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FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 1046
INFO RUEHSO/AMCONSUL SAO PAULO 1626
RUEHRI/AMCONSUL RIO DE JANEIRO 5808
RUEHRG/AMCONSUL RECIFE 7709
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 04 BRASILIA 000246 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR OES/PCI - L.SPERLING AND F.COLON 
DEPT FOR OES/ENCR - S.CASWELL AND C.KARR-COLQUE 
DEPT FOR OES/EGC - D.NELSON AND T.TALLEY 
DEPT FOR WHA/EPSC - L.KUBISKE 
 
E.O. 12958: N/A 
TAGS: SENV EAGR ENRG KSCA BR
SUBJECT: BRAZIL'S DEFORESTATION CYCLE (PART 3 of 3): GOVERNMENT HAS 
LIMITED ABILITY TO BREAK THE CYCLE 
 
REF:  (A) BRASILIA 224, (B) BRASILIA 229 
 
¶1.  (U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR 
INTERNET DISTRIBUTION. 
 
¶2.  (SBU) SUMMARY.  The Government of Brazil (GOB) has a limited 
ability to use "sticks," various law enforcement measures to control 
deforestation.  Even if it could obtain the tools it currently lacks 
(sufficient law enforcement units, clear proof of violations, judges 
willing to penalize, etc.), a massive crackdown would border on 
political suicide.  Illegal deforestation has benefited many, 
possibly millions, in the Amazon; an estimated 80% of the 
approximately 730,000 square kilometers that has been cleared since 
the 1970's was done illegally.  The Congress would be up in arms 
with a serious campaign against illegal deforestation; 33% of the 
Senators and 18% of the Chamber of Deputies come from the Amazon. 
The federal government has not yet tried "carrots" to halt 
deforestation.  Meanwhile, the GOB has a variety of programs that 
result in clearing forests, even though that is not the intended 
goal of these measures (e.g., the constitutional requirement that an 
owner must make "productive" use of agricultural land). 
 
¶3.  (SBU) This is the last cable in a three-part series on 
deforestation.  While we identify serious problems confronting the 
GOB's efforts to control deforestation, it does not follow that the 
situation is hopeless.  The GOB in fact has had a critical success 
with what sometimes is referred to as "constrangimento" or "guilty 
conscious" policy: raising environmental consciousness about 
deforestation in the political class.  Further, several policies and 
measures either have recently been introduced or are under 
consideration which could in the long run markedly help control 
deforestation: (a) improving forest management, especially with a 
new Forest Service law that established a system for granting forest 
concessions to responsible companies; (b) improving the land title 
registry system; and (c) lowering the Forest Code requirement that 
80% of forest on private property be conserved, which has been such 
a high standard that it has left most ranchers and farmers in the 
Amazon outside of the law.  END SUMMARY. 
 
¶4.  (SBU) Government policies of establishing settlements in the 
Amazon alongside roads and soft agriculture credits contribute to 
deforestation, as do plans to construct additional highways and 
dams.  There are changes afoot that could lead to a permanent 
reduction in the deforestation rate.  The most important are:  land 
cadastrationor registry programs, new forest management regimes, 
improved monitoring and enforcement, and certification programs. 
Moreover, the Congress is considering modifying the Forest Code, 
which could transform vast numbers of ranchers and farmers into 
law-abiding citizens.  END SUMMARY. 
 
MODEST "STICKS" AND NO "CARROTS" 
 
¶5.  (SBU) GOB officials have consistently spoken out against the 
illegal deforestation of the Amazon (which for this cable means the 
Legal Amazon, a region of nine states that encompasses about 60% of 
the country).  When a report was released at the end of January 
indicating a sharp rise in deforestation in the last five months of 
2007, President Lula called an emergency cabinet meeting to consider 
the problem.  To date, the GOB has not developed "carrots" to 
encourage the residents of the Amazon not to illegally clear the 
land.  In 2007, the isolated, northern State of Amazonas announced 
the "Sustainable Amazona" fund with R40 million (over US$20 million) 
to encourage residents of that state living on forest reserves (not 
private property) to not clear the land.  It is too early to say how 
effective it will be or whether it might be transferable to other 
states.  In short, at this time there are practically no "carrots" 
or positive incentives for residents of the Amazon not to deforest. 
 
¶6.  (SBU) The January 24 emergency cabinet meeting adopted a number 
of "sticks" or punitive measures.  The GOB would send in about 800 
more Federal Police to combat environmental crimes, it would 
strengthen controls over the livestock and agriculture sectors 
(supposedly requiring proof that these agricultural goods were not 
the result of illegal deforestation), requiring re-registration of 
land titles and better monitoring at 36 municipalities with 
high-rates of deforestation, and helping state governments to 
monitor and combat deforestation.  President Lula recently 
acknowledged that the federal agency responsible for enforcing the 
environmental laws (IBAMA) might not be up to the task and said that 
"For this reason, I don't think IBAMA alone should be responsible 
for enforcement."  Thus, the Federal Police and to some extent the 
Brazilian Army are asked to assist. 
 
BRASILIA 00000246  002 OF 004 
 
 
 
¶7.  (SBU) COMMENT. More federal agents on the ground is a step 
forward, however, there are weaknesses throughout the system - lack 
of judges, difficulties in proving violations, long appeals process, 
and then inability to collect fines.  Paulo Barreto, a senior 
researcher at the respected NGO IMAZON, estimated that only two to 
three percent of fines imposed on illegal loggers are ever 
collected.  It is commonly accepted that law enforcement until now 
has been practically non-existent.  All in all these new measures 
are more than symbolic, but not by much.  They are likely to end up 
as more proclamations from Brasilia without sustained, effective 
actions to back them up.  END COMMENT. 
 
¶8.  (SBU) While the GOB decries deforestation, several of its 
policies do result inevitably in clearing forested land in the 
Amazon.  These policies include: 
 
- Improving roads and infrastructure projects pursuant to the GOB's 
Program for Acceleration of Growth (PAC).  For example, the PAC 
envisions building two hydroelectric plants on the Rio Madeira near 
Bolivia, which are estimated to bring in as many as 100,000 new 
settlers to that region. 
 
- Establishing new settlements by the National Institute for 
Colonization and Agriculture Reform's (INCRA) in the Amazon.  The 
GOB continues with its program of developing settlements for the 
poor and landless alongside of roads constructed in the Amazon. 
 
- Requiring an owner to make "productive" use of the land or risk 
losing it under Articles 184 and 185 of the Brazilian Constitution. 
The widely held view is that keeping a standing forest is not 
considered a productive use. 
 
- Providing soft agriculture credits even though the majority of 
agricultural land was illegally cleared.  The emergency cabinet 
meeting initially proposed cutting off credits to those who could 
not prove they had legally acquired their land.  Subsequently, 
President Lula exempted small farmers and ranchers and INCRA 
settlers from this measure. 
 
THE POLITICAL LIMITATIONS 
 
¶9.  (SBU) Stark political realities limit what a government can do 
to control deforestation in the Amazon.  While there are no exact 
figures, it is commonly thought that at least 80% of the 
deforestation in the Amazon is illegal, which means at least 580,000 
square kilometers of the 730,000 square kilometers cleared since the 
1970's was done illegally.  Thus, a campaign against those involved 
or benefiting from illegal deforestation could affect huge numbers, 
possibly in the millions.  Furthermore, the Amazon has tremendous 
clout in the Congress.  Although only 13% of Brazilians live in the 
Amazon, the region has 33% of the Senators and 18% of the Deputies 
in the Chamber of Deputies.  COMMENT.  Since President Lula's Labor 
Party (PT) and allied parties have only a slim majority in the 
Senate, he cannot afford to have such a large block up in arms. 
Antagonizing the "Amazon block" by actions that threaten large 
numbers of their voters and important economic interests would also 
put into jeopardy other GOB priorities requiring legislative 
approval.  END COMMENT. 
 
THE SUCCESSFUL "CONSTRANGIMENTO" POLICY 
 
¶10.  (SBU) The national governments since the return of democracy in 
1985 have accomplished a critical feat, without which the prospects 
for eventually controlling deforestation of the Amazon would be very 
bleak indeed.  President Lula's administration and those that 
preceded it have in one generation changed the view of the political 
elites about the value of the Amazon.  Previously, the political 
class considered the Amazon forest as a burden, something that had 
to be cleared to make it productive.  This view was held towards the 
Atlantic Forest, which has been reduced to just 7% of its original 
size, and many still hold it today towards the vast Cerrado (or 
savannah) region, where 40% has been cleared in just a matter of 
decades.  Although less than 20% of the Amazon has been cleared 
(REFTEL A), today politicians of all stripes pay homage - whether 
they believe it or not - to sustainable development and protecting 
the Amazon. 
 
¶11.  (SBU) This consciousness raising was the work of years, but it 
has come to fruition under Lula.  Environment Minister Marina Silva 
refers to this as the "constrangimento" or "self-consciousness" 
policy, which causes people not to want to be seen as destroying the 
 
BRASILIA 00000246  003 OF 004 
 
 
forest (something akin to the efforts to shame those who litter in 
the United States).  The Governor of Mato Grosso and so-called "King 
of Soy", Blario Maggi, is a good example of the success of this 
policy.  His state has cleared more of the Amazon than any other. 
Still, Maggi is sensitive on this issue.  He was quick to deny that 
his state is responsible for the ongoing deforestation.  A 
generation ago you would expect to see him proudly being 
photographed next to a bulldozer. 
 
OTHER POSITIVE DEVELOPMENTS 
 
¶12.  (SBU) The GOB has a number of policies that are being 
introduced or under consideration that could significantly help to 
control illegal deforestation.  Three notable ones are: 
 
-- Improved forest management pursuant to the new Forest Service 
Law.  The GOB plans to award long-term concessions to logging 
companies that will take responsibility for managing and preserving 
the forest.  These concessions will allow harvesting of trees, but 
in a rationale, sustainable manner.  More importantly, these 
concessions should create entities that have an economic interest in 
protecting the forest and preventing illegal deforestation.  The 
first concession process is underway in the State of Rondonia, and 
others are scheduled to follow. 
 
-- Land Registry.  President Lula asserted last fall that the Amazon 
had an "owner", however, to this day the question of title to land 
in the Amazon is a murky subject.  Most of the land in the Amazon 
belongs to the national government, yet one often hears how ranchers 
and farmers end up - in some mysterious way - with papers that 
suggest they may have title.  There seems to be a greater focus by 
the GOB on clearing up title and land cadastration to determine what 
are the property boundaries.  Mark Lundell of the World Bank in 
Brazil views addressing the lack of clarity on land title as a top 
priority.  What is evident is that there has been no "owner" 
preventing illegal loggers, ranchers and farmers from logging, 
clearing and using vast swaths of the Amazon. 
 
- Revising the Forest Code to allow more productive use of land.  In 
1996, President Fernando Henrique Cardoso issued a "Provisory 
Measure" revising Article 44 of the Forest Code to require a 
landowner in the Amazon to preserve 80% of the land, versus the 50% 
requirement then in the law.  Knowing that the Congress with the 
large Amazon contingent would block enactment of the law, the 
Provisory Measure was reissued 67 times to keep it in effect, until 
2001 when the procedure was changed to require Congress to vote on 
any Provisory Measures.  This Provisory Measure was never brought up 
for a vote, however, the GOB has treated it as having legal effect. 
Now, the GOB is considering reducing the conservation requirement 
back to 50%.  If this were to happen, then it might be possible for 
large numbers of ranchers and farmers who are out of compliance with 
the 80% requirement to come in from the cold.  Such a move could 
make dealing with the past - and preventing future - deforestation 
on a more manageable scale.  Environmental groups in Brazil are 
divided on this step.  Greenpeace views it as a sell-out; Friends of 
the Earth consider it a pragmatic and constructive step.  The 
question of "amnesty" for deforesters continues to generate a heated 
debate within and outside government circles. 
 
¶13.  (SBU) COMMENT. As with illegal immigration in the United 
States, illegal deforestation in the Amazon leaves the national 
government with two main problems to address - preventing future 
illegal activity and sorting out the status of those who acted 
illegally in the past.  At the same time, meeting the economic 
imperatives of Brazil ranging from reliable electricity supply to 
farmland to viable transport routes to enhance economic growth in an 
environmentally sustainable way remains a political and practical 
challenge for Brazil.  These are complex problems and there are 
powerful political constraints limiting the government's room for 
action.  Nonetheless, the GOB has scored a major success with its 
"constrangimento" or "guilty conscious" policy and has laid the 
ground for possible future actions that would seriously address 
these issues.  The GOB has some of the tools in hand already (such 
as land registry, modern forest management, and better law 
enforcement) and is considering others (such as modifying the land 
use rules).  If these measures were followed through, the rate of 
deforestation could come down significantly over the long-term.  The 
GOB is clearly under significant domestic (such as from Environment 
Minister Silva and the media) and international pressure to address 
deforestation in a serious manner.  However, it is too early to say 
whether this level of pressure is sufficient to persuade the GOB to 
use its limited political capital to take on this daunting task. 
 
BRASILIA 00000246  004 OF 004 
 
 
END COMMENT. 
 
SOBEL