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by Victor Menotti
Director of the Environment Program at the
International Forum on Globalization

When world leaders gathered at the 1992 Earth Summit in Rio de Janeiro, they declared to the world that the present economic model must change. Never before had so many heads of state gathered in one place to agree on such a unifying theme: charting a new economic course for the planet that would provide for the needs of all species while ensuring that future generations could do the same. This was the hope of Rio.

But while world attention was transfixed on prospects for resolving the looming social and ecological crisis, off camera its very aggravation was being planned. Far from the media circus assembled in Rio, trade ministers met secretly in Geneva to finalize a lesser-known agreement that would expand world trade and thus have far greater impact on natural resource exploitation into the next century.

That agreement, know as the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), embodied a singular premise that underpins Rio's many government declarations, action agendas, and non-binding treaties: ecological sustainability through economic globalization. Indeed, Agenda 21, Section 1, emphatically declares that sustainable development would be achieved through trade liberalization. This was the strategic vision of Rio, whose tragic failure is now increasingly evident.
Since Rio:

  • Timber from the vast woodlands of Siberia have started flowing to ports of the Pacific Rim.
  • After depleting the forests of Sarawak and Saba, Malaysian logging companies have moved on to Amazonia.
  • The rate of deforestation in Amazonia has increased by one third, and burning has tripled.
  • The United States suspended all laws on National Forests in order to log some of their few remaining roadless areas.
During Rio, few questioned the inherent contradictions between the free trade agenda and planetary ecological limits; in fact those who warned that the two were on an inevitable collision course, were largely ignored (1). It was entirely predictable, environmentalists said, that, without any new safeguards, intensifying economic activities through expanded international trade and investment would only magnify the negative environmental effects of the very development model the world was supposed to be abandoning. From the outset, this paradox undermined Rio's hope.

But if Rio's conceptual framework was not contradictory enough, government actions on behalf of global corporate interests has subverted any remaining hope. Since Rio, governments have demonstrated enormous energy and political will to forge new free trade agreements that increase corporate access to and control over natural resources and consumer markets, whilst letting treaties which might protect the planet languish. Rio's strategic vision that free trade would stabilise global climate, protect endangered species, and slow deforestation has proven catastrophically wrong.

As evidence mounts of economic globalization's role in accelerating the ecological crisis, government and industry leaders are finding free trade's failures increasingly difficult to deny. At the United Nation's five year review of Rio's progress, there was near consensus that not only had governments failed to achieve their modest targets but significant backsliding had occurred. Indeed, one of the chief advocates of Rio's global free trade rhetoric, the World Business Council on Sustainable Development (WBCSD, formerly BCSD, which was founded by some of the world's largest corporations to influence the Rio process) has since admitted that its strategic vision is backfiring. In a recent "scenarios report" WBCSD explains that, "Globalization and liberalization of markets alone with the pressures of rapid urbanization have raised the degree of social inequity and unrest to a level that threatens basic survival of both human and environmental ecosystems." (2)

But if Rio's conceptual framework was not contradictory enough, government actions on behalf of global corporate interests has subverted any remaining hope.

Globalization has shifted control over planetary health from communities to corporations that operate in a global marketplace with no government oversight. Fierce competition forces firms to shove ecological costs onto society in order to satisfy the demands of global financial markets. The result is a new political structure where no one is in control or accountable for the accelerating destruction. Captured by corporate interests, governments have taken action in at least four key areas that have combined to create a global economy that systemically punishes ecologically-sustainable practices while rewarding environmentally-destructive ones. Those four areas of government action include:

1) Forging Free Trade Agreements: The North American Free Trade Agreement (NAFTA), the GATT (now administered by the powerful World Trade Organization, the Asia-Pacific Economic Community (APEC), the European Union, and other initiatives to integrate markets have established sweeping new rules for trade and investment that, consequently redefining the terms of economic competition everywhere. Where such agreements traditionally aimed at only reducing tariffs (import taxes), they now extend into new areas like buying land, dismantling supports for small producers, protection foreign investors' property, and eliminating so-called nontariff barriers, such as environmental laws. Free trade pacts provide an enforceable international legal framework that transfers access and control over natural resources out of local hands and into those of the highest bidder in the global marketplace.

2) Rolling back National Regulations: To accommodate the new international framework created by trade agreements, national governments spent enormous energy changing domestic policies to attract more foreign investment, promote exports, and generally increase their competitiveness in the global marketplace. Some of the measures common to many countries include weakening environmental protections, reducing their legal enforcement, raising corporate subsidies and protections, and weakening citizen's rights.

3) Globalizing Financial Markets: While globalization of the logging industry has shifted control to large corporations operating in unregulated global markets, it is important to note that these firms, like all firms, are under increasing pressure to deliver profits for their shareholders. Because globalization provides unprecedented opportunities to increase one's return on capital, investors' expectations have been raised to levels that can only be achieved through wholesale exploitation of the natural world. In the business of logging, such high profits can only be maintained by ignoring protections for endangered species, cutting along steep slopes and riparian zones, or sacrificing worker safety.

4) Restructuring under the World Band/IMF: In a painful process beginning more than a decade ago, economies of the Third World have been systematically opened via Structural Adjustment Programs (SAPs) and other market-opening conditions of the World Bank and the International Monetary Fund. Working together, and usually for the direct benefit of the Third World elites and Northern lenders, their lending policies have laid the regulatory groundwork for large multinationals to enter the economy, access resources, and export them back home with minimal restrictions. Environmental damage, and particularly deforestation, was often a direct consequence of the export-oriented policies imposed by the Bank and Fund.(3)

clearcut forestEnvironmental damage, and particularly deforestation, was often a direct consequence of the export-oriented policies imposed by the World Bank and IMF.

photo by Garth Lenz

Globalization has rendered nations vulnerable to forces far beyond their control, as seen in the recent financial turmoil that has rocked the so-called emerging markets. The crisis has not only subjugated the economies of Mexico, Indonesia, Russia, and Brazil to the crushing demands of foreign investors, but it has also deepened the vulnerability of forests as a desperate means for indebted nations to repay their foreign creditors. As a result, collapsing currencies could reverberate throughout the Sierra Madre, Borneo, Siberia, and Amazonia, as the world's last significant tracts of forests fall victim to finance capitalism.

The global financial crisis has also deepened the vulnerability of forests as a desperate means for indebted nations to repay their foreign creditors.

The causal relationship between crashing currencies and falling forests became quite clear in the aftermath of the Mexican peso crash in 1994 (see section below on Mexico). Most recently, Brazil's President Fernando Henrique Cardoso, under enormous pressure to attract $50 million in foreign investment in 1999, declared a ten-year moratorium on penalty fees for environmental crimes.

Moreover, as the financial contagion spreads globally, it directly influences forest industries in other countries, such as Canada, Chile, and the United States. Gluts in the world timber markets compel government to increase logging subsidies, or rollback more regulations, all in a bid to maintain competitiveness. While there may be an initial slowing of logging or delays in the expansion of new investment, crises situations tend to weaken the weak and strengthen the strong, creating the potential for even greater concentrations of wealth and power in the industry.

"Commercial logging," notes the Washington, D.C.-based World Resources Institute in its 1997 report, The Last Frontier Forests, "poses by far the greatest danger to frontier forests," referring to the planet's remaining large, intact natural forest ecosystems that have maintained their original biodiversity. The report explains that, "Logging in turn opens forests to hunting, fuelwood gathering, and clearing for agriculture."

This article focuses on the globalization of the logging industry. What follows are some examples of how the "globalization policy package" of privatization, deregulation, subsidization, and liberalization of trade and investment is affecting forests in different countries.


Without question the US logging industry has led the way in using government to scuttle what paltry international efforts there have been to forge an agreement to protect world forests. At the same time, by dominating the national policy making bodies that virtually set negotiating instructions for the U.S. Trade Representative (the Industry Sector Advisory Committees, or ISACs), the industry has ploughed ahead with expansionist trade policies to increase access to other nations' forest resources and consumer markets.

The most significant initiative affecting U.S. forests since Rio has been the 1995 Timber Salvage Rider, which served as a sort of "Global Competitiveness Restoration Act" for domestic logging companies that at once faced decreasing access to forest resources, increasing regulatory costs, and greater competition from cheaper imports.

Maintaining its position as the world's leading exporter of forest products required across-the-board cost reductions. The requirement to protect endangered species habitat, riparian zones, water and soil quality, among other things, made US timber producers "less competitive" in the globalized marketplace they had fought so hard to establish. Even non-exporting companies found competition stiffened by lower-cost imports, as world markets became increasingly integrated.

To sharpen its competitive edge therefore, the U.S. logging industry needed unrestricted access to more trees at less cost. The Timber Salvage Rider delivered precisely these measures. Without a hearing or proper committee vote, the rider was attached to a larger piece of legislation that was widely hailed as the holy grail of the so-called Republican Revolution. Known as the Rescissions Act of 1995, it rescinded $16 million from federal programs, some aiding America's poor, hungry, and elderly, while handing out millions of dollars in subsidies to the logging industry.

The Timber Salvage Rider, passed on April 7, aimed to expand logging an additional six billion board feet of wood over the next two years, nearly double the amount planned by the Forest Service.(4) It suspended all laws applicable to logging on National Forests, including the Endangered Species Act, the Clean Air Act, the Clean Water Act, and the National Forest Management Act. As a result, some of the few remaining roadless areas in the country went up for bid at below market cost, effectively privatizing public assets at a highly subsidized price. In California alone, nearly one billion board feet of timber went up for sale.(5)

By massively increase logging in National Forests, taxpayers not only absorbed the cost of degraded salmon habitats and damaged watersheds but even paid for the building of logging roads into their country's last reservoirs of biological diversity. Had the U.S. Senate ratified Rio's Convention on Biological Diversity, the Timber Salvage Rider would almost certainly have been in violation of the agreement's provisions for habitat protection.

Logging on private lands has also increased as property owners, under Federal order to protect endangered species, were given new ways to relieve themselves of the responsibilities by "soft deregulation" such as Habitat Conservation Plans. HCPs allow owners of private forests to log areas classified as important habitats for endangered species on condition that they set aside other areas with similar characteristics.(6) Since the early nineties logging companies have sought, and in many cases obtained, approval for HCPs on 11.4 million acres of forest land in California, Oregon, Washington, Idaho, and Montana.(7)

Increasing market access to overseas timber supplies is also undermining efforts to reduce wood fibre consumption in the United States. Paper mills that invested in technology upgrades to produce higher recycled content products are being undermined by cheap and plentiful imports of virgin pulp.(8) Deregulated global markets can thus subvert sustainable practices from ever taking hold, let alone flourishing.

As one top lobbyist for U.S. logging corporations explained, "The market for forest products is a global market, and the only way we can compete is to be able to maximize efficient use of the capital of our shareholders; to do this we need to achieve a barrier-free market".(9) Thus they continue to expand into markets abroad under the auspices of international trade fora such as the WTO and more recently the Asian Pacific Economic Community (APEC) whose member countries are home to 63percent of the world's last frontier forests(10) These forests are the target of a planned trade initiative that goes by the forgettable name of "Early Voluntary Sectoral Liberalization" (EVSL). As its name indicates, it is committed to expanding markets by eliminating both the tariffs and "non-tariff barriers" to trade.(11)

The industry's chief lobbying arm, the American Forest and Paper Association, is pushing the U.S. Trade Representative to take the EVSL initiative to the WTO, where they can pressure other member countries to sign as well. Efforts to forge a worldwide agreement may begin as early as 1990, when the so-called Millennium Round is launched at the WTO Ministerial, to be held in the U.S.


Canada's western province of British Columbia possesses some of the most significant tracts of large, intact, temperate coastal rainforests in the world. However, since the early nineties and the development of global free-trade, they have been subjected to ever increasing exploitative pressures. The 1989 Canada-United States Trade Agreement (CUSTA) brought Canadian forests under the discipline of binding international trade rules, creating a significant departure from the imperatives that guided past management practices.(12) Deregulation, privatization of public resources, government subsidies, and liberalized trade have together given rise to a huge export-driven wood products industry.

Local environmental groups have fought hard to bring the resulting ecological holocaust to an end. To begin with they were reasonably successful, and in 1995 managed to establish a Forest Practices Code, In 1997, five years after the Rio summit, they proposed legislation that would have brought Canada into line with its commitments under Rio's Biodiversity Convention for protecting endangered species. However, timber companies argued that any restrictions would raise costs and harm Canada's ability to compete in global markets. A team of timber executives rewrote the Forest Practices Code to "streamline regulations and cut costs," while the Timber and Jobs Accord rolled back protection and increased logging subsidies.

In May 1998, the British Columbian Premier Glen Clark again increased subsidies by further reducing stumpage fees by 16 percent (the price paid to provincial governments per tree cut on public land) to "restore competitiveness to our forest industry" (13). Canada hopes the backlash from environmentalists and smaller American loggers does not force the U.S Trade Representation to take steps to counter Canada's "beggar thy neighbor" trade policy on forests.


Mexico ranks as one of the five countries with the greatest biodiversity in the world. . However, since Rio it has made a particularly ambitious effort to expand its forestry sector. Since NAFTA, fifteen U.S. wood product companies set up operations in Mexico, and much of their investment is in regions possessing some of North America's largest remaining intact forests.(14)

Forest protection was given no consideration by those who drew up NAFTA. One of its predictable consequences, however, is the voracious demand for wood-fiber (packaging) created by the maquiladoras - the export-oriented factories that line the U.S.-Mexican border. Further forest destruction is also occurring as a result of deregulation of border controls which have greatly increased drug trafficking and the production of cocaine in the Sierra Madre mountains of Chihuahua.

Mexico ranks as one of the five countries with the greatest biodiversity in the world. However, since Rio it has made a particularly ambitious effort to expand its forestry sector. Since NAFTA, fifteen US wood product companies have gone to Mexico, and much of their investment is in regions possessing some of North America's largest remaining intact forests.

Mexico's entry into the global marketplace has brought rapid and profound structural changes, not only to trade and investment policies but also to underlying property laws, subsidies, and strategic priorities for land use. The globalization policy agenda is attracting new foreign investment by offering 1) stronger legal protections for foreign investors at the expense of local communities and indigenous tribes, 2) increased subsidies to ensure international competitiveness, and 3) weakened environmental regulations, which were rarely enforced in the first place.

The massive economic transformation Mexico has undergone since Rio evolved through a process of at least three phases: a preparatory phase, the NAFTA negotiations, and fall out from the peso crash. In the preparatory phase, one priority was the repeal of Article 27 of the Mexican Constitution, which gave people rights to communal land ownership. Mexico's land distribution system, one of the most progressive in Latin America, was the veritable fruit of the Mexican Revolution obtained by one of its leaders, Emiliano Zapata. However, the welfare and democratic rights of Mexico's peasantry was of little concern to Mexico's leaders who, with the signing of NAFTA, sought above all to attract foreign investment, particularly in the rapidly industrializing agricultural sector. Repealing Article 27 was necessary to conform to the macro-changes NAFTA would impose.

Under NAFTA negotiations, other important barriers were eliminated or reduced. Perhaps chief among them was the elimination of restrictions on foreign ownership of property, previously limited to 49 percent. At the same time import barriers on U.S. grains were drastically reduced as were support programmes for assisting the rural population, such as ready access to low credit and technical and marketing assistance. Needless to say, the effect of these new laws could only be to drive people off the land into the slums of the major cities or across the border into the United States.

At a ceremony marking the first anniversary of the massacre, Mexico's Popular Revolutionary Army emerged to denounce the economic policies that drove so many people to such poverty and despair. It saw no alternative, it stated, but to declare was against the government.

The peso crash of 1994 accelerated these trends, as well as the Zedillo government's desperate efforts to attract foreign capital. The International Paper Corporation used that leverage to reform Mexico's laws governing forest exploitation, winning generous federal subsidies and "new flexibility" for the Environment Secretariat to waive protections for biodiversity, soil, and water quality. (15) The Forest Reform Law also created a new legal status for private industrial tree plantations, a critical protection for investors who recognized that eighty percent of Mexico's forests are to be found in indigenous reserves or are part of communal land-holdings. Under these highly favourable conditions International Paper is planning a 100,000 hectares plantation of eucalyptus and pine plantation in Chiapas - an area that is largely inhabited by indigenous Mayas. It fully expects to obtain highly generous subsidies.(16)

Post-Nafta Investment in Mexico's Forestry Sector

It is largely because most of the good land in Chiapas has already been taken away from its indigenous inhabitants and made into plantations and vast livestock enterprises that the Zapatista rebellion took place. Clearly the Mayas, who make up the bulk of the Zapatistas, want to regain their traditional lands. This is something that they cannot conceivably do within the context of NAFTA which favours vast export-oriented enterprises such as that being planned by International Paper. That company has already set up a highly subsidized joint venture with US -based Simpson Corporation in the state of Chihuahua, obtaining its initial wood supply from neighbouring the communal land holdings, or ejidos. (17) Another US-based joint-venture, Temple Inland Forest Products and Simpson, is planning a 70,000 hectare plantation of eucalyptus and pine in the southern states of Tabasco and Veracruz.(18) Chips from this plantation are destined to be transported to a paper-mill in Texas, where nearby maquiladoras need large amounts of wood fiber for packaging exports. These plantation proposals have been strongly denounced by local campesino organizations, as the livelihoods of their members would be seriously threatened by the projects were they to be implemented. Boise Cascade has been exporting tropical hardwoods out of the southern coastal state of Guerrero, where the process of land concentration is particularly advanced. Drawing initial logs from 24 different ejidos, the U.S.-based corporation is planning to export back home 20 million board feet for the next five years.(19) In June 1995 nineteen campesinos were massacred while en route to protest against expanded logging in the mountainous regions that was threatening their farm lands below. At a ceremony marking the first anniversary of the massacre, Mexico's Popular Revolutionary Army emerged to denounce the economic policies that drove so many people to such poverty and despair. It saw no alternative, it stated, but to declare war against the government.(20)

Mexico's Chimalapas forest - the country's most important tropical forest - is also threatened by highways and other infrastructure projects required to accommodate long-distance trade. Plans are also afoot to forge an industrial waterway through the Chimalapas, which is to compete with the Panama Canal. Intermodal cargo carriers would receive containers on the Atlantic coast and transport them via the Tehuantepec isthmus, Mexico's narrowest point between the two oceans, to ports on the Pacific coast. Some 12,000 Zoque Indians inhabit the area of over 18,000 square kilometers (21) that would be affected by this project. Indigenous peoples are widely recognized as the best caretakers of the land, and the Zoque's dislocation by an industrial waterway will certainly result in the loss of Mexico's most important biological zone as well as the Zoque's own cultural integrity. Moreover, their displacement will force them onto other areas, most likely slashing and burning to eke out a living.


Only a few years after hosting the Earth Summit, Brazil's shift into higher economic gear is accelerating the devastation of Amazonia, perhaps the Earth's most important reservoir of biological diversity. Adalberto Verrissimo, a leading researcher with the Institute for the Study of Man and the Environment (IMAZON) in Belém, believes that, due to a number of recent developments, Amazonia is on the brink of an unprecedented level of destruction.

Major Infrastructure Projects proposed or underway in the Amazon Basin
At the Earth Summit there was considerable optimism that governments would recognize that the best way to protect forests was to protect the rights of their original caretakers - their indigenous inhabitants. This optimism however was short-lived, for shortly after the summit ended and the international press had left, the Brazilian government announced that private interests could now legally challenge indigenous land titles, which cover vast forested areas throughout Amazonia. Corporations wasted no time in taking advantage of the new legislation. Peracchi, a logging company well known for its illegal logging of mahogany in indigenous lands lodged a claim for land forming part of two indigenous reserves in the State of Pará - that of the Apyterewa and the Baú Indians.(22)

Shortly after coming to power in 1996, President Fernando Henrique Cardoso adopted a series of bold initiatives to integrate Brazil's domestic economy and hence the natural resources it depends on - including the entirety of Amazonia's natural wealth - into the global economy.

The basis of President Cardoso's strategic plan, known as Brasil em Açao, or Brazil Action, is the building of a massive trade infrastructure to expedite the exploitation of Brazil's natural resources. Government briefing documents declare quite openly that they are "redesigning the country".(23) Fourteen transport projects aim to increase Brazil's global competitiveness by reducing the shipping costs of timber, minerals, energy, and agricultural products from the region. Highways, waterways, railroads, and ports, are planned throughout the basin to link some of the most remote areas to major ports via shipping routes for intermodal cargo carriers. Foreign investors are being aggressively courted to finance this totally irresponsible mega-project, to which the government will itself contribute 50 billion reais - a massive subsidy to the corporations that will benefit.

Indigenous people in particular have suffered and indeed are likely to suffer most from Brazil's current trade infrastructure scheme, as industrial waterways, in particular those designed to facilitate the export of soya (Brazil is now the second leading soyabean exporter after the US) will run adjacent to, and in some cases actually pass through, demarcated indigenous reserves.

Changes to the river ecosystem could also endanger local fish stocks, a main source of protein for the Xavante people residing in the Pimental Barbosa Indigenous Reserve.

The indigenous Xavante people are fighting the dredging, widening, and straightening of the Rio das Mortes in the state of Mato Grosso, a key section of the Tocantins-Araguaia waterway. Once completed it will accommodate multi-ton grain barges making their way via the Amazon to European markets. (24) Changes to the river ecosystem could also endanger local fish stocks, a main source of protein for the Xavante people residing in the Pimental Barbosa Indigenous Reserve. Tragically, and indeed ironically, the project will thus sacrifice the vital food sources of indigenous people in order to enhance the profits of global corporations that claim to feed the world.

Indeed, one of the most important factors driving the destruction of the Brazilian Amazon is the expansion of industrial agriculture. A recent parliamentary investigation identified soy bean plantations as one of the four "belts of destruction" advancing north-eastward into the vast tropical rainforest.(25) Monsanto, the chemical-maker turned biotech behemoth, has teamed up with Brazil's National Institute of Agricultural Research (EMBRAPA) to create a selection of genetically-modified soy bean seeds tailored to various growing regions.(26) Seeds may be modified in order to enable crops to tolerate the greater amounts of pesticides required for agriculture in the cerrado or central savannah of southeast Amazonia. Within a few years growers should know if large scale production on the thin topsoils of its tropical forests is, in fact, viable.(27)

Export agriculture also exerts great pressure on the Amazon because the best farmlands inevitably fall into the hands of a few giant producers, leaving small, family farmers, roaming the countryside in search of land on which to grow their food. Tens of thousands of landless Brazilians have already grouped together to form a movement that is committed to taking over unoccupied farmland. To diffuse this explosive situation, President Cardoso has set in motion an ambitious plan to settle thousands of people every year on such land. However, a recent parliamentary study found that nearly 90% of them were being settled in Amazonia, which spells doom for its beleaguered forests.(28) The peasants of course usually get the blame for starting forest fires, though in reality it should rest with the global economic system itself which forces them off the land in areas where they are a hindrance to the development of vast export-oriented plantations that earn foreign exchange - such as the sugar plantations of the Recife area or the soya bean fields if the central cerrado, or the orange groves of the south, and into remote and usually very infertile areas which include most of Amazonia.

In the meantime Brazil's forestry sector is booming, largely as a result of the vigorous attempts made by Cardoso's government to attract foreign investment and promote exports. Since 1996 Brazil has successfully lured several Asian logging companies to purchase millions of acres of concessions.(29) These logging companies have acquired financial, technological and management skills while clear-cutting their own forests, which will be exhausted in a matter of years. They are now investing world-wide in order to be able to satisfy the timber requirements of their, until recently, insatiable markets, and Brazil is an obvious country to invest in. American logging companies are also moving into Brazil en masse. Champion International, for instance, recently sold its degraded land in New England and is now expanding operations in Brazil.(30) As the debate heats up in the US to end commercial logging on public lands, Brazil is moving quickly to privatize thirty-nine of its national forests to make sure that it is to that country that the American logging companies will have to move.(31) Not surprisingly Brazil, and indeed South America's last remaining untouched forests are now under serious threat.


Chile provides a textbook case of how export-oriented management under the brutish imperatives of global competition can exact a heavy toll on forest ecosystems and biological diversity. Nearly two decades before the Rio Summit, Chile embarked on a path of national economic development that opened itself up to international trade and investment, emphasizing the export of its natural resources to maximize economic growth.

According to the Chilean Central Bank's Natural Accounts Programme, if the government maintains its "business as usual" policies, logging would completely deplete the country's native forests by the year 2025.

Chile's comparative "advantage" based on its cheap labour, its externalized environmental costs, and the direct subsidies provided to its forestry corporation, has made possible its rapid economic growth. According to the Chilean Central Bank's Natural Accounts Programme, if the government maintains its "business as usual" policies, logging would completely deplete the country's native forests by the year 2025.(32)

According to the World Resources Institute report, already referred to, "Chile and Argentina share the largest single block of remaining temperate frontier forest in the world".(33) It contains at least 50 species of timber trees (95 percent of them endemic) and more than 700 vascular plant species (half of them endemic). Chile's native temperate rainforests - that constitute one third of the world's largest track of relatively undisturbed temperate forest - is being rapidly logged for wood chip exports, mainly to Asia, and replaced with plantations of fast-growing non-native species that yield maximum wood fibre on short rotations. Of course, with the current collapse of the Far East economies the demand and price for commodities like timber have dramatically fallen. Imports of timber from Japan for instance have almost entirely dried up. What the future holds is not yet altogether clear.

Because Chile had already spent considerable energy putting in place a neoliberal policy framework that had already exposed its industries to the imperatives of global competition, the adoption of WTO rules triggered off less of a transformation of its forestry sector than it did to Mexico's for instance. Nevertheless, since Rio, destructive activities continue to expand with the help of state subsidies.

Because one of the main aims of governmental policy in Chile is to become accepted as a member of NAFTA, more lip service than usual has been paid to the importance of environmental conservation, and environmental laws are under consideration. However, the very modest regulations proposed to protect forests would do little to reduce the destruction, particularly as the government, at the same time, continues to intensify its efforts to expand forest exploitation. One controversial project is a proposed investment by the US-based Trillium Corporation in a project to log hundreds of thousands of acres of rare native forests for chip exports.(34) Yet another pending Trillium investment to log 140,000 acres of lenga forests on the Argentine side of Tierra del Fuego (a complement to the Chilean Río C—ndor project) signals that some foreign logging companies might not even wait for Chile to become a member of NAFTA.

Under NAFTA, the destruction of Chile's forests would inevitably accelerate rather than slow down. By adopting NAFTA's provisions on investment (similar to those in the proposed Multilateral Agreement on Investment), any Chilean regulation passed to protect forests which has the effect of reducing the profits of a planned foreign investment could be challenged as an "expropriation of property" and judged illegal. Under such rules, the protection of forests in any country that is signatory to the agreement would be well nigh impossible.(35)


Anticipating the boom in demand for wood products in south-east Asia, Indonesia has been preparing to become a pulp and paper powerhouse in the region. New investment in mills and equipment show that Indonesia has been planning to make the most of its greater capacity to export forest products.(36)

The financial meltdown in Asia - in itself an effect of the globalization of financial markets - will have major effects on how and by whom Indonesia's forests will be controlled. State or domestically-owned logging companies have certainly not managed forests sustainably. Nevertheless, bailout agreements with the IMF will put Indonesia's forest under more direct control of foreign corporations and globalized market forces. Forestry products rank third among Indonesia's foreign exchange earners, after textiles and gas and oil products. In 1997, forestry products yielded some 6.25 million U.S. dollars of foreign exchange (37). The agreement that the Indonesian government has signed with the IMF aims to remove the restrictions on the foreign ownership of land in that country (38).

The export of cash crops such as palm oil, cocoa, rubber, coffee and pepper, are likely to increase next year, and this will further remove forest cover. Because these commodities are some of the country's best generators of foreign exchange, it seems that new government policies are to be formulated to address the monetary crisis by expanding agribusiness. Palm oil production is particularly destructive to native forests, and it is a matter of considerable concern to hear that the Ministry of Agriculture has announced a 1.5 million hectare expansion of palm oil plantations in 1988.(39) This would increase the extent of oil palm estates to about three and a half million hectares in that country. Once again, the IMF can be held partly responsible for the destruction this would cause, as on the basis of their recent agreement with Indonesia, that country is forced to eliminate all restrictions on the setting up of palm plantations.

Indonesia may also look to the Asia Pacific Economic Co-operation (APEC) forest initiative (EVSL) to stimulate more exports of wood products. Leaders of the 18 APEC nations agreed in November, 1997 to lift trade barriers on wood products. The Indonesian Government would gain advantages from this initiative since it would enable it to insist that its 435 forest concessionaires, that control 30 million hectares of forests, shift their production into higher gear as wider market access must obviously mean more sales.(40) Needless to say all this would greatly increase forest destruction in that country.


The 1990s was supposed to be the "turnaround" decade, when economic development would "change course" towards ecological sustainability. Instead economic globalization, as was totally predictable from the very nature of the phenomenon, has had exactly the opposite effect of still further reducing the sustainability of our economic activities, including those of the forestry industry.

Globalization has led to the development of increasingly big and powerful transnational corporations, many of which are bigger than the average nation state of today. Corporations, by their very nature, have no social or ecological concerns - only their immediate financial interests concern them. They are accountable to nobody except their shareholders, and because of their ever increasing power they are today in a position in which they can, in effect, dictate economic policies to the governments of even the most powerful nation states such as the US itself.

Through the recent GATT Agreements and the World Trade Organization that they brought into being, corporations have built a sort of utopia for themselves by creating nearly all those conditions world-wide that best favour their immediate interests, which unfortunately are generally in conflict with those of human communities, local economies, and the natural world. So long as these uncontrollable corporations are given free rein to exploit the world's forest resources, the fate of the planet's remaining accessible forests is sealed.

If our political leaders had the slightest sense of responsibility and the necessary courage and integrity they would change the direction in which our whole society is moving - away from economic globalization and towards economic localization - with small and medium companies taking over that are rooted in their respective societies and that cater for very much more restricted markets. Only in such an economy do our forests have any future whatsoever.

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1 See Rio's "NGO Declaration on Trade and the Environment," or transcripts from Rio's NGO Global Forum debate panel, "Free Trade vs Sustainable Development," which was moderated by this article's author and included officials from GATT, OECD, USTR, as well as NGOs Institute for Agriculture and Trade Policy, World Wildlife Fund, Instituto Brasileiro de Analises Socio-Economico, and Third World Network, June, 1992.

2 "Exploring Sustainable Development: Global Scenarios 2000-2050," World Business Council on Sustainable Development, Geneva, 1998.

3 Bello, Walden, Dark Victory, documents the cause and effect relationship between SAP's and deforestation in Ghana, Chile, Costa Rica, and the Philippines. Third World Network, 1996.

4 Ross, Carl and Winstein, Mark, Save America's Forests, Vol. 6, No. 1, Washington, D.C., April 1995.

5 Henson, Ryan, personal communication with Program Director of the Davis-based California Wilderness Coalition, August, 1996.

6 Hall, Daniel, Western Forest Habitat Conservation Plan Inventory, Western Ancient Forest Campaign, Forest Biodiversity Program, Portland, OR, 1998.

7 Hall, op. cit. Note 6.

8 Imhoff, Daniel, personal communication with California-based consultant for users of sustainably-produced fibrous materials.

9 Langman, James, unpublished interview with Maureen Smith, Vice-President of the American Forest and Paper Association's International Wood Products Division, Washington, D.C., March, 1998.

10 Bryant, Nielsen, Tangley, The Last Frontier Forests, World Resources Institute, Washington, D.C., 1997.

11 Seligman, Dan, Director of Sierra Club's Trade Program in letter to Marcia Miller, Chair of the U.S. International Trade Commission, Washington, D.C., April 28, 1998.

12 Shrybman, Steven, Selling Canada's Environment Short: The Environmental Case Against the Trade Deal, Canadian Environmental Law Association, Toronto, Canada, 1989.

13 News Release, British Columbia Ministry of Forests, May 28, 1998.

14 Ross, John, "Treasures of the Costa Grande," Sierra magazine, July/August, 1996.

15 Villamar, Alejandro, Datos de la "Version Mexicana" de la Estrategia Global de la Industria Maderera-Papelera Internacional bajo el Tratado de Libre Comercio, Red Mexicana e Accion frente al Libre Comercio, D.F., Mexico, 1998.

16 Villamar, op. cit. Note 15.

17 Villamar, op. cit. Note 15.

18 Villamar, op. cit. Note 15.

19 Ross, op. cit. Note 12.

20 Ross, op. cit. Note 12.

21 Villamar, op. cit. Note 15.

22 Santilli, Márcio, "Terras Encolhidas," Parabolicas, No. 28, Instituto Socioambiental, April, 1997, Brasília, Brazil.

23 Cardoso, Fernando Henrique, from the presentation "Brasil Em Acao, Resultados no Primeiro Ano," made at the Palalcio do Planalto, Brasilia, Brazil, August 12, 1997.

24 Liguori, José Lescaut, personal communication with the Director of Hidrovias in Brazil's Transport Minstry, Brasília, Brazil, December, 1997.

25 Viana, Gilney, Relatorio Parliamentario Sobre Amazonia, Comissao Externa da Camara dos Deputados, Brasília, Brazil, December, 1997.

26 Serrao, E. Adilson, presentation by General Director of EMBRAPA, Brazilian Agency for Agricultural Research, in Brasília, Brazil, December 1997.

27 Kishinami, Roberto, personal communication with the Director of Greenpeace Brasil, Sao Paulo, Brasil, 1998.

28 Viana, Gilney, op. cit. Note 25.

29 Soltani, Atossa, and Osborne, Tracy, Arteries of Global Trade, Amazon Watch, Malibu, CA, April, 1997.

30 News Release, "Champion International Corporation Announces Plan to Maximize Shareholder Value," Champion International, Stanford, CT, October 8, 1997.

31 Ramos, Adriana, "Flonas e Cifroes," Parabolicas, No. 28, Instituto Socioambiental, April, 1997, Brasília, Brasil.

32 Larrain, Sara, and Menotti, Victor, "Implicaciones de la Globalizacion Economica y el Libre Comerico Sobre la Biodiversidad y los Bosques de Chile," Santiago, Chile, 1998.

33 Bryant, Nielsen, Tangley, op. cit. Note 9.

34 Hoffman, Adriana, "Algo Se Avanza," Voces del Bosque, Defensores del Bosque Chileno, Santiago, Chile, No. 14, Winter, 1997

35 Menotti, Victor, Testimony given before the British Columbia Legislative Assembly's Special Committee on the Multilateral Agreement on Investment,Vancouver, BC, Canada, September 29, 1998.

36 Yamin, Kafil, "Freer Trade May Quicken Pace of Logging," InterPress Service, January 5, 1998.

37 Daju Pradnja Resosudarmo, "Indonesian Economic Crisis Implies Immense Changes in the Forest Sector," Update by CIFOR, Jakarta, Indonesia, March 26, 1998.

38 Fischer, Paige, personal communication with APEC Forest Campaigner, Pacific Environment Resources Center, Sausalito, CA, May, 1998.

39 Daju Pradnja Resosudarmo, Op. Cit. Note 37.

40 Yamin, Kafil, Op. Cit. Note 38.