The State of Nature and the Nature of States
Patricia Marchak, Ph.D., F.R.S.C.
The University of British Columbia, Vancouver, Canada
Thank you for inviting me to give this Starker Lecture. I’m honored to be here at your beautiful campus. As you know, I am not a professor of forestry. I’m a sociologist who, over the past several decades, has studied the social context and conditions for forestry. I propose to take you on a tour of the world today. My objective is to show how the nature of states – or more immediately, governments acting on behalf of states - affect the way we treat forests, the way we develop forestry as an industry, and the kinds of issues we encounter in dealing with both forests and forest markets. I’ll begin here in the northwestern sector of North America and then move to Asia, Latin America and Africa.
LOGGING IN NORTHERN B.C.
First let’s take a quick look at a few pictures of spring logging in northern British Columbia in the late 1970s.
Most of the harvest from the northern camps went into local sawmills and then to pulpmills. The better grade logs became lumber for the vast American housing market. Both pulp and dimensional lumber crossed the border tariff-free. Many of the forest companies in BC at that time were subsidiaries of parent paper and lumber companies in the United States.
But that era was already moving toward closure when I took these photos. The housing market of the 1950s and 1960s had declined, and the vast northern forests that could be easily accessed and logged were also in steep decline. Many prime valleys were already logged out, and to be honest Canadian governments had not themselves planted second growths nor had they succeeded in persuading companies to do so. It was another decade before replanting began in earnest, and that was an initiative of the Canadian federal government. Several American companies sold their mills and abandoned British Columbia during the economic downturn at the end of the 1970s.
This history is part of the explanation for the softwood lumber dispute that began in the 1980s. The United States, in defence of its own lumber producers, claims that Canadian producers are given low-cost resource supplies by governments. A recent NAFTA decision ruled against the United States, saying that there was no evidence that Canadian production was causing harm to American forest companies.
Canadians argue that natural resources should be held by the state for the benefit of all citizens. Less than five per cent of forest land in British Columbia is privately owned; most of it is owned by what we call the Crown. Harvesting rights are leased to companies under a legal form known as tenures. Companies then pay a fee, known as stumpage, for the right to cut timber. Thus there is no open log or timber market, and stumpage is determined for about 5-year periods or occasionally shorter periods by complex formulae rather than markets.
US negotiators say they won’t accept NAFTA or other rulings until Canada puts its timber on an open market or auction where US producers can compete for it. Canadians generally would oppose this and governments would not choose to ensure their electoral defeat by changing the ownership status of forest land.
In other words, this is an issue embedded in two very different cultures: yours, much more individualistic, more concerned with private property rights, and with a strong belief in unfettered markets determining prices. Ours, more collectivist, more concerned with public property rights, and with a notion that market forces should be tempered by the collective rights of citizens through government legislation. So when we approach an issue such as the softwood lumber dispute, we cannot adequately understand it or resolve it by simply trying to determine whether market forces yield different resource rents than stumpage. The two systems differ for historical and deeply embedded cultural reasons. Governments have played important roles in both countries but the precise nature of government roles differs.
By the 1980s many changes were affecting our two northern countries.
Four changes are prominent.
These conditions have obliged governments and companies to confront the new conditions whereby plantations elsewhere take over developing markets while northern forests produce less at higher cost.
JAPAN
Japan has been at the forefront of these changes. With very little forest cover on her own islands, Japan has succeeded in becoming the second largest producer of paper in the world, and a major investor in new forest plantations and pulpmills elsewhere.
Most of the natural forests on three of the four small islands of Japan were destroyed during the Second World War. Following the war, the national government provided funding and regulations to enable rural people to re-forest the region. The land was divided between individual families, the community as a whole, the quasi-religious entity known as Shinto for Shrines, and the nation as a property owner.
These pictures were taken in the late 1980s. They show a logging cooperative in Kyoto, a log year cooperative, and a polishing pole cooperative, all of these jointly owned and managed by the forest owners of the prefecture. The beautifully polished Hinoki poles are used as centre poles for Shinto shrines and sometimes in the homes of wealthy families. If a family wishes to sell their property the community as a whole would be involved in making the decision because land is viewed as a property held in common even where individuals hold the formal property rights. All tree farm owners must contribute several days’ per year to caring for the community, Shinto, and national forests. The federal and prefecture governments issue rigorous regulations regarding seeding, thinning, and nurturing Hinoki and Sugi species that were planted after the war.
An individual tree farm might be less than an acre, and I was amazed at how much care every seedling was given on those tiny plots. When I traveled through the Kyoto Prefecture mountain forest regions I wondered if I was going to be introduced to the trees – “here is Kai, he had a little bend when he was three years old but we bound him up and now he looks fine…. “
The same forest economists who kindly took me through their forest regions were aghast at the profligate management – well, being polite, they would not use the word mismanagement but there was no doubting their nuanced words - when shown huge forests in Washington State and British Columbia where clear-cutting is the mode of extraction and reforestation is sometimes not done at all or done in a minimal or even haphazard way. I was told firmly that by law in Japan, every tree removed from the forest had to be replaced so that the future forest would be equal to the current one.
I should mention that the same environmental concern is not exercised in nearby tropical regions where Japanese companies log native forests. The reason is that governments in nearby countries are disinclined to legislate with environmental concerns as a priority. Rather, they seek quick profits. Japanese companies have been very destructive in the natural forests in Papua New Guinea, the Philippines, Sabah and Sarawak, and Indonesia
However, Japan’s role in world forestry is not restricted to tropical forests. Japan, through initiatives of her government and then of her forestry companies, has scoured the world in search of raw materials for her paper industry.
First round-logs from North America and Russia, then, as the supply diminished, woodchips and later pulp were purchased on world markets to feed the numerous large paper mills in Japan. Chile still sells woodchips, though most other countries have abandoned that market so as to utilize the chips in their own mills. About 20 years ago Japan began investing in full-scale state-of-the-art pulp mills in the boreal forests of Canada, with the pulp going directly to parent firms in Japan. Based on this global procurement policy, Japan became the second largest paper producer in the world – well ahead of forested countries such as Canada, Sweden, France, or Germany.
China, Taiwan, and South Korea took Japan as a model and have moved in the same direction to obtain fibre supplies for their paper mills. China is the third largest paper-maker in the world despite having very little wood supply of her own. It is now well known that illegal supplies are obtained from Myanmar and the former USSR as well as legal supplies from other countries.
The land on which tropical and sub-tropical forests are situated is becoming extremely important to new forestry developments. In the past many of these forests were decimated by settlements, roads, railways, military excursions, ranching, attempts to move poor people onto the land where they promptly failed to turn tropical soils into farms, as well as industrial forestry. Tropical forests are actually not prime fibre for forestry. The nutrition resides in the trees themselves rather than the soils, and if the land is clearcut and left for even a short interval it tends to dry up. Alang-alang grass is the only thing likely to take root
In most tropical forests there are a few select species – teak, mahogany, ebony, for examples – that are worth a small fortune on markets for decorative woods, but most of the other species are of poor quality for industrial purposes.
However, the land on which the tropical forests are located may be worth much more than the trees in countries where land is scarce. Companies and governments might choose to strip the tropical forest and immediately plant a fast-growing crop of industrial species as a fibre source for pulp and paper. To use such lands governments and companies have sometimes invested heavily in chemical fertilizers and other products to create substitute nutrients. The chemicals can drop into the water table and cause problems downstream but governments and companies sometimes consider that an acceptable risk in order to obtain land for planting new species of trees.
Japan has been particularly important in providing investment funds for the development of fast-growing trees as the basis for fibre farms in warm climates. Since about the 1970s, bio-technology combined with investments have resulted in the development of fast-growing eucalyptus, acacia, albizzia, gmelina, and a few other species that now provide pulp at much lower cost than was the case with northern species. Both the fibre source and the labour are relatively cheap. The only economic issue is the cost of energy, but even that, where there is sufficient water supply for electricity is manageable.
Several species of eucalypts can be grown to maturity in seven years, then coppiced, and can produce 3 crops from one stem in a 21 year period. Pines – Radiata, Elliotti, Caribbean and other species – take up to 30 years depending on intended end uses, but compared to northern species that take at least 80 years if intensively managed and closer to 400 years if left to natural growth cycles, these new plantation crops are the future of the forest industry.
Japanese companies join with American companies as investors in the new plantations of Asia and South America. And American companies are also investing in Alabama, Georgia and other southern states. Weyerhaeuser, for example, has invested heavily in a pine and eucalyptus plantation in Uruquay and in plantations in Tennessee and the Carolinas. Simultaneously, it has divested itself of timberland in the Pacific Northwest.
Developing countries rarely have the capacity to establish their own forest industries. So governments have to decide how to deal with external investors – should government co-invest, for example, sharing the cost of the operation but also, then, sharing information and profits? Should it provide start-up funds, should it build roads, ports, townsites, and all the rest of the needed infrastructure, and if it does, what should it require in return?
Often these countries turn to engineering and development companies such as Jaakko Põyry and H.A. Simons to do assessments of proposed forestry complexes. When the decision to go ahead is made, the new establishments are pretty well obliged to purchase much of their machinery and other supplies from more industrialized economies. The changes that are occurring today thus involve not only a movement toward fibre plantations in southern climates, but also a new international market for manufacturers in developed countries.
Two countries with tropical and sub-tropical forests illustrate the different ways that governments in their territories have dealt with investors, with profound differences in the impact those investments have had on the domestic population. The first is Indonesia; the second, Brazil.
THAILAND AND INDONESIA
Both Thailand and Indonesia have attempted to create plantations and to enter the new global forest economy. I’ll concentrate on Indonesia.
Indonesia is a collection of islands comprising in size twice the area of Western Europe. The most frequently cited estimate of forest land is that it covers in the neighbourhood of 65% of the total land mass of about 144 million hectares, and that it is being deforested at a rate of between 1.2 and 1.8 per cent per year. Alang-alang grass covers some 20 million hectares that were deforested and left to nature. Nature cannot regenerate most of that land, and human intervention will necessarily involve many fertilizers which will then pollute the water table and may have long-term consequences.
After the Sukarno regime was toppled in 1965, the military government established laws friendly to external investment in forestry. The government claimed that the objective was to enable the state to obtain resource revenue for public purposes. In actual fact military groups became the front for international investors. They provided the required 51% domestic investors though they didn’t actually put money into the projects. The external companies benefited from low-cost wood supplies, tax holidays, and import exemptions on machinery.
The law against exporting logs was removed, and there was an export bonanza, with the combination of favored outsiders and military insiders reaping the benefits. The major external investors were Japanese firms, but there were other companies as well from Malaysia, the Philippines, Korea and the United States. Weyerhaeuser, for example, obtained concessions in East Kalimantan in 1971 under the corporate label of International Timber Corporation Indonesia. It subsequently abandoned its holdings.
The Indonesian state retains ownership rights to the prime land and grants concessions to timber entrepreneurs. In fact by the 1990s almost all of the prime production land was under contract. The trees removed from the original forests include teak, ebony, and meranti, all worth small fortunes on world markets, and this harvest helps to pay for the planting of new crops of acacia, eucalyptus, and other fast-growing species. The plantations on the outer Islands include pine, acacia, albizzia, and eucalyptus. Albizzia is perhaps the fastest-growing species in the world: from seedling to full size takes about four to five years. Acacia takes about eight years.
One of the world’s largest pulpmills was constructed by Indah Kiat in Ache, Indonesia on land that was then still forested in tropical species. As the tropical plants were cut down, plantation species were planted. This kind of development gives the lie to the notion that the new plantations will save the tropical forests. Instead, they destroy those forests in order to establish plantations on the same land.
Plantation forestry and the establishment of plywood and pulpmill industries owe their existence to government policies, just as the parallel industries do in Brasil. Government in 1961 established a state forestry enterprise, Perhutani, which secured monopoly control of much of South and Central Kalimantan and three million hectares in East Kalimantan. This firm entered into production agreements with Japanese firms. These were less than successful because the interests of Japanese logging companies – to procure logs at a low cost – and of the Indonesian government – to create long-term investments – were not congruent.
Environmentalists – that is, anyone who criticizes government policy regarding the forests and land – are jailed or worse. The considerable deforestation that has resulted from these policies is thought by some commentators to be greater in rate and permanent damage than the deforestation occurring in the Amazon region of Brazil.
Indigenous peoples and Encroachers in Indonesia
Indigenous people of Indonesia are many, and they now are forced to live in minimal housing provided by the state on the margins of forests. If they try to go back into the forest to plant subsistence crops as they did in times past they are called “encroachers” and the penalties are severe. Long ago they practiced swidden agriculture. This would involve clearing a small area, planting a subsistence crop – yams, most often – and continuing to cultivate the crop there for a period of about 3 years. That is the maximum period for poor soils in tropical forests to sustain an agricultural crop. Then the little band would move on, often leaving behind them several medicine trees or other imported species that would be expected to help the next generation that eventually used that land again. It would not be cultivated, however, for at least a quarter century, so the tropical forest could reclaim it.
These little bands, now affected by Western medicine and sometimes having lost their aboriginal medical knowledge, have increased their population over the past half-century, and simultaneously forest companies and many other interest groups have moved into the forests. The forest dwellers have been marginalized, and frequently the forest itself has been destroyed by over-cutting, road construction, heavy machinery on fragile soils, and other practices that harm both flora and fauna.
Landless peasants
Indigenous people are joined by landless peasants as deprived groups when forest land is scheduled for industrial development. In Indonesia there are many such peasants, people who may have lived in and near forests for many generations, but they lack property deeds and the Indonesian government is not prepared to consider their land claims.
The Indonesian government undertook a transmigration project in the 1980s, trying to shift poor people from the main island of Java to locations on the margins of tropical forests. These attempts failed because tropical soils are not suitable for traditional farming. The transplanted people have drifted back to Java’s shanty-towns.
BRAZIL
Now let us move on to Brazil. A new pulpmill industry was born in Brazil three to four decades ago. Starting with several varieties of eucalyptus seeds from Australia and with aid from the emerging biotechnology sciences, Brazil has created some of the world’s most sophisticated and huge forestry complexes. Beginning from zero in about the 1970s, Brazil has become one of the major producers of pulp, and its companies – all state of the art – are now also producing high-quality papers and paper-board.
Yes, there are potential problems with monocultures, but different clones and also interspersed tropical plants between fields of eucalypts have so far mitigated against the influx of devastating pests and diseases. Of course here we are dealing with exotic plants that have an advantage over indigenous plants because the diseases to which they are prone in their natural state have not yet emerged in the new conditions. But the companies are aware that sooner or later indigenous diseases and pests will emerge; they are spending a good deal of their money on research.
During my fieldwork in Brazil I met many of the researchers and found them knowledgeable, well-trained (mostly in foreign universities), and excited to be at the forefront of this industry. They were mainly young Brazilians for whom this was not only a personal undertaking but also a conscious commitment to their country’s future.
Assuming that the potential ecological problems – there are others besides those associated with monocultures – are resolvable, the Brazilian government has created legislation that allows forestry companies to buy up farms and other existing properties, and has provided funds through a development bank. In some cases the bank is the major partner for a company. By legislation, all companies must have 51% or more Brazilian ownership. Most of the Brazilian operations are below the Amazon basin, situated primarily along the Atlantic coast or slightly inward from it.
I traveled around to virtually every pulpmill and plantation along the Atlantic coast and the major ones inland in the mid-1990s. These companies, many of them originally financed by loans and land grants from the Brazilian Government through its development bank, have very large plantations of eucalyptus chosen as best for the soil conditions and micro climate, and, in higher elevations, either Radiata or Ellioti Pine. Some of these are planted on land that was shorn of its tropical or sub-tropical forest cover for this purpose, but most of those below the Amazon basin benefited from destruction of forests for earlier plantations of sugar, cocoa, rubber, or coffee.
The entire Atlantic coastal region was denuded of Araucaria forests early in the 20 th century with scarcely any return to either the government or the population of the region.
As part of their pact with the funding bank the new plantation companies employ local people, train them, and provide them with uniforms, holiday time, a decent salary relative to Brazilian comparisons, and recreational opportunities in swimming pools, game rooms and the like.
Brazilian governments at both national and state levels have encouraged the growth of the industry not only through grants but also by improving transportation capacities and ports for shipping out pulp. As well, Brazil itself provides the companies with a huge domestic market, and gradually home-grown eucalyptus pulp has displaced pulp and newsprint from more developed regions such as the Pacific Northwest in both the US and Canada. Export markets are being developed. The produce from this industry is so great that industry observers acknowledge that Brazil could eventually provide the world’s pulp requirements all by itself.
Amazon Region
Most of the plantations and mills are along the Atlantic coast of Brazil, well below the Amazon region. But Daniel Ludwig, a shipping magnate, took it into his head to start a forestry project in the Amazonian state of Pará at the headwaters of the Jari river in the 1970s. He obtained loan guarantees and promises of tax-free imports of machinery from the Brazilian government. He and the government constructed a townsite suitable for a sizeable labour force. It included schools, a hospital, recreational facilities, and supermarkets. He bulldozed and burnt the tropical forest to establish his plantation and by 1978 he imported a complete pulpmill from Japan with capacity to produce 500 tons per day floated in on barges. But he had chosen Gmelina Arborea seedlings, and despite early trials that indicated potential success they did not flourish. Also the fragile soils did not survive the heavy imported logging machinery that had been engineered in temperate regions. The scheme went bankrupt and the state-controlled Banco do Brasil assumed its $180 million of debts.
The failure of the Jari project served as a warning to investors about the problems of large-scale forestry in the Amazon. But after awhile another group of investors bought out the Jari operation, began experimenting with other quick-growing species, and their firm, Monte Dourado, began turning a profit. This gave the incentive to other companies to move to the tropical area, and forest operations are now among the many industrial and other inroads into that fragile ecosystem.
We who have not practiced sustainable forestry in our own lands have no right to tell Brazil how to do so on their land, even though destruction of the Amazon forest will affect climate throughout the world. Unfortunately, there is too much money to be made in the Amazon basin, and more companies are moving in with government blessings.
One should note that it is not only forestry companies that are bulldozing and burning tropical forests in the Amazon or other countries. At one stage the Brazilian government attempted to force landless and poor people from the north-eastern states to marginal lands in the Amazon region. This project was a total failure because the land could not support agriculture and the people were not skilled for any other form of subsistence. All this did was add to the destruction of the forest. The history of clearances, settlements, failed plantations, road building, attempts at railway building, tragically failed cattle ranching and military spending on mind-boggling projects is quite a tale.
Indigenous Peoples
There is another negative in Brazil and also in most of the world, including Canada. These huge forestry installations have pushed indigenous peoples off their land, often pushed them to the absolute margins of society without adequate means to keep their families alive and safe. Rarely are they employed. In Brazil, in Chile, in Thailand, in Indonesia, virtually everywhere that indigenous peoples squeeze out a thin living, the forest industry along with the mining industry, construction, urban expansion, and many other inroads to the forests that once provided their habitat, threaten them with extinction.
Summary of two countries
These two countries, Brazil and Indonesia, are both trying to create a forest industry on the basis of agricultural plantations, and the policies of both have led to considerable damage to tropical forest lands. But the policies in Brazil have so far led to the creation of a successful industry and the distribution of benefits in the form of employment and regular wages for a local workforce, facilities and schools for children who were living in nearby villages and towns as these operations were established. Farmers in the same vicinities have lost out, but even they, in some cases, have benefited from policies that pay them to grow eucalypts on their properties under supervision from the companies, so instead of being taken over they become partners in the operations.
In Indonesia the benefits have been corralled by military and other high-level interest groups who essentially sell the concessions to outsiders and turn what might otherwise be public revenues into private fortunes. In both cases the government, or better said the state because several successive governments in both Brazil and Indonesia have contributed to these situation, has been the important intervener between the natural resources and the industry.
It will not surprise you to know that violence is much closer to the surface in Indonesia than in Brazil. Greenpeace and other critical organizations are able to mount their opposition in Brazil – it’s not easy, but it is possible. Environmentalists in Indonesia are likely to end up in jail – if they’re lucky.
Finally, and briefly, I want to mention the situation in African countries.
In the social sciences we have theories that link violent conflict to scarcity of resources, suggesting that people will commit crimes against humanity, or genocide, or civil war when there are insufficient resources to go around. When we think of East African societies we might well conclude that scarcity is the basic cause of violence in such places as Ethiopia and Eritrea, Sudan, Somalia, Rwanda, and Burundi. But we have discovered that the anticipated relationship is not found consistently. Indeed, we have many examples of the opposite relationship, where violence is associated with an abundance of desirable natural resources. Side by side in Africa we have both situations.
THE DEMOCRATIC REPUBLIC OF THE CONGO
The core region of sub – Saharan Africa is the Congo River Basin. This enormous area – about a quarter the size of the United States – was claimed as an imperial property by King Leopold II of Belgium in the late 19 th century. Elephant-tusks and natural rubber were the basis for the Belgian imperial empire between about the 1880s and the early 20 th century. Estimates of the premature deaths of indigenous people throughout the region under colonialism run between 5 and 10 million, including those who were killed outright, those who starved or worked to death, diseases, and many forms of deprivation. Joseph Conrad’s short novel, The Heart of Darkness, is close to the truth of that awful time.
Unfortunately the shadow of colonialism lived on after independence. The first post-colonial election held in the Congo resulted in the election of Patrice Lumumba and he was promptly assassinated by a combination of Belgian and US covert personnel. This was the cold-war era; he was regarded as too far left by the Western world. Since then the entire region has been autocratically governed by dictators – Mobuto Sese Seki, Laurent Kabila, and now Joseph Kabila.
But government is not the correct word because much of the territory, especially the eastern province of Ituri, where there are gold, diamonds, emeralds, coltan, and timber is not governable. Local war-lords are in charge of bits and pieces, and foreign corporations including some from both Canada and the United States, together with foreign state actors have staked claims in the region. The human rights record is appalling. Thousands of civilians have been killed outright, others have starved to death or otherwise died indirectly from the anarchic conditions.
So in Central and Eastern Africa we have examples of both the violence associated with resource scarcity and violence associated with resource wealth. The resource situation, then, is not in itself the explanation for what happened in these territories. In both circumstances the problem has been a lack of effective governance. I would probably not go with the Chinese proverb to the effect that even bad government is better than none, but certainly anarchy is not a desirable situation; territories controlled by war-lords soon take over from anarchic conditions. People need governments that are capable of turning the region’s resources to advantage, or to devise ways of surviving with poor resource supplies.
While still considering the continent of Africa, we should look at the changing conditions in post-apartheid South Africa. Plantation forests were initially seeded in the 1920s and they are now important components of the economy with about 1.40 million hectares of which about 75% are owned by large companies and Safcol, the recently established State company. Small farmers also participate. Plantation forests include pines, eucalypts, and wattle. Productivity is fairly high, capable now of meeting domestic demand for pulp and allowing for an export industry in the forms of pulp, paper, and wood chips. South Africans have debated the options for forests, leaning strongly toward multiple use policies.
South Africa has a good climate, especially along the eastern coastal regions, for plantations. Not all sub-Saharan countries could develop plantations because their climates may be less compatible. But the example of South Africa, with government becoming a major participant in the development of plantation forestry, might provide a model for some other African countries.
CONCLUSION
In conclusion, the forest industry, with or without new African participants, will move southward. Northern industries are not competitive in price for the raw material; the raw materials, moreover, are dwindling. Northerners are not competitive in labour costs, either. The cost of energy remains a question, for sure, but when everything else is cheaper elsewhere, inevitably investors will move south.
My objective has been to demonstrate that what happens to natural resources and also plantations is very much dependent on the nature of the state, and the way in which governments operate in any region. Just looking at the resource endowment for any country will not inform us about its utilization or its benefits for the resident population.
For this reason I have long advocated that students of forestry become familiar with the range of government styles around the world before they go into the field to practice. Forestry students in this audience might well find themselves in Brazil or Indonesia, Cambodia or Rwanda, you name it: today educated people like yourselves are likely to go around the world and back many times in the course of your careers. The tool kit for the future is not restricted to skills for practising forestry in the Pacific Northwest in a temperate rain-forest. We are all now global citizens, and what happens elsewhere has resonance here. You might be the ones who can say to a sub-Saharan government, “there is a possibility for a plantation pulp industry here and this is how to do it.” You, who might have thought you were being trained for a technical career, might well find yourselves in positions that make a real social and cultural difference to parts of the world you have yet to discover. I wish you all the best in what is now a world of new opportunities that grow beyond technical training.
Just to remind you, it is not only people who need the tropical forests for their survival.
Thank you.