Chapter 2 – The Environment Strikes Back

The Environment Strikes Back

ATTEMPTS TO CONQUER the mighty Amazon have never been cheap, and rarely have they been successful. Gold diggers, grand old families in search of plantation lands, and traders of quinine bark and other exotic substances have for centuries plied their way up the Amazon. But Amazonia had its own defenses. So inhospitable to outsiders was the rainforest, so dense its vegetation, so difficult its climate, so dangerous its diseases, so swift its regenerative powers that intruders were quickly swallowed up by its seething life.

The Madeira-Mamoré Railroad, begun in 1872, was the first great contest between modern man and the Amazon jungle. Its European and North American backers simply intended to transport Bolivian rubber 230 miles to the markets and shipping routes of the eastern Amazon — a distance less than one-tenth that of the U.S. transcontinental railroad, completed just three years earlier.

But building the railway was not simple. Malaria, yellow fever, amoebic dysentery, beriberi, and typhoid killed an estimated 10,000 people, more than any other construction project in modern times, including the Panama Canal. “Under each crosstie a human skull,” goes the saying of locals, who designated Madeira-Mamoré the Railroad of the Dead.

In five years only five miles of track had been laid. The rainforest was so dense that surveyors could measure only a few feet at a time. Routes were often abandoned for new directions when the track struck an impassable hill that had been camouflaged by jungle. The rains swamped roadbeds and shifting rivers carried them away.

The European owners, in a survey of their investment debacle, branded the region “a welter of putrefaction, where men die like flies. Even with all the money in the world and half its population it is impossible to finish this railway.” The Madeira-Mamoré Railway thus lurched from one private owner to another, ruining more than one great fortune along the way. Finally, in 1931, the government stepped in. So often the investor of last resort, it mustered the money to finish it and to keep the debt-ridden railway operating until 1972. Then, a full century after its beginning, the government closed it in favor of a road through the Amazon.

Throughout these misadventures, history had kept repeating itself, attracting new adventurers — Henry Ford among them — who ignored the lessons of their predecessors.

In 1927, seeking to circumvent the British and Dutch rubber monopolies, Ford bought two and a half million acres of Amazonian river-front property, called his development project Fordlandia, and set about transforming it into a rubber plantation. Seven thousand acres were cleared while Ford’s head office in Dearborn, Michigan shipped in houses, a school, a hospital, a sawmill, and other facilities. The sawmill processed the virgin hardwoods, and young rubber trees were planted.

But no sooner had the canopies of the young trees begun to close in upon one another than Microcyclus ulei, or South American leaf blight, struck savagely. Fifty-three other grafts and clones were then brought in from Sumatra and Liberia, but all became susceptible to the disease. To compound Ford’s troubles, two dozen insect predators also attacked. In 1942 swarms of caterpillars nearly destroyed the trees. By 1945, after spending nearly $10 million, Ford admitted defeat and sold out to the Brazilian government for $500,000. Two decades would elapse before another developer dared defy the Amazon.

Then in 1967, North American shipping magnate Daniel K. Ludwig came to develop the Amazon, and on a still grander scale. Expecting the world to soon run out of wood fiber, Ludwig decided to clear 250,000 acres of native rainforest for plantations of his “miracle tree,” Gmelina arborea, a fast-growing Burmese species. On his three million acres of Amazonian rainforest, Ludwig also envisaged the world’s largest rice plantation, mining and livestock operations, nicely planned communities for workers, a 2,500-mile network of roads, and fifty miles of railroad track. With help from the Japanese Import-Export Bank and the Brazilian government, he brought in, by barge, preassembled, a 17-story-high pulp mill from Japan.

Ludwig’s heavy land-clearing machines scraped and compacted the delicate soil, which retaliated almost immediately. Transplanted Gmelina grew slower than in its native environment. But Ludwig persevered, replacing Gmelina plantations with equally disappointing eucalyptus and Caribbean pine. The pulp mill processed what pulp it could extract from the rainforest while his billion-dollar investment faltered. After fourteen years, Ludwig gave up, losing an estimated two-thirds of a billion dollars.

Ludwig, Ford, and the original developers of the Madeira-Mamoré found their pockets too shallow to persist in fighting the Amazon. The Brazilian government has no such limits with its Greater Carajas Development Program.

The Greater Carajas story begins in 1967 when a Brazilian geologist, whose helicopter was forced down in the Carajas region, discovered an El Dorado of mineral riches: mountains laden with gold, copper, manganese, bauxite, nickel, tin, and other valuable minerals. Eighteen billion tons of iron ore deposits — the world’s purest — made Carajas among the world’s two or three largest finds. Attempts to exploit these reserves went nowhere until 1980, when the Brazilian government announced a $62 billion plan to create an agro-industrial complex of mines, smelters, dams, railroads, ports, ranches, and plantations. This Greater Carajas Program encompasses an area in the eastern Amazon the size of Great Britain and France combined.

The Carajas plan includes 25 privately owned pig iron smelters, their investors lured into the Amazon by generous tax deductions. To fuel the smelters, some 58,000 square kilometers of primary Amazonian rainforest will be converted into charcoal. For the operation to be financially viable, the rainforest’s trees have to come free and the environmental costs of destroying the rainforest have to count as zero. The Brazilian government made both assumptions in justifying the project. When the nearby stands run out, the private smelters will likely be forced to shut down, leaving a ruined rainforest behind them.

THE RAINFOREST may not have the strength to recuperate from these repeated assaults. With the incursions now so frequent, with roads now piercing the protective bubble that had previously protected the Amazon from man, the one species who could destroy it, the Amazon may fall along with its despoilers.

Some 500,000 landless peasants and 50,000 cattle ranchers, none of them individually as threatening as Ford, Ludwig, or the Brazilian government, have collectively become the major engine of destruction. Traveling along highway BR-364, the road which replaced the Madeira-Mamoré railway, lured by government ads promising free rich land and a better life, they would discover that the Amazon’s verdancy sprang not from its soil but from the canopy of life above it.

Within a few years of their arrival, vast areas of destroyed Amazon rainforest could be spotted from space, clouds of smoke replacing what were once the rainclouds of the greatest river basin on earth. In this way, the world’s most concentrated, diverse, and ordered habitat has become a commons that is fast devolving into a desert.

The peasants plant subsistence crops, exhausting the soil after a few years. When crops fail, they move further into the forest, burning and planting, failing, and then moving further in again. In their wake come ranchers who consolidate the cleared land to graze exotic species of cattle.

But Amazonian soils make poor pastures. The minerals held in the rainforest’s lush vegetation, though released to the soils upon clearing, soon vanish. As the pastures’ nutrient value declines, noxious weeds invade. Incapable of supporting grasslands, the pastures are abandoned, usually within ten years of the initial clearing.

There was much to draw the cattle ranching industry into the rainforest: cattle are a symbol of prestige and the cattle rancher, flanked by gleaming white herds, is a potent image of the wealthy frontiersman. But status wasn’t enough: the government needed to provide lucrative tax incentives, subsidies, and outright grants to encourage the massive livestock projects — average size: 60,000 acres — favored by its Superintendency for the Development of Amazonia.

According to the World Bank, livestock subsidies cost the Brazilian government over $1 billion between 1975 and 1986. The British magazine The Economist calls it “the biggest known subsidy in history for ecological destruction, unrelieved by economic gain.”

Mammon, as much as nature, should persuade Brazil to conserve the Amazon. Much deforestation results from activities fostered by bad fiscal policies: from cattle ranching designed to mop up tax losses, from unprofitable hydro-electric schemes built to provide under-priced electricity, from iron smelting built with lavish state aid, from small farmers displaced by the subsidised mechanisation of big farming in the south. President Sarney has begun to put a stop to cattle-ranching subsidies. A strong, sensible government would save itself money, and ultimately create more jobs, by ending all such fiscal folly. Many of the schemes that spring up where the trees come down are intrinsically uneconomic.

The World Bank, which had lent a half billion dollars to this giant road-building and agricultural colonization project — called “Polonoroeste” or “North West Development Pole” — eventually admitted its mistake. World Bank President Barber Conable, on the U.S. public affairs program 60 Minutes, described the Polonoroeste project as “a sobering example of an environmentally sound effort which went wrong.” He explained that “the bank misread the human, institutional and physical realities of the jungle and the frontier.”

The Polonoroeste project, by providing access on a scale unknown before, threatens the destruction of an area of the Amazon the size of Great Britain. Indian lands are systematically seized, generally without compensation, and Indian economies destroyed. The livelihoods of non-Indian dwellers — mainly rubber tappers who for generations had collected rubber, Brazil nuts, and rainforest products — are also threatened.

Defying reason, the Inter-American Development Bank followed in the World Bank’s footsteps and financed an extension of highway BR-364 still deeper into the Amazon, heightening tensions between the rubber tappers and Indians on the one hand and colonizers, especially the cattle ranchers, on the other. Their conflict over land led to hundreds of murders, including the assassination of Chico Mendes, the now legendary union leader of the rubber tappers.

With the razing of the rainforest came disease. The malaria-carrying mosquitoes, which had formerly restricted themselves to monkeys and other creatures in the jungle’s upper canopy, discovered the ever expanding human population on the ground, making malaria endemic and leading the Brazilian government to declare the area a national public health emergency zone. To counter the malaria epidemic which threatened its development plans, the World Bank lent the state of Rondonia $99 million for a mosquito eradication program, with DDT its choice of pesticide.

IN INDONESIA, AS IN BRAZIL, the state spent billions of dollars — most of it raised through foreign loans or from oil revenues — to colonize the rainforest. The Indonesian program, called Transmigration, is a modern-day version of the old North American homesteading: residents of Indonesia’s densely populated central islands were relocated in the sparsely populated, rainforested islands such as Kalimantan (formerly Borneo) and Irian Jaya (western New Guinea).

Those who originally challenged the transmigration program as a thinly veiled experiment in social engineering, and as an unprecedented gamble with the last great rainforests of Asia, have been borne out. Millions of dollars, many lives, and vast expanses of destroyed tropical rainforests later, transmigration is a dismal failure.

Thousands were moved to areas with water available only six months a year, with soil unsuited to farming. Many abandoned their plots only to join the ranks of shifting cultivators or illegal loggers: an estimated 300,000 of those who remain languish at impoverished farms. Exotic pests introduced by the transmigrants decimated crops. The rat population exploded on the rotting remains of burned and bulldozed rainforest. To counter these pests, peasants saturated their fields with chemicals, leading to humans poisoned by DDT and Klerat, a rodentcide. As in Brazil, malaria spread among the migrant population.

The native people, who once counted the rainforest as their home, have had their land and their means of subsistence mercilessly eroded, with clashes between them and settler communities on the increase.

The environmental horrors aside, there is not even a semblance of an economic argument to help justify this enormously destructive scheme: the World Bank, one of the main financiers of the transmigration operation, merely explains that the project has “unquantifiable economic and social benefits,” citing hoped-for benefits from increased food security and improved regional development — precisely the opposite of what transmigration has brought.

As in the rainforests of the Americas, investments in other environmentally risky endeavors the world over — especially large dams — were ending in financial disaster. What were touted as engineering miracles instead turned out to be technical nightmares and financial drains on the people they were meant to enrich.

Guatemala’s Chixoy hydro dam was one such example. Completed in 1983, the dam was closed six months later when a 26-mile tunnel feeding water to the power station collapsed. This feeder tunnel, one of the longest ever built in Latin America, cut through unstable geological formations, including gypsum, a soluble rock, where the collapse eventually occurred. Repairing it — an operation that involved lining the tunnel with steel — took four years and helped triple the dam’s cost to $1 billion.

Through this entire fiasco, the financiers of Chixoy were always at the ready to lend more money to help see the project through. The Inter-American Development Bank, with cofinancing from several commercial banks and the World Bank, financed the construction of the dam, then the repairs to the tunnel, and eventually when soil erosion threatened to cripple the dam they financed plans for corrective action including reforestation and soil reclamation. In the end, this hoped-for economic boon had become a boondoggle responsible for a third of Guatemala’s $2.5 billion foreign debt.

In the Dominican Republic, the Tavera dam — its productive life already shortened — is threatened by swaths of hillside that sweep into the turbines with the rains. Dominicans have had to borrow more to dredge out the muck. Meanwhile, their Valdesia dam is impoverishing them as well, and for similar reasons. Because its deforested hills choke the reservoir with silt, it is becoming useless.

In China, siltation is so severe that the Sanmenxia dam had to be decommissioned just four years after completion, and the Laoying reservoir was retired even before dam construction was completed. In Colombia, the lower Anchicaya reservoir filled with silt within the first decade of operation, and the silt-laden Guatavita hydroelectric complex operates at one-sixth capacity.

When not crippled by high silt loads or by weed growth and acidic water, dams built in the last 40 years have often been crippled by lack of water. Ghana’s Akosombo Dam — financed by the World Bank, various national aid agencies, and the export credit agencies of the U.S. and the U.K. — has for years provided between 40 and 80 per cent of its intended power because the Volta River has too little water to keep the dam’s reservoir filled. In Peru, engineers designing the Carhuaquero dam discovered that the river had insufficient water before it was completed.

Brazil’s Balbina dam similarly ran short of water. Its drainage basin — the surrounding area from which rainfall drains into the river — turned out to be only eight times larger than the reservoir itself, very small as hydroelectric dams go. As a result, water would flow into the reservoir too slowly to replenish the outgoing water generating the electricity: Balbina had only enough water to produce 112 megawatts — less than half the amount promised. Combined with cost overruns that doubled the original estimate, Balbina is doing more to bankrupt the economy than to enrich it.

Dams have also become nightmarish investments when they’re designed for irrigation. Waterlogging from large irrigation systems has destroyed millions of acres of Third World farmland at a cost of billions of dollars. In the Indian state of Uttar Pradesh, a massive irrigation project designed to boost food production waterlogged 20 per cent more land than it irrigated, reducing overall food production. Throughout the Third World, irrigation takes as much land out of production each year, through waterlogging and salinization, as it brings into production.

Large-scale irrigation schemes were just one part of the Green Revolution — a package of agricultural techniques promoted to end hunger in hapless Third World countries forever. The rest of the package, which was promoted in the Asian countries in the 1960s, included fertilizers and pesticides, mechanization, and new seed varieties genetically engineered to provide higher yields. Like other revolutions blinkered by dogma, the Green Revolution has often failed spectacularly.

After 15 years of collecting data from Indonesia’s rice fields, the International Rice Research Institute found that insecticides, though exorbitantly expensive, did not improve that country’s rice yields. Several hundred species of insects normally live in a rice field, and for every insect that is a pest many more are natural predators which do not damage the rice but feed on the pests that do. By upsetting the delicate balance between pest and predator which had evolved over 3,000 years of rice farming in Asia, pesticides cause havoc.

Before the Green Revolution, the brown planthopper was a minor pest in the rice crops of Java and north Sumatra. By 1976, because it was resistant to the pesticides which were destroying its predators, the planthopper devastated over 500,000 hectares, destroying 350,000 tons of rice — enough to feed three million people for an entire year. Efforts to eradicate the planthopper with higher doses of pesticide proved a costly failure.

When another outbreak of brown planthopper plague appeared imminent in 1986, the Indonesian government reverted to pre-revolutionary techniques: it cut pesticide subsidies and banned many pesticides from rice fields. Within a year pesticide use fell by more than half, natural predators thrived, and the planthopper population in pesticide-free fields declined by 75 per cent. Crop yields soared, and the government saved a small fortune in subsidies.

Scores of debt-financed development projects have become outright money losers when their physical and environmental repercussions were ignored. But sometimes developers can insulate their projects from the environment’s wrath, making the projects themselves appear viable. All too often, in those cases, society as a whole, and future generations, pay for the environmental sins of the destroyers.

Sources and Further Commentary

For details on the various attempts to conquer the Amazon see The Fate of the Forest: Developers, Destroyers and Defenders of the Amazon by Susanna Hecht and Alexander Cockburn, Verso, London, 1989 and Jacques Cousteau’s Amazon Journey by Jacques-Yves Cousteau and Mose Richards, Harry N. Abrahams, Inc. Publishers, New York, 1984. The quotation by the European owners of the Madeira-Mamoré Railway was made by The [British] Public Works Company in 1873, to the British financial assessors, who subsequently issued a harsh post-mortem on the project. More details, including the quotation, can be found in Susanna Hecht and Alexander Cockburn’s book, pages 55 and 65.

For details on the Grande Carajás project see Susanna Hecht and Alexander Cockburn (as above); Bound in Misery and Iron by Survival International, London 1987; The Greater Carajás Programme: An Update, Survival International Information Pack, London, February 1989; “The `Greening’ of the Development Banks: Rhetoric and Reality” by Bruce Rich in The Ecologist, vol. 19, no. 2, U.K., 1989; “The Charcoal of Carajás: A Threat to the Forest of Brazil’s Eastern Amazon Region” in AMBIO, Sweden, vol. 18, no. 2, 1989; “Grande Carajás, International Financing Agencies, and Biological Diversity in Southeastern Brazilian Amazonia” by David C. Oren, and “Deforestation and International Economic Development Projects in Brazilian Amazonia” by Philip M. Fearnside in Conservation Biology, vol. 1, no. 3, October 1987; “The Militarization and Industrialization of Amazonia: the Calha Norte and Grande Carajás Programmes” by David Treece in The Ecologist, vol. 19, no. 6, U.K., November/December 1989; “Amazon Rainforest Project Hurtles Towards Disaster” by Catherine Caufield in The New Scientist, London, February 26, 1987.

Information on subsidies that have led to rainforest destruction can be found in “A Prescription for Slowing Deforestation in Amazonia” by Philip M. Fearnside in Environment, vol. 31, no. 4, U.S., May 1989; “How Brazil Subsidises the Destruction of the Amazon” in The Economist, U.K., March 18, 1989; “The Month Amazonia Burns” in The Economist, U.K., September 9, 1989; “Plundering the Amazon: Notes on the Greater Carajás Program” by Atila P. Roque in AMPO Japan-Asia Quarterly Review, vol. 20, no. 4 and vol. 21, no. 1, 1989; “Time to tackle the threat” by Tom Wicker from The Globe and Mail, Toronto, November 29, 1988; Brazilian Policies That Encourage Deforestation in the Amazon by Hans P. Binswanger, The World Bank Environment Department Working Paper no. 16, April 1989.

For information on the Polonoroeste Project in Brazil see letters from the Environmental Defense Fund (Washington) and copies of EDF staff lawyers’ testimony to the U.S. Congress. Also see the following articles: “Debacle in the Amazon” by Pat Aufderheide and Bruce Rich in Defenders, U.S., March-April 1985; “World Bank urged to halt aid to Brazil for Amazon development” by Erik Eckholm, The New York Times, October 17, 1984; “Payments stopped on loan to Brazil” by Clyde H. Farnsworth in The New York Times, April 9, 1985.

Much has been written about Indonesia’s Transmigration Program, especially by Survival International (U.K.), the Environmental Defense Fund (Washington), and The Ecologist (U.K.). See in particular, “Transmigration in Irian Jaya: Issues, Targets and Alternative Approaches” by George J. Aditjondro in Adverse Environmental and Socio-cultural Impacts of World Bank Financed Transmigration Under Replita IV, April 28-29, 1986; “Indonesia’s population relocation: the high costs of failure” by Charles P. Wallace in Los Angeles Times, January 6, 1990; Transmigrasi: Myths and Realities, Indonesian Resettlement Policy, 1965-1985 by Mariël Otten, International Work Group for Indigenous Affairs Document no. 57, Copenhagen, October 1986.

For information on the demise of big dams see the three volumes in The Social and Environmental Effects of Large Dams by Edward Goldsmith and Nicholas Hildyard, published by the Wadebridge Ecological Centre, U.K., 1984. The details on hydro dams throughout this book are filed in Probe International’s Hydro File, a collection of data and articles on approximately 800 hydrodams around the world. For information on the Chixoy project in Guatemala see various issues of International Water Power and Dam Construction, U.K., in particular June 1986 and July 1986; Central American Report June 3, 1983, January 20, 1984, May 11, 1984, and December 6, 1985. According to the last, after critics publicly charged the National Institute of Electrification with government impropriety and warned that Chixoy’s tunnel was doomed to collapse again, General Oscar Sandoval, superintendent of INDE, said that “those who criticize the repairs of Chixoy on the basis of speculation are bad Guatemalans.” Also see “Guatemala: A development dream turns into repayment nightmare” by Christopher L. Bryson in The Christian Science Monitor, U.S., Friday, May 1, 1987; Efectos Sobre el Ambiente de Proyectos Financiados Por Bancos Multilaterales de Desarrollo en Guatemala by Amb. Tulio Monterroso Bonilla and Dr. Oscar R. Murga Solares para Asociacion “Amigos del Bosque,” Guatemala, December 1989.

For information on the other dams mentioned see “Prospects for Large and Small Hydro Development in Peru” by P. Wicke in International Water Power & Dam Construction, U.K., July 1987; “Debt crisis is inflicting a heavy human toll in Dominican Republic” by Charles F. McCoy in The Wall Street Journal, April 20, 1987; “IDB Grants $772,000 for Conservation Study in the Dominican Republic,” Inter-American Development Bank Press Release, November 15, 1989; “Was Ghana’s Akosombo Dam the Best Option?” in World Water, U.K., September 1989; “Electricity rationed” in The Globe and Mail, Toronto, December 17, 1983. The Balbina dam in Brazil is plagued by more than just an unusually small watershed: according to Philip Fearnside, “Aquatic vegetation, together with the large surface area per volume of water in a shallow reservoir will lead to heavy losses of stored water to evaporation and transpiration.” In addition, Dr. Fearnside points out that the residence time of water in Balbina’s reservoir will be so long (as long as several years, compared to 1.8 months for Tucurui) that the decomposing vegetation at the bottom of the reservoir will produce acids that will cause corrosion of the turbines. (See Brazil’s Balbina Dam: Environment Versus the Legacy of the Pharaohs in Amazonia, INPA, Manaus, Brazil, 1989.) For details on India’s irrigation record see “The case against big dams” by B.B. Vohra in Daily Indian Express, Bombay, March 20, 1989.

For details of the Green Revolution in Asia see “Green Counter-Revolution: Getting Rid of Pesticides” by Ian Steele in Development Forum, New York, September-October 1990.