TED Case Studies

ECOCOSMETICS

NUMBER: 452

MNEMONIC: ECOSMET


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I. Identification

1. The Issue

The destruction of the rainforest has dire consequences not just for rainforest dwellers, but for plants, animals and people the world over. Just how many species of plants and animals have become extinct due to the elimination of their rainforest habitat is impossible to know. Like the indigenous flora and fauna, indigenous peoples have also lost or are in danger of losing their habitat and the right to live the way they have for centuries. The loss of their habitat amounts not only to a major human rights violation but to a loss for all of humanity. Scientists have only begun to understand the medicinal and other benefits of rainforest plants and animals--something that rainforest peoples have known for centuries. The loss of the rainforest means a loss of indigenous knowledge and with it many possible cures and medical treatments. In the words of Horst M. Rechelbacher, the founder and CEO of Aveda Corporation, a natural cosmetics and personal care company, "We are losing the medicines of the future, the lungs of our planet, the very-life support system for all of existence." ("Staying Connected," Aveda Magazine, p. 2) In response to this crisis, a variety of organizations, governmental, non-profit and for-profit alike have begun formulating and implementing creative solutions. These organizations understand that if tropical forests are to survive, the people who depend on them for their livelihood must survive as well. Many organizations are joining forces to develop products which will create economic incentives for conservation among people who might otherwise destroy habitats for timber, small farms, or cattle ranching. One solution devised by these organizations has been to use rainforest plants and indigenous knowledge for the manufacturing of cosmetics. By capitalizing on indigenous knowledge and the increasing western demand for "natural" and "pure" cosmetic and personal care products, these organizations have created a sustainable and profitable way to protect the rainforest and its peoples.

2. Description

Demand for natural cosmetics has risen steadily since the early 1980's. People feel that these types of cosmetics are better because they are derived from natural sources. In addition, they may feel that by spending a little more, they are helping to preserve a portion of the rain forest. Today, the natural cosmetic industry represents one quarter of the entire $29 billion cosmetics industry. By comparison,revenues for the pharmaceutical industry reached $56 billion. CIO Magazine By any standard, the natural cosmetic industry is an important one, one which, by its sheer volume, has the potential to do much good in terms of conservation of tropical rainforests and their peoples. But why is the rainforest important to preserve? There aretwo primary reasons: the wealth in bio-diversity and possible geopolitical implications.

a. Bio-diversity

Just in one hectare alone, in the Southern Bahia forest of Brazil, 456 different tree species were identified. Bio-diversity is a "dynamic system of complex, evolving eco-systems" which protect the world from changes in climate and crop yield. (www.conservation.org/ web/fieldact/c-c_prog/POLICY/ biovalue.htm) Of the estimated 250,000 known plant species still in existence, maybe 5,000 have been tested for their medicinal potential. Of the remaining 245,000 any one could hold the cure for what is today considered an incurable disease. Pharmaceutical companies like Bristol-Myers Squibb are working with indigenous peoples, in this case the Saramaccanos in southern Surinam and they have tested 788 extracts prepared from 394 plants for potential use in developing drugs to combat cancer and AIDS. Shown in this picture is Ancistrocladus Korupensis, a rainforest vine recently discovered in the Korup National Park of Cameroon. This plant contains Michellamine Ban alkaloid that has exhibited significant in vitro activity against HIV-1 and HIV-2. Because of its importance in AIDS research, scientists in the country have started a programme to conserve the rare plant. ''We fear that using this limited source for anti-AIDS research could eventually lead to extinction of the species. That is why we are attempting to domesticate the plant and increase its production,'' says Professor Johnson Jato, director of the Bioresources Development and Conservation Programme (BDCP). Finding ways to propagate the plant is key to its conservation, Jato says. So far, by careful use of high humidity propagators, the BDCP team has succeeded in speeding up the growth of transplanted young plants, and they have been able to germinate and rapidly grow the plant from seeds. Young plants have been successfully transplanted from the rainforest, domesticated in a nursery and then planted on a farm. They are protected and shaded by palms and watered twice daily. Cuttings of the plant have also been taken, dipped in a rooting hormone and then planted in a one-to-one mixture of sawdust and sand. The cuttings are placed in humidity propagators where they are constantly examined for rooting.

In addition to the Ancistrocladus, more than 90 medicinal plants have been discovered in the Korup National Park, 36 of them new to science. Unfortunately, the existence of this and other conservation parks is being threatened for a number of reasons. It is for this reason that efforts such as those being undertaken by CI, Croda and natural cosmetic companies are so important.

In order to protect the important rainforest resources that are the indigenous people and the plants and animals they live with, economic incentives and solutions must be found. Because so many "discoveries" capitalize on the knowledge of traditional peoples, it is important that these peoples achieve the economic power to protect themselves and their biological resources from outside "predators". Predators include non-sustainable yet profitable (in the short-term) alternatives, such as those presented by the extractive industries, logging, oil and gas and other resource extraction. These types of "alternatives" can destroy indigenous people, indigenous knowledge, and irreplaceable natural resources unless they are managed properly. If done carefully, "the extraction of natural resources in some cases may be possible with little impact on biodiversity."

Oil and gas development, if planned and executed properly, can "avoid the pollution of immediate surroundings and provides a means to protect larger tracts of habitat. Some forms of logging can extract economically valuable trees with relatively little damage to a forest's biodiversity. All of these activities can be less destructive than agriculture and livestock, common alternatives." (www.conservation.org/web/fieldact/c-c_prog/POLICY/ bestprac.htm)


b. Geopolitics
Given poor countries' need for foreign exchange (to repay World Bank, IMF or other development loans and other debts) and due to the insidiously destructive trends brought about by globalization, developing countries and their peoples are increasingly in need of profitable alternatives.

Many poor and developing countries possess some of the earth's most diverse and concentrated numbers of living creatures. Their biological resources, if managed and "licensed" properly could provide a lucrative source of foreign exchange. The case of the Rosy Periwinkle of Madagascar teaches this very lesson. In the 1980's, scientists discovered that the rosy periwinkle contained anti-cancer alkaloids which are now used to treat Hodgkin's disease and childhood leukemia. But, neither the indigenous people nor the government of Madagascar "saw any financial returns from the discovery and development of medicines from this endemic [emphasis added] plant."

Due to the difficulty many governments have "encountered in maintaining sovereignty and control over their resources, there has been a surge of interest in legislation governing access to resources and in ensuring that host countries benefit from the commercial products created from their native species." Conservation International's "next major objective is to diversify and further develop bioprospecting relationships between industrial partners and source countries. This will bring developing countries one step closer to gathering financial and political power over genetic resources and ultimately gain the advantages they deserve from their rich and varied ecosystems.

(www.conservation.org/web/fieldact/c-c_prog/Econ/biopros.htm) Biodiversity is also considered important for maintaining global geopolitical stability, or "ecosecurity." In many developing countries, the negative impacts of diminishing resources and environmental degradation are felt directly be people in the form of shortages of food, fuelwood, fiber and other products. These shortages, exacerbated by growing populations, economic crises, and social unrest, can result in regional and national conflicts.





Case Study: The Players and Their Roles

Environmental organizations, cosmetic companies and companies which develop raw materials used in cosmetics form a "triumvirate" and together have begun offering solutions to endangered traditional peoples and their habitats. Our case study will examine a group or organization from each category. We will focus on Conservational International, a Washington, D.C.-based environmental NGO, Croda, a UK-based world-wide supplier of cosmetic raw materials, Aveda, a booming "natural" cosmetics company and the Yawanawa, an indigenous tribe located in the Brazilian Amazon.

ENVIRONMENTAL ORGANIZATION: Conservation International

Conservation International (CI), a U.S. NGO, was founded in 1987. Over the years, CI's work has grown tremendously. Its cutting edge projects and techniques are leading the way in creating alliances between governments, other NGO's (including NGO's in developing countries), for-profit companies and groups of indigenous peoples for the preservation of the rainforest and rainforest people.

With the goal of preserving endangered natural habitats, CI has spearheaded projects in a variety of areas. These include:

In 1991, CI created its Conservation Enterprise Department to help develop markets for natural materials that can be used in the production of consumer products, ranging from foods and fragrances to jewelry, textiles, furniture and cosmetic ingredients. . (Croda-CI Press Release: "rainforests Benefit From New Personal Care Ingredient Line: Croda Inc. and Conservation International Turn Renewable rainforest Resources into Cosmetic Raw Materials.") This department performs the following services:

COSMETIC RAW MATERIAL PROVIDER: Croda Surfactants Inc.

Founded in 1952, Croda Inc. first began as a lanolin company. With its focus on innovation, Croda established itself early on as a forerunner in the development of cosmetic raw materials and quickly grew to become a leading supplier for the Personal Care Industry. Croda is a multinational supplier of ingredients used in Personal Care, Household, Pharmaceutical and Manufacturing products. Its international volume exceeds 425 million (pounds) and it employs approximately 4000 people.

In 1994, Croda and CI joined forces "to identify and market new rainforest materials for everyday products such as shampoos, creams, and other personal care items. Croda and CI have developed a new line of personal care ingredients from the renewable rainforest resources that are harvested by local communities in threatened ecosystems around the world." The ecosystems targeted under the CI-Croda initiative are designated "hotspots" by CI, or an area considered to be one of the world's most biologically rich, yet most endangered ecosystems. This project will help to offer economic alternatives to deforestation and the forced uprooting of indigenous peoples by "generating new value for the resources found in standing rainforests." Already, CI and Croda have launched Cronaturals, a range of completely natural products derived from the rainforest. (www.croda.com/PC.html) This line of products differ from other natural lines because they offer the following benefits:

The first four products marketed under this project are Brazil Nut Oil from Peru, Cohune Oil, Jaboncillo Extract and Allspice Extract from Guatemala. Each of the four products required several steps of processing before they were ready for marketing. For example, Brazil nuts are harvested from a part of the Peruvian Amazon, the Peten, where CI has operations. In conjunction with CI's Peruvian counterpart, Candela (an NGO), indigenous peoples collect, shell and press Brazil nuts collected from the forest. The oil is then shipped to the Croda labs where it is analysis, refinements and animal-free safety tests are conducted by Croda's chemists. Once this process is complete, Croda distributes the final product to its end-manufacturers, "and in so doing creates a new market for sustainably harvested Brazil nuts."

COSMETIC COMPANY: Aveda

Horst M. Rechelbacher, the founder and CEO of Aveda Corporation, a personal care and cosmetics company that has grown 30% a year since 1990, considers his company "A biological organization" whose mission it is to "bring about positive effects through responsible business methods." He says, "We do this quite frankly, out of self-preservation. We want to sustain ourselves, and by so doing, demonstrate that one's life and one's business can be conducted in a way that respects all cultures, all creatures, all the wisdom on the face of the Earth." ("Uruku Now," Aveda Magazine, p. 3) Aveda's mission statement says, "Aveda takes an ethical approach to business: we aim to create products that make intelligent use of the planet's resources; we support the rights of indigenous peoples; we do not conduct animal testing. In our view, these policies make good sense financially, environmentally, and morally. In fact, we believe they are the only sustainable path to the future." ("Uruku Now," Aveda Magazine, p. 2)

The Aveda Mission Statement continues, "In the end, issues of environmental and social responsibility will determine the future of our species. At Aveda, we believe that tomorrow will arrive through the use of renewable resources, sustainable development, and constructive environmental practices. By manufacturing the purest plant products available and using innovative and responsible methods, we are working to set new standards of corporate practice." ("Uruku Now," Aveda Magazine, p. 2)

In keeping with its stated principles, Aveda embarked on a project about five years ago to work with a group of indigenous peoples, the Yawanawa, see below. In 1993, Rechelbacher, Aveda's founder, and May Waddington, Aveda's resource specialist, traveled to a "remote town in western Brazil and met with leaders of 16 tribes to explore partnership possibilities." ("Uruku Now," Aveda Magazine, p. 5) Previously, Aveda chemists had discovered that the rainforest plant, Bixa orellana, also known as uruku, contained a pigment, colorau that could be used in lipstick. Waddington recommended that Aveda work with Biraci Brasil, or Bira, the leader of the Yawanawa tribe whom she had known "from her days in the indigenous rights movement." ("Uruku Now," Aveda Magazine, p. 5)

INDIGENOUS PEOPLE: The Yawanawa

Background:
 The Yawanawa are descendants of the Incas and belong to the Pano linguistic group. They live in the Katukina village in the Nova Esperenca region of Brazil. The village is located on a high cliff off the banks of the Gregorio River, a tributary of the Amazon. The Yawanawa live in wooden thatched-roof huts, with no plumbing, no electricity or other conveniences known by people in industrialized societies. The nearest town is a few days' trip downriver and only possible when the water level is high enough. Most of their food is grown, gathered, raised or hunted, and drinking water comes from nearby streams. "The tribe's only way of communicating to the outside world: a two-way radio that runs off a car battery recharged by one small solar plate." ("Uruku Now," Aveda Magazine, p. 5)

Though the tribe was legendary for never being dominated by others, eventually white missionaries and rubber barons succeeded in piercing their pristine haven. In thirty years, missionaries were able to convert almost 80 percent of the tribe to a very "strict form of Protestantism, which frowned on traditional Yawanawa rituals and forbade many tribal customs, including polygamy (a custom that is still being practiced today)." ("Uruku Now," Aveda Magazine, p. 5) Today, the Yawanawa are faced with many problems and challenges, perhaps chief among them is reclaiming their culture "which was nearly erased by decades of domination by rubber barons and missionaries." ("Uruku Now," Aveda Magazine, p. 5) Today, despite having their land officially demarcated by the Brazilian government, the Yawanawa are still facing many of the same problems, "...missionaries remain a divisive presence in the area; [and] outsiders still want the land for their own economic gain." ("Uruku Now," Aveda Magazine, p. 6)

Working with Aveda:
Aveda's resource specialist based in Brazil, May Waddington, travels to the Yawanawa several times a year despite the arduous treck through the rainforests. She also travels throughout Brazil in order to forge "new bonds with indigenous peoples, often in remote and dangerous areas; exploring possibilities for sustainable economic activity; and providing invaluable guidance through the often byzantine workings of the Brazilian government." ("Uruku Now," Aveda Magazine, p. 5)

Once After Aveda provided the initial funding, "seed money--in the truest sense of the word", the Yawanawa planted 13,000 uruku seedlings "in groves, between houses, along paths--in any open area--and carefully tended by all members of the tribe." ("Uruku Now," Aveda Magazine, p. 6) Today, those seedlings are mature trees which produce thousands of seeds and tons of seeds and tons of seeds which yield uruku.

This project involves the entire Yawanawa community, "Each day at sunrise, a core group gathers to decide on the work to be done. Whether harvesting pods, winnowing seeds, processing manioc flour (with which to grind the seeds) or grinding colorau [uruku], willing hands join in the work--men, women, and children alike." ("Uruku Now," Aveda Magazine, p. 6) This work allows the Yawanawa to purchase the things they need, such as soap, fuel, tools. The amount of uruku the Yawanawa are producing is far greater than what Aveda can use at the moment. Aveda is using the uruku in three Uruku Lip Colours, three Uruku Lip Sheers and Biza and Annatto Color Conditioners. ("Uruku Now," Aveda Magazine, p. 6) Currently, Aveda's research chemists are working on more ways to use uruku, including shampoo and permanent hair color. ("Uruku Now," Aveda Magazine, p. 6) In the meantime, the Yawanawa sell the remaining uruku to processing companies in Sao Paolo, "where bixa derived ingredients are utilized b the food industry in cereals, pastas, and margarine, thus making the project a doubly sustainable source of income for the tribe." ("Uruku Now," Aveda Magazine, p. 6)

Because so much is being produce, "some modern-day intrusions to help make processing easier" have become necessary. With the help of Aveda, the Yawanawa were able to produce equipment which allows them to process 50 kilos of seeds in 25 minutes--a feat that "once took many men a full day to accomplish by hand." ("Uruku Now," Aveda Magazine, p. 6)

The modern technology, juxtaposed against this rainforest setting, may seem disturbing, but "Bira accepts the need for such technology if the Yawanawa are to meet their goal of economic independence without deforesting their land or depleting its natural resources." ("Uruku Now," Aveda Magazine, p. 5) Thanks to this project, the Yawanawa, says their leader Bira, are better able to fend off assaults or threats on their culture and on their land. "Everything we're doing here is to rescue what we weren't allowed to hear and see from our ancestors but still know." Bira's vision for the tribe is to obtain other customers like Aveda and work like an independent business. This will allow his people to achieve freedom from outside intervention and attempted control, "We will have freedom to work and live on our own." ("Uruku Now," Aveda Magazine, p. 6) Bira sees his people "becoming a ‘modern tribe' who utilize the resources of the modern world to enable them to live in harmony with their land and traditions." ("Uruku Now," Aveda Magazine, p. 6)

The need for these links to outside corporations is perhaps best highlighted by the plight of other, less fortunate, rainforest tribes. The Caiua, Guarani and Terena peoples who share a reservation in central Brazil were convinced 20 years ago to cut down their forests in exchange for housing. The tribes deforested "their land with their own hands--but the promise was never kept." Now the land is a desolate, midwestern-like prairie, there are no birds, game, wood and no houses. "For many, the only source of income comes from leasing their land to outside farmers, whose use of petrochemical fertilizers and herbicides compromised the health of the land as well as that of those who live on it. Their plight has led to a high rate of suicide on the reservation, and is now a cause celebre in Brazil." ("Uruku Now," Aveda Magazine, p. 6) Currently, Aveda is exploring several plant ingredients for natural pigments and nutritional use with these highly endangered peoples.

Bira knows of the Caiua's predicament, his vision and his leadership are helping the Yawanawa guarantee a different kind of fate. But, they need allies, "like Aveda, who come from other cities to listen to the people." ("Uruku Now," Aveda Magazine, p. 6)

COUNTRY: Brazil

Brazil's rainforests and its dwellers are severely threatened by agricultural development, cattle grazing, poaching, charcoal production. Brazil is generally recognized as the country with the most terrestrial biological diversity. For example, of the earth's primate species, 64 or a quarter of the world's primate population can be found in Brazil. In addition, Brazil boasts more species of parrots, amphibians, and flowering plants than any other country.

Key words:

(1): Cosmetics
(2): Environmental Protection
(3): rainforest

3. Related Cases

1. Brazil Case
2. Ben and Jerry and Brazil
3. Rubber
4. Nicaragua
5. Coldefor
6. COCA
7. Colcoca
8. Ecuador
9. Bragold
10.Vengold

4. Draft Author:

M. Dina Lehmann, December 14, 1997

II. Legal Clusters

5. Discourse and Status:

Agreement and in progres

6. Forum and Scope:

Brazil and unilateral

7. Decision Breadth:

(Brazil)

8. Legal Standing:

sub-state

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: South America

b. Geographic Site: Amazon

c. Geographic Impact: Brazil

10. Sub-National Factors:

Yes

11. Type of Habitat:

Tropical Rainy Forest and Savanna [TROP]

IV. Trade Clusters

12. Type of Measure:

Subsidy

13. Direct v. Indirect Impacts:

Indirect

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes, Cosmetics.

b. Indirectly Related to Product: No.

c. Not Related to Product: No.

d. Related to Process: Biodiversity

15. Trade Product Identification:

Cosmetics

16. Economic Data

The cosmetic industry is a $29 billion industry.

17. Impact of Trade Restriction:

Low

18. Industry Sector:

Chemical

19. Exporters and Importers:

Brazil and USA

V. Environment Clusters

20. Environmental Problem Type:

Biodiversity. This is the immediate problem of rainforest destruction. Clearly however, destruction of the rainforests has far-reaching repercussions which are global in scale. Not only is our environment being affected but our very health. Indeed, we risk losing future treatments for today's incurable diseases. This is demonstrated in our discussion above in Section I(2)(a) regarding biodiversity.

21. Name, Type, and Diversity of Species

Name: Higher Plants

Type: All species, edemic species for Brazil and South America.

Diversity: 55,000 all species (for Brazil); no endemic species reported for Brazil; 4,958 all species for South America.

22. Resource Impact and Effect:

Low and Product

23. Urgency and Lifetime:

Low and hundreds of years.

24. Substitutes:

Synthetic products.

VI. Other Factors

25. Culture:

Yes.

The destruction of the rainforest can only destroy indigenous peoples and with them, their culture and precious botanical knowledge. It is not only wrong to destroy these peoples and their habitats, but on a more practical level, it is not in our best interests health-wise or even economically. Governments must be intransigent in the face of rainforest destruction. Private corporations must be held accountable for the high human and ecological cost their mining activities exact.

26. Trans-Boundary Issues:

Possibly..

27. Rights:

Yes.

Human rights are clearly a factor. The rights of the indigenous people to live the way they have for centuries is being jeopardized by loggers, farmers, ranchers who do not have or are unaware of other economically sustainable alternatives.

28. Relevant Literature

Aveda:
"Staying Connected," Aveda Magazine. Conservation International:
Croda-CI Press Release: "rainforests Benefit From New Personal Care Ingredient Line: Croda Inc. and Conservation International Turn Renewable rainforest Resources into Cosmetic Raw Materials."


Croda-CI Press Release: "Croda-Conservation International Initiative: Who Does What"

From the World Wide Web:

Conservation International Biovalue
Conservation International Field Page
Conservation International Bioprospecting
Conservation International Best Practices
Conservation International Biovalue
Conservation International Case Study
Electronic Mail & Guardian

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