Illustration: Paul Aitchison
Illustration: Paul Aitchison

Whose woods are these?

Could opening up to foreign investment improve Burma’s forest protection – or will it fuel the same industries that have contributed to the country’s rampant deforestation?

Long known for its repressive military government, Burma has experienced a breathtaking degree of change within a relatively short span of time. Only last month, Nobel Peace Prize winner Aung San Suu Kyi, who spent 15 years under house arrest for her opposition to the Burmese government, took her seat in the country's parliament.

However, the transformation is hindered by the lack of a political solution to long-standing conflicts in many of Burma's ethnic areas: some ethnic states are operating under fragile ceasefires, while in Kachin State, fierce fighting between the army and Kachin resistance groups continues. In spite of this, governments around the world have responded enthusiastically to the promise of democratic reform in Burma. The US and the European Union have relaxed their long-standing trade sanctions: the EU has given its companies the green light to invest in Burma, and has suspended its ban on Burmese imports such as timber, gems and precious metals. International financial institutions such as the World Bank and the Asian Development Bank have also begun cautious re-engagement with Burma. All in all, a country that was once an international pariah is bracing itself for an influx of foreign direct investment and development aid over the next few years.

Yet this flood of money could spell disaster for one of Burma's most vital economic, ecological, and social resources – its forests.

Burma is home to large swathes of what remains of the Indo-Burma forest, a key global biodiversity hotspot that Conservation International calls one of the most threatened forests on the planet. The country contains Asia's most extensive intact tropical forests, but these forests are rapidly disappearing. Currently, 47% of Burma's land is forested – 14% less than in 1975. Deforestation in Burma has accelerated sharply since the late 1980s, and the country now has one of the highest rates of deforestation in the world. In addition, much of the existing forest land is being thinned out and degraded, according to the recent Burma Environmental Working Group report, 'Advocating for Sustainable Development in Burma'.

Burma's forests are of particular economic, social, and cultural importance to the country's minority ethnic and indigenous communities, many of whom depend on the forests for food, fuel, shelter, and medicine, and use traditional methods to sustainably manage these resources. Deforestation has a devastating effect on these communities. Indigenous peoples and minority ethnic groups constitute about 40% of the country's population, and the majority live in the border regions. Most of Burma's intact forests are in ethnic areas.

Despite the central role that forests play in their lives, ethnic and indigenous peoples are largely excluded from the Burmese government's decisions on forest resources. The situation is complicated by the fact that Burma's government continues to clash with armed resistance groups in ethnic states: the most valuable forests in Burma are divided among areas administered by the government, areas under the de facto control of ethnic militias, and contested regions, where armed conflict only worsens the environmental destruction.

Big money
To predict the effect that recent political changes could have on Burma's forests, it is essential to understand the factors that have driven deforestation over recent decades.

Logging – long a major source of income both for Burma's national government and for armed ethnic resistance groups (who grant timber concessions in the areas they control) – has done a lot of damage. According to the UN's Food and Agriculture Organisation, Burma's stock of commercial timber has fallen almost 20% just since 1990. Whether it is the government or armed groups who control the timber trade in any given area, local communities rarely receive any income or benefit from timber sales.

The most serious destruction, especially from illegal logging, has occurred in ethnic areas along the borders with China and Thailand, which, along with India, are among the biggest importers of Burmese timber. While China's 2006 crackdown on illicit timber imports reduced the amount of timber leaving Burma, illegal logging is still rife. The lifting of EU sanctions on sought-after Burmese teak and other forest products could lead to an increase in demand within this already lucrative industry – a heady incentive for both legal and illegal logging to continue.

However, logging is not the only threat to Burma's forests. A series of mega-development projects, especially in the energy sector, have led to wide-scale confiscation and clear-cutting of forest land, particularly in ethnic areas. The construction of these projects has meant the forced relocation of thousands of local indigenous people, and the NGO Earthrights International has tracked a significant increase in human rights violations, often carried out by the Burmese military, in project areas. Hydroelectric dams, mining, and gas extraction are among the biggest threats. These projects are frequently funded by neighbouring countries, such as China and Thailand, and the energy generated is mostly sold to these countries, even though Burma is facing a serious shortfall in energy for its own citizens.

Dams flood large areas and contribute to the degradation of surrounding forests through erosion. According to the Burma Environmental Working Group's research, an estimated 48 hydroelectric dams are planned or currently operating in Burma. To take just one example, the planned Tasang Dam, designed to be the highest in Southeast Asia, would submerge 870 sq km of land, including extensive areas of Shan State's remaining teak forests. Mining operations, especially pit mining, also require clear-cutting and produce pollution that can severely damage forests within a wide radius. Research by one ethnic NGO, the Pa-Oh Youth Organisation, has linked coal mining in Burma with air pollution and acid rain. Meanwhile, pipelines like the Yadana Pipeline project – a natural-gas line, run by Total and Chevron that was Burma's largest single foreign investment project when it was built – disrupt entire forest systems. According to Earthrights International, the vast area of rainforest cleared for the Yadana Pipeline provided poachers with easy access to the forest, and illegal hunting drastically increased.

Mega-projects will almost certainly continue to play a major role in Burma's development. The energy sector is among the government's largest sources of income; between 1998 and 2009, the Yadana Pipeline alone earned the government USD 4.6 billion. However, even that figure is dwarfed by the projected profits from the Shwe Gas project, an oil and natural-gas extraction operation and pipeline meant to come online next year. The project, funded by China's state-owned National Petroleum Company, will mean an annual profit of USD 1 billion for the government over the next thirty years. And there is more at stake than just the potential profits. Only 25% of Burmese households are connected to the electricity grid, and there is public pressure for the government to increase energy production. May 2012 saw mass protests in Mandalay over the lack of access to reliable electricity. As long as the energy sector remains economically and politically crucial, and is the leading destination for foreign investment, it will be difficult to stem deforestation caused by large-scale energy projects.

Finally, Burma's forests have suffered from the spread of monocrop agriculture. Burma's current laws on land tenure inadequately protect small farmers, especially in ethnic areas, where families are less likely to have documents for the lands they have occupied for generations. This makes it easy for large agribusinesses to acquire land, much of which is then clear-cut to make way for commercial plantations producing rubber, jatropha, and palm oil. In recent years, the amount of land covered by large, monocrop plantations has spiked dramatically. The Thai energy company PTT Plc has announced that it will buy up 200,000 hectares of land in Burma, at the cost of USD 1 billion, in order to grow oil palms. Several major Indonesian palm oil companies are also currently in talks with the Burmese government.

Of the development aid and foreign investment expected to flow into Burma over the next several years, a large chunk is likely to fund the very industries that have proven damaging to Burma's forests in the past: mining, mega-development projects, and monocrop plantations. In 2010-2011, an unprecedented USD 20 billion in foreign direct investment was pledged to Burma, almost all of it from other Asian countries, with China leading the way and Thailand and South Korea following closely behind. Overwhelmingly, this investment was concentrated in the lucrative energy sector, split between the exploitation of oil and gas in the country and the electricity industry, primarily hydroelectric dams. It is not a stretch to imagine that with sanctions lifted, American and European companies will seek to compete in these sectors as well. Given the low levels of access to electricity for Burma's citizens, the energy sector is likely to be one focal point for international development aid, too. And with the opening up of Burma's economy, the US and Europe could also provide new markets for Burma's mining and forestry products.

Who regulates whom?
At the national level, Burma lacks effective laws to limit deforestation. In its 2006 National Sustainable Development Strategy, the government initially pledged to set aside ten percent of the country as protected land by 2010. However, recent government strategies have pushed this goal back to 2030. Only about five-and-a-half percent of Burma's land has been set aside so far, and the government admits that even these areas have not been adequately protected. In 2012, Burma passed a sweeping environmental protection law – but while the law establishes an environmental ministry with the power to regulate potentially damaging development projects, it does not put any actual policies for forest conservation in place. Worse, Burma does not require any environmental impact assessments for development projects.

However, there are encouraging signs. In the past year, the Burmese government surprised activists and the public by consenting to suspend plans for two potentially destructive projects: the Myitsone hydroelectric dam, and a coal-fired power plant that was to be part of a new special economic zone at Dawei. In both cases, the government cited environmental concerns. Burma's government also frequently voices its support for forest conservation and green economic growth, recently touting its forestry policies at the ASEAN-China Environmental Cooperation Forum. As Burma is increasingly in the public eye, and will chair ASEAN in 2014, there is rising pressure for the government to back up its rhetoric on conservation. Still, it is unclear how the government plans to reconcile such assurances with hugely lucrative investment plans.

Weighed against the risks of foreign investment is the hope that foreign governments and international financial institutions will be scrupulous in making sure the development projects they back adhere to the donors' own environmental regulations – which could even help raise environmental standards for other development projects in Burma. However, in the absence of national regulations, donors and investors may not have the will or the ability to enforce and monitor environmental regulations on the ground.

Any genuine solution to the problem of deforestation in Burma must begin by empowering indigenous and ethnic forest communities. These communities not only suffer the worst effects of deforestation, they also possess centuries' worth of local knowledge that can make forest and biodiversity conservation programmes more effective. Enabling local communities to actively participate in the decision-making process for new land-use plans, development projects, and protected forests is crucial, especially if these initiatives are to conserve forests while making sure that local people are still able to use forest resources sustainably. Well-informed and mobilised communities can also hold government or militia leaders to account for their environmental decisions.

Some communities in Burma have had success in establishing community forests, a programme that allows them to officially gain tenure of and manage their ancestral forests. According to the Burma Environmental Working Group's research, this scheme now covers 101,000 acres of forest and over 40,000 local people. Establishing community forests not only prevents the land from being sold to developers, but also allows communities to shape their own conservation plans, allowing for sustainable forest use. Many community forest schemes include agroforestry to improve local communities' food and fuel security. A number of communities have also introduced bee-keeping or tea planting within their community forests, and in many cases the income from honey and tea sales means that fewer villagers need to hire themselves out for manual labour outside the community to support their families. The process of managing a community forest can even improve local governance and empower indigenous communities in other areas. For example, local women on the management committee of one community forest in Karen State went on to form a biodiversity research team, studying and promoting the conservation of traditional medicinal plants in the region.

However, obtaining permission to establish a community forest can be difficult, as can enforcing the forest boundaries against logging and poaching. Some communities have also found that community forests take time and land away from necessary agricultural work, or that they require an investment in seedlings and equipment. The community forest scheme is a valuable foundation, but it needs reform – including a streamlined registration process, as well as training and initial material support for communities – in order to be more effective.

At the international level, governments, companies, and financial institutions need to consult closely with, and rely on the expertise of, local forest communities. They must also be able to ensure that projects in Burma are carried out to global industry standards (including conducting environmental impact assessments), regardless of national laws in place. In addition, governments, particularly in Asia, can help address the problem of deforestation by imposing and enforcing stricter regulations on Burmese exports like timber. If one of the most biodiverse and crucial forests in the world is to survive, Burma needs effective environmental regulations – and ethnic forest communities need to be heard.

~ Catherine Martin is Climate Change Advisor for the Burma Environmental Working Group, which has recently published guidelines for new investments in Burma.

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