GLOBALIZATION AND THE ACCELERATION OF FOREST DESTRUCTION SINCE RIO
by Victor Menotti
Director of the Environment Program at
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.
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.
- 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
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)
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
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
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
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
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)
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
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
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,
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
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
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
Back to IFG Home
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,
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,
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,
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
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,
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,
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,
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,
33 Bryant, Nielsen, Tangley, op. cit. Note
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
40 Yamin, Kafil, Op. Cit. Note 38.