VZCZCXRO9926
RR RUEHBZ RUEHDU RUEHGI RUEHHM RUEHJO RUEHLN RUEHMA RUEHMR RUEHPA
RUEHPB RUEHPOD RUEHRN RUEHTRO
DE RUEHDS #0189/01 0241214
ZNR UUUUU ZZH
R 241214Z JAN 08
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC 9288
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUEHBS/USEU BRUSSELS
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAEPA/HQ EPA WASHINGTON DC

UNCLAS SECTION 01 OF 03 ADDIS ABABA 000189 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR OES/PCI OES/ETC AF/E AF/FO EEB/IEC 
DEPT PASS TO USF&W FOR INT. CONSERVATION AND CITES 
DEPT PASS TO USAID 
EPA PASS TO MERCURIO 
 
E.O. 12958: N/A 
TAGS: SENV ENRG EAGR ECON EAID ET
SUBJECT: ELEPHANTS AND BIOFUEL DON'T BLEND 
 
-------- 
SUMMARY 
-------- 
¶1. (U) The conflict between conservation and investment in Ethiopia 
has escalated.  Caught in the cross-fire is a chronically food 
insecure community that welcomes the opportunity to grow a cash 
crop.  In 2007, the regional government of Oromia granted the 
Israeli-German firm, Flora EcoPower (FEP), thousands of hectares of 
land both outside and within the Babille elephant sanctuary - a 
federally managed transboundary park - in order to grow castor beans 
for bio-fuel and other export uses.  The clear cutting of sanctuary 
forest by FEP threatens the elephants' ability to access water and 
forage resources. End Summary. 
 
---------- 
Background 
---------- 
¶2. (U) The rapid reduction in the number of African elephants 
(Loxodonta africana) due to loss of habitat and poaching has placed 
them on CITES' Appendix 1 for endangered species.  According to 
wildlife experts, Ethiopia has lost about 90% of its elephant 
population since the 1980s.  There are currently less than 1220 
elephants in Ethiopia, split among isolated pockets of protected 
areas and unprotected peripheral areas-two in the northwest, two in 
the west, three in the southwest, one in the south, and one in the 
southeast.   Babille Elephant Sanctuary, spanning parts of both 
Oromia and Somali Regions, sustains Ethiopia's largest elephant 
population of at least 323 individuals.  This population has been 
isolated from Ethiopia's other elephant populations for over eighty 
years; it is the last relic elephant population in the far Horn of 
Africa. 
 
¶3. (U) Babille Elephant Sanctuary (7000 sq. km; 4350 sq. miles) was 
created in 1970 by Emperor Haile Selassie to protect elephants and 
other large mammals including the Black-maned lion, leopard, 
cheetah, and over 250 endemic plant and bird species.  At that time 
human influence was minimal, the main interference being subsistence 
agriculture and charcoal making on the road from Babille to Jijiga. 
Illegal activities such as poaching, charcoal making, and the 
encroachment of subsistence agriculture and grazing, have since 
reduced the practical boundaries of the sanctuary, posing a threat 
to the species within.  Elephant numbers have been declining for 
several decades, and they have lost about 82% of their range in 
areas surrounding the sanctuary since 1970.  With no effective 
conservation strategy in place, scientists working in Babille 
believe the Babille elephants are in danger of becoming extinct, 
with the greatest threats being habitat loss and conflicts between 
elephants and local residents. 
 
¶4. (U) As a transboundary protected area, management of Babille is 
under federal authority.  In an effort to regain control over park 
boundaries, while recognizing the physical and economic needs of 
surrounding villages, the Ethiopian Wildlife Department (EWD) 
conducted a wildlife survey in Babille in May 2006.  The EWD drafted 
a re-demarcation plan based on this survey.  Pending adoption of the 
EWD's re-demarcation plan, the Oromia Regional Government granted a 
land concession in early 2007, much of which was within current park 
boundaries, to a German-registered, Israeli-owned company, Flora 
EcoPower (FEP), for castor bean production with the intent to 
produce crude castor oil for export sale to the biofuel and 
cosmetics/pharmaceutical industries. 
 
--------------------------- 
Conservation vs. Investment 
--------------------------- 
¶5. (U) The Investment Commission of the Oromia regional government, 
without regard for formal legal procedures calling for technical 
consultations, gave 10,000 hectares of land in and adjacent to the 
northwest portion of the park to FEP.  Environmentalists and other 
concerned individuals were upset at this concession-the first time a 
sanctuary designated for wildlife protection was given over for 
investment-and demanded that both regional and federal governments 
intervene to stop clearing within the sanctuary and form a taskforce 
to assess the situation and formulate a response.  In a meeting with 
an official from the EWD in May 2007, the Regional Environmental 
Assistant (REO/A) was told that the investor had already cleared 
approximately 1000 hectares and had not yet made any promises to 
stop clearing.  The number of hectares is disputed-some experts 
claim 5000 hectares were cleared.  According to EWD observations, 
elephants were not leaving the sanctuary and water holes were still 
intact, but clearing had taken place in an important elephant 
 
ADDIS ABAB 00000189  002 OF 003 
 
 
corridor and feeding grounds between valleys in the northwestern 
section of the sanctuary. 
 
¶6. (SBU) The EWD also found that the sizes of the castor plots shown 
on the investor's map are smaller than the plots on-site.  The 
actual size indicates that FEP cleared more forest area than it 
reported.  The EWD reported that over 56% of the current farm plots 
granted to Flora EcoPower are found within the most important 
elephant habitat and block the main elephant corridor.  Thus, the 
elephants have no room left for further movement.  The EWD further 
states that if the last remaining habitat is destroyed this endemic 
subspecies will face extinction. 
 
¶7. (SBU) By June 2007 negative press in Ethiopia and Europe led to 
growing public awareness about the investor's activities in the 
sanctuary.  In a meeting with embassy representatives in October, 
the investor claimed he became aware that they had cleared plots 
inside a protected area only when the issue was presented in the 
German press in June 2007.  FEP shares are traded on the German 
stock exchange and sales dwindled after the release of the story. 
According to all parties involved, it was at that point the company 
agreed to stop all clearing and new cultivation within sanctuary 
boundaries.  FEP's senior representative in Ethiopia claimed "even 
if the regional government says yes, we won't clear any more in the 
protected area."  In an agreement among local NGOs and FEP that was 
brokered by the German and Israeli Embassies it was decided that 
plots within the sanctuary that were already cleared and under 
production would remain so for the productive life cycle of the 
castor bean plant (about three years).  All of the stakeholders and 
regional and federal officials agreed to a "gag order" pending a 
decision by the Deputy Prime Minister.  In fact, attempts by the 
Regional Environment Office (REO) to get information in October were 
repeatedly rebuffed. 
 
¶8. (SBU) According to a credible source, no further clearing and 
cultivation has taken place within official sanctuary boundaries. 
The EWD is using the official 1970 Ethiopian Environmental 
Protection Agency (EPA) maps for Babille Elephant Sanctuary, while 
regional authorities are using recent maps with proposed new 
boundaries that show agricultural encroachment within the park and 
bolster arguments to degazette the park accordingly.  The EPA maps 
from 1970 indicate that more than 80 per cent of the land plots 
granted to FEP are within the sanctuary.  Of this, more than three 
quarters are within the present range of the current elephant 
population.  Global positioning systems (GPS) and maps indicate that 
most of the cultivated areas are more than 4 kilometers deep into 
the sanctuary.  Maps that show the proposed re-demarcation indicate 
that more than 50 per cent of the concession would be within 
sanctuary boundaries. 
 
-------------------------------------------- 
Regional vs. Federal Jurisdiction 
-------------------------------------------- 
¶9. (SBU) Babille is split between two regional states, Oromia and 
Somali.  The federal government has total jurisdiction under 
Ethiopian law due to the transboundary nature of the protected area. 
 Notwithstanding, the Investment Commission of the Oromia Regional 
Government granted the concession to FEP without consulting federal 
authorities. According to credible sources the investor commenced 
clearing without the knowledge or approval of federal officials or 
consultation with technical personnel at zonal and regional levels. 
The source also indicated that he was subject to intimidation by the 
Chief Administrator, including being taken to the police station, 
and was banned from traveling to the site until October 2007. 
Sources from the Ministry of Agriculture and the investor emphasized 
that the Oromia regional government picked the site and gave it to 
the investor. 
 
¶10. (U) In addition, no environmental impact assessment (EIA) was 
completed as required by Ethiopian law. According to numerous 
sources, no contact was made with regional or federal environmental 
authorities before the agreement was reached.  In the normal course 
of activity, the Oromia region Environment Bureau should have been 
informed of and provided with an EIA for lands under federal 
jurisdiction, they would then have forwarded the EIA on to the 
federal EPA for review.  Since no report was submitted, EPA was out 
of the loop at both regional and federal levels. 
 
¶11. (U) In August, the Ministry of Trade and Industry called the 
first high-level meeting of stakeholders from all sides of the issue 
to address conflicting equities as reported in the press.  One month 
 
ADDIS ABAB 00000189  003 OF 003 
 
 
later the Deputy Prime Minister called another high-level meeting to 
discuss the issues.  In September stakeholders agreed that a team 
consisting of the Institute for Biological Diversity and 
representatives from relevant regional and federal government 
departments would go to Babille and make a recommendation that would 
be a "win for both conservation and development."  The group, 
including the regional chief, was expected to report their 
recommendations back to the Deputy Prime Minister in mid-October. 
To date, no report has been made. 
 
------------------------------------ 
Biofuel Production vs. Conservation 
------------------------------------ 
¶12. (U) The State Ministry of Agriculture claims local communities 
are pleased with the concessions because of the employment 
opportunities it provides.  FEP claims that they are focused on a 
"community farming model" where they provide seeds, fertilizer, and 
water to farmers with plans to cultivate up to 200,000 hectares of 
castor bean in the coming five years.  They also discussed plans for 
secondary assistance in the form of health clinics and schools, but 
no movement has been witnessed on these activities. 
 
¶13.  (U) FEP claims to have invested at least 11 million USD secured 
from European sources in its castor oil venture.  Part of that 
investment includes a recently completed castor oil production 
factory.  The factory produces crude oil from the castor bean that 
will be exported for use in biofuels or the cosmetics/pharmaceutical 
industry.  At its inaugural ceremony, Oromia State Chief 
Administrator, who referred to the project as "environment 
friendly," reiterated the government's strong support for the 
investors that are playing an important role in Ethiopia's 
development.  The GOE encourages this type of direct foreign 
investment for several reasons: it narrows the trade deficit because 
all foreign currency coming in passes through the Ethiopian banking 
system and it diversifies non-traditional exports.  In addition, 
according to GOE's Investment Proclamation, all but 10% of income 
from exports must be converted to Ethiopian currency within 28 days 
of sale. 
 
¶14.  (U) The Regional Administrator also expressed appreciation for 
the investor's decision to construct the factory in a relatively 
undeveloped area near Harar that is prone to famine and drought. 
The mill has a production capacity of 80,000 tons of crude oil (the 
current market price is 750-900USD per ton) and employs about 150 
people.  To reach that capacity 50,000 hectares need to be 
cultivated.  Current reports from the investor indicate that 
approximately 5000 hectares have been cultivated, most on "community 
farms." 
 
¶15.  (U) The investment also supports the Biofuel Development and 
Usage Strategy declared by the Ministry of Mines and Energy in 
August 2007.  Some key objectives in Article 4 include: to achieve 
foreign exchange savings by replacing imported petroleum with 
domestically produced biofuels; to accelerate agricultural and 
agro-processing facilities development by maximizing biofuel 
development; to create employment opportunities; to increase the 
productivity of agricultural lands; and to protect the environment 
from pollution and contribute to global efforts to stem the effects 
of this pollution through the use of biofuels.  Ethiopia's first 
priority for biofuels has been to focus on fuel blending using 
ethanol produced from sugar cane and benzene.  However, the export 
of all of the crude castor oil seems at odds with their overall 
biofuels strategy. 
 
------- 
Comment 
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¶16. (SBU) Comment: This situation starkly illustrates the 
consequences of promoting biofuel as an economic panacea. Not only 
is the elephant population of Babille facing increased habitat loss 
that may lead to their extinction, but the farmers of Oromia - a 
chronically food insecure area - are replacing sorghum, a staple 
crop, with a cash crop that faces an uncertain market.  While the 
market price of castor oil is currently high, there is the 
possibility that new EU definitions for sustainable biofuel 
(BRUSSELS 104) will limit the ability of Flora EcoPower to access 
world markets. End Comment. 
 
Yamamoto