• The second rating of the pulp and paper sector shows visible improvements in environmental performance of large companies.
• CSE’s data shows that industry can work to provide jobs and a growth model -- it can provide employment to 0.55 million farming families just from tree plantation, and can make India a pulp-surplus country.
• The credibility of the rating works as a reputational incentive to drive change in the sector.

Former President of India K R Narayanan (Right) and CSE director Sunita Narain release the result of CSE's 2nd Green Rating for Pulp and Paper Industry. Also in the picture is Associate Director of CSE's GRP unit, Chandra Bhushan (left).

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New Delhi, September 30, 2004: Former President of India, K R Narayanan released the Centre for Science and Environment’s (CSE) green rating of the pulp and paper sector today. ITC-Bhadrachalam unit was awarded the first rank, displacing last time winner JK Paper Mill to second place. The big loser is Andhra Pradesh Paper Mills, which has slipped from 2^nd place to 11^th in this public rating of the environmental performance of companies.

The project to rate industries was started by CSE in 1999 as an independent tool to leverage change in the environmental balance sheet of companies. As the pulp and paper industry is extremely environmental intensive, using large amounts wood and bamboo as raw material and releasing huge amounts of wastewater into rivers, CSE had rated this sector first in 1999.

The re-rating was done to check if companies were responding to public pressure to reform their environmental performance. "The good news is that even this environmental nightmare sector is showing big changes," says Chandra Bhushan, coordinator of CSE’s Green Rating Project. "The fact that we can benchmark the improvements shows that even if government regulations do not work, public pressure and the reputational incentive to reform does work," adds Sunita Narain, director, CSE.

The rating shows that the companies have responded strongly to recommendations which arose from the first rating.

For instance:

• Only one company had an environmental policy in 1999, and now 16 companies have policies; 25 of the 28 companies rated today have an environment department.
• The average water consumption of a mill during the first rating was 200 tonnes per tonne of paper produced. This has come down to 135 tonnes today.
• While only one company, the winner ITC Bhadrachalam, has totally eliminated the use of toxic chlorine in its process, the others have cut down on their consumption from 65 tonnes of elemental chlorine used for each tonne of bleached pulp to 40 tonnes by 2002.
• In the 1999 rating, CSE had strongly urged companies to move towards sourcing their wood and bamboo from farmers, instead of depending on government forestlands for raw material supplies. It will be recalled that the voracious appetite for wood of this industry has been the single largest cause of deforestation in the country. The 2004 rating reveals that the area brought under farmland for tree cultivation has doubled – from 20,000 hectares to over 40,000 hectares by 2002. Leaders in this area – Harihar Polyfibres, JK Paper Mills and ITC Bhadrachalam – are getting as much as 80-90 per cent of their wood from farmers, who they are encouraging with their technical help and assured markets.

These improvements are reflected in the fact that the 2004 rating awards six companies Three Leaves, as compared to 1999 when only three mills could make the grade.

However, there is plenty of scope for improvement. The top companies have only qualified for the Three Leaves Award, while the highest in the sector is Five Leaves. The overall analysis shows that while the sector improved in some areas, it lost out in certain areas like process efficiency and management. Also, the improvements made in raw material sourcing and water use need to go further.

The companies still misuse water as compared to the global best practice in the industry. It is possible for mills to close their water cycle and recycle and reuse water so that they can virtually become zero discharge mills.

CSE director Sunita Narain presents a memento to the former president

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In the area of raw material sourcing, the sector has the opportunity to become a sunshine sector and catalyse change for the better in the rural economy by generating millions of jobs for poor farmers who can grow trees on marginal lands for the mills.

It can reduce its pollution generation considerably by installing methods to generate energy from its biomass wastes and become an energy surplus sector, rather than depending on fossil fuels like coal.

In the field of wastepaper utilisation, the sector only utilises around 20 per cent of the wastepaper generated in the country and depends largely on imports. By networking with ragpickers and kabariwallahs, the industry has the opportunity to generate wealth for the poor in the country.

The sector has to think in terms of technology leapfrog so that it can eliminate its use of toxic chemicals like chlorine. Today, even with the poor and highly polluting technology it uses, it is earning huge profit margins compared to Western mills. The sector is experiencing a boom and the growth rate is twice the international rate. Growing prosperity and literacy will only increase the size of the paper market in India, providing the sector tremendous scope for improvement on all fronts.

The pulp and paper industry is an environmentalist’s nightmare. It can eat away a nation’s forest. It uses huge amounts of equally precious water to ‘cook and clean’ its raw material. It uses high amounts of bleach in manufacturing, which then emerges as toxins in its wastewater and sludge discharge. It produces bad smells and its effluent is coloured suspiciously.

For precisely these reasons, any change for the better is good news. This green rating shows that change is possible.

NUMBER ONE: ITC Ltd’s Bhadrachalam unit has been judged the greenest of them all. The company has been applauded for leapfrogging into a new technology and becoming the first plant in the sector to eliminate the use of chlorine. Chlorine is used to bleach pulp and impart brightness to paper. This extremely polluting process generates toxic organochlorines that end up polluting the water that they are discharged into. By eliminating chlorine use, ITC can now make food-grade paper -- paper that can be used to package food.

RUNNERS UP: JK Paper Mills of Raygada, Orissa, which was number one in the last ratings, has slipped to the second slot. The company has maintained a foothold because of its efficient resource management process.

The third spot in the ratings has gone to BILT Graphics of Bhigwan, Maharashtra, which uses its state-of-the-art technology to good effect – it generates little pollution and treats its wastewater effectively, which is then used by local farmers for irrigation.

THE LOSERS: The rating is also able to show which companies have fallen behind. The Andhra Pradesh Paper Mills Ltd has dropped to the 11^th position from its second ranking in the last green rating, largely owing to its technological backwardness. The mill also consumes huge amounts of water – 200 tonnes for every tonne of paper it produces, which is more than five times the global best practice. Thirteenth-ranked BILT-Ballarpur unit (placed third in the first ratings) is another major loser: its generation of lime sludge has given it the unenviable epithet of ‘sludge garden’. The mill also loses out in its water consumption and farm forestry initiatives. The third major loser is Hindustan Paper Corporation, Nagaon, which has slipped to the 20^th spot from its 10^th ranking. The mill is changing for the better, but its snail’s pace has put it in the ranks of the losers.