Human rights disclosure, policies, priorities, community engagement

Stora Enso Oyj – Annual report – 31 December 2019

[Note: this is a summary of a longer report in the Sustainability report which forms part of the Annual report]

Industry: forestry, manufacturing

Human rights
Our human rights work is guided by international principles and standards, local regulation, and our company values of ‘Lead’ and ‘Do what’s right’.

We identified development areas related to our highest priority human rights and defined actions to address them.

Opportunities and challenges
Proactively responding to global expectations
We always strive to ensure that human rights are respected in all our operations and activities. Many of the human rights challenges we face are deeply rooted in local society and can only be effectively addressed through a long-term commitment and close cooperation with global and local stakeholders.

The UN Guiding Principles on Business and Human Rights highlight that companies have an ongoing responsibility to respect human rights, even where government actions and regulatory frameworks are inadequate. Compliance with these principles requires companies to conduct human rights due diligence procedures to identify, assess, and remedy the human rights risks and impacts of their operations, products, and services. In addition, new legislation is being explored and developed in numerous countries to address human rights due diligence by companies, with modern slavery being one widely covered aspect. Stora Enso supports human rights regulation that puts companies on an equal standing.

Our policies
Embedded in our strategy
Human rights are integrated into our Sustainability Agenda, which is aligned with the ten principles of the UN Global Compact.

Relevant Stora Enso policies on human rights include:
Stora Enso Code – our code of conduct that expresses our respect for human and labour rights.
Supplier Code of Conduct – imposes strict contractual requirements on our suppliers regarding human rights.
Human Rights Policy – sets out our commitment to fully respect human rights throughout our operations and in all relationships involving Stora Enso and expresses our respect for international human rights instruments.

Human rights are also a fundamental part of several internal policies and guidelines such as our Environmental Guidelines, Diversity Policy, and our Minimum Human Resources Requirements for labour conditions.

How we work
Systematic assessment of human rights impacts
Our commitment to respect human rights covers all our operations, including our employees, contractors, suppliers, and neighbouring communities. We require that human rights risks and impacts are taken into account throughout our operations, including investment decisions related to mergers, acquisitions, and divestments. Our investment guidelines stipulate that environmental and social risks and impacts, including those related to human rights, must be duly identified, assessed, and addressed prior to approval in projects with business-critical risks.
Stora Enso’s key tools for human rights due diligence
Continuous or periodic monitoring with
• Stora Enso Code
• Business Practice Policy
• Minimum Human Resources Requirements for labour conditions
• Supplier Code of Conduct
• Safety standards and tools for all units
• Grievance mechanisms

Project-specific human rights due diligence with
• Investment guidelines
• Environmental and social due diligence for mergers and acquisitions
• Environmental and Social Impact Assessments (ESIAs)
• Community consultations, including Free, Prior, and Informed Consent (FPIC)
• Sustainability Assessment checklist for innovation projects

Environmental and Social Impact Assessments (ESIAs)
We conduct ESIAs for new projects that could directly or indirectly cause significant adverse effects in local communities. Such projects include board, pulp, paper, or sawmills built on greenfield sites, industrial scale plantation projects, and any large-scale investments in or expansions of existing facilities.

An important element of any ESIA involves assessing the operational context from a social impact perspective, including human rights, and establishing dialogues with local residents, members of local organisations, experts, and other stakeholders. This is done through interviews, meetings, workshops, and public hearings. ESIA results give us valuable information on how local communities may be affected by changes in their socio-economic situation and any impacts on cultural heritage, while also setting out implications for community health and safety.

Community consultations
Respecting human rights in land acquisition and management is one of our priority human rights. Community consultations, including Free, Prior, and Informed Consent (FPIC), continue to be a key element in our human rights due diligence and forestry operations in Brazil, Uruguay, China, and Laos, especially concerning land leasing and indigenous peoples’ rights. Our forestry employees in Guangxi, China, work in dialogue with local communities to maintain good relations, and to understand the potential social impacts of our operations. For more information, see page 24.

In southern Laos, in the Saravane and Savannakhet provinces, our trial eucalyptus plantations are located near culturally and ethnically diverse villages. It is essential for us to engage in dialogues in a culturally appropriate way, based on informed consultation and participation, and to obtain community consent for our projects. FPIC is integrated into land identification and acquisition processes, which are implemented together with local communities and authorities. Together with partners, we have developed various FPIC tools to ensure that communities understand the information that is shared with them, and regularly train our employees in community engagement and consultation. We also continue to enhance gender inclusion in land acquisition processes and community consultation meetings, which is an important part of FPIC.

Access to remedy and grievance channels
In accordance with the UN Guiding Principles on Business and Human Rights and our own Human Rights Policy, Stora Enso is committed to remedy situations where our activities have caused or contributed to adverse human rights impacts. Where violations are committed by third parties with links to Stora Enso through our operations, products, or services, we strive to use our influence together with the relevant stakeholders to ensure that those impacts are remedied. For example, our 50/50 joint operation Veracel in Brazil has worked closely with landless movements and authorities for several years to find and implement solutions to land distribution disputes. Veracel has also helped stakeholders understand their rights to various services, including access to legal support. For more information, see page 25.

Access to grievance mechanisms is one of Stora Enso’s highest priority human rights. Our formal grievance mechanism, formerly open to employees in all units and external stakeholders in selected locations, was opened to all stakeholders globally in 2019 to further improve access to anonymous reporting of potential non-compliance. The channel enables any stakeholder to report instances where their rights may have been infringed, or where they have observed potential violations of the Stora Enso Code, including those related to human rights. This service is independently administered by an external service provider. For more information, see page 29.

We have also established grievance channels in local languages for communities and other external stakeholders associated with our plantations and mill in Guangxi, China. We encourage anyone with concerns to call our anonymous hotline number, write to us, visit us, or talk to our field personnel. Stora Enso’s employees are trained to distribute information about our operations in local villages, and to duly process any grievances, even in villages not engaged in any kind of business relationship with the company.

Similar local grievance channels exist for our project in Laos, and our joint operations Veracel in Brazil and Montes del Plata in Uruguay. In Laos, Stora Enso works with communities to raise awareness of villager rights and the channels they can use if concerns arise.

Reporting on our performance
Stora Enso reports on its human rights work annually. We also follow the legal requirements of the UK and, as of 2019, the Australian Modern Slavery Acts. Our annual Slavery and Human Trafficking Statement, which covers the requirements of both Acts, is available at storaenso.com/sustainability. We also follow developments in national legislation to ensure we are compliant with all regulations.

Progress
Updated human rights due diligence
While we respect and consider all human rights important, our highest priority human rights remain the primary focus of our work:
• Health and safety
• Fair employment conditions
• Forced labour
• Freedom of association
• Non-discrimination and non-harassment
• Land and natural resource rights acquisition and management
• Grievance mechanisms
• Children’s rights (relevant to the forest sector).

We continued to develop our human rights due diligence programme in 2019. As a first step, to strengthen our strategic focus, we mapped our Group function processes to identify development areas related to our highest priority human rights. Actions to address the findings are expected to be completed by the end of 2020. In addition, we began updating our internal guidelines to better align them with our eight priority human rights.

Due diligence helps us understand and address our impacts on people.

In 2019, Stora Enso was one of the first companies to sign the WBCSD’s CEO Guide to Human Rights, in which leading companies in the field of human rights encourage their peers to take action. We also signed the guide’s Finland-specific version, which was published by the Finnish corporate responsibility network FIBS. During the year, we also joined a campaign calling for human rights due diligence legislation in Finland, led by the Finnish NGO Finnwatch.

In 2019, we further clarified how human rights are connected to the other topics of our Sustainability Agenda. The related table can be found at storaenso.com/sustainability

Actions related to our highest priority human rights in 2019 included:
Health and safety
It is our goal that all employees, on-site contractors, and our wider workforce return home safely from a healthy workplace every day. For detailed information on our progress in health and safety, including accident rates, absenteeism, and safety observations, see pages 19–21.

In Guangxi province, China, we continued to focus on road safety in rural areas in 2019. For more information, see page 24.

Our joint operation Montes del Plata in Uruguay works closely with its transportation contractors to raise awareness of and improve road safety. For more information, see page 26.

Fair employment conditions
We set strict standards for our operations to ensure fair employment conditions for all employees, on-site contractors, and our suppliers’ employees. This covers topics such as wages, working hours, and overtime compensation. For detailed information about compensation, see pages 20–21.

For several years, Stora Enso has been monitoring labour rights in its bagasse supply chain in the United States to ensure that working hour schedules do not have adverse impacts on contractor health and safety. For more information, see page 63.

Forced labour
Our commitment to combat modern slavery is expressed in our Human Rights Policy and the Stora Enso Code. We take action to prevent all forms of modern-day slavery, including forced labour and human trafficking, in our operations and supply chains. For more information about how we manage potential forced labour and human trafficking, see our annual Slavery and Human Trafficking Statement.

Freedom of association
We strive to avoid activities that could interfere with the right of our employees, on-site contractors, and our wider workforce to freedom of association and to engage in collective bargaining.  Stora Enso signed a global framework agreement with the labour unions IndustriAll, UniGlobal, and BWI in 2018. Stora Enso and the unions held one collaboration meeting in 2019. For more information, see page 18.

Non-discrimination and non-harassment
Stora Enso does not tolerate any form of discrimination or harassment and we encourage anyone who experiences or witnesses such behaviour to report it. Fostering a culture of diversity and inclusion at Stora Enso addresses these themes and raises awareness within the company. For detailed information about our progress in diversity, inclusion, and gender equality, see pages 20–21.

Land and natural resource rights acquisition and management
We strive to ensure that when acquiring and managing rights to use land and natural resources connected to our operations and supply chains, the rights of stakeholders are respected, with a special focus on those of indigenous people.

With the acquisition of Swedish forest assets, Stora Enso is a major forest owner in Sweden (see page 51), and we recognise our responsibilities regarding the rights of Sámi people living in areas that are located on our lands. Stora Enso maintains good relations and cooperation with indigenous Sámi communities in Sweden and Finland. Over the years, we have, for example, established special agreements on land use with several Sámi communities in Sweden. For more information on our land use and wood procurement, see pages 48–54.

In Brazil, Veracel, our 50/50 joint operation with the Brazilian company Suzano, manages a pulp mill, eucalyptus plantations, and related logistics in southern Bahía State. In 2019, Veracel continued its dialogue with the landless movements and the Bahía State government to address land distribution disputes, and its ongoing implementation of special agreements in response to this issue. Read more on page 25.

Veracel maintains good relations with local indigenous villages, and supports educational, infrastructure, and cultural programmes for 30 Pataxó and three Tupinambá communities. Some of these communities are calling for the expansion of the Barra Velha Indian Reserve. The extension would include hundreds of land properties, including 3 219 hectares of land acquired by Veracel before the indigenous peoples first made claim to the land. At the end of 2019, this case was still being processed by the regional federal court. Veracel remains committed to fully comply with the court’s eventual decision.

Grievance mechanisms
Our grievance hotline is available to all employees, on-site contractors, suppliers, and any other external stakeholders that seek access to a confidential grievance mechanisms and effective remedy. For detailed information about our grievance channels and reports received through them in 2019, see page 29.

Children’s rights (relevant to the forest sector)
In accordance with the Convention of the Rights of the Child, children younger than 18 years old enjoy special protection of their human rights. Stora Enso supports the Children’s Rights and Business Principles developed by UNICEF, Save the Children, and the UN Global Compact, and considers six of these principles directly material to its business: principles 2, 3, 4, 5, 6, and 7. Stora Enso’s work on children’s rights and business is integrated into our implementation of the UN Guiding Principles of Business and Human Rights framework. In practice, this means that we strive to:
• contribute to the elimination of child labour;
• ensure decent work for young workers, parents, and caregivers;
• ensure the protection, health, and safety of children in all operations and activities;
• ensure that marketing and advertising respects children’s rights; and
• prevent or minimise risks and impacts on children’s rights due to environmental impacts or the acquisition and management of rights to land and natural resources.

For several years, Veracel has successfully cooperated with the NGO Childhood Brasil to combat child abuse and exploitation in the local municipalities of Belmonte, Porto Seguro, Santa Cruz de Cabralia, and Eunápolis. The goal is to improve the capacity of the municipalities to handle cases of child abuse and adolescent violence through strengthening public policies and providing training to professionals. The outcomes are documented in municipal plans. The municipal plan for Belmonte was completed and delivered to the relevant administrative bodies in 2019.

Stora Enso has a Group-wide internal guideline for the responsible use of children’s images and for organising photoshoots involving children. This guideline was updated in 2019.

In 2019, Stora Enso continued to support six schools in cooperation with the Pakistani non-governmental organisation Idara-e-Taleem-o-Aagahi (ITA) in Pakistan. These schools were set up in 2015 to provide education for the 640 children identified as child workers in the supply chain of our previous 35% minority holding in the equity accounted investment Bulleh Shah Packaging (Private) Ltd. (BSP). The divestment of BSP was completed in 2017 but the school programme, together with Stora Enso’s funding for ITA, will remain in place until 2023 when the youngest children will complete compulsory primary school education as required by the state of Pakistan.

Providing training in human rights
In 2019, Stora Enso supported WWF Russia in providing three human rights-related training sessions to various forest sector actors. The goal was to raise awareness of effective interaction with indigenous people and local communities, and to introduce key concepts such as Free, Prior, and Informed Consent (FPIC). For more information about our long-standing cooperation with WWF Russia, see page 52.

In Brazil, Veracel continues training, auditing, and follow-up procedures related to its supplier code of conduct. Additional human rights training is provided to employees working as guards for Veracel’s security service provider when they begin employment and then every two years.