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I. Identification
The international timber trade is linked to a variety of different issue areas including economics, the environment and politics. Within economics one must consider the effect on labor, income, and the opportunity costs associated with the decision. Generally speaking, new business will increase the demand for labor and create jobs. This was the initial primary goal of Suriname and the main reason they considered the Malaysian and Indonesian offers. In today's real world of survival, protecting the environment is rarely, if ever, at the top of any government's agenda. National security and economic welfare are primary concerns, as was the case for both Malaysia and Suriname. As Malaysia's and Indonesia's own sources of lumber dwindle, the economies of these countries are threatened. Much of the income for these SE Asian nations comes from logging. Even if the initial cutting takes place outside their national borders, the processing of the wood into plywood, pulp and even furniture will still occur at home.
On the other side of the quation, Suriname's economy was also struggling. A new source of income from the sale of land, as well as increased employment, tempted the government and rightfully so. A deal like this one would benefit all parties involved, except, of course, the environment. The opportunity cost of cutting down trees can be found in the resulting environmental damage, as well as any other uses the forests may provide such as potential medicines or another industry altogether, eco-tourism.
Because we are discussing trees, that there is an impact on the environment is obvious, but there are also some other hidden concerns that may not present themselves at first glance. These apprehensions include the effect of fewer trees on global warming, erosion, and biodiversity. Politically speaking, the laws and regulations governing trade must be considered as well as the political factors that determine which company or companies may have the concessions to certain tracts of land. All of these areas are inextricably linked.
Some environmental groups, including the EPA, Conservation International and the World Wildlife Federation argue that the timber trade is the absolute bane of existence for those who wish to save the world from global warming. They claim that as governments allow more trees to be cut down, the smaller the world's carbon sinks become. Fewer trees does mean that there is less space to absorb harmful carbon dioxide, but another scholar noted that in fact, preventing the timber trade by placing bans on products actually causes more harm than good.
Azlan Adnan writing for METLA, the Finnish Forest Research Institute, noted that as restrictions on timber increase, the product is devaluated meaning that the cost per tree is greatly reduced thus spurring further cutting in order to make up the lost profit. He claims that environmentally, it would make more sense to continue the trade of tropical timber, for in the long run it will reduce the actual number of trees that will be cut down. (To read further on Adnan's findings, please go to the following web site: http://www.metla.fi/archive/forest/1996/02/msg00133.html
A brief look at the data reveals that the majority of the deforestation cases are in Central America and Mexico, not in South America.
The largest number of deforestation cases in Latin America (Central and South America combined) occurs in Brazil and the Amazon region. This is mostly because of the sheer size of the region. Brazil is the largest country, physically, in Latin America, as well as housing the largest portion of tropical rainforest. It is also one of the most well know regions of deforestation.
A second set of related cases was also considered. This time the criteria set were Continent: Asia and the Environmental Problem listed as Deforestation. I am only concerned with the countries in Southeast Asia, and therefore those are the only cases discussed. Below are some of the descriptive statistics regarding the search results.
India, Indonesia, Malaysia and the Philippines appear from this data to have the most cases of deforestation. I am not sure this is an adequate representation of the situation. According to other sources the worst cases of deforestation are in Indonesia and Malaysia.
For more information on related case studies, please see these
other web pages:
| Brazil | Chile | Coldefor | Honduras | Mesquite | Nicarag |
| Camwood | Chipko | Chopstik | Indones | Malay | Philwood |
| Sandalwd | Teak | Thailog | Vietwood | Penan | Surinam |
Date: November 2000
II. Legal Clusters
The bulk of the timber trade out of Suriname has stopped, mostly because the country has declared a national reserve where logging companies originally wanted to buy concessions. But suppose that logging were permitted. Some of the issues that the WTO would need to consider are regulations regarding the labeling of timber from sustainable forests.
A country could choose not to import logs unless they are from a sustainable forest. A sustainable forest is one that is logged adhering to certain guidelines and regulations that maintain production of a relatively constant amount of wood products. This includes absolutely no clear-cutting, as well as the conscience decision to cut down only trees that are a certain size and leaving the smaller ones to continue growing. This may result in a smaller yield from year to year because it will limit the number of trees that can be cut, but it will provide many more years of harvest. For example, in the Pacific Northwest of the United States, logging has been slowed and nearly stopped in an effort to protect the Spotted Owl that lives in that region. The biggest impediment to this decision was the cry of the lumberjacks claiming that they would lost their jobs and their incomes. What these lumberjacks did not fully understand was that if they had been allowed to continue harvesting logs at the habitual rate, they would have been unemployed anyway, because there would simply have been no trees left for them to cut at all. This is why maintaining forests is actually in the economic interest of a nation: to continue employment and income much longer than would be possible under clear-cutting strategies.
Any country that chooses to only import logs from countries that practice sustainable forest management are potentially going against WTO regulations preventing the placement of unfair restrictions on trade. The same way the United States was brought to dispute settlement for refusing to import tuna fish caught with nets that were unsafe for dolphins, a country that prevents the importation of logs based on logging practices could be in direct opposition to WTO disciplines.
There are many corporations such as the Home Depot that will only purchase wood from forests that are from Forest Stewardship Council (FSC) certified forests. The FSC "is an international, non-profit organization that establishes standards, and accredits and monitors certification organizations. Forests that are managed to meet FSC standards can be certified as 'well-managed'." The Certified Forest Products Council (CFPC) "studies and evaluates the various forest certification and management systems that exist in the marketplace, both domestically and internationally." The CFPC monitors the FSC, but both organizations work together to ensure that the "wood was indeed produced from a Certified Well-Managed forest." (http://www.homedepot.com/prel80/HDUS/EN_US/diy_main/pg_diy.jsp?BV_SessionID=@@@@1359182881.0973004508@@@@&BV_EngineID=kaljelkigfhbfdkcffcfhcfml.0) . In this way, independent firms are taking responsibility for the environment, but because they are not regulated by the WTO, they do not have to adhere to their restrictions.
Generally speaking, logs from certified forests are more expensive than logs from uncertified forests. The price depends on a few factors including the cost of production and the demand for the product. Logs produced in certified forests require extra supervision as well as new technology that allows for independent tree cutting such that only the desired tree is cut down and none of the surrounding trees are harmed. Also, if the demand for trees from sustainable forests is low, the price of the product will rise. If the price of the commodity is too high, this may inadvertently prevent certain groups from purchasing the product thus reducing trade. Although the WTO cannot regulate market prices, it may prevent the full intent of free trade.
According to the WTO website, however, "The WTO's committee says the basic WTO principles of non-discrimination and transparency do not conflict with trade measures needed to protect the environment, including actions taken under the environmental agreements. It also notes that clauses in the agreements on goods, services and intellectual property allow governments to give priority to their domestic environmental policies." (http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey4_e.htm#keyquestion)
This means that as long as all countries involved in trade affecting the environment agree that certain practices and products negatively affect the environment, and as long as all countries agree to trade restrictions designed to protect the environment, there is no need for the WTO to get involved. The WTO website also notes "so far, no action affecting trade and taken under an international agreement has been challenged in the GATT-WTO system." More importantly, the WTO Trade and Environment Committee is "more concerned about what happens when one country invokes an environmental agreement to take action against another country that has not signed the environmental agreement." In effect, the WTO would get involved if a country that had not participated in an environmental agreement was being forced to adhere to trade restrictions set by other nations that stated that the practices and or products involved were harmful to the environment. This would then be listed as an impediment to free trade. Otherwise, there is no trade dispute regarding the trade of timber products. (http://www.wto.org/english/thewto_e/whatis_e/tif_e/bey4_e.htm#keyquestion) For example, if Malaysia claimed discrimination by Suriname on the grounds that Suriname prevented free trade by restricting logging practices, Malaysia would lose. Suriname has the right to give priority to protecting its forests over the trade desires of any other nation.
The Preserve is virtually uninhabited and close to its original, pristine state. It is home to eight species of primates, more than 400 species of birds as well as other endangered animals such as the jaguar, the giant armadillo and the giant river otter. The protection of this land and these animals is an incredible success for the preservation of biodiversity and natural beauty.
http://www.conservation.org/web/NEWS/NFF3-3/SURIN.HTM
http://www.conservation.org/web/NEWS/PRESSREL/00-0408.htm
III. Geographic Clusters
a. Geographic Domain: South America
b. Geographic Site: Amazon
c. Geographic Impact: Suriname
IV. Trade Clusters
The regulatory measures imposed to maintain certified sustainable forests can affect trade, but the effects are indirect to the trade process. The regulations set are primarily designed and imposed to protect the land, and any impact on the trade of timber that may or may not result is secondary.
a. Directly Related to Product: Yes, timber and non-timber products
b. Indirectly Related to Product: No
c. Not Related to Product: No
d. Related to Process: Yes, deforestation
The trade products being considered in this case study are any and all timber products available from the rainforests of Suriname. These products include both finished and unfinished timber products including such items as raw lumber and plywood (see Table 1.3 in Section IV.19), as well as non-timber products, that is to say, products, which can be found in the forests but can be harvested without actually cutting down a tree. Such non-timber products include seeds, nuts, and sap.
It is assumed that the key exporter in this case is the country of Suriname in Latin America. Key importers are any and all countries around the world with a demand for timber. What is interesting to note, however, is that one of the major impetuses for timber exports out of Suriname came not from Suriname, but from Southeast Asian nations such as Malaysia, Indonesia and the Philippines. All three of these nations are major timber exporters, especially to Japan. Due to an increased demand for timber products, the Southeast Asian nations have been rapidly deforesting their own land, leaving very little to continue harvesting. Not wishing to lose valuable income, they have started to look elsewhere around the world for sources of lumber. Suriname’s virgin, virtually un-chartered forests seemed like an ideal place.
The following table lists rates of deforestation in Malaysia from 1980-1994.
Table 1.1 - MALAYSIA: TOTAL FORESTED AREA AND AREA UNDER TREE CROPS AS COMPARED TO TOTAL LAND AREA (Million Hectares) Year Total Land Area Forested Area % Other Tree Crops * % Forest & Tree Covered Area % 1980 32.9 20.5 62.3 3.5 10.6 24.0 72.9 1986 32.9 19.7 59.9 4.1 12.5 23.8 72.3 1987 32.9 19.5 59.3 4.2 12.8 23.7 72.0 1988 32.9 19.4 59.0 4.3 13.1 23.7 72.0 1989 32.9 19.4 59.0 4.5 13.7 23.9 72.6 1990 32.9 19.4 59.0 .6 14.0 24.0 72.9 1991 32.9 19.2 58.4 4.6 14.0 23.8 72.3 1992 32.9 19.2 58.4 4.6 14.0 23.8 72.3 1993 32.9 19.1 58.1 4.8 14.6 23.9 72.6 1994 32.9 19.0 57.8 4.4 13.4 23.4 71.1
Here it is clear that between 1980 and 1994, the percent of total land area covered by forests has decreased. This shift in the rate of deforestation in Southeast Asia will be discussed further in the Trade section of this case study.
Therefore, based on the assumption that the primary exporter is no longer simply Suriname, but Malaysia, Indonesia and the Philippines, it is helpful to take a look at some trade data for these countries. Tables 1.2 and 1.3 give a good representation of the export rates for Malaysia and Indonesia.
Table 1.2 - A comparison of Japanese Tropical Hardwood Imports and the Sources of the Imports Measured in 1,000 Cubic Meters
| 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | |
| Tot. Japanese Imports | 21,494 | 19,464 | 20,230 | 20,914 | 19,611 | 18,871 |
| Tot. Japanese Imports from Malaysia | 10,169.6 | 9,045.7 | 8,426.8 | 5,216.2 | 4,463.2 | 3,902.0 |
Japan, although not in SE Asia, has a major impact on the timber trade, demanding vast quantities of lumber, which it receives mostly from Malaysia and Indonesia. Because Japan is a country made of volcanic islands, there is relatively little land from which the country can harvest trees. Its impact is on the trade side of the equation. (See the Chopstik case study - link below.) As noted in Table 1.1, the total forested area in Malaysia steadily declined from 1980 to 1994. This accounts for the drastic drop in exports to Japan between the years 1990 and 1995. As Malaysia continues to cut down trees, their ability to maintain high levels of exports drops, lowering income and overall economic growth.
Indonesia profits differently from their tropical timber production. Instead of exporting whole logs, they produce plywood. Listed below in Table 1.3 are some figures regarding plywood production and exports for Indonesia.
| 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | |
| Production | 8,860 | 9,958 | 10,550 | 10,689 | 9,836 | 9,500 |
| Exports | 8,502 | 8,970 | 9,761 | 9,724 | 8,852 | 8,500 |
Again, please note the decline over the years in quantities produced as well as exported. With fewer trees standing, Indonesia's ability to maintain high levels of production drops drastically. And with decreased levels of production, economic growth and stability are also threatened.
In 1985 alone, the Sabah and Sarawak regions of Malaysia exported 18.942 million cubic meters of logs. 8.442 million cubic meters were produced in Sabah, but total log production only reached 10.757 million cubic meters. Over 78% of logs produced in 1985 were exported for profit. In 1995, the numbers for the Sarawak region dropped with total log production reaching only 16.0 million cubic meters and total log exports reaching only 7.745 million cubic meters (Dauvergne - Appendix, pg 190-192). This is only about 48% of production as exports, but these numbers represent two different regions of Malaysia and are therefore difficult to truly compare. The point is that each year the demand for tropical timber takes at least half of all the timber produced in Malaysia leaving little for use at home. It also means that increased demand overseas will require further cutting in Malaysia. Soon, there will be precious few trees left to cut.
According to the following website:
(http://search.britannica.com/frm_redir.jsp?query=indonesia&redir=http://www.odci.gov/cia/publications/factbook/geos/id.html)
only 67% of Indonesia is forested area. With deforestation rates similar to
those in Malaysia, it is clear that there is less and less available land for
timber.
Comparatively, Suriname’s total land area is roughly 329,749 square kilometers, and only about 30 square kilometers of that along the coastline is inhabited. (http://www.escapeartist.com/suriname/suriname.htm) (1995). That leaves nearly the entire country forested and available as an excellent source of timber for logging companies. What is interesting to note, however, is that according to other sources, the major export of Suriname is not timber, but bauxite, a very valuable mineral necessary for the production of aluminum. As noted in the CIA Fact Book, “the economy is dominated by the bauxite industry, which accounts for more than 15% of GDP and 70% of export earnings” (http://search.britannica.com/frm_redir.jsp?query=suriname&redir=http://www.odci.gov/cia/publications/factbook/geos/ns.html).
This is important because it seems that regardless of how many trees Suriname
has or how many trees Malaysia wants, the trees are staying in Suriname! This is
not due to any kind of trade barriers, taxes, tariffs or quotas. Simply put, the
country of Suriname decided not to sell its major resource. Initially it was the
bauxite industry that helped protect the rainforest, but as mining continued,
bauxite reserves diminished and other sources of income were necessary. It was
at this point that Suriname considered selling concessions of land to Malaysian
logging companies. Although major logging was started, both local and
international protests slowed it. Now the Central Suriname Wilderness Nature
Reserve has virtually stopped logging altogether.
(http://search.britannica.com/frm_redir.jsp?query=suriname&redir=http://www.euronet.nl/users/mbleeker/suriname/suri-eng.html)
V. Environment Clusters
Even though deforestation is the major environmental problem facing Suriname,
were it to trade its timber, it is not the final resting place of the issue.
Tropical forests provide an irreplacable habitat for multitudes of plants and
animals, most of which are completely unknown to man. But just because we cannot
identify them and label them, it does not mean that they are not important and
they do not have the right to live. Below are two species, one animal and one
plant of many in the forest that could be at risk of extinction if the tropical
forests of Suriname are destroyed. More plants and animals of Suriname can be
found at the following website:
http://www.euronet.nl/users/mbleeker/suriname/suri-eng.htmlThis
list is just an example of the vast biodiversity that exists in the forests of
Suriname.
Name: Morpho menaelaus
Type: Butterfly
Diversity: n/a
Name: Eperua falcata - Walaba Tree
Type: Tropical Vegetation
Diversity: N/A
"Deforestation robs the world of countless species, destroying crucial biodiversity and losing species with potential uses in medicine, agriculture and industry. Biodiversity is important because it contributes to resiliency. A world without biodiversity would be fragile and likely to amplify disturbance into catastrophe through the collapse of ecosystems that had lost keystone species. Thus, biodiversity reduction, combined with climate change, has the potential to spin out of control and to threaten the prosperity of global civilization. Already the scale of biodiversity caused by the present generation of human activities ranks with the great prehistoric extinctions. Recovery from this level of disturbance will require tens of millions of years" (http://www.davison.k12.mi.us/academic/global/deforest.htm).
This quote is perhaps the most succinct discussion of the importance of biodiversity. But another aspect of this issue is one that many have a difficult time understanding and relating to. Different species of both flora and fauna have the right to live because they are alive, and no other reason is necessary to fight for their existence and survival. John Terborgh is his book Requiem for Nature spends a great deal of energy and effort pushing just that notion. Even if certain plants offered no medicinal value for humans, and the flowers they produced were hideous in both color and scent, that does not mean that they have any less of a reason for being on the earth than the plant that provides pain relief or the perfect flower for a centerpiece.
But in the rainforest, it is not just the trees that are important, but the animals as well. The multitude of different species of animals including amphibians, mammals, reptiles and birds is quite possibly well beyond the scope of human understanding. There is so much deep in the forest that has yet to be discovered, much less understood. Any attempt to cut down vast numbers of trees for someone else's profit instantly reduces any chance for these animals to survive. Consider the butterfly, only one of any number of beautiful creatures whose existence would be threatened by the continued pressure on its home.
(For more information on habitats both in Suriname and around the world, please visit the World Conservation Monitoring Centre's website on Habitats at http://www.wcmc.org.uk/habitats/index.htm)
"One of the last great tropical wilderness areas on Earth, Suriname is home to a rich variety of biodiversity including:
As a comparison, it is interesting to note that the Odzala National Park in the Republic of Africa in Congo is home to over 440 bird species and 16 species of primates. Different animals live in different parts of the world, and although Suriname may not lay claim to nearly 420 gorillas (as many as live in Odzala), the numbers are comparable and noteworthy. (http://www.conservation.org/odzala/info.htm)
Fortunately, the majority of the population of Suriname lives on the coast. More than half of the total population lives in Paramaribo, the capital city. ("Population: 424,569 (1997) - 95 percent of the population resides in and around the capital city of Paramaribo." Because of this, any logging practices would have little affect on the culture of the people (http://www.conservation.org/web/fieldact/regions/guianreg/sur2.htm).
Thus, considering that very few people would be adversely affected by logging in the interior of Suriname, a lot of people would find the argument to stop deforestation simply in order to protect biodiversity a very weak one. But as noted earlier, the impacts of biodiversity do trickle down to even the most remote person in another country, aiding in medical research, farming habits and industry, as well as sustaining the earth's ability to rejuvenate itself through genetic differences.
The substitutes for major deforestation are simple. There are really only two options. The first is to create a natural preserve, like the Suriname government did in 1998. With the financial help offered by organizations such as the GEF, the UNDP and CI, this type of project is possible, and of course preferable. But the economic strain on a country may be difficult to bear, at least initially. By refusing to sell land and trees, Suriname gave up a very real and potentially very large source of income.
If economic growth and stability is a major concern for a nation, then Sustainable Forest Management (SFM) is the other option. SFM is a process whereby countries adhere to international standards for production, logging techniques, and quotas confirming the stabilization of tree growth and future stocks of lumber. There are three major obstacles to successful SFM policy implementation. The first is that international standards are difficult to set for different types of trees, in different countries with different climates and different demands. The second is that once standards are set it is difficult to demonstrate the future potential income to poor farmers who only want enough money to feed and clothe their families now. The third impediment to successful SFM policy execution is weak government. Even if decent policy can be written, enforcement of such laws and regulations must be maintained, and this can be only done if a country respects the government. In Malaysia, sustainable forest management policies are in place, but traditional racial and cultural differences between the government and big business make cooperation complicated at best, thus perpetuating the cycle of major deforestation. Peter Dauvergne in his book Shadows in the Forest: Japan and the Politics of Timber in Southeast Asia notes that "modern patron-client links among top politicians, military officers, bureaucrats and timber operators drive destructive logging and undermine state capacity and willingness to manage the forests" (Dauvergne, pg. 59). Dauvergne spends a great deal of time in his book discussing the problem of corrupt governments that make deals allowing the logging companies to continue caustic and harmful logging practices, as long as profits continue to find their way to the palms of the leading officials. Through groups such as the FSC and the CFPC, logging can continue while protecting the forest from devastation and successfully providing products for the future instead of destroying the area completely at the beginning. For more information on the FSC and Certified Managed Forests, please see the FSC website at: www.fscus.org.
VI. Other Factors
Porter, Gareth and Janet Welsh Brown. Global Environmental Politics. Westview Press. Boulder: CO: 1996.
Terborgh, John. Requiem for Nature. Island Press. Washington, D.C.: 1999.
Additional websites as listed throughout the case study.