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Latin America: Investment threatens biodiversity
Latinamerica Press / April 9, 1998

By Larry Luxner

WASHINGTON -- Huge investment in the timber, mining and petroleum extraction industries of Latin America is rarely viewed as a bad thing. But a new study by Conservation International warns that the region's most biologically rich ecosystems are being logged, mined and drilled far more rapidly than ever imagined.

"The sheer scale of investment, as measured by the number and size of concessions, threatens to open up vast expanses of previously undisturbed natural areas," writes the study's author, Ian Bowles. "Secondly, the rate at which new concessions have been granted over just the last five years means that this threat is an immediate concern for conservationists."

Between 1991 and 1996, for example, investment in minerals exploration in Latin America jumped 130%, from $300 million to $700 million per year. And in a 1996 survey of the CEOs of the world's largest mining conglomerates, seven Latin countries rated among the 10 most promising over the next decade.

Likewise, privatization of the timber industry -- along with preferential trading agreements, heavy subsidies and improved economic conditions -- have made Latin America much more attractive to logging firms. In the last seven years, timber exports have risen 120%, from 1.4 million to nearly 3.0 million cubic meters.

In one of the biggest and most controversial investments of this type, Chile's regional environmental review body, Corema, recently gave its blessing to a 350,000-hectare forestry project in Tierra del Fuego. The company behind this venture, Seattle-based Savia International, proposes to "sustainably manage" its temperate beech forest at South America's extreme southern tip, while adhering to stringent environmental standards -- including no clear-cutting -- as it produces furniture and other value-added hardwood products for customers in Europe, the Americas and Asia.

"We're very pleased with the strong vote of approval by Chile's environmental agency. Only a worthy project could survive such scrutiny and delay," said Robert E. Manne, CEO of Savia, whose company -- 60% owned by Trillium Corp. and 40% by The Beacon Group -- has invested $100 million in the project and must spend another $200 million to pull it off.

"It is time for responsible environmental groups to look at the facts and support our project," he said. "We have endured more analysis and have proposed higher environmental standards than any forestry project I know of in the world. If ever there was a sustainable development worthy of wide support, this is it."

Maybe so, but plenty of other projects in Latin America, particularly in sensitive areas like the Peruvian and Colombian Amazon, have led to widespread environmental destruction. Between 1972 and 1989, says Conservation International, petroleum companies drilling in Ecuador dumped 19 billion gallons of toxic waste into fragile tropical areas -- roughly 4.4 million gallons a day -- while more than 17 million gallons have been spilled along the Trans-Ecuadorian Pipeline in the last two decades.

CI warns that a similar environmental tragedy could face Guyana, Suriname and French Guiana, which together share the best-preserved block of tropical forest in the world. Asian timber giants and Canadian gold-mining ventures in all three countries have raised howls of protest from indigenous groups who complain they're rarely consulted or informed about timber and mining concessions that threaten ancestral lands. One company, Omai Gold Mines Ltd. -- a U.S.-Canadian-Guyanese joint venture -- still faces lawsuits over a 1995 cyanide leak that caused widespread environmental damage at its mine in northern Guyana.

"Without a regional planning strategy for the allocation of conessions, or the use of best environmental and social practices for minimizing negative impacts," warns the CI report, "these mining and timber operations could have a devastating impact on the tropical forests of the Guianas."

Far from wringing its hands in despair, however, the CI report says there's plenty of steps corporations and governments can take as they pursue Latin American investments. Among the group's recommendations:

* Invest in new protected areas. This strategy should include increased investment in existing protected areas, and "establishment of new areas to provide maximum representation of the region's biological wealth."

* Prohibit development in protected areas.

* Use "best practices." Where petroleum and mining development do occur in sensitive ecosystems like tropical forests, companies and conservationists should engage in an informed debate about ways to reduce the social and environmental impact of exploration and extraction activities.

* Involve the locals. All major development projects should take place within the context of public participation in decision-making.

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