Workers react to threat of closure of paper pulp mills

In January 2008, about 300 people staged a sit-in protest against the proposal of paper manufacturer Stora Enso to close its local pulp mill in Kemijärvi in northern Finland. The company subsequently announced that it would cut its Finnish workforce by 985 people and close its Kemijärvi and Summa mills. Recently, political and trade union pressure to save pulp mills has grown, despite the government’s reluctance to interfere.

In October 2007, the paper manufacturer Stora Enso announced that it would shut down its factories in the northern city of Kemijärvi and in Anjalankoski and Summa in southern Finland, as well as its site in Norrsundet, in eastcentral Sweden (FI0711029I). The closures would amount to about 1,100 job losses in Finland.

Protest action

On 3 January 2008, about 300 people, including factory employees, staged a sit-in protest at the Kemijärvi plant’s cafeteria. The protest sought to draw attention to the plight of employees, along with the drastic effect the closure would have on the community, and what the protesters consider to be the inattentiveness of the government.

As one of the chairpersons of the Kemijärvi city government and a protest leader, Heikki Nivala, highlighted: ‘The protest’s one and only goal is to keep the Kemijärvi pulp factory up and running. It’s a message to the government to let them know we’re serious.’ After about an hour, the factory’s directors told the protesters to leave, which they did peacefully.

Job cuts confirmed

On 17 January, the company announced that the number of layoffs would be slightly less than it had initially forecast. Stora Enso also confirmed that it would close its Kemijärvi and Summa plants, as well as one of the machines at its Anjalankoski paper mill. The Kemijärvi plant will close in late April 2008, while the Summa plant was due to be shut down by the end of January. The paper machine in Anjalankoski will close in November. The move will result in some 985 job losses among the company’s Finnish workforce. Stora Enso attributed the job cuts to rising costs and the need to safeguard the company’s future profitability.

Increasing political pressure

The Finnish Paper Workers’ Union (Paperiliitto) has revealed that an offer had been made for Stora Enso’s Summa factory. The Chair of the union, Jouko Ahonen, insisted that he was convinced that paper production at the Summa factory would continue.

Meanwhile, according to the Permanent Secretary of the Ministry of Trade and Industry, Erkki Virtanen, Stora Enso could still change its mind on the planned closure of its Kemijärvi pulp mill. Mr Virtanen declared that political pressure to save the wood processing industry in Lapland is growing. He added: ‘There are certain social pressures facing Stora Enso. If the decision is not reversed, it can at least be altered somewhat.’ However, Mr Virtanen did not specify what those changes might be.

The Minister for Foreign Trade and Development, Paavo Väyrynen, stated that Stora Enso’s final decision to close its Finnish mills raises a number of questions regarding the state’s role as a stakeholder in listed companies. Minister Väyrynen asked: ‘Should not the state require companies, specifically those in which it has significant shareholdings, to reveal high ethical principles and socially responsible restructuring?’

Government remains impartial

Despite the mounting political pressure, Stora Enso’s largest shareholder – the Finnish state – will not use its influence to pressurise the company to reverse its decision regarding the factories’ closure; nor has it made any attempts to force the company to accept the buyout offer put forward by the Ruukki Group. The Ruukki Group specialises in wood-based industrial business operations. Currently, the group’s operations are mainly located in Finland, but its targeted emphasis for the future is principally Russia.

Finland’s Minister of Defence, Jyri Häkämies, who is responsible for government ownership steering, explained that forcing the company to keep the factory open would not solve anything, since the closure is due to a lack of raw materials. Minister Häkämies added that the government is only requiring that Stora Enso help the community to recover from the blow resulting from the closures. Moreover, the government has reserved €15 million to support the regions affected by the job cuts.

Violation of cooperation act

The Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK) has called for more time before Stora Enso closes its plants at Kemijärvi and Summa. More specifically, SAK wants clarification regarding the availability of timber at the plants and the current market situation.

The trade union confederation highlights that the Kemijärvi pulp mill and the Summa paper factory are extremely important to the local municipalities in terms of employment and income. As SAK outlined in a recent statement: ‘The plant workers have been involved in developing more efficient operations. After this, they’ve had the rug pulled out from under their feet.’

SAK also believes that the additional time could be used to help identify potential buyers, and is accusing Stora Enso of failing in its obligations to society. In particular, the trade unions have accused the company of breaking the Act on cooperation within undertakings (192Kb PDF), due to the fact that it decided on the plants’ closure in December 2007, before the start of cooperation procedures. The Chair of Paperiliitto, Jouko Ahonen, has demanded that Stora Enso take more time to consider the matter and that the foreseeable improvement in the operating environment must be taken into account in any decision making.

Trade unions critical of government

Mr Ahonen and the Chair of the Union of Salaried Employees (Toimihenkilöunioni, TU), Antti Rinne, have stated that they believe that Stora Enso received the go-ahead from the government before it announced the plants’ closures. Subsequently, the trade unions organised a joint meeting in Helsinki, attended by union members from different parts of Finland, to discuss the issue of the state’s ‘owner policy’. In a press conference, Mr Ahonen outlined that he was amazed that the government was ‘hiding behind certain sections of stock exchange’. He raised the question: ‘Is it the case that the management of Stora Enso and the ministers have beforehand sought acceptance from the biggest owner, in this case from the state, that the government will not interfere in the matter?’ Mr Rinne agreed with this statement.

However, Minister Häkämies has denied these allegations, insisting that the state had not been informed in advance of the planned closure of the Kemijärvi and Summa mills. He did, however, admit that broad consultations have taken place regarding the prospects and developing views of the company and also on the situation of the Russian block tariff, but no discussion of the plants’ closures.

Threat of industrial action

On 17 January, clerical workers at Stora Enso staged a walkout following the company’s announcement. Meanwhile, the trade union TU announced in a statement that its board had decided on ‘measures to apply pressure on the authorities and Stora Enso starting next week’. It added that the clerical workers would return to work at 6.00 on Saturday 26 January. Stora Enso employs about 2,000 white-collar workers in Finland.

Paperiliitto also discussed the possibility of strike action at a meeting held in Kemijärvi after the Stora Enso announcement. Mr Ahonen confirmed that the trade union would use every measure required to keep the Kemijärvi and Summa facilities running and preserve the jobs. However, the executive board of Paperiliitto decided to abstain from immediate industrial action. Instead, Paperiliitto stated that its branches would stage a 24-hour walkout at all Stora Enso mills in protest against the Finnish government’s ownership policy. The stoppage, spanning all Stora Enso workers covered by the pulp and paper industry’s collective agreement, was set to begin at 6.00 on 6 February.

Pertti Jokivuori, Statistics Finland

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Add new comment