Helsinki, Finland, 11 July 2008 -- Stora Enso's associated company, Veracel, in Brazil, has received a decision issued by a federal judge in Bahia originating from a claim of 1993 in which Veracel (at that time Veracruz Florestal Ltda.) was accused of having deforested a minor area (64 hectares) of native forest in 1993.

In the decision, the judge claims that Veracel's permits issued by the State of Bahia are not valid and that no environmental impact assessment study was undertaken for the licensing. According to the decision, 47,000 hectares of Veracel's current plantations should be cut down and reforested within one year with native trees. The decision also imposes a possible fine of BRL 20 million  (EUR 8 million) on Veracel. Veracel has not recorded any provision for either  the reforestation or the possible fine.

Veracel operates in full compliance with all Brazilian laws. An extensive environmental impact assessment study was undertaken in 1994-1995 as part of the legal permit requirements. Veracel has obtained all the necessary environmental and operating licences for its industrial and forestry activities from the Brazilian environmental authorities.

Veracel vigorously disputes the findings of the court and is analyzing the content of the decision, Veracel's position, and how to respond appropriately to the allegations. Veracel has asked the court for clarification of the judgement and will appeal against the same.

The preparation work for possible expansion of Veracel will continue.

For more information on Veracel, visit www.veracel.com.br.

www.storaenso.com