Federal court in Brazil suspends Suzano's operation license authorizing planting of 42,000 hectares of eucalyptus forests in Maranhão state, where new 1.5 million tonnes/year pulp mill project is underway; company expects to 'assert its rights'

Diane Keaton

SAO PAULO, Brazil , March 20, 2012 (press release) – Industry Intelligence Editor's Note: on March 19, Bloomberg News reported that Suzano was ordered to suspend construction of the pulp mill, on the grounds that the license from Maranhão state does not replace the need for a license from the federal environmental agency Ibama. The mill is targeted to start up in November 2013.

Regarding the article published on the Civil Action on the suspension of the operation license that authorizes the planting of 42,000 hectares of eucalyptus forests in Maranhão state,

Suzano Papel e Celulose (“Company”) explains that on May 4, 2010, the Maranhão Federal Prosecution Office (“MPF”) requested, among other things, that the license issued by the Maranhão State Secretariat of Environment and Natural Resources (“SEMA”) be declared null and void as it should have been issued by the Brazilian Institute of Environment and Natural Resources (“IBAMA”) and not by SEMA.

Interlocutory relief was rejected by the Judge of the 5th Federal Court of Maranhão after the presentation of respective defense’s allegations by the Company and the state of Maranhão.

The Maranhão Federal Prosecution Office appealed the decision and its allegations were accepted by the 5th Panel of the Federal Regional Court, which granted the interlocutory relief.

The Company reinforces its resolve that it has acted and will continue to act lawfully, based on the practices in effect in Brazil, where environmental licensing is granted by the state.

Opinions of renowned jurists corroborate our understanding.

Although it has not been officially notified, the Company anticipates that it will take all applicable judicial matters to assert its rights.

The forest area affected by the relief of the 5th Panel of the Federal Regional Court was not projected and will not be used to supply wood to the site in Imperatriz, Maranhão.

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