve their productivity, while mitigating climate change, according to IFC.
“This partnership raises the bar in environmental and social standards in Lao PDR’s forestry sector,” said Sergio Pimenta, IFC Global Head of Industry, Manufacturing, Agriculture, and Services. “IFC’s global expertise can help provide Stora Enso with the tailored services the company needs to improve its business performance.”
An industry leader in environmental and social standards, Stora Enso Group is a global provider of renewable solutions in packaging, biomaterials, wood, and paper. Its Lao PDR operations focus on optimum use of land for wood and food production. The company has a 2,200-hectare concession for a pilot and feasibility plantation project in Savannakhet and Saravane provinces.
While not investing in Stora Enso Lao, IFC’s loan exposure to the Stora Enso Group is $238 million. In 2014, Stora Enso’s global sales topped $10.2 billion. The Stora Enso Group, publically traded in Helsinki and Stockholm, employs approximately 27,000 professionals in over 35 countries.