Aracruz Celulose: best practices icon but still at risk

Abstract

Purpose

The purpose of this case study is to illustrate the global risks facing an award‐winning company known for best practices in sustainability and HRM that, nevertheless, is challenged by a contentious land dispute with indigenous communities and numerous stakeholders.

Design/methodology/approach

This is a case study based primarily on secondary sources, such as reports and web sites of the company and its stakeholders.

Findings

Aracruz Celulose SA, a Brazilian pulp company founded by a Norwegian, owns legal title to land claimed by indigenous communities. As a result, they face a complex array of additional stakeholders with contradictory perspectives: local and international non‐governmental organizations, various Brazilian and Norwegian Government entities, the World Bank, and investors. The company runs the risk of losing land and assets, reputation, and investors. There are few simple solutions to the dilemma of unresolved property rights and agrarian reform problematic in much of Latin America. Even Aracruz's hoped – for court ruling may not guarantee an end to conflict without a creative solution.

Research limitations/implications

The controversy is ongoing and the outcomes are not yet determined. Based on one case, limited generalizations can be made.

Originality/value

Numerous best practices in the operational areas under a company's control cannot completely protect firms from risks related to larger societal dilemmas and the need to negotiate win‐win solutions with stakeholders.

Citation

Osland, A. and Osland, J.S. (2007), "Aracruz Celulose: best practices icon but still at risk", International Journal of Manpower, Vol. 28 No. 5, pp. 435-450. https://doi.org/10.1108/01437720710778411