An Irresponsible Campaign

Robust debate and freedom of speech are fundamental attributes of Harvard. At Harvard Management Company, we are proud to have responsibility for protecting and growing the endowment and supporting that freedom of thought and expression. We aim to invest responsibly in everything we do, but we understand and respect the right of people to challenge and question what that means in practice.

Unfortunately, the latest campaign from Responsible Investment at Harvard falls well outside of a reasonable right to disagree.  Their claims in recent Crimson Op-Eds and in YouTube videos about our investments in pine forests in Argentina are full of factual errors.  More disturbingly, they show a clear pattern of deliberate misrepresentation.

EVASA and Las Misiones are companies that own land and grow pine plantation forests in the Corrientes province of Argentina. Both have third-party certification from the Forest Stewardship Council to ensure we remain aware of the social and environmental context in which our assets are managed. It also establishes a continuous improvement program that gives confidence that we can meet one of our primary goals: to leave our investments in better health and condition than when we bought them. EVASA sought certification by the independent Forest Stewardship Council under prior ownership in 2009. HMC completed that process as the new owner in 2011. Las Misiones was established later than EVASA and began preparing for the same FSC certification, which was granted just last month.

We like plantation forests. The Food and Agricultural Organization of the United Nations estimates that well over 30 percent of the world's industrial wood supply comes from plantations occupying less than seven percent of total forest area. The high productivity of plantations takes an enormous amount of pressure off of the world’s precious remaining natural forests, reducing over-harvesting and deforestation. Wood is one of the most remarkable and least appreciated natural resources we have. It provides the raw material for a wide array of industrial and consumer products, from construction materials and paper—to products such as films, thickeners and fabrics—to organic products that offer an alternative to those from fossil fuels. Wood is by far the most energy-efficient building material we have, both in its production and in its use. Sustainably managed forests are essentially carbon neutral, even while producing useful wood products. New plantations absorb carbon dioxide from the atmosphere, and then hold it for as long as they persist, which may be in perpetuity.

Well-managed forests, including plantations, also provide many services and benefits to the local environment: shade, shelter, scenic beauty, soil protection, regulation of water quality and yield, rich ecosystems supporting diverse flora and fauna, jobs for local people, recreational areas, and more. Plantations are also often far more bio-diverse than the modified grass pasture land on which they are commonly established. Though plantations can cause negative impacts in some cases if poorly developed or located, with care and attention to planning and management, benefits should far outweigh the costs.

In this context, we are dismayed at the claims made by Responsible Investment at Harvard.

They claim that Harvard's plantations are damaging the environment of the important Iberá wetland reserve by drying it up, contaminating it with chemicals and planting trees in areas designated for conservation, or that will spread into the wetlands themselves. Not so.

In fact we believe the opposite is true–our forests are likely better for the Iberá wetlands than the former use of the land which was large-scale cattle ranching. We aim to demonstrate that with long-term water quality monitoring that has been underway for some time. The Iberá wetland ecosystem is indeed a magnificent natural area of wild land and is worthy of all of the protection accorded to it by the Argentine authorities. It is a huge area, designated into preservation land, buffer areas to protect the core preservation areas and land designated for commercial production, to include cattle ranching and plantation forestry. All of our planted land is firmly and clearly within the commercial zones. Our properties also include buffer zone and preservation land, representing over 55 percent of our titled area, which we will faithfully manage within the rules established for such areas.

Herbicides and insecticides are used at establishment to protect young seedlings from being swamped by grass or eaten by ants, but for the following 15 to 20 years until harvesting and replanting, no chemicals of any kind are applied to the land. The chemicals that are applied at establishment (approved for use by the FSC) break down fast after doing their job and they do not spread into ground water or the wetlands.

The species of tree we have planted—loblolly pine—will not spread naturally into the wetlands. It is a species, unlike slash pine that some others have planted, that will not grow on wet ground and only survives, and in fact thrives, in the well-drained parts of the commercial zones.

With an annual rainfall of about 50 inches, the effect of our plantations will be to regulate (lower the volatility of) water flows, reducing flood run-off and sustaining dry season flows by acting as temporary storage of rainfall. Nevertheless, we are monitoring water flows in long-term studies that will test this thesis so that we can be sure our plantations are not negative and are in fact positive for the Iberá wetlands.

They claim that our plantations are responsible for drying up local residents’ wells.  Not so.

One such resident, Adrian Obregon, came from Corrientes to Boston to draw attention to this concern. We are sorry to hear that Mr. Obregon has had to deepen his well, but as discussed above, the possibility that Harvard's trees are responsible for that is effectively zero. Not only would it be highly improbable that pine trees on neighboring land would have such an effect on the water table at well-depth, but more importantly, the trees nearest to Mr. Obregon's house are owned by somebody else. That is easily determined by simple inspection of property boundaries and signage in the area.

They claim that we have never consulted with local inhabitants. Not so.

We would never obtain or retain FSC certification without a series of well-publicized public meetings with local residents. This is a key criterion of their audit process, which seeks to bring global principles into local focus through dialogue and interaction with adjoining communities. We have held public meetings numerous times and in each case specifically invited members of all stakeholder groups who have standing in the community. This includes two members of the local Small Producers Association (that Mr. Obregon identifies with), who were commended to us as the appropriate representatives of that organization.

They claim that our trucks destroy local roads and create a dust problem for local residents.

Of all of the claims made by Responsible Investment at Harvard, this is the only one in which there is even a grain of truth. Corrientes Route 22 and other local roads in the area are in many parts poorly formed and surfaced. In dry conditions passing vehicles create dust clouds and this is without doubt an irritant and possibly a potential health problem for some local residents.

It should be noted that we are one of many landowners and road users in the region and the problem has existed from a time long before our investment. Our local management has been diligently working to find solutions to this problem with the municipal authorities. The creation of a by-pass road around the center of the town of Chavarria was instigated at our request. We initiated, at our own cost, a regular road-watering program at the Taquaritas Colony to keep the surface damp and dust free. Our efforts in solving these problems were fully audited by the FSC.

Sections of road have been resurfaced and improved, but we would like to see more rapid progress to eliminate, or at least further mitigate road surface and dust issues. It is a municipal and provincial problem, needing a municipal or provincial solution. Unfortunately, like local authorities in many places, those in Corrientes have regional priorities and budget constraints.

They claim that we attempted to acquire land from small farmers by forging title documents so as to force them off their properties. Not so.

In some respects, this may be the most serious false allegation since Responsible Investment at Harvard is alleging criminal, fraudulent behavior. Harvard acquired its property in Corrientes through five separate transactions, all of them with large landowners. We have never attempted to buy land from small farmers and abhor any effort to coerce landowners into selling their land.

If the alleged incident did occur, then it was certainly not perpetrated by anyone connected with Harvard's holdings. In the Responsible Investment at Harvard video, a local official is filmed stating that he agrees that such things have happened. But the question to which he was responding is not shown, and we believe he was commenting on a different matter completely unrelated to Harvard’s investments. The attempt to portray this as official confirmation that we have fraudulently acquired land from small farmers is a gross breach of ethics.

They claim that we manage our property poorly, and house workers in substandard conditions. Not so.

How can anyone interested in honest debate take video footage of a run-down and untidy farm compound more than four miles from Harvard’s property and show that facility with a voice over claiming it is evidence of Harvard’s poor management and worker housing? How can any organization purporting to bring more responsible management to the endowment for the betterment of Harvard, publish such claims? This is exactly what Responsible Investment at Harvard has done.

I have worked for Harvard Management Company for over twelve years. I came to Harvard in 2001, drawn by a belief that Harvard's long-term, patient capital and high ethical standards would make it an ideal owner of forests with a similarly long horizon and needing careful, professional management. In my career, I have worked in Government-owned forests, where best practice is often compromised by the political realities of a short-term electoral cycle. I have worked for corporate forest owners, where the demands of Wall Street to meet next quarters' earnings release or the need to service too much debt, can result in a focus on how much cash the forest can generate in the short-term.

At Harvard, we have always focused on building wealth in the forest asset itself, in the broadest possible way. Wealth that is reflected in more living trees, longer rotation lengths between harvests, diligent replanting or regeneration of seedlings, richer and healthier ecosystems supporting the widest possible array of native plants and animals and safe and rewarding jobs for local people. Such people were my friends and neighbors for many years and I learned a lot from them.

The wealth we build never needs to be lost when we sell to others. The assets are perpetual and only require good management and another patient owner to ensure that commercial, environmental and social benefits continue to be enjoyed by local communities for generations, well after we leave.

In my career I have been engaged in native plant surveys, in field projects to protect critically endangered bird species, in restoration projects for land damaged by poor past practice. All of these experiences are brought to bear on what we do. The Natural Resources team at HMC brings their own rich array of experiences and the same dedication to making good investment decisions. I am proud of every one of them. None of them would knowingly engage in an investment project that they believed would harm the environment or hurt the interests of local residents. We seek to continuously learn from best practices and improve our approach. Doing real asset investments is hard, and on rare occasions, people we work with have let us down. But in the vast majority of situations, our local property management teams delight us with their commitment, energy, experience and dedication. Our local management in Argentina is composed of just such people.

The Responsible Investment at Harvard campaign falsely accuses us of serious offenses and failures in a way that damages Harvard's good name in Corrientes and in Cambridge. It raises unwarranted concern and doubt among the rest of the student body, faculty and alumni. We deny and refute their allegations.

I feel truly privileged to have this opportunity to play a small part in advancing the interests of such a great institution. Perhaps no symbol of the significance of Harvard's mission is greater than the crimson shield, proudly embossed with the word Veritas. We all know what that means. But Responsible Investment at Harvard seems to believe it doesn't apply to them.

Andrew G. Wiltshire is Head of Alternative Assets for Harvard Management Company.


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