The proposed Project is considered to be of public interest by the local municipal authorities of Ortigueira due to the economic benefits to the municipality from job creation and tax revenues. 

So far, the Sponsor?s proposed development of the Project has required an area of approximately 850 ha for the construction of the proposed cellulose mill, including a buffer zone around the industrial buildings and other plant infrastructure.   The Sponsor has purchased a total of nine (8) properties through market-based willing buyer-willing seller transactions (with an approximate area of 430ha) and contributed with additional land from its own planted forest assets. Four (4) out of the eight (8) properties acquired for the cellulose plant site were purchased from absentee owners, some of whom have extensive land holdings in the region.  One (1) of these properties owned by an absentee owner was occupied by a farm worker (caseiro) who could become economically displaced.  Other three (3) properties were owned and occupied by small rural producers whose livelihoods and survival depend on the affected land (i.e. for gracing and crop production) and who are being displaced both physically and economically.  One (1) property is used for recreation on weekends.

For the purchase of these properties, Klabin provided the owners total compensation package consisted of the provision of a plot of land located nearby for the family lo live in; cash payment for part of the total property value; and in-kind exchange of a plot of land owned by Klabin, already under production of pine or eucalyptus, which will be in turn leased by Klabin for a period of 14 years, generating an annual cash revenue to the owner, according to negotiations to re-establish or improve pre-existing living conditions. The owner and Klabin have the option of extending this lease period for additional time upon mutual agreement or else terminate the lease agreement after the plantation is harvested by Klabin at the end of the leasing period.  The current agreements will include moving or other assistance that may be required for these families to re-establish their living conditions, including assistance for the rural worker employed in one big-size productive property acquired for the placement of the cellulose plant. 

The Project will also require additional land for the construction of the aforementioned ancillary facilities which consist of: approximately two 230-kilo volts (kV) high voltage transmission line (56,5km); dedicated water intake and wastewater discharge pipelines from the Project site to the Tibagi River (approximately 4km each); approximate 22km internal road with bridge over Tibagi River as a dedicated connection between the Project and Klabin?s existing Monte Alegre pulp and paper mill in Tel?maco Borba; approximate 22km railway spur to connect the Project to the Central Paran? Railway system; approximate 54km dedicated main access road; and 4 temporary construction worker camps.  The land requirement for these facilities includes a combination of Sponsor land holdings; public land sold or assigned by the municipalities; and private land belonging to third parties.   

The forestry assets that will be assigned to the Project consist of approximately 200,000 ha of forest lands, 106,000 of which are currently under various stages of production and the remainder of which are set aside as conservation land.  Of the 106,000 ha under production, 96,000 ha are owned by Klabin and another 10,000 are leased from third parties. The 96,000 ha under production include approximately 66,000 ha of existing forests transferred from the Sponsor to the project and an estimated additional 30,000 ha of existing plantations purchased from a competitor in 2011. Forest assets under Klabin?s ownership are all FSC certified.   

In order to meet the requirements of IFC?s Performance Standard 5, the Sponsor will document its on-going land acquisition and resettlement compensation process as follows: 
Develop and implement a Strategic Resettlement Framework to secure the replacement of productive land and provision of social, economic and technical assistance for restoring/improving productive activities and social support networks of all vulnerable affected families and workers, including those whose lands have been already purchased. The strategy will encompass socio-economic and legal assistance for physical relocation and property rights; 
Complete a Land Acquisition and Resettlement Report, including: (a) detailed information on land/properties acquired and to be acquired; (b) socio-economic baseline information of affected owners and their families; (c) vulnerability analysis and eligibility for assisted resettlement and/or livelihoods restoration; (d) impact assessment on the livelihoods of  vulnerable families and land-dependent workers; (e) evidence of consultations and compensation alternatives offered by Klabin; (f)  compensation package agreed upon with each affected family and, (g) support given or to be given by Klabin for resettlement, employment/income restoration and reestablishment of living conditions; (h) post audit to access completion of livelihood restoration program. 
If applicable based on the results of the land acquisition analysis, complete and implement a Complementary Action Plan to secure the active involvement of affected families and proper management of socio-economic impacts due to the land acquisition program;  

Going forward, as set forth in the ESAP, the Sponsor will conduct all future Project-related land acquisition in accordance with the above-referenced Strategic Resettlement Framework. In the event that land acquisition for ancillary components (i.e. access roads, railway spur etc.) result in economic or physical displacement of persons, the Sponsot will prepare a Resettlement Action Plan. At project completion, the Sponsor will prepare a Resettlement Completion Report documenting the land acquisition process for all Project-related assets.