VZCZCXRO6432
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMA RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHAN #0053/01 0321250
ZNR UUUUU ZZH
R 011250Z FEB 10
FM AMEMBASSY ANTANANARIVO
TO RUEHC/SECSTATE WASHDC 3267
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEHZO/AFRICAN UNION COLLECTIVE

UNCLAS SECTION 01 OF 04 ANTANANARIVO 000053 
 
SENSITIVE 
SIPDIS 
 
STATE FOR AF/E - MBEYZEROV - AND OES - MJOHNSEN 
USDOC FOR RTELCHIN 
TREASURY FOR FBOYE 
ADDIS FOR KBAUMAN AND IHERSH 
USAID FOR AFR/EA - CTHOMPSON 
 
E.O. 12958: N/A 
TAGS: SENV ETTC ECON ETRD MA
SUBJECT: FRUSTRATED DEVELOPMENT PARTNERS DISCUSS HOW TO IMPROVE 
ENVIRONMENTAL GOVERNANCE 
 
ANTANANARI 00000053  001.3 OF 004 
 
 
¶1. (SBU) Summary:  The forestry sector in Madagascar continues to be 
decimated by rampant unsustainable and illegal practices, especially 
in the northeastern region of the country.  The Ambassador hosted a 
roundtable discussion on Jan 21 with NGOs and like-minded 
ambassadors to discuss the causes of the problem and possible 
responses, which are detailed in this cable.  The lack of political 
will at multiple levels of the government of Madagascar, combined 
with insufficient surveillance and controls, and the contradiction 
between legal and regulatory texts have created an enabling 
environment for illicit behavior that has long-term economic, 
environmental and social consequences.  The de facto government 
created a Task Force and issued a series of inter-ministerial orders 
between September and December 2009 to "clean up" the existing 
stocks of illegal wood, but none of the governmental orders 
respected the existing legislation on forest exploitation in 
Madagascar.  On the non-government side, the environmental technical 
and financial partners responded with multiple actions to the 
increased threats on the environment, but have had little impact 
given the absence of a real commitment on behalf of the government 
to address the sense of open access to resources.  End summary. 
 
Roundtable on Environmental Governance 
-------------------------------------- 
¶2. (U) The Ambassador hosted a roundtable discussion on Jan 21 with 
civil society organizations, conservation NGOs, and the diplomatic 
and donor communities to discuss the growing problem of 
environmental governance, including illegal forestry activities, the 
recent proliferation of fishing and mining licenses, and exports of 
endangered species protected under CITES.  This cable outlines that 
discussion, including recommendations on follow-up actions, and 
provides an update on illegal logging in Madagascar. 
 
Illegal Decrees Provide "Legal" Cover for Exports 
---------------------- 
¶3. (U) On September 21, 2009 inter-ministerial decree no. 38244/2009 
was issued for the exceptional export of non-processed precious 
woods from Madagascar.  The decree authorized up to 25 containers 
each of precious woods, including rosewood, ebony and palissandre, 
for 13 operators, and specified that the sale or export of the 
authorized stocks should be completed by November 30, 2009 in the 
regions of Sava and Analanjirofo.  Information obtained from the 
Sava region in early December, however, identified at least 27 
operators that were in the process of exporting unprocessed precious 
woods. 
 
¶4. (U) On October 5, 2009 a second inter-ministerial decree, no. 
38409/2009, was issued to establish procedures that must be followed 
to grant export permits.  This includes required documentation on 
source, volume, quantity, destination and other factors.  The decree 
states that designated task force and forestry service investigators 
will attempt to verify paperwork and stocks.  The government does 
not appear to have the capacity or the consistent will to 
effectively enforce the procedures.  The decree also gave the 
government authority to seize improperly documented wood. 
 
¶5. (U) On November 30, 2009, note no. 190-PM/SP.09 was issued by the 
former Prime Minister forbidding any additional exploitation and 
export of precious wood beyond November 30, 2009. 
 
¶6. (U) On December 31, 2009, another note, no. 218-PM/SP.09,  was 
issued by the current Prime Minister which extended -- with no 
expiration date -- the export of unprocessed and semi-processed 
woods by operators who had already met the requirements of the 
September 21 inter-ministerial decree by November 30, 2009. 
 
Decrees Contradict Malagasy Law 
--------------------------- 
¶7. (U) It has been illegal to fell certain hardwood species since 
¶2002.  Given the amount of logs involved, it is clear that the wood 
intended for export under any of the recent decrees has been 
illegally harvested, rather than uprooted by cyclones or other 
natural forces.  As precious hardwoods have been completely logged 
out of some forests, the unsustainable wood trade is now moving to 
other species.  This environmental deterioration jeopardizes the 
overall health of the ecosystem and threatens downstream rice 
producing zones. 
 
Donors and NGOs Take Action 
-------------------------- 
¶8. (U) The environmental technical and financial partners hold a 
monthly roundtable, and have set up an Environmental Governance 
Group as a sub-committee of this roundtable.  This group is tasked 
 
ANTANANARI 00000053  002.3 OF 004 
 
 
with addressing current environmental governance issues related to 
illegal exploitation of natural resources.  It has disseminated 
information and raised awareness at the international, national and 
local levels, mobilized key Malagasy stakeholders to advocate 
effectively against illegal logging, and improved information flow 
between all actors at all levels through media articles, conference 
debates, and declarations. 
 
Local Civil Society Sues the Government 
------------------- 
¶9. (U) The crisis has led to the emergence of a vibrant civil 
society movement, known as the Voary Gasy Alliance, that is 
demanding accountability of the government for the plundering of 
natural resources and illegal logging.  Many member organizations in 
this nascent movement are past beneficiaries of USG technical 
assistance.  This platform of 29 Malagasy civil society 
organizations serves as an information and lobbying platform with a 
focus on increasing communication and raising awareness about the 
illegal exploitation of natural resources and the trafficking and 
poaching of endangered species.  The Alliance also filed suit 
against the government for the illegal issuance of the Sept 21 
inter-ministerial order that was based on the outcome and 
conclusions of the legal study commissioned by environmental 
partners' roundtable. 
 
International Mobilization 
-------------------------- 
¶10. (U) Global Witness and Environment Investigative Agency (GW/EIA) 
through the Madagascar National Parks exposed the current illegal 
logging situation as an environmental crime at the international 
level.   GW/EIA examined the supply chain from producer to consumer, 
focusing on countries which launder illegal timber such as China, 
with pressure on consumer markets in Europe, Japan, and the U.S. 
GW/EIA transmitted information to targeted buyers and suppliers and 
worked with the U.S. Fish and Wildlife Service (U.S. FWS) on the 
application of the Lacey Act which does not allow the import, 
export, transport, sale, receipt or purchase of plant materials 
taken, possessed, transported, or sold in violation of US or foreign 
laws.  This includes timber from parks and protected areas.  One of 
their actions included a raid on the U.S. Company, Gibson Guitar, 
who has been importing processed hardwood from Madagascar.  While 
the Malagasy Minister of Environment endorsed the content and 
recommendations of the GW/EIA report, there has been little 
application of the recommendations. 
 
¶11. (U) There have been efforts to mobilize donors to provide 
continued funding for protected areas and communities living in the 
peripheral zones of the highly vulnerable protected areas.  Through 
lobbying efforts by three international conservation NGOs, the World 
Bank provided a waiver to allow for the continued use of 
Environmental Program 3 (EP3) funds (USD 12 Million) for social and 
environmental safeguards with a focus on continued support to 
Madagascar National Parks that prioritizes protected areas facing 
threats of illegal exploitation of natural resources. 
 
Tarnished Image Hinders Fundraising 
--------------- 
¶12. (U) Nearly 4.6 million hectares of protected areas are currently 
under increased threat of irreversible destruction due to the lack 
of good natural resource governance.  The increased illegal logging 
tarnished the image of Madagascar, nationally and internationally, 
as a country committed to the protection of its unique biodiversity 
and natural resources.  The credibility of wood harvesting and sales 
is being questioned in international forums, such as the recent 
UNFCCC meeting in Copenhagen.  As global partners move forward in 
funding adaptation and mitigation measures for climate change, such 
as REDD, investors and financial partners are questioning the 
viability of investing in Madagascar.   Tourism, which represents 
significant income generation, is also being seriously affected by 
Madagascar's tarnished image. 
 
Who Benefits?  A Few Traders and Corrupt Officials 
------------ 
¶13. (SBU) The overriding cause of illegal exploitation of natural 
resources continues to be the general lawlessness that reigns in 
Madagascar.  The de facto government perceives natural resources as 
a ready source of revenue.    Short term gains outweigh the need to 
consider implications for long term sustainable environmental 
management.  A significant amount of precious resources are lost 
from this uncontrolled timber harvesting, meanwhile rural Malagasy 
only marginally benefit from this illegal trade of precious wood, as 
the international value of the exported wood is over 600 times the 
 
ANTANANARI 00000053  003.3 OF 004 
 
 
benefits to the collector. 
 
¶14. (SBU) The environmental partners roundtable commissioned a study 
on the economic costs and benefits of the export of hardwood in 
November 2009.  In comparison to an average quantity of 1,204 cubic 
meters per year between 2000 and 2005, 1,211 containers holding 
around 26,642 cubic meters of precious woods have been exported over 
the last ten months following the two inter-ministerial orders 
issued in January and September 2009.  This corresponds to a total 
value of approximately USD 175 million.  The value of the 325 
containers to be exported under the September 21 inter-ministerial 
order will only bring USD 15.5 million of "official" revenue to the 
state.  "Unofficial" corrupt payments are believed to be 
significantly higher. 
 
Impact of Funding Cuts 
-------------------- 
¶15. (U) The decrease in international financial support for the 
environment sector has weakened pressure for environmental 
governance as there is no longer the traditional "donor 
conditionality stick".   The international and national NGOs are 
working to maintain support to communities who are on the front 
lines, but their resources have decreased as Madagascar's image as a 
country that cares about its environment has plummeted, and private 
donors hesitate to provide funding. 
 
Recommendations from the Roundtable 
----------------------------------- 
¶16. (U) The Jan 21 roundtable discussion culminated in a number of 
recommendations: 
 
a) Encourage the government to seize the remaining illegally-sourced 
wood (180 containers).  The government would have to reimburse any 
fees that were paid by the timber traders, the rosewood would be 
auctioned through a transparent and open process, and then the 
revenues would be equitably distributed to the government and the 
communities. 
 
b) Include the anti-corruption agency, BIANCO, in the Environmental 
Governance Group.  Denounce the known illegal timber traders, 
companies, and high level individuals involved in this industry. 
The masterminds and traders could be prosecuted through the 
enforcement of criminal law.  Pressure should also be applied for a 
formal response to the Voahary Gasy law suit against the transition 
government for the illegality of the inter-ministerial orders. 
 
c) Reinforce international contacts and communication to inform 
international buyers, transporters, banks, and other private sector 
actors in the supply chain about the illegal nature of all wood 
coming from Madagascar.  Pursue the possibility of international 
sanctions against traders and companies involved in the illegal 
exploitation of natural resources. 
 
d) Organize an international or national conference to discuss the 
different elements of the supply chain with all of the actors.  The 
objective would be to identify common challenges and solutions and 
to create a viable joint plan of action with clearly measurable 
benchmarks. 
 
e) Provide continued support to local communities and civil society 
who are on the front lines in protecting Madagascar's unique natural 
resources and remain underrepresented in decision making around 
environmental issues. 
 
f) Increase knowledge of the economic benefits of good environmental 
governance as a key element to capture revenues from climate change 
initiatives, including Reducing Emission from Deforestation and 
Forest Degradation(REDD).  The climate change meeting in Copenhagen 
resulted in a commitment of USD 3.6 billion by six nations (US, 
France, Australia, UK Norway, and Japan) to address deforestation 
and degradation as a key element in providing adaptation and 
mitigation measures against climate change through the end of the 
¶2012. 
 
Comment:  A Herculean Task 
-------- 
¶17. (SBU) The businessmen involved in rosewood export are relatively 
few, and their identities have long been known.  The de facto 
authorities could tackle the problem if they so desired, but 
high-level officials are benefitting from the trade.  Given the lack 
of political will by the HAT to address these issues, local actions 
are likely to have a limited impact at this time.  Attacking the 
 
ANTANANARI 00000053  004.4 OF 004 
 
 
problem by reducing international demand in Europe and the U.S. 
offers a more promising alternative.  End comment.