From conflict to cooperation: International policies to protect the Brazilian Amazon

Pergamon World Development Vol. 26, No. 8, pp. 1481-1493, 1998

0 1998 Elsevier Science Ltd All rights reserved. Printed in Great Britain

0305-750X/98 $19.00+0.00 PII: SO305750X(98)00062-X

From Conflict to Cooperation: International Policies

to Protect the Brazilian Amazon

ANS KOLK* University of Amsterdam, Institute for Environmental Management, The Netherlands

Summary. - When environmental degradation in a particular country has international consequences, a dilemma arises: how to find effective policies which address the causes and take domestic sensitivities into account? This article analyzes the Brazilian Amazon, where international concern over deforestation led to accusations of hypocrisy, infringement of sovereignty and impeding development. By cautiously building coalitions and by offering favorable conditions, donors contributed to changing conflict into cooperation. The Pilot Program for the Brazilian rainforest has not ended all controversies because international influence is legitimized. The case of the Brazilian Amazon has wider relevance: it sheds light on the limits and possibilities of international environmental cooperation, and shows how an international coalition against deforestation emerged. 0 1998 Elsevier Science Ltd. All rights reserved.

Key words - international environmental cooperation, political economy, World Bank, NGOs, forest policy, Brazil

1. INTRODUCTION: THE INTERNATIONAL CONTEXT

Environmental policy has an inherent conflict potential, especially in case of so-called win-lose situations. But even with “win-win” options, crucial issues are whose environment is at stake, and who will receive what, at what price and why. Therefore, environmental policy involves interests other than just the environment: the distribution of costs and benefits, both nationally and internationally.

At the international level, concern over environmental problems in developing countries gave rise to a revival of the North-South conflict; pre-existing controversies on trade versus aid, state versus market and the question of development came to the fore again. Tropical deforestation became the focal point of international concern and a highly controversial issue, as developing countries strongly resented this kind of intervention. They expressed fears that the environment was simply being used as a pretext by the North to prevent the South from “developing” and to infringe on national sovereignty.

At the same time, however, the environment has turned out to be a potential source of power

as well, a vehicle for bringing demands for the restructuring of international economic relations into the negotiations. Especially during the 1992 United Nations Conference on Environment and Development (UNCED), developing countries took a firm bargaining position: environmental concessions would only be made in exchange for Northern commitments to transfer technology and resources, to increase access to Northern markets, to reduce the debt burden, and to regulate multinational corporations in the areas of safety and the environment (South Centre, 1991). Throughout the negotiations, Southern countries refused to accept binding agreements; they even feared that nonbinding declarations would be used as an additional conditionality by international financial institutions. Although the South succeeded in avoiding unwanted environmental regulatory agreements, no major concessions were obtained from the North on economic reforms, trade, debt, transfer of technology or

*I would like to thank all the representatives of international organizations, NGOs, and of the Brazilian government whom I interviewed in the course of this research project. I am grateful to Alex FernAndez Jilberto and the referees for their suggestions. Final revision accepted: March 2, 1998.

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1482 WORLD DEVELOPMENT

financial resources. This also appeared at the Rio+5 meeting, where the achievements five years after UNCED were evaluated. Only the Global Environment Facility and the Pilot Program to conserve the Brazilian rainforest can be cited as examples of international cooperation and transfer of resources.

The case of the Brazilian Amazon has been marked by similar conflicts about development and sovereignty. International attention focused on this region, and on the role of the Brazilian government and the World Bank, which funded large development projects in the Amazon in the 1980s. Campaigns by international and Brazilian nongovernmental organizations (NGOs) raised knowledge of and concern over deforestation and the fate of the local population. This had substantial domestic repercussions: it built on a long-standing sensitivity with respect to the Amazon and existing accusations about attempts to “internationalize” the region. Brazilian support for policy changes was required, however, especially because the causes of deforestation were primarily national in character, and the result of the development model adopted in the 1960s. Effective measures to reverse this trend, therefore, implied harm to vested interests, to those groups which had profited from deforestation.

Hence, environmental policy deals with international and national distributive issues. These levels are interrelated, as the international integration of the Brazilian economy, inter- governmental cooperation and the emergence of alliances with environmental, developmental and indigenous groups demonstrates. In the past decade, pivotal international organizations, NGOs, companies and states have shown considerable interest in the Brazilian Amazon. This article examines the international attention for the Amazon, its consequences within Brazil and the resulting policy changes of the Brazil government, the World Bank and donor countries, of which the Pilot Program to conserve the Brazilian rainforest is a clear example.’ The analysis shows how environmental problems are embedded in political economy, how political and economic pressure can bring about changes in environmental policy, and how international cooperation may change ideas about sovereignty. The case has broader relevance than the Brazilian Amazon: lessons can be learned about the limits and possibilities of international environmental cooperation. The significance for other regions can, however, only be grasped by an in-depth analysis of the developments in Brazil.

2. INTERNATIONAL CONCERN OVER THE AMAZON

The 1987 fires in the Brazilian Amazon caused much international concern. The Brazilian National Space Research Institute INPE reported alarming deforestation figures, which surpassed those of preceding years. The images of burning rainforests, spread by global media coverage, including a number of captivating documentaries, were important in mobilizing international public opinion; the fires in Indonesia one decade later had a comparable effect.

In the case of Brazil, attention focused on the destruction of the largest remaining rainforest, which covers approximately one-third of the total rainforest area in the world, on the unparalleled biodiversity of this unique ecosystem, and on the fate of the local population. In addition, deforestation was associated with the threat of global warming, which scientists started to warn about in this period; this coincided with a warm summer in various Western countries. Although the trend and consequences of deforestation were not as obvious as assumed, convictions had become firmly rooted.

International concern over the inhabitants of the rainforest increased with knowledge of the difficult situation of the “victims”, especially Indians and rubber tappers. Due to international media attention, the rubber tapper Chico Mendes symbolized the struggle against deforestation. It reinforced feelings of international solidarity which had emerged earlier in that decade, In 1983, US environmental NGOs initi- ated an international campaign against the multilateral development banks (MDBs). By showing the negative environmental and social effects of MDB project lending, public awareness and suspicion spiralled. The environmental destruction caused by two projects in the Amazon, which were partly financed by the World Bank, became the focus of an international coalition of Northern and Southern NGOs.’

Attention focused primarily on Polonoroeste, a large colonization and infrastructure project, but also on Grande Carajas, which aimed at the construction of transport infrastructure and mining facilities to exploit large mineral reserves in the southeastern Amazon. Both projects had provisions for the protection of the environment and the Indian population, but their implementation was problematic. NGO accusations were confirmed by internal World Bank evaluations (OED, 1991a; Redwood III, 1993). Unforeseen and uncontrollable factors also played a role,

FROM CONFLICT TO COOPERATION 1483

especially the economic recession, and the decisions of state governors to build roads, attract migrants and set up colonization projects in ecologically fragile areas (see Section 3 below).

Warnings by World Bank consultants and staff members about the project risks were repeatedly disregarded. Bank loans played an important role in assuring and attracting other international lenders, in a period in which the Brazilian government struggled with a huge foreign debt and balance-of-payments difficulties. Optimistic estimates about the future iron ore prices resulted, in the case of Carajas, to the required economic rate of return and to approval by the World Bank’s Board of Directors (OED, 1991b). Others donors, including the European Community and Japan, followed suit. By its support for large-scale projects, the World Bank could disburse substantial amounts at once. Polonoroeste and Carajas had a significant share in new Bank lending to Brazil in the years in which they were approved: respectively 48% and 21% (OED, 1991a, p. 17). The two Brazilian projects were clear illustrations of the emphasis on project approval and the “pressure to lend”, which the Wapenhans report strongly criticized because it harmed the effectiveness of development projects (PMTF, 1992).

With the information from internal World Bank sources and from the local population, and helped by the fast means of communication provided by the Internet, the international campaign became a threat to the World Bank. The NGOs. entered into a coalition with US critics of the World Bank, who used every opportunity to plead for a reduction of the contribution to international organizations. The MDB campaign thus fell in line with prevailing opposition to multilateralism and development aid, favorite subjects of Republican hostility in particular. This combination of environmental and financial pressure forced the World Bank to pay more attention to the environment.

These successful actions against the World Bank and the Inter-American Development Bank (IDB) had already attracted a considerable amount of attention to the Brazilian Amazon. The alarming pictures of burning forests, the deforestation figures, the greenhouse effect and the assassination of Chico Mendes in December 1988 further increased international concern. The murder of Mendes emphasized the harsh political struggle he and other people had been engaged in, stimulating all kinds of international action. In this period, the Brazilian government was frequently requested to assume its responsi-

bility vi&-vis the international community: at conferences and during visits to the Amazon by a range of prominent foreign persons - politicians, artists and royalty.

3. THE ‘INTERNATIONALIZATION’ OF THE AMAZON?

This formidable interest in the fate of the Amazon provoked a staunch reaction of Brazilian nationalist forces. Every proposal for the supposed “internationalization” of the Amazon in whatever form was fiercely renounced.’ The nationalist rejection of foreign interference was based on several arguments, which almost without exception centered on the role of the industrialized countries and their “agents” (such as multinational corporations, international organizations, sectors of the church and environmental groups). First, the price to be paid for the Amazon would be very high: if the industrialized countries wanted Brazil to cut down deforestation, substantial concessions would have to be made, such as the transfer of technology without any cost. Second, nationalists accused the industrialized countries of hypocrisy, since they neglected the enormous environmental problems they themselves had caused. The almost exclusive focus on the Amazon was experienced as Western “colonialism” which had the effect of diverting attention from the environmentally-damaging byproducts of industrial production.

A third argument held that the protests were based on misinformation: the deforestation rates were much lower than reported, and no scientific evidence was said to exist on the consequences for the global climate and the equilibrium of the global ecosystem.4 A congressional commission of inquiry, specifically established to investigate the rumors about the extent of deforestation and the role of foreign actors in these accusations, came up with a lower figure than suggested in a World Bank report (CPI, 1989). The commission’s report revealed the highly political nature of the issue, not only internationally but also nationally, and within INPE itself.

Finally, the alleged “internationalization” was seen as a threat to Brazilian sovereignty and the legitimate right to use and manage the Amazon. This could imply not only the creation of a large Amazon reserve to protect the environment, but also a further “internationalization” and exploitation of the large mineral reserves in the Amazon by international forces under the pretext of the environment. The Brazilian military, which expressed this view most promi-


nently, showed a special sensitivity with regard to the protection of Indian rights and the environment (ESG, 1990). They also resented the inclu- sion of provisions to protect the environment and indigenous peoples in World Bank and IDB project lending (CSN, 1986) aspects for which national and international NGOs had lobbied intensely.

Although the connection with the environment was relatively recent, only during the Constitu- tional Process in 1987 and 1988 did it emerge for the first time (Kolk, 1996a, pp. 99-106) the issue was certainly now new in Brazilian politics. Already in the 1960s during the dictatorship (1964-85) the military and other nationalist groups warned for the supposed attempts to internationalize the Brazilian Amazon (Veloso, 1968). Protection of the region against foreign intrusion, be it from neighboring countries or one of the superpowers, occupied a central place in a special study by the Superior War College (ESG, 1968). It also referred to the danger of psychological warfare, revolutionary guerillas and subversion; this supposed influence of the Cold War on Brazil was, however, far removed from the international political reality. The idea, used for national purposes, stemmed from the strong anti-communist ideology which prevailed during the dictatorship. It served to legitimate the Brazilian military’s intervention in the Amazon.

The “internationalization” accusations were largely rhetorical as the entrance of foreign capital was part and parcel of the economic model adopted under the dictatorship (Moreira Alves, 1985). This doctrine of national security and development emphasized the necessity of economic growth, the potential superpower status of Brazil, and the struggle against so-called internal subversion. Industrialization was a crucial element of national security: developing countries were very vulnerable for subversion and “nondeveloped” regions complicated the defense of borders. Furthermore, it could help to strengthen the negotiating position of the country.

The dictatorship’s strategy aimed at a deepening of the industrialization process based on an alliance between state, multinational and national companies (Evans, 1979). This capitalist development effort resulted in rapid economic growth, especially in certain sectors of the economy, durable consumer goods and capital goods, which relied heavily on the technological, financial and organizational knowledge which only multinationals could provide. The state played a leading role in guiding and attracting international capital flows, and in investing in

crucial economic sectors, especially petro- chemicals, mining, the iron and steel industry, and telecommunications. Although less important, national companies dominated the construction industry, and were active in the agriculture/cattle sector and light industrial goods. The economic model was based on an extremely unequal division of wealth and income, which enabled the growth of the capital and consumer goods industries.

The large-scale colonization of the Amazon fitted perfectly in this development model. The occupation of the “empty” region would help to ensure national security and territorial integrity. Moreover, the Amazon assured the Brazilian grandeur, not only on territorial grounds, but also economically, ideologically, politically and socially (Reis, 1968). The region comprised half the Brazilian territory, offered potential for economic growth and the use of new agricultural techniques, and its soil contained many minerals (such as bauxite, tin, manganese, iron and gold).

After 1964, the infrastructure of the Amazon region was improved by highway construction and electrification. Furthermore, regional development plans attempted to attract foreign and national investors, and the exploitation of the rainforest for its resources and land was encouraged. Agricultural and economic policies reflected this general tendency: land concentra- tion and agricultural mechanization in the south ousted small peasants, higher taxes were levied for unused ground, inciting cultivation of land, and loans and all kinds of tax facilities were readily available for the Amazon (Browder, 1988). High inflation rates and low land prices further stimulated speculation. This process lies at the heart of the destruction of the rainforest. National forces took the lead, supported to a considerable extent by foreign capital and international development projects.

As a result of state guidance, the Amazon economy changed substantially: the prevailing system of simple reproduction became subordin- ated to the logic of capitalist production and the inherent drive for capital accumulation. Dominant forces in Brazilian society focused on influencing state policy in order to profit from the “newly discovered” area. The most important interests were those that supported the military dictatorship and its political and economic model, including the ideological, geopolitical component: the state bureaucracy, the army, and both national and international industrial, agrarian, mining and construction firms.

The course of affairs with regard to Polonor- oeste revealed these differences in power and


influence. When the project started, road building turned out to proceed very rapidly due to the efficiency of the construction sector, while the protection components were lacking (OED, 1991a). In the frontier economy, characterized by survival strategies and short-term extraction, environmental concerns did not rank high and powerful economic forces predominated; local and regional state agencies and politicians were unwilling or unable to confront them. As a result of the uneven implementation, migrants could enter the region easily and without restrictions, and deforestation increased substantially. By the time the effects became known, the World Bank had lost most of its financial influence because road construction absorbed the largest amounts of money. Rampant inflation further depleted the available budgets and the funds disbursed by the World Bank.

At the time of the 1987 accusations about internationalization, the mining sector in the Amazon clearly exhibited the existence of a triple alliance, in which state and multinational companies were more important than national capital. The state company CVRD (Companhia Vale do Rio Dote), currently in the process of privatization, had a market share of slightly above SO%, or even more if majority and large minority positions in other companies were added.5 It should be noted that in the CVRD system, as the conglomerate of approximately 35 companies has sometimes been called, Japanese participation is significant. Rather than taking minority ownership positions in Brazilian state and national enterprises, US companies preferred to invest in majority-owned companies. In addition, US foreign direct investments in mining have exceeded those of Japanese companies. Concessions for the exploration of minerals in the Amazon were divided between the partners in the tripod.6

It can be concluded that the internationalization of the Amazon, seen as substantial foreign investments and ownership positions, started under the military dictatorship. This very process offered nationalists the opportunity to point at international actors when politically expedient. These accusations neither corresponded to the actual situation in the Amazon nor reflected international developments. This “hard-line nationalism” has, nevertheless, been of great political relevance.

4. FROM REJECTION TO ACCEPTANCE

Although hard-line nationalist influences have persisted and at times have peaked, their

political dominance gradually diminished from April 1989 onward. One of the reasons for this was the continued attention to the Amazon, in which the interaction between international and national environmental organizations seemed to be crucial. The political importance of all kinds of popular organizations, which had been increasing since the early days of the transition to democracy and which was clearly shown during the Constitutional Process, further increased as a result of public and financial support from international counterparts. The destruction of the Amazon rainforest and its implications for the global environment, and the difficult situation of the Indians, landless, and rubber tappers gave Brazilian organizations substantial backing. Despite the nationalistic rhetoric surrounding these relationships, it was obvious that these forces did not aim at a true internationalization of the Amazon, but rather tried to strengthen the struggle of the victims and contribute to the preservation of the rainforest. Concurrently, against the background of the highly internationalized Brazilian economy and the pivotal role of multinational capital in a development model of which environmental degradation was part and parcel, nationalism was clearly of little avail.

The environmental issue started to become a barrier to Brazilian successes in other international negotiations and undermined its position, emerging time and again in bilateral and multilateral discussions. Loans from the World Bank and IDB were suspended or became subject to stricter conditions, signs that unwill- ingness to respond to environmental concerns caused difficulties. Alternatively, the environment could also be a potential source of power, in which Brazil used the promise to preserve the rainforest to achieve concessions on other points or to obtain additional funds. Shortly after a visit of a US congressional delegation in 1989, the idea emerged at the Brazilian Ministry of Foreign Affairs to organize UNCED to improve the country’s environmental image, and generate substantial flows of “green” money.’ The Sarney government launched an environmental plan for the Amazon in April 1989, which included the abolition of some subsidies and other regulations which encouraged deforestation, and the suspen- sion of large government projects. President Collor, his successor, chose an even more active approach.

The fact that Sarney and Collor reversed some of the measures was crucial as the causes of Brazilian deforestation were primarily national in character. Contrary to other regions, where


logging for export of wood and meat were significant reasons for deforestation, international relationships worked more indirectly, through the incorporation of the Amazon in the Brazilian political economy. International organizations, Western governments and NGOs, therefore, welcomed the changes in Brazilian environmental policy. At the same time, Brazilian renunciations of foreign interference and international hypocrisy had contributed to creating a climate for positive steps to address the deforestation problem. This formed the background for the creation of the Pilot Program to conserve the Brazilian rainforest (PP-G7), which the German Chancellor Kohl launched at the 1990 Houston summit of the Group of the seven most industrialized countries (G-7). The Houston declaration welcomed the efforts of the Brazilian government and requested the World Bank and the European Community to formu- late a proposal for the PP-G7, which would be approved in London one year later. The German initiative on a topic which had already been discussed at the European summit in Dublin one month earlier, and its subsequent adoption by the G-7, took place in a particular political context.

In various European countries, the fate of the rainforest in general and the Amazon in particular gave rise to debate, actions and programs. In Germany, for example, a large number of environmental organizations expressed their concern in a 1989 rainforest memorandum, signed by more than a hundred NGOs (Hagemann, 1994, p. 49) and the subject was actively discussed in and investigated by the Parliament (Deutscher Bundestag, 1990). More than other European countries, Germany had participated in, and profited from, the Carajas project. The European Community had provided loans for Carajas, which gave rise to questions from the European Parliament and to deliberations with the World Bank to diminish the worst consequences. The idea emerged that Brazil should probably be given funds on favorable conditions if the industrialized countries attached so much importance to the conservation of the Brazilian rainforest.x Personal commitment of Kohl to the issue also played a role: since the late 1980s German support for the Brazilian Amazon and for rainforests in general had increased; the same was true of Great Britain and the United States.

Other considerations also played a role. During the preparations of the Pilot Program, frequent mention was made of the necessity to achieve results before UNCED. For the G-7

countries, the Commission of the European Communities (CEC) and the Brazilian government, this would prove their sincere intention to deal with environmental issues. At the same time, World Bank and European officials, and the Brazilian government used this argument at various instances to put pressure on the donors to commit funds; Brazil in particular threatened to denounce the G-7 publicly if sufficient funds were lacking. Moreover, quick disbursal of substantial amounts might also prevent potential Brazilian opponents of the Program from increasing their political influence. Finally, calcu- lations by the CEC showed the economic sense of the Program: giving money to reduce carbon dioxide emissions in Brazil would presumably be cheaper than the cost of achieving the same results in the European countries themselves (World Bank, 1991a, p. 2). Therefore, the PP-G7 could help to fulfill the European promise of stabilizing emissions at the 1990 level.

To some extent, the Pilot Program also demonstrates changing practices and insights within the World Bank. Under pressure from NGOs and industrialized countries, the Bank adopted a more cautious attitude toward mega- projects, strengthened its environmental procedures and started to implement environmental projects. Coordination of international environmental programs and more intensive cooperation with local organizations fitted into this new policy. Moreover, supervision of small- scale projects is easier, which benefits the effectiveness as well. The PP-G7 represented a new tendency in a region in which the World Bank had negative experiences. The Planafloro project, also in the Brazilian Amazon, showed that this did not always proceed smoothly: designed to diminish the negative effects of Polonoroeste, it became the subject of NGO criticism because the conditions and local participation were considered insufficient. These charges have been confirmed by the World Bank’s inspection panel (Aslam, 1997).

The G-7 Houston announcement put the Brazilian government in an interesting position: it was offered an aid program which it had not asked for. Deliberations between different ministries followed to decide whether to accept the proposal, and if so, in what form (Hagemann, 1994, p. 70). The discussions resulted in two positions: one, advocated particularly by the Ministry of Foreign Affairs, feared interference in Brazilian matters and only wanted to propose a number of projects which were ready, while another group, led by the Secretariat for the Environment (SEMAM), strongly advanced the


idea of submitting a detailed proposal which included new projects. With presidential support, the latter view prevailed because it was considered very important to show Brazilian environmental progress during UNCED; the proposal could also help requests for further financial assistance. The relatively “soft” conditions of the Program contributed to the shift of the balance in favor of acceptance after weighing the “costs” and “benefits”.

5. THE DYNAMICS OF COOPERATION

In contrast to the Houston declaration, which requested the World Bank and CEC to formu- late a proposal, the World Bank decided to seek the active involvement of the Brazilian government in the preparation, without losing its leverage on the final product. The reasons for this change were Brazilian sensitivities regarding outside interference, the readiness on the Brazilian side to prepare a proposal and the fact that such a clear commitment would increase the chance of success and effective implementation of the Program (World Bank, 1990, p. 1).

Throughout the preparation of the PP-G7 and its specific projects, the representatives of the World Bank, European Community and donor countries adopted a cautious approach in order to prevent particular sectors within Brazilian society and the government from being offended. This prudence was motivated by the concern that nationalist forces would characterize the Program as yet another attempt to “internationalize” the Amazon or to infringe on Brazilian sovereignty. In the negotiations, the Brazilian delegation pointed out that the government’s acceptance of the Program represented a novelty which should be handled carefully to prevent misinterpretations from frustrating such an international effort for some time (World Bank, 1991a, p. 8).

At the time of the negotiations, accusations about the internationalization, directed particularly at environmental and Indian organizations and their international supporters, received much attention as a result of a 1990 report of the influential Brazilian Superior War College (ESG, 1990). The 1990 publication of the “greenhouse index ranking” by the World Resources Institute (WRI/UNDP/IJNEP, 1990), in which Brazil occupied the third position after the United States and the USSR, also gave rise to a large controversy. The contribution of deforestation to global warming was calculated on the basis of the 1987 figures, the exceptional nature of which was already known at the time. Moreover, there were

other problems regarding interpretation and assumptions (Feamside, 1990; Kolk, 1996a, pp. 78-82). Designed to help international negotiations, the Institute was accused of “environmental colonialism” as its method tended to exaggerate the share of Southern countries in the emission of greenhouse gases (Agarwal and Narain, 1991). The Brazilian congressional commission of inquiry, which investigated the rumors about internationalization, concluded that the suspicions could neither be confirmed nor identified (CPI, 1991). Nevertheless, the hearings and the accompanying media attention provided nationalists with a good opportunity to express their ideas in public. In view of this political situation, donor insistence on furthering the participation of Brazilian NGOs in the process was formulated discreetly (World Bank, 1990).

Because of their intention to set the Program in motion, the World Bank and CEC almost automatically entered into a coalition with the Brazilian proponents, particularly SEMAM and a group of Amazonian NGOs (GTA). The GTA had been critical but supportive of the PP-G7; other NGOs, mainly traditional development organizations based in the south of Brazil, had rejected it. These opponents also dominated the Brazilian NGO Forum, formed to represent NGOs in the UNCED process, which led to conflicts with more moderate NGOs (such as the GTA members) which participated in the Forum as well (Hochstetler, 1994). After the approval of the PP-G7, the controversy between the two groups declined considerably and the GTA has continued to participate (Fatheuer, 1994).

In spite of these difficulties and the allegations of “internationalization” mentioned before, the political climate proved to be favorable to this alliance until mid-1992. This was largely the result of the organization of UNCED in Brazil, Collor’s concern to present a positive image of the country, and the idea that the environmental cause would yield substantial international funds. Corresponding to this desire, the government had, during the preparations of the PP-G7, emphasized the need to achieve results before UNCED. Particularly the Ministry of Foreign Affairs, which largely shaped the Brazilian positions advanced during the UNCED process, awaited clear commitments. It expected to profit from the peculiar moment, in which international attention and a positive Brazilian attitude would generate financial resources for environmental protection.

This view became evident in the Brazilian reaction to a World Bank report on the environ-


mental problems in the Brazilian Amazon (World Bank, 1992). Although wide sectors of the Brazilian government, including military officials, agreed with the comprehensive analysis, the Ministry of Foreign Affairs expressed its opposition: the report’s proposition that the concept of “sustainable development” is not useful contradicted the Ministry’s intention to attract funds for sustainable development projects during UNCED. The Ministry therefore also raised objections to the official publication of the report before the Conference. The World Bank report rejected the term sustainable development because of the variety of interpreta- tions and stated that its

popularity (...) at the political level stems from the same ambiguity that has driven it from use at the technical level: Environmentalists hear ‘sustainable’ while developmentalists hear ‘development’. The term suggests that ‘win-win’ alternatives are awaiting to be discovered (World Bank, 1992, pp. 26-27).

The Brazilian objections to this view were included in the report and referred mainly to the report’s supposed bias towards the environmental dimension, which neglected the population’s developmental needs (World Bank, 1992, pp. xix-xx).

The SEMAM reformers adopted the strategy of preparing the most controversial projects first and having them approved before others were negotiated; the World Bank informally backed this approach, which was shared by other international agencies. The generally shared objective of proceeding rapidly with the Program to show its potential for success would increase the chances for approval of the first projects. The SEMAM priorities were the demarcation of indigenous territories, extractive reserves, NGO demonstration projects and the strengthening of environmental institutions.

In July 1992, however, the political situation changed considerably. Not only did attention to the environmental issue decline now the Confer- ence had been held, but Collor was also accused of corruption and misappropriation of funds and sought to save his political life by turning to conservative forces (which turned out to be unsuccessful, as Collor was forced to resign in October 1992). The nationalist opponents to the projects, which until then had been unable to mobilize sufficient support to reverse the reformist trend, to which the upcoming Confer- ence and the awaited funds had certainly contributed, regained political attention. In spite of this relatively low profile, the military succeeded in monopolizing zoning activities. With the

appointment of Perri as secretary of the environment, a reorientation of SEMAM’s course took place, and the team of reformers left. Money to carry out INPE’s deforestation surveys also dried up (MMA/World Bank, 1996, pp. 10-11).

The government now shared some of the criti- cisms of the Program and its components, whereas before the Conference it had quietened PP-G7 adversaries. In August 1991, for example, Foreign Minister Rezek declared that the government would not accept attempts to diminish Brazilian sovereignty, be it under the pretext of the environment, drugs or human rights (Jomal de Brasilia, October 16, 1991). Furthermore, when Amazon governors denounced the extent of the G-7 commitments in Geneva, a government delegation was sent to avoid more agitation (Hagemann, 1994, p. 123).

The conservative, nationalist opponents included those forces engaged in profitable activities in the Amazon, the proponents of Brazilian sovereignty, and those who were skeptical about international aid programs. This skepticism was based on a “cost-benefit analysis” which compared the large amounts of time and money these projects would cost Brazil with the funds to be eventually expected and applied particularly to environmental projects which aimed to reduce deforestation. Such projects were not given high priority; large-scale projects were preferred. The opponents included the military, mining, construction, agricultural and industrial interests, which at the ministerial level found support in (parts of) Foreign Affairs, Economic Affairs and the Secretariat of Strategic Affairs SAE. In particular the resistance to the demarcation of Indian lands, which has been a sensitive issue, mobilized a broad coalition. They also opposed the funding of extractive reserves and the support for Brazilian NGOs by way of the demonstration project, denouncing the overemphasis on and international support for groups to which they clearly did not attach priority. Likewise, donor insistence on NGO consultation was not appreciated. Presumably because these projects competed for funds with the science project, the Secretariat for Science and Technology joined the nationalist ranks.

The policy change did not lead to a reversal of the progress achieved with the formerly priority projects, but they suffered a drawback while other projects, particularly a scientific research project, proceeded much more quickly (Hagemann, 1994, pp. 132-138). New rounds of negotiations with the World Bank and donors followed to solve the problem of insufficient resources to fund all the prepared projects,


which ended up in the reduction of project budgets. The political changes, difficult economic conditions and the recurrent discussions resulted in considerable delays, a situation which was further aggravated by the involvement and required approval of the various ministries and donors with their specific interests, In spite of all these complications, activities to further the implementation of the PP-G7 have continued. During the presidency of Itamar France, the vice president who succeeded Collor after the impeachment, lack of political power and credi- bility slowed down the process. This situation improved with the election of Fernando Henrique Cardoso who assumed the presidency in January 1995.

During the Cardoso presidency, five years of preparations for the Pilot Program have started to produce results. A large number of meetings and activities is being organized to realize the objectives of the PP-G7. The main projects in the process of implementation are the indigenous lands project, which aims to protect indigenous peoples and the natural resources in their areas; the natural resources policy project, meant to strengthen environmental management entities in the states of the Brazilian Amazon; support for extractive reserves, for scientific centers and the management of forest resources. Approximately $300 million has been pledged by donor countries, of which Germany provides the majority, followed by the European Union.’

6. ASSESSMENT AND DILEMMAS

By now, the PP-G7 is recommended as a promising example of international environmental cooperation by the participants (World Bank, 1996b, p. l), in spite of its difficult and protracted preparations. The strength of the Program is that it actively seeks the participation and support of the local authorities and the population. Previous projects in the Brazilian insufficiently reckoned with the political situation to ensure that they were profitable for the most important stakeholders, including the partners in the triple alliance. By analyzing the potential winners and losers beforehand, and, if necessary, adjusting conditions and increasing involvement, the group of actors which may benefit from the project one way or the other, has been enlarged. The success has been facilitated by the size of the PP-G7, which is the largest environmental program for a single country, and by the fact that it encompasses grants instead of loans. At the moment, proposals are being prepared which

enable international payments for protecting biodiversity and preventing the emission of greenhouse gases. This kind of compensation for landowners or local authorities had drawbacks which need careful consideration, particularly the sensitivities with regard to sovereignty, and the control of these agreements (MMA/World Bank, 1996).

These aspects point at the ambiguity of current Brazilian policies. On the one hand, responsiveness to international concerns is accompanied by measures against deforestation. In July 1996, for example, the Cardoso government adopted the “Amazon package”. It included the announcement of a two year moratorium on the logging of two rare timber species (mahogany and virola), the review of the environmental impact of current logging contracts, and the imposition of more restrictions on deforestation in agricultural areas. The new measures coincided with the publication of new. high deforestation figures for mid-1992 to mid-1994. In these years, annual deforestation was 34.4% higher than in 1990-91, when INPE reported the lowest rates; in mid-1994, approximately 12% of the rainforests in the Brazilian Amazon had disappeared (MMAlWorld Bank. 1996, p. 10). There are indications that the number of fires increased substantially in 1995, although uncertainty exists whether this can be unequivocally translated into deforestation figures, as fires may also have taken place in areas already deforested (World Bank, 1996b, P. 4).

On the other hand, however, a new development plan for the Amazon has been devised, and policies with regard to indigenous territories remain highly controversial. The 1995 Integrated Policy Plan for the Legal Amazon aims to further the integration of the region both nationally and internationally, while safeguarding sovereignty (MMA, 1995). Better routes of access to the Caribbean and the Pacific, including the construction of a new trans- Amazonian highway which connects the Western Amazon with Peru, should improve transporta- tion by road, rail and water; new hydroelectricity projects are also proposed. Projects should, however, also benefit agriculture, energy, housing, sanitation, health and education. As stated in the plan, this development must be “socially just, environmentally sustainable, economically effective and with an ethical dimension which corresponds to the basic requirements of a National Project” (MMA, 1995, pp. 15-16).‘” Part of the funding for this policy would have to come from foreign loans and

donations, such as the Pilot Program. According decree, concluded that it did not violate existing to Cardoso, Brazil’s ability to attract these funds agreements between the Bank and Brazil, depends on how well the country recognizes its including those for the indigenous lands projects, own responsibility for preserving nature and a cautious attitude has been taken. To cite an indigenous culture. example of this approach, the World Bank

The situation with regard to the indigenous secured a commitment from the government of territories, one of the most controversial issues, the state of Rondonia to withdraw two of the provides insights into the dilemmas. In January claims it had made on Indian land, as these 1996, Cardoso signed a decree which enhances might impinge on the Planafloro project financed the possibilities for filing injunctions against the by the Bank in this state. In this same project, demarcation of indigenous areas. The decision to the World Bank had also insisted on the partici- change the procedures originated from the pation of local NGOs; concerted NGO pressure conviction that the previously existing situation from the very beginnings of Planafloro has was unconstitutional. The act has aroused much produced effects. protest: it is regarded as a reversal of the hard- At various instances, donors and international won constitutional rights of the indigenous organizations participating in the PP-G7 have peoples. National and international environ- expressed their concern. They also demand a mental and indigenous organizations have urged rapid implementation of the indigenous lands Cardoso to revoke the decree. They have project, “which many view as a bell-wether for requested the World Bank, the European Union the entire Pilot Program” (World Bank, 1996b, and the G-7 governments to suspend funds allocated to projects in the Brazilian Amazon.

p. 4). The PP-G7 has enlarged the possibilities for the international community to exert influ-

In February 1996, the European Parliament strongly condemned the decision of the Brazilian

ence on Brazilian policies. In that sense, the worst fears of hard-line nationalist forces have

government and called upon the European Commission to cease funding demarcation

been realized. The political situation and the

projects in Brazil. This resolution received nature of the coalitions has changed to such an extent however that both this national-inter-

widespread attention in Brazil and provoked a strong reaction from the Brazilian Minister of

national dichotomy and the concept of sover-

Justice. He emphasized Brazilian sovereignty and eignty need to be reconsidered. In a similar vein,

criticized the members of the European Parlia- the triple alliance, on which the development of

ment by stating that “they should be more the Brazilian economy and the Amazon was

concerned with the problems in Bosnia, which built, is characterized by continuity and change.

they have not managed to solve” (CIMI, 1996a). On the one hand, the difficulties encountered by

In addition, he was not receptive toward the President Cardoso, especially in privatizing

Brazilian groups which criticized the decree and former state companies and in assuring all

organized an international lobby. These parties with regard to the future development of

denouncements did not silence all protests, the Amazon, show that the alliance is still

however, since the number of appeals under the relevant. On the other hand, democratization has

new decree has exceeded 35% of the demarcated changed the political and economic situation,

indigenous areas (CIMI, 1996b). This poses a and the terms of the debate: companies can no

serious threat to the position of the indigenous longer rely on protectionist measures, high trade

peoples and shows that counterforces are still barriers and large state influence.

influential. In subsequent months, members of the US Congress, and the British and German Parliaments have expressed their concerns. 7. IMPLICATIONS FOR INTERNATIONAL

The Brazilian government has tried to COOPERATION convince international opinion of the importance of the decree. The Minister of Justice went on a Compared to a decade ago, the Brazilian mission to various European countries, and position has changed considerably. A strong Cardoso vehemently underlined his commitment rejection of international interference has given to indigenous causes. Furthermore, the govern- way to cooperation on the Pilot Program to ment assured the World Bank and PP-G7 donors conserve the Brazilian rainforest. Important that the “decree will make indigenous land factors which explain this shift encompass the regularization efforts more transparent, large international interest in the environment at democratic and agile” (World Bank, 1996a, p. 2). the time of UNCED, the relatively favorable Although World Bank staff, who examined the conditions and the fact that national sensitivities



were taken into account. An international environmental coalition has emerged in which representatives of the Brazilian government, the World Bank, the European Commission, donor countries and NGOs cooperated intensively to prepare the different projects of the PP-G7.

The formation of this coalition also shows the policy changes within the World Bank, which came about after fierce critique on both the environmental effects of lending and the declining effectiveness of development projects. As part of an overall restructuring, the organization has started to pay more attention to small- scale projects and to the participation of local NGOs (World Bank, 1997). So far, NGOs have given the organization the benefit of the doubt. Forced to build up environmental expertise by international NGO pressure, the World Bank points at the gravity of the environmental situation to underline the need for its activities and partly to legitimate its existence. Both current president Wolfensohn and his predecessor Preston emphasized that the environment is one of the areas in which the World Bank can play a crucial role in the interest of the international community (Bretton Woods Commission, 1994, pp. 43, 4.5; World Bank, 1997, p. ii).

Interestingly enough, requirements to reckon with the environment and to involve local organizations in the preparation and implementation of projects have enlarged the Bank’s influence on borrowing countries’ policies. Fear of intervention into domestic matters will increase, possibly stimulating those developing countries which have access to the international capital market, such as Brazil, to refrain from World Bank loans. This may diminish the effectiveness of the World Bank’s new environmental policy.

Although the PP-G7 is unlike the standard international aid program because it does not consist of loans, the perceived infringement of Brazilian sovereignty continues to be a sensitive issue. Paradoxically, the groups which most staunchly defended the national interest were those which stimulated the large-scale inflow of international capital in the 1960s. When politically useful, they can refer to the involvement of international actors just because of the large degree of internationalization of the Brazilian economy, and the growth of international governmental and nongovernmental cooperation patterns.

These tendencies underline the need to refine the concept of sovereignty and to distinguish different dimensions, considering not only the external but also the internal aspects, as highlighted by the environmental problem. Inter-

national environmental cooperation, such as the PP-G7, can strengthen and erode the power of the state simultaneously. Increasing international influence and direct donor collaboration with local authorities and NGOs diminishes the role of the state. At the same time, the federal Brazilian government is party to the agreement and mainstay in its implementation, which means that its power at the local level has also been augmented.

The fact that international attention for the Brazilian Amazon has provoked so many reactions reveals the other interests which are at stake in slowing down deforestation. Environ- mental policy not only deals with the environment, but, perhaps more importantly, with distributional issues. The Pilot Program reckons with these other aspects by international transfer of resources, cooperation with those Brazilian groups which benefit from protection of the rainforest, and by compensating and counterba- lancing others. In view of the size of the Amazon and the difficulties of control, measures which diminish the incentives to deforest are preferred to coercive approaches (Rude1 and Roper, 1997). Changing local practices is crucial, because at this level the ultimate causes of deforestation are found (Andersen, 1996) as part of a process set in motion by national development policies. Whether this process can be changed, will depend on the effectiveness of the coalition against deforestation, an alliance which has been strengthened as a result of the Pilot Program. Although conflicts about the Brazilian Amazon will continue to emerge every now and then, the terms and the intensity of the debate have changed considerably in 10 years’ time.

At the international level, a comparable development can be noted. After UNCED, the controversy between North and South and the politicization of the forest issue have diminished. The recognition that the focus on tropical rainforests was not at all free of hypocrisy grew among a large number of Northern countries. They have accepted the importance of preserving all types of forests instead of just tropical forests. Policies to import only sustainably produced timber, announced for example by the Dutch government in 1991, have given way to a more cooperative attitude (Kolk, 1996b). As a result, Southern accusations of infringement of sovereignty have declined in number and intensity. International and national attempts to protect forests are increasingly coordinated, and cooperation prevails over conflict. How such a coalition can be forged in spite of all difficulties is the most salient lesson of the Brazilian case.


NOTES

1. The Program also covers the Atlantic Rainforest; this article focuses only on the Brazilian Amazon.

2. For a more specific account of the MDB campaign see, e.g., Arnt and Schwartzman (1992); Aufderheide and Rich (1988); Cowell (1990); Bramble and Porter (1992); and Rich (1994).

3. These developments and the following arguments were reported in various issues of Folha de Stio Paulo, 0 Estado de Stio Paul0 and Jomal do Brasil, particularly in the period from January 7, to April 7, 1989.

4. Deforestation in 1987 turned out to have been exceptionally high, due to the long, dry season and the uncertainty on the future regulation of land rights, which incited land-invaders to burn large areas beforehand. For an analysis of deforestation figures and the climatic consequences, see Fearnside (1990, 1997) and Kolk (1996a), pp. 78-86.

5. The CVRD had a majority ownership in Nibrasco, Itabrasco and Hispanobras, and a nearly 50% owner-

ship in Mineracao Rio do Norte. Taken together, these four enterprises and the CVRD represented 63.7% of the 1991 market share (for a more detailed analysis of the information in this paragraph, see Kolk, 1996a, pp. 91-99).

6. Of the total area on which concessions were granted in 1986, 39.9% was in foreign hands, 36.2% in national hands, and 23.9% in state hands (Fernandes, 1987, p. 21).

7. Thomas Lovejoy, personal communication, October 26, 1994.

8. Maritta Koch-Weser, personal communication, October 25, 1994.

9. Information derived from World Bank, Ruin Forest Pilot Progrum Update, various issues. The Brazilian government originally requested $1.6 billion, but donors have made no commitment to reach this amount (World Bank, 1991b, pp. 6-7).

10. Translated from Portuguese by the author.

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From conflict to cooperation: International policies to protect the Brazilian Amazon

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