Aracruz Celulose: best practices icon but still at risk Asbjorn Osland and Joyce S. Osland San Jose State University, San Jose, California, USA 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. Keywords Best practice, Sustainable development, Human resource management, Risk assessment, Stakeholder analysis, Brazil Paper type Case study In the Aracruz Celulose, SA (hereafter referred to as Aracruz) annual report, Carlos Augusto Lira Aguiar, President and CEO, wrote: In 2005, we received more distinctions than ever before in our history. Paradoxically, we were also faced with one of the most serious conflicts the Company has ever experienced with neighboring communities and social movement. How can Aracruz Celulose SA be a poster child for sustainability best practices and one of Brazil’s best companies to work for and, at the same time, be cast as the villain in a land dispute with indigenous people? To answer this question, we look at literature on sustainability, stakeholder theory, and land tenure difficulties in Latin America as it applies to Aracruz. The various stakeholder perspectives are presented to illustrate the complex nature of the challenge currently facing the company. The paper concludes with implications for research and practice. Case description Company overview Aracruz is the world’s leading, most cost-effective producer of bleached pulp used in paper manufacturing[1]. In 2005, the firm earned US$341 million in net income. Wholly The current issue and full text archive of this journal is available at www.emeraldinsight.com/0143-7720.htm Aracruz Celulose 435 International Journal of Manpower Vol. 28 No. 5, 2007 pp. 435-450 q Emerald Group Publishing Limited 0143-7720 DOI 10.1108/01437720710778411