Monday, November 3, 2008

Linking the Global Financial Crisis and the Environment: Respite for Resources or Increased Pressure?

Admittedly, it is guesswork, but last week in Geneva, I raised the global financial crisis as a challenge and an opportunity for those of us committed to bringing clean drinking water, sanitation, and hygiene education to everyone.  It is a challenge, of course, to find funding in such times.  But it is an opportunity because finally the mesmerizing power of the myths about unfettered free enterprise has been broken.

Although I was not in Barcelona for the IUCN World Congress, apparently everyone there was considering the same question.  Here is one of the reports that came out of Barcelona:

Global Financial Crisis a Bad Sign for Andean Biodiversity

by Julio Godoy* - Tierramérica

BARCELONA, Oct 16 (IPS) - The crisis affecting the financial sector and stock markets around the world could fuel the expansion of extractive industries in South America's Andean region, warn experts.

Investors from the industrialised world may feel pressure to seek alternative means for financial liquidity, forced by divestment from stocks in recent weeks, Stewart Maginnis, director of forest conservation for the World Conservation Union (IUCN), told Tierramérica.

Debate on the environmental repercussions of the financial crisis overtook much of the World Conservation Congress held by the IUCN Oct. 5-14 in Barcelona, Spain, which drew some 8,000 experts.

But the uncertainty is such that others predict reduced pressure on natural resources as a result of the economic crisis.

Maginnis pointed to the current high prices of fuels, noting that investment in the expansion of mining and oil company activities now is attractive -- and constitutes a threat to protection efforts in areas like the Amazon jungle region in Bolivia, Columbia, Ecuador, Peru, and Venezuela.

The phenomenon could be intensified by the existing policies of the Andean Community trade bloc, made up of Columbia, Ecuador, Peru, and Bolivia, that favour extractive industries and clash with the interests and development ideas of local indigenous communities. That contradiction was evident in Barcelona during a debate among environmental experts, government delegates and representatives of indigenous groups from the four Andean Community nations.

"Our idea of development does not coincide with that of the white man. For us, the most sacred thing is to protect Mother Earth. For the corporations and the governments, drilling holes in her is part of development," Gerardo Macuna, an indigenous representative from Columbia, told Tierramerica.

In contrast, Francisco Dallmeier, a biologist with the Centre for Conservation Education and Sustainability at the U.S.-based Smithsonian Institution, said that some oil production areas in South America meet high biological conservation standards.

The Bolivia-Brazil natural gas pipeline, inaugurated in 1999 by the Brazilian oil giant Petrobras, "is one of those examples of excellent environmental management" of an oil industry project, according to Dallmeier.

A more nuanced view was taken by César Ipenza, a researcher with the Peruvian Association for the Conservation of Nature, who said, "We need to develop tools for research and evaluation that allow us to reconcile exploitation of hydrocarbon resources as a factor of development with the effective preservation of biodiversity in the protected areas of the Andean Community."

The Andean region is rich in petroleum and natural gas deposits. According to the latest official data from the Andean Community, from 2004, production of oil and derivatives in Columbia was 686,000 barrels per day -- three times the average national consumption. Columbia exported some 460,000 barrels per day.  Bolivia produces around 41 million cubic metres of natural gas per day, 35 million of which is exported to Brazil and Argentina.

This enormous source of wealth is difficult to bring into line with environmental conservation and the standards for protected areas. It also challenges the effectiveness of international agreements ratified by the Andean Community nations, such as Convention 169 of the International Labour Organisation, which protects the rights of indigenous peoples.

Governments and indigenous communities interpret the Convention text in different ways.

Article 6 of the Convention states that "governments must consult the peoples concerned, through appropriate procedures and in particular through their representative institutions, whenever consideration is being given to legislative or administrative measures which may affect them directly..."

According to the Andean Community governments, "this article only requires them to consult indigenous communities, but they interpret it to mean that they are free to decide on the policies for the extractive industries," María Amparo Albán, Ecuadorian attorney and environmental consultant, told Tierramérica.

The governments of the Andean bloc are not generally concerned about preventing extractive industries from operating in protected areas -- and which are often also the lands of indigenous peoples -- "merely for reasons of biodiversity conservation," she said.

The indigenous communities, meanwhile, interpret the ILO Convention "as giving them the power to make decisions on extractive policies that take place in their territories," said Albán.

This interpretation is based on Article 7: "The peoples concerned shall have the right to decide their own priorities for the process of development as it affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or otherwise use, and to exercise control, to the extent possible, over their own economic, social and cultural development."

According to Oscar Castillo, a Bolivian expert on the oil and natural gas industry at the Wildlife Conservation Society, "the challenge for the Andean region is to conduct a comprehensive analysis, one that is supra-national, about the environmental impacts of the extractive industries, in order to draft policies for the entire region."

But Albán believes a region-wide policy is currently impossible for the bloc. "The internal conflicts of the Andean Community, derived from ideological differences separating Columbia and Peru on the one side, and Ecuador and Bolivia on the other, have brought to a halt all progress towards regional integration," she said.

There are more than 180 oil and natural gas fields across the western Amazon, which comprises the five Andean countries, and 72 percent of the jungle territory of Peru is affected by plans for fossil fuel exploitation, according to a study published in August by the online scientific journal PLoS ONE.

In times of uncertainty, many more interests could go in search of those treasures, says Maginnis.

"This expansion occurs to the detriment of our peoples and of Mother Earth," warned José Antúnez, a leader of the Asháninka people of Peru.

(*Julio Godoy is an IPS correspondent. This story was originally published by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme, United Nations Environment Programme and the World Bank.) (FIN/2008)

Biodiversity, Economics, Energy, Governance/Management, International, Mining, South America, Sustainability | Permalink

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Good post.Global financial crisis that could lead to the collapse of the current systems combined with other events that will happen leading to the implementation of a global cashless system based on RFID technology that will prevent anyone from buying or selling if they choose not to participate.

Posted by: commodities | Apr 26, 2009 11:20:57 PM

I find it interesting that those experts having biased interests that serve the interests of the oil production giants use vague unquantifiable terms like "meets high standards" and "excellent example of environmental management." Yes? Compared to what exactly? Until we are able to standardize on acceptable baseline levels of environmental impact measured against quantifiable metrics, we are in danger of blindly trusting the "experts" who tell us to relax; everything looks "good" and is "well"-managed. The truth is, we need more than that.

Posted by: solar-cost-solar-panels-solar-house | Nov 24, 2008 12:56:13 PM

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