The Multinational Monitor


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Asia Logs Surniname

by Marcus Colchester

SURINAME, IN NORTHEASTERN South America, is arguably the continent's least-known country. It did not win independence from the Netherlands until 1975 and still has closer ties to its ex-colonial master than to any South American neighbor. It is one of the most forested tropical countries, carpeted in a rich variety of tropical forests. Just a few years ago, Washington, D.C.-based Conservation International announced that "there is probably a better chance of conserving large tracts of undisturbed rainforest wilderness in Suriname than virtually anywhere else on earth."

Since then, however, the Surinamese government has encouraged rapid exploitation of its natural resources, handing over large tracts of the forested interior to foreign mining and logging companies.

Accelerated resource exploitation took off in 1992, after foreign companies offered to make substantial logging and mining investments. Under these arrangements, for example, Denver, Colorado-based Golden Star Resources gained access to rich gold lodes in the interior. Golden Star's operations have led to the forced eviction of thousands of tribal people. Conflict at mine sites reached a flash point in September 1995, as police shot at Maroon people trying to access their traditional forests.

Even greater international concern, however, has been focused on the threat posed by Asian timber companies. Suriname's forests cover more than 14 million hectares, an area about the size of England and Wales. Approximately 3 million hectares in the "forest belt" along the north coast have already been logged. The rest is largely unexploited. These interior upland forests once were considered too vulnerable to log because their steep terrain and poor soils are prone to erosion if the forest cover is broken. Despite its fragility, the area is now coveted by foreign loggers.

The inhabitants of the interior lands pose an obstacle to logging plans. The area is home to four tribes of Amerindians (a fifth group of hunters and gatherers -- the Akuriyo -- are believed to be extinct). Six Maroon peoples, descendants of escaped slaves who recreated forest societies in the interior in the 17th and 18th centuries, also populate the middle rivers area, which lies 50 kilometers to 100 kilometers inland. The Maroon lands are most at risk.

Most of these forest communities were caught up in a vicious, six-year civil war in the late 1980s. The war devastated the country and brought its bauxite- and aid-dependent economy to near ruin. During the conflict, Maroon insurgents took control of the interior and unsuccessfully tried to seize the capital, Paramaribo, by force. A tenuous peace with the insurgent tribes was established in 1992 in return for unkept promises to secure their land rights and provide community development. Observers fear that the new logging deals could rekindle old hostilities in the hinterlands, where leaders recently declared regional autonomy.

Cutting deals

An Indonesian-owned company, MUSA Indo-Suriname, has secured a 150,000 hectare logging concession in the interior and is buying timber directly from indigenous villages. MUSA is pushing its case among Amazonian Indians near Jodensavane through ex-army strongman Desi Bouterse, who ruled the country from 1980 until 1988. The same company is also extracting timber from the Maroon community of Baling Sula. "These people are cutting down every tree and we are afraid of the erosion," one resident reported. "It is terrible what they are doing, they are even cutting down the sacred KanKan trees," which are revered as the homes of ancestral spirits.

The new captain of the Arawak community of Washiabo in western Suriname, complains that MUSA has recruited other ex-insurgents as forest guards. "I feel very sad when I see so many logs being taken away," he says. "It's unimaginable how much money is there, while we have nothing." A recent investigation by the Penang, Malaysia-based World Rainforest Movement also found that MUSA was illegally logging experimental reserves, tearing apart forests where Dutch foresters had begun meticulous studies of forest regeneration in the 1970s.

The Forestry Department cannot control this mayhem. Reduced to just four professional foresters and about 10 lower-level forest rangers, the department lost nearly all of its vehicles and forest camps in the civil war. Forestry staff can no longer afford to venture into the forests. Even if they could, the government is under enormous pressure to sell off the forests to address a balance of payments crisis brought on by financial mismanagement and declining bauxite prices.

In early 1994, MUSA negotiated a $1.5 billion preliminary agreement with the cash-strapped government for massive concessions covering nearly six million hectares. This area accounts for more than half of the country's untapped forest lands and wildly exceeds Suriname's 150,000-hectare legal ceiling for forestry concessions. In an attempt to circumvent this restriction, MUSA created 70 Surinamese front companies to ostensibly control legal-sized parcels of the huge concession. But the sheer excess of this proposed concession sparked a national and international uproar.

Concerns were raised not just because of the poor record of large logging companies in Indonesia, but also because MUSA provided minimal details about its ownership and financial viability. MUSA revealed even less about its forest management experience. Moreover, the agreements between MUSA and the government were negotiated behind closed doors, fueling corruption rumors. "The concession was granted in a very quick and mysterious way," Kenneth Tjon, the head of the forestry service, told a Time magazine correspondent. "Even I had to learn about it in the newspapers." Surprised by the international backlash to the deal, the government subsequently backed off.

The controversy now is focused on three one-million hectare logging concessions being sought by MUSA Indo-Suriname, Suri-Atlantic, also of Indonesia, and the Malaysian conglomerate Berjaya. Under Suriname's Forestry Act, the timber deals require the approval of the National Assembly. A fierce campaign is being waged by environmentalists to persuade parliamentarians that the logging would be uncontrollable and generate little government revenue. Forest policy specialists Nigel Sizer and Richard Rice of the World Resources Institute calculate that, once fully operational, each concession would bring in less than $9 million of government revenue a year. This figure would fall to only $2 million if the companies dodged taxes, as they commonly do. The three companies, on the other hand, would be expected to make profits of more than $80 million a year on their Suriname operations.

Paramaribo is rife with rumors of corrupt deals between loggers and politicians. "The Indonesian and Malaysian logging firms are mounting an all-out campaign for approval [of the contracts]," the Washington Post reported in May 1995. "Bribery is rampant," according to Ernie Bruning, an outspoken member of [the Surinamese] parliament. "In a country where parliamentarians make no more than a few dollars a month, some view a little added cash as most welcome," he explained.

These concerns are accentuated by the record of some of the Asian companies. An official of the Malaysian conglomerate Berjaya was caught trying to bribe a minister to get a logging permit in the Solomon Islands last year, resulting in his expulsion. The incident "only highlighted the endemic corruption which surrounds the timber industry in the Solomon Islands," said the minister that the Berjaya official tried to bribe. "This problem has only gotten out of control in the last six years, a period which coincides with the big influx of foreign timber companies," he said.

Like MUSA, Berjaya has cultivated local power brokers to advance its deals, choosing Surendre Mungra, the brother of Minister for Foreign Affairs Subhas Mungra, to run its Suriname subsidiary. Foreign Minister Mungra happens to be negotiating with the government of Brazil to build an all-weather road that would connect the Berjaya concession to Paramaribo. As for Suri-Atlantic, which is seeking a million hectares in western Suriname, no one knows who its owners are and what influence they might have.

Meanwhile, other companies are knocking on the door. A Chinese consortium, calling itself Suriname Natural Resources Industries, is seeking 250,000 hectares for logging and palm oil development. Canada's Gordon Capital Corporation has offered between $25 million and $45 million to buy a 51 percent share of Bruynzeel, the state timber company. Although Bruynzeel already controls 470,000 hectares, Gordon wants to expand the holding to one million hectares as part of the deal. Australia's Parkland is rumored to be interested in timber deals, as is a Brazilian consortium and three other Asian companies.

Winners and losers

Foresters familiar with Suriname say that logging these fragile hill forests will prove unsustainable, while financial analysts doubt that Suriname will see much profit from the deals. Rather than open up new areas, they advise, the government would do better to extract proper revenue from the existing concession areas. If logging continues to be unsupervised and unregulated, they say, the profits will accrue to distant investors while the costs are paid by local communities.

An explanation of why the Suriname government might be pursuing these perilous policies lies in the country's political economy, which is structured to satisfy the needs of an urban middle class that has grown dependent on aid and foreign business enclaves. Of the country's 400,000 people, 90 percent live along the coast, with 80 percent living in Paramaribo. Foreign-owned bauxite mines provide most of the country's scarce foreign exchange, with two transnational mining corporations, Pittsburgh, Pennsylvania-based ALCOA and Billiton Mining Company (which Shell sold to South Africa's Gencor mining company in 1994), profoundly shaping the country's political and economic development.

Throughout Suriname's history, the forest communities have been denied effective rights and marginalized from decision-making. Political power is vested in an elite group of ethnically factionalized politicians (Creole, East Indian and Indonesian), who have built up their fortunes and patronage through their control of Dutch development assistance. This aid has constituted up to 40 percent of government revenues in the post-independence years.

This patronage system is now in crisis. Leaders of a 1980 military coup sought to end the country's dependency on the Netherlands. Responding to rampant human rights violations, the Dutch government cut off aid to Suriname and the new regime failed to come up with an alternative source of financing. An economic crisis followed, exacerbated by declining bauxite prices, global recession and civil war.

Although a civilian government gradually has been restored during the 1990s, the foreign exchange crisis has deepened, leading to spiraling inflation and recent bread riots. Foreign aid flows will not be renewed until the government commits itself to austere neo-liberal "structural adjustment" policies proposed by the European Union, International Monetary Fund (IMF), World Bank and the Interamerican Development Bank (IDB). But politicians facing elections in one year are unlikely to introduce such belt-tightening reforms.

Suriname is caught on the horns of a dilemma. Although the government seeks a development path that will not deepen its dependency, as a country that imports 60 percent of its food it desperately requires foreign exchange. It can only acquire hard currency quickly through foreign aid agencies or transnational corporations. There is a strong nationalist backlash in Suriname against all Western foreign aid, especially aid from the Netherlands. Instead, the government has sought corporate investment, especially from transnational corporations based elsewhere in the developing world.

But Surinamese environmental, development, human rights and indigenous peoples organizations argue that rapidly expanding logging at a time when the country has lost its ability to police existing forest concessions amounts to economic and environmental madness. The groups have called on the Surinamese government to halt the deals until the forest peoples' land rights are secured and the overextended forestry department can be built up to a level that can monitor logging activity.

Aid agencies are seeking more imaginative aid packages that can help the government carry through structural reforms, while softening the blow to the electorate and simultaneously defining a more prudent forest policy. Teams from the IMF, the World Bank, the IDB and the U.S. Congress have flocked to Paramaribo to propose alternatives. IDB President Enrique Iglesias has personally approached the Surinamese government, offering an injection of foreign currency to help the country through its foreign exchange crisis and to quickly build up the forestry department's regulatory capacity. But suggestions that such aid be made conditional on a freeze in the hand-out of logging concessions have been denounced by President Ronald Venetiaan as "eco-colonialism."

Multinational corporations are not interested in guaranteeing a sustainable future for Suriname's forests. While some foreign advisors may be concerned, they lack the clout to bring it about. The best hope for securing a sustainable future lies in giving indigenous and Maroon peoples control of Guyana's interior forests.

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