Several shareholder activists of UPM have made a proposal for the annual general meeting of shareholders 2005 regarding UPM's cooperation with APRIL and its pulp procurement policy. Since APRIL's operations are highly controversial, UPM's reputation can suffer unless these issues are considered properly.

Currently APRIL pays back its loans from UPM by supplying UPM's Chinese paper mill with pulp. The pulp originates in Riau, Sumatra, where its production destroys large areas of rainforests. The shareholders propose that the loand repayment agreement should be renewed so that instead of supplying pulp APRIL would conserve forests and alleviate social problems it has created. In practice this could be achieved for instance so that APRIL would designate forested areas that otherwise would be felled to be protected, or by lowering its pulp production capacity so that less natural forest would have to be cut to supply the pulp mill.

The shareholders also propose that UPM should establish a pulp procurement policy that would rule out the use of pulp from companies that cause considerable damage to natural forests or wide-spread social problems.

Below is a translation of the proposal by the shareholders.

Proposal of shareholders Annina Käppi, Matti Liimatainen, Oras Tynkkynen, Tuomas Rantanen, Thomas Wallgren and Otto Miettinen to the general meeting of UPM-Kymmene Oyj. to be held 31 March 2005

We, the undersigned, have long been alarmed by the impacts of UPM's partner APRIL towards Indonesian forests, related social problems and human rights violations. As shareholders we are also concerned for the consequences of APRIL's operations to the reputation of UPM. We believe that UPM could influence APRIL's operations more by active involvement. For these reasons we demand based on the law on limited companies (osakeyhtiölain 9. luvun 7. pykälä) that the general meeting of shareholders of UPM (trade register number 676.439) will deal with the following issues to be mentioned in the summons:

1. Introduction of the alliance, corporate deals, ownership arrangements, or other kind of cooperation between UPM and Asia Pacific Resources International Holding (APRIL) and their subsidiaries in regard to rights of traditional land owners, environmental protection and unionisation of workers.

2. Changing the chemical pulp procurement policy of UPM so that the use of pulp from producers that cause significant destruction of natural forests and social social problems would be ended.

3. Changing of the loan payment and pulp supply agreement between UPM and Asia Pacific Resources International and their subsidiaries so that APRIL would pay back its loan to UPM by refraining from logging natural forests, by protecting forests and by alleviating social problems created by its operations.

This can be put into practice for instance by APRIL handing over its land tenure rights in an extent agreed by the two companies so that at least half of the areas ceded to UPM will be uncut natural forests. In connection with the land tenure arrangement UPM commits to protect forests ceded to it and create a programme to alleviate social problems caused by APRIL in Riau.

4. UPM demands state of Indonesia to control illegal logging more strictly.

>>> Summons to the general meeting of UPM

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