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Tropical Forest Conservation
Act and Ecological debt
The Island, Colombo
http://www.island.lk
October 01, 2003
By Hemantha Withanage
Environmental Scientist
The Sri Lankan government is planning to sign an agreement, under the
US Tropical Forestry Conservation act, to bind Sri Lanka's forests for
external debt, soon. Under this arrangement those forests will in future
be managed by a committee comprising representatives from the US government,
International NGOs other than local representatives. Would this be a question
of sovereignty too?
Like any other developing country, Sri Lanka receives loans and grants
from both multilateral and bilateral agencies, such as the World Bank,
the Asian Development Bank, the IMF, USAID and the JBIC. Nevertheless,
Sri Lanka’s foreign debt continues to increase.
The repayment of such a debt is not easy for a Third World country and
all such countries find they must exploit their resources excessively
in order to do so. Sri Lanka is no exception. The large scale felling
of timber, shrimp culture, the cultivation of cash crops such as gherkins,
baby corn and tobacco, the extraction of minerals such as phosphates and
mineral sands and the privatisation of water supplies are examples of
such exploitation. It is not merely the present generation, but also another
three to four generations which may have to carry this burden.
The environment sector also receives large-scale loans and grants. These
grants and loans cover tree planting, watershed management, coastal conservation,
pollution control, wildlife, medicinal plant conservation, conservation
of bio-diversity, traditional knowledge etc. In spite of this aid, however,
there is no improvement in the environment sector in general.
Forest cover has been reduced to 19% from 24% in 1990, while the green
cover has been reduced to 47% from the 70%. More than 200 elephants die
annually. There is no new data available in other sectors. However, necessary
laws and funds are available in this sector. Government institutions and
the non-government sector promote environmental conservation, but are
unable to control this destruction. The reasons are politically supported
illegal forest felling, tea cultivation etc.
Neither the government sector nor the non-government sector projects
have been able to improve the forest cover; nor indeed have they managed
to at least abate the destruction. The felling of Jak, Sapu, Lunumidella
trees were deregulated and that destroyed most of the trees on Sri Lankan
land. There are over 100 trees species, which include some native species,
and medicinal plants in a list to be deregulated under the present ADB
funded project for the Forest Department. In short, although there is
an official logging ban by the Government they are not able to stop forest
felling due to the haphazard decision making of certain sections of the
executive.
Recent environmental conservation project grants, such as the Global
Environmental Facility (GEF) Enviro-nmental Action 1 project may be regarded
as unsuccessful. These projects mainly finance the purchase of vehicles
and the planting of trees, but 80-90 percent of the trees planted no longer
exist. Hence, these project grants tend to add to the foreign debt of
the country.
The Act
However, third world countries have no resources to repay their debt.
In this context the US Public Law 105-214, for Debt Reduction for Developing
Countries with Tropical Forests the Tropical Forest Conservation Act (TFCA)
- might be seen as a valuable mechanism. Under the provisions of this
legislation, if a tropical country possesses at least one globally important
tropical forest, then that country may sign an agreement with the United
States of America to reduce the debts to the latter incurred either as
a result of loans under the Foreign Assistance Act of 1961 or because
of credits extended under title 1 of the Agriculture Trade Develo-pment
and Assistance Act of 1954. This may be achieved by DEBT BUYBACK, by DEBT
FOR NATURE SWAP or by LOAN RESTRUCTURING.
I. Debt Buyback
Under this provision, a loan may be repurchased at a price equal to its
net present value, with an additional local currency payment made up-front
to endow a Forest Conservation fund. This endowment would be up to 40%
of the purchase price of the loan.
II. Debt For Nature Swap
According to this provision, a third party may purchase a loan in exchange
for a commitment by the debtor country to fund forestry conservation and
protection programmes. The exact terms of the agreement will be subject
to negotiations between the US Government, the third party and the debtor
country. The total payments by the debtor country under this option would
be higher than the net present value of the original credits, but lower
than their actual face value.
III. Loan Restructuring
Payments of principal would continue to be made, in US Dollars, to the
US Government, but interest payments would be made in local currency to
a Tropical Forest Fund.
Tropical Forest Funds
The key element in the TFCA is the concept of Tropical Forest Funds.
These are intended to be established, under the laws of the debtor country,
as endowed trust funds to be managed in perpetuity. They would make grants
for the conservation, maintenance and restoration of tropical forests
in the debtor country, through the following activities:
a) The establishment, restoration, protection and maintenance of parks,
protected areas and reserves;
b) The development and implementation of scientifically sound systems
of natural resource management, including land and ecosystem management
practices;
c) Training programmes to increase the scientific, technical and managerial
capacities of individuals and organisations involved in conservation efforts;
b) The restoration, protection or sustainable use of diverse animal and
plant species.
e) Research into and identification of medical uses of tropical forest
plant life to treat human diseases, illnesses and health related concerns;
and
f) The development and support of the livelihood of individuals living
in or near a tropical forest in a manner consistent with protecting that
forest.
The grants would be made primarily to non-governmental organisations
(NGOs) involved with environment, forestry, conservation and indigenous
peoples and other local or regional entities. Grants to the government
of the debtor country would only be made in exceptional circumstances.
The Tropical Forest Fund in a given country would be administered by
a body, to consist of one or more individuals appointed by the US Govern-ment
(ie the US Ambassador or his/her designate), one or more individuals appointed
by the government of the beneficiary country and individuals from NGOs
and scientific, academic or forestry organisations.
The Pros
The failure of the Sri Lanka Government to prevent the destruction of
the forests means that a new mechanism is necessary for forest conservation.
It appears that the Sri Lankan Government will be never committed to forest
conservation if it does not come as a condition for grants. It is hence
argued by proponents of a US-Sri Lanka Tropical Forestry Agreement under
the TFCA that, although they may not want a third party intervention in
managing the countrys natural resource, there is no other practical way
to protect the remaining forests in Sri Lanka. Such an agreement, they
say, would ensure that resources would be allocated to the protection
of the forests that would not otherwise have been so used.
There would be enhanced forest conservation through the establishment
of a Tropical Forest Fund for Sri Lanka. There would be more effective
use of existing funds and resources through better management.
Furthermore, such an agreement would alleviate indebtedness; resources
that once went to the US as debt repayment would remain in the domestic
economy and be channelled to organisations involved in forest conservation
and protection. The US Government might subsidise the programme partially,
leading to further reductions.
The Cons
The fundamental disadvantage, to Sri Lanka, of a Tropical Forest Agreement
with the US, under the TFCA, is the abdication by the Government of Sri
Lanka of the responsibility for safeguarding the forest resources of this
country. However the meaning might be clothed in verbiage, the primary
aim of the TFCA is for the US Government to obtain control over the forest
resources of tropical countries. According to the TFCA, one of its main
purposes is:
To recognise the values received by United States citizens from protection
of tropical forest.
It is unrealistic to expect a foreign country such as the US to behave
totally altruistically in managing Sri Lanka's forest resources. It will
put its own interests before those of this country.
A corollary is the possibility of exploitation of the resources of Sri
Lankan forests by US-based NGOs and companies. One of the reasons for
the TFCA is the protection of the plant and gene bank which is only available
in tropical forests, while one of the activities envisaged under the Tropical
Forest Funds (and mentioned above) is research into the medicinal uses
of tropical forest plant life indicating that this issue was not far from
the minds of US legislators. The US may, therefore be expected to benefit
fully from research into the plant and gene resources of Sri Lankas forests,
to the detriment of the local population. US pharmaceutical companies
are well known for getting patents for plant based pharmaceuticals, sometimes
of substances that have been in use for millennia.
The question of control over the process appears to be already raising
its head. The Additional Director General, Department of External resources
of the Ministry of Finance and Planning has written to the Ministry of
Forest and Environment asking the latter to identify activities for funding
under the Tropical Forest Fund that could be established under the mechanism.
It appears, therefore, that either (a) the Government has not understood
the mechanism or (b) the Government does not wish any collaboration with
NGOs although the NGOs are major stockholders of this mechanism. Whichever
is the case, it appears that the needs of the Government of Sri Lanka
will be in contradiction to the requirements of the TFCA.
There are many threats of bringing international NGOs to protect our
resources. Some of them are infamous for biopiracy and some of them keep
biodiversity sites with military support. The killing of two Indonesian
tribals who tried to enter to COMODO National Park is a popular story
to show how they treat the people in biologically valuable areas. Their
approach is removing people from the forest and buffer zones which is
not a suitable option for Sri Lanka.
There is also the question of how effective the fund would be. The activities
mentioned above are not new to Sri Lanka. As noted earlier, there are
quite a few foreign funded projects which do not provide serious protection
to the forests right now. Does it seem likely that these NGOs which have
failed to affect the situation so far will be able to do so in future?
Yet finally, the question of sovereignty remains the principle one. If
the Government of Sri Lanka is unable to protect its natural resources,
then the state is no longer viable in that it cannot protect the interests
of the country. How far would such a state be able to exercise control
over what would be basically a foreign agency operating as an administrator
of forest resources within Sri Lanka?
The Ecological Debt
It is a well-known fact that US refused to sign the Kyoto protocol, which
is the agreement, negotiated under the climate change convention signed
in 1992 at the Rio conference, which aimed to reduce the greenhouse effect.
The US disagreed with the level of reduction of the C02 for the US and
with the mechanism to reduce such C02 levels, which were included in the
protocol.
It appears that US will benefit from the TFCA without reducing its C02
levels, by stating that it has protected so much of Tropical forests in
the world, which act as sinks to absorb the C02, which the US releases.
One US citizen releases C02 equivalent to 19 Sri Lankan, 19 Indians 107
Bangladeshis or 269 Nepalis. The United States currently emits 45,000
pounds (20 tonnes) of C02 annually per person. The reduction of C02 level
for US involves serious reduction of the life style and this is a very
big political question there. The US and all other developed countries
which emit enormous amounts of greenhouse gases are already served by
the countries that own tropical rain forest. Absorption of C02, controlling
the hydrological cycle, acting as a gene and seed bank are those major
functions. The value of these functions is higher than the capital of
all the countries that exist in the world or the value of all business
in the world.
Therefore all developed countries already owe an enormous debt to these
third world countries. This is normally called ecological debt. Environmentalists
argue that the developed countries should reduce the foreign debt of these
countries considering the value of such ecological debt.
The US TFCA, while accepting this principle, does not forget or reduce
that debt with regard to the past services. The Act is intended for the
future services of the Tropical Forest. However, the past debt should
be reduced unconditionally and the TFCA should be only in respect of future
loans.
So far Bangladesh and Thailand have signed the agreement with the USA
under the TFCA, while Peru, Belize, Ecuador, Malaysia, Jamaica, Brazil,
The Philippines, E1 Salvador, Costa Rica and Dominican Republic and Paraguay
have expressed their interests in the programme. The Sri Lanka Government
thus has a very big role to play when considering this mechanism to reduce
debt. The role of the government in identifying the eligible purchaser,
the activities under the programme and how to select the administering
committee are some of the issues that it must cover.
We know that forests are public assets. The Government only acts as the
guardian. This public guardianship doctrine is very clearly explained
in the Eppawela Phosphate case. Therefore the key issue is whether we
lose our rights in the tropical forest sector once we enter into such
an agreement and whether the government can sign such an agreement without
any public consultation.
As a country we have to have policies and laws
a) To protect the alienation of forest resources
b) To stop pirating the genetic material, plant serum, plant species
or the traditional knowledge.
It should be the first step of any government before entering into such
an agreement. However, instead of the government identifying whether Sri
Lanka has policy and legal coverage to enter in to such an agreement they
just try to identify the activities. This indicates that the Sri Lankan
government wishes to hurry up the process.
Most importantly, the government should be very careful whether it would
affect the sovereignty of the country. No one wants another Kandyan Convention
in Sri Lanka.
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