BACKS TO THE WALL IN SURINAME: FOREST POLICY IN A COUNTRY IN CRISIS Nigel Sizer Richard Rice WORLD RESOURCES INSTITUTE BACKS TO THE WALL IN SURINAME: Forest Policy in a Country in Crisis Nigel Sizer Richard Rice WORLD RESOURCES INSTITUTE April 1995 Kathleen Courrier Publications Director Brooks Belford Marketing Manager Hyacinth Billings Production Manager Nigel Sizer, Gary Brana-Shute Cover Photos Each World Resources Institute Report represents a timely, scholarly treatment of a subject of public concern. WRI takes re- sponsibility for choosing the study topics and guaranteeing its authors and researchers freedom of inquiry. It also solicits and responds to the guidance of advisory panels and expert reviewers. Unless otherwise stated, however, all the interpretation and findings set forth in WRI publications are those of the authors. Copyright © 1995 World Resources Institute. All rights reserved. ISBN 1-56973-034-2 Library of Congress Catalog Card No. 95-060863 Printed on recycled paper CONTENTS ACKNOWLEDGMENTS v FOREWORD vii I. BACKGROUND AND CURRENT FOREST POLICY IN SURINAME 1 1.1 Overview 1 1.2 The Issues 2 1.3 Historical Context and Political Constraints 4 1.4 Suriname's Forests—Use, Policies, and Institutions 6 II. THE NEW FOREST-CONCESSION PROPOSALS—THE BIG QUESTIONS 11 2.1 Who Is Investing and Why? 11 2.2 How Much Revenue Will the Concessions Generate? 11 2.3 Will the Concessions Promote Development in the Hinterland? 17 2.4 Will Economic Growth and Social Development Be Achieved without • Major Environmental Impacts? 21 III. OPTIONS FOR STRENGTHENING SURINAME'S FOREST-CONCESSIONS POLICY 23 3.1 Options for Increasing Rent Capture 23 3.2 Options for Reducing Negative Social Impacts and Creating Better Jobs 26 3-3 Options for Reducing Environmental Impact 28 IV. INSTITUTION BUILDING, CROSS-SECTORAL ISSUES AND ALTERNATIVE DEVELOPMENT OPTIONS 31 4.1 Strengthening Mechanisms for Public Participation in Decision-Making 31 ** "* 4.2 Establishing the Capacity to Design, Promote, and Implement Sustainable Development in the Forest Sector 32 4.3 Cross-Sectoral Issues 33 4.4 Alternative Financing Mechanisms for Alternative Forest Uses 34 4.5 Recommendations for the International Donor Community and the Special Role of the Inter-American Development Bank 35 APPENDIX: ECONOMIC ASSESSMENT OF THE TIMBER-CONCESSION PROPOSALS 37 NOTES 43 ACKNOWLEDGMENTS Many people in many institutions helped make van Hueven, Stanley Rensch, The Central Bank of this research possible. At WRI, valuable comments, Suriname, and the Ministry of Natural Resources. assistance, and collaboration came from Kenton Thanks also to Wouter Veening, Ambassador Miller, Bill Urban, Lea Borkenhagen, Robert Repetto, Robert Pringle, John Matuszak, Marcus Colchester, Walter Reid, Jonathan Lash, Bruce Cabarle, Owen Andrew Howard, David Smith, Thomas Lovejoy, Lynch, Donna Wise, Charles Barber, Nels Johnson, Michael Ross, Enrique Iglesias, and the staff of the Kirk Talbott, Aaron Zazueta, Tom Fox, Shirley Geer, Inter-American Development Bank for much stimu- Laura Lee Dooley, Donna Dwiggins, and Lisa Sullivan. lating discussion and thoughtful comment. Special At Conservation International in Washington D.C. appreciation must be expressed to Gary Brana-Shute and in Suriname, help and support came from John for his insights. Reid, Diji Chandrasekharan, Chris Rodstrom, Ian Finally, thanks to Kathleen Courrier for her su- Bowles, Russ Mittermeier, Stanley Malone, and Yvette perb editing, to Hyacinth Billings for managing pro- Merton. Others in Suriname who provided valuable duction, and to Samantha Fields. insight, criticism, and encouragement include Kenneth Tjon, Henrie Wesenhagen, Muriel Held, N.S. Daniel Christiansen, Ambassador Roger Gamble, Ruth R.R. FOREWORD A country on the brink of economic collapse, concessions, Dr. Sizer and Dr. Rice offer pragmatic Suriname is under enormous pressure—from within ways to improve concession policy. If it changed the and without—to restructure its economy and heal the way that forestry concessions are awarded, taxed, wounds of twelve years of civil unrest. Poor, bereft and enforced, the government could prevent the of foreign currency reserves, suffering 500-percent worst environmental damage and reap enough rev- annual inflation and rising unemployment, Suriname enue to deal with its most pressing social and eco- is desperately resisting advice to implement structural nomic problems. Specifically, the authors propose adjustment. To attract foreign investment, the govern- auctioning off concessions after establishing mini- ment is poised to award forest concessions covering mum bids and making sure that prospective bidders one fourth of the nation's territory to Asian timber have good track records in other countries, in addi- barons whose records in Malaysia and Indonesia do tion to levying value-added taxes on timber and not inspire confidence. processed wood products. With pristine tropical rainforest blanketing 80 Backs to the Wall outlines how Suriname's gov- percent of its terrain, Suriname is among the world's ernment could protect both forests and forest- most heavily forested countries. Indeed, Suriname is dwelling communities of Amerindians and Maroons, probably richer in rainforest now than Costa Rica was descendants of escaped slaves who live by the tradi- when the Spaniards arrived in the sixteenth century. tions their ancestors brought from West Africa 300 Each of the proposed concessions lies in forests years ago. Launching a program to protect commu- now accessible only by aircraft or dugout canoes. nal lands, sharing information with forest communi- One of the tracts is home to 10,000 forest-dwelling ties on pending development proposals, and requir- peoples. Although the concession contracts have al- ing social impact assessments for concessions within ready been drafted and submitted to Parliament, Suri- or bordering on communal lands would improve name still has the opportunity to consider other op- development planning. Establishing a program to tions. Backs to the Wall in Suriname: Forest Policy in continuously monitor forest concessionaires' perfor- a Country in Crisis, by WRI Associate Nigel Sizer, mance would help ensure compliance with contract and Richard Rice, Director of Economic Policy at provisions. Conservation International, examines the proposed Who can help? The Organization of American contracts and proposes options for a more sustain- States, which is already helping forest-dependent able approach. communities map their lands, could broaden its ef- As the authors note, no rational observer would forts into a formal land-demarcation program that in- suggest that Suriname should not harvest timber from cludes mechanisms for resolving conflicts between part of its forest patrimony. After all, this is one of communities and outside interests. Multilateral fun- the routes that wealthy countries of the North took in ders could supply technical and financial assistance their nineteenth-century drive to industrialize. But un- to communities through micro-enterprise develop- less Suriname revises its current plans, it will forego ment grants to help them better satisfy their needs. tens of millions of dollars in annual revenues—up to Suriname's government could bolster social progress 10 percent of gross domestic product—essentially by requiring that concessionaires and wood-process- giving away its forests and getting shattered biodiver- ing industries meet minimum employment standards sity, ruined fisheries, eroded soil, displaced popula- and integrate training and apprenticeship programs tions, and perhaps ethnic strife in return. into their business plans. Government could also Recognizing that Suriname's government may help ensure that concession workers have the right to feel compelled to go ahead with substantial forest organize labor unions. All people with a stake in the forests must be a multilateral assistance package that would give represented in decision-making circles if concession Suriname enough time to explore other ways of agreements are to reflect their rights and interests, using its forests to spur economic development. The and Backs to the Wall outlines ways to ensure this. assistance funds would help build the capacities of Suriname has already established councils designed Suriname's public and private sectors to design sus- to give people in the hinterland a say in decisions tainable forestry options, in addition to providing that will profoundly affect their lives, but the nation compensation to cover the short-term opportunity has been unable to get them up and running because costs of putting the contracts on hold. A modest in- of budget constraints. Backs to the Wall stresses that vestment in assistance for Suriname at this crucial supporting these participatory mechanisms should be juncture can enable this beleaguered nation to exam- a key part of any international assistance package. In- ine other forest options that exist in plenty. deed, as the authors note, simply providing Suri- Backs to the Wall in Suriname extends the analy- name's councils enough money to operate would go ses and recommendations set forth in such previous a long way toward bringing isolated rural peoples WRI studies as Breaking the Logjam: Obstacles to For- into the forest policy-making process. est Policy Reform in Indonesia and the United States, Dr. Sizer and Dr. Rice end by suggesting devel- Surviving the Cut: Natural Forest Management in the opment alternatives that would make the most of