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Veracel's position regarding a news item published on the IBAMA web site

On December 26th, 2005, Veracel Celulose S/A received a fine from the Instituto Brasileiro de Meio Ambiente (IBAMA- a Federal Environmental Office in Brazil) under the allegation that it had “prohibited regeneration of the Atlantic Rainforest on 1,200 hectares” of its property. The information was published in the IBAMA website before an accusation had effectively been issued and without Veracel being given the possibility of defense.

The article does not reflect the reality of the facts:
Veracel did not, directly or indirectly, substitute or hinder the regeneration of any protected vegetation nor did it encourage any third party do so. All our plantations are duly licensed by the Environmental Authority of the State of Bahia (CRA).

Actually, Veracel itself identified the occurrence of possible deforestation having taken place in the past, in unconnected 1,203 hectares of its lands. However, this occurrence was not caused by Veracel but possibly by former owners, without Veracel having any knowledge of their acts, at that time. Currently, a Term of Adjustment is being agreed upon with the State of Bahia, in which Veracel volunteered to correct the situation.

The detection, voluntarily revealed by Veracel, occurred due to improvements in its image surveillance management system, used to generate information of its property. This system, compares images of present forest status with situations prior to ten years ago. It is one of the company’s most modern tools for environmental surveillance and, as such, is subject to permanent control and continuous improvement.

From its total properties, Veracel keeps 81,575 hectares specifically for preservation and recovery of the Atlantic Rain Forest and other Native Eco-Systems. This initiative includes previously degraded areas and connection of original forest fragments to form ecological corridors. To enhance the regeneration, Veracel additionally plants 400 hectares per year with native species.

Another important component of Veracel preserved areas, is the Veracel Station, the largest Atlantic Rainforest Natural Private Heritage Reserve (RPPN) in Brazil, which encompasses 6,069 hectares. The areas of our preserved forests are wider than those of our eucalyptus plantations, and are far bigger than legally demanded. Veracel is among the few companies in Brazil that have adopted programs of such nature.

It is Veracel belief that, for an effective protection of the environment, Private Enterprises, Governmental Offices, and other related stakeholders must establish actions based on constant dialogue, mutual respect and cooperation.

Veracel will take the appropriate steps in defense of its interests and legal rights.

Veracel Celulose S/A

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