[] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 RAINFORESTS UNDER SEIGE Founder Ralph Nader Editor Robert Weissman Editor-at-Large Ellen Hosmer Associate Editor Amy Allina Managing Editor John Richard Contributing Writers Alexandra Allen, Diane Bartz, Katherine Isaac, William Jackson David Lapp, Russell Mokhiber, Allan Nairn, Sandy Smith, Samantha Sparks, Jim Sugarman, William Steif and Cathy Watson Staff Researchers Jim Donahue, Holley Knaus, Jennifer Kassan Production and Design Kathy Cashel Business Manager Bryan Penas Multinational Monitor [ISSN 0197-4637] is published monthly by Essential Information, Inc., P.O. Box 19405, Washington, DC 20036. Telephone: (202) 387-8030. Contents: Behind the Lines Editorial No Debt for Nature The Front Labor Rights Hoax Tying Up the South Feature Sacking Guyana By Marcus Colchester Economics Progress in Paradise? By Samantha Sparks Interview Empires in Decline An Interview with Paul Sweezy Labor Organizing the South By Robert Weissman Corporate Profile Trashing the Future By Brian Lipsett Names In the News Book Review Southern Renewal Resources BEHIND THE LINES (omitted here; unscannable) ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 L E T T E R S To the editor: The Bhopal article in the July/August 1991 issue contained bad politics and worse reporting, in at least the following three respects: 1) The article recycles Wall Street propaganda that Union Carbide has suffered financially from Bhopal when in fact the real story is that UC's shareholders profited enormously in the wake of the Bhopal disaster. The quote from the [Wall Street] Journal comparing share prices before and after Bhopal is factually in error because it compares numbers that are not comparable. In 1986, after the Bhopal disaster, there was a three-for-one UC common stock split, meaning that the post- Bhopal $30 share was equal to a $90 pre-Bhopal share. Even in a recession UC shares are presently selling at more than $22, well in excess of the $50 pre-Bhopal share value, if the value is properly adjusted for the split to $66. Of course this is after UC paid a special dividend to its shareholders in 1986 of about $33, which if added to today's value would give a $100 equivalent share value, double the pre-Bhopal value, but still $24 less than the highest adjusted share values reached post- Bhopal. 2) The article accepts at face value that the GAF takeover bid was a real threat to UC, instead of a sweetheart operation and intentional smokescreen for fraudulent transfers to UC shareholders of assets that might otherwise have been subject to a potential Bhopal legal judgement requiring payments to its victims in excess of equity. In any event, UC shareholders, including GAF, all profited from the "takeover bid." Meanwhile UC ran its assets down to a level where a judgement for much more than the current settlement amount could be defended against by bankruptcy. 3) Union Carbide's profits in 1988 and 1989 were the two highest on record. Therefore a decline in profits of a cyclical producer of industrial raw materials in the 1990 recession was not remarkable, and certainly no indication of any adverse effect of the Bhopal legacy on profits, as the writer suggests. Nor was a 1990 increase in debt surprising in light of the election of V. P. Singh's pro-Bhopal government at the end of '89. Union Carbide can be expected to remain highly leveraged until the risk of liability for Bhopal is finally put to rest. This high debt load, particularly in the current period of low interest rates, does not in any way impair UC's profitability. Profitability has, in fact, significantly improved after Bhopal, as reflected by its consistently higher adjusted share values. This is all readily available in briefs I have filed in India, all now collected and published with other materials by the Bhopal Justice Campaign, Tel: 1-800-888-6423 ext. 3859. Rob Hager Washington, DC ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 EDITORIAL NO DEBT FOR NATURE THERE IS A DARK SIDE to the Northern environmental movement's growing concern with Third World environmental issues, evidenced now in "debt-for-nature" swaps. Good intentions notwithstanding, these arrangements, designed by U.S. environmental groups to save the world's rainforests, are yet another expression of industrialized country imperialism. Proposed in 1984 by Thomas Lovejoy, then of the World Wildlife Fund (WWF), debt-for-nature swaps involve Northern environmental groups paying off part of the debt of a Third World country in exchange for the country agreeing to protect forest land. They have been pursued most vigorously by WWF and The Nature Conservancy. In theory, all parties benefit from the debt-for-nature arrangement. Banks have devalued loans repaid before their value sinks further; debtor countries' debt burdens are lessened; and the environment is protected. In practice, debt-for-nature swaps do not work so well. The amount of debt paid off is so small in relation to the overall debt owed by many Third World countries that it is virtually irrelevant. And the protected lands--managed by local conservation groups--are often not protected. Reports on areas set aside in debt-for-nature swaps in Ecuador and Bolivia, for example, indicate that they have been despoiled by companies seeking to exploit their natural resource value. The most significant problems with debt-for-nature swaps, however, are how they relate to indigenous people. An unstated premise of the swaps is that set-aside lands are governments' to set aside. But indigenous people who live in these areas--though they may not possess legal title to the land--reject this notion. They argue that the land is theirs. They object most strenuously to the idea that they should help pay off a debt they did not contract. (In fact, many of the loans which now make up the debt funded projects that had directly negative effects on indigenous people.) Santos Adam Afsua, secretary-general of the Inter-Ethnic Association for the Development of the Peruvian Jungle, says, "The debt has been created by a total mismanagement of foreign loans, of foreign capital. The governments are responsible for this poor management and use of resources.... The debt-for-nature swaps cannot take place with our land because that debt is not ours; we have not contributed in any way to that debt." Similarly, many progressive Third World political and environmental activists oppose any steps which legitimize the debt. In Brazil, a number of groups tied to the Workers' Party of Luiz Ignacio "Lula" da Silva have protested the efforts of WWF to put together a debt-for-nature swap. They charge that Brazil's debt was incurred by a military dictatorship to which banks should not have made loans, and that it should not be repaid at all. As well as violating the sovereignty of indigenous peoples, debt-for-nature swaps are based on a fundamentally flawed approach to protecting rainforests. While setting aside land is clearly necessary to preserve rainforests, it is a wholly insufficient solution, since it fails to address the root causes of deforestation. The Latin American and Asian experiences with "protected" reserves clearly indicate that such areas will be violated if social pressures on them continue. Efforts to protect the rainforests should revolve around the following three principles: First, indigenous people and forest dwellers should be guaranteed custody of the lands they occupy in order to preserve rainforests for future generations. They are morally entitled to it, and all experience indicates that indigenous people have the skills and priorities necessary to preserve forests. Second, the external pressures which encourage Third World countries to exploit rainforests--primarily those brought on by their foreign debts--must be alleviated. As long as foreign countries are forced to orient their economies toward earning foreign exchange to meet outrageous debt repayment schedules, they will have almost no choice but to pillage their rainforests and other resource bases. The debt must be forgiven, in whole or in large part. Third, the internal pressures on rainforests--colonists, ranchers and miners pushing in on the forest--must be relieved. What is needed above all is land reform. While issues of internal wealth distribution must be resolved in accordance with the democratic will of a country's population, it should be recognized that much of the wealth and land disparity in Third World countries is a colonial legacy that has been maintained by the economic and military aid policies--as well as direct and indirect military interventions--of Northern governments, especially the United States. Northern groups need not sit by and do nothing; they can work to change their governments' foreign policies. For thousands of years, rainforests have been a home and provided a way of life for millions of people who have managed to sustain them. Today, they are threatened by the spillover effects of national and international economic and social conflicts. Strategies to preserve the rainforests must recognize and respond to these realities. Debt-for-nature swaps do not. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 THE FRONT Labor Rights Hoax THE BUSH ADMINISTRATION has failed to consider labor rights standards when granting certain trade benefits to developing countries, charges a suit filed by a number of labor and human rights organizations. The International Labor Rights Education and Research Fund (ILRERF), along with the AFL-CIO, several unions, human rights organizations and other labor groups, is seeking judicial review of what it claims is a systematic failure of the U.S. Trade Representative (USTR) to fulfil its legal obligation to enforce international labor rights in its administration of the Generalized System of Preferences (GSP). The GSP program, established under the 1974 Trade and Tariff Act, grants developing countries the right to export goods duty- free to the United States. A 1984 amendment to the Act requires that countries receiving GSP benefits respect international labor standards, including the right to association, the right to organize and bargain collectively, a prohibition against compulsory labor, a minimum age for the employment of children and regulations governing minimum wages, hours of work and occupational safety and health. While ultimate authority for all GSP determinations rests with the president, the program is administered by the GSP Committee of the USTR, which is made up of the secretaries of several executive departments. Under the GSP regulation, any interested party may petition the Committee to review the eligibility status of any country designated for benefits. If a country is selected for review, the Committee then conducts its own investigation of labor conditions and decides whether or not the country will continue to receive GSP benefits. Interested parties may also submit testimony during the review process. In the past, the Central African Republic, Chile, Nicaragua, Paraguay and Romania have been suspended from the program. Petitioners voice several complaints with the way the GSP review process has been administered. The first is that, in enforcing the labor rights provision, the GSP subcommittee has relied exclusively on petitions filed by interested parties in making the decision to review a country. If no petition is filed, the Committee appears to assume that the government is respecting the international standard. Terry Collingsworth, the lawyer who is filing suit under the Administrative Procedures Act against President Bush and the GSP Committee on behalf of the ILRERF and other organizations, says that the Committee has failed to take any action on its own initiative "even when it has independent information" that the country is failing to meet the standard. Many organizations have questioned, for example, why the president has failed to remove El Salvador from the program when State Department officials have reported extreme violations of basic labor and human rights there. The second complaint applies to the application of the worker rights standard itself. The worker rights provision states that a country must be denied GSP benefits if it fails to "take steps" to comply with the standard. The USTR has interpreted this to mean that if a government is taking steps to comply with any one of the standards, then its failure to comply with the other four will not preclude its inclusion in the program. As a result, Collingsworth explains, a country like El Salvador, where the murder and disappearances of labor organizers have been well-documented, will continue to benefit from the GSP program if it "takes steps" to establish a minimum wage. Furthermore, in several instances, the subcommittee has failed even to review cases in which petitions document the murder or torture of labor activists, claiming that these offenses constitute "human rights" and not "labor rights" violations. The GSP Committee has also implemented procedural regulations "which make it more difficult to have a country reviewed," says Collingsworth. A regulatory requirement that all petitions must contain "new information" has been interpreted by the Committee to mean that once a country has been reviewed, any new petitions about that country must provide information about another type of violation. If a country has been reviewed in the past on the basis of violating its workers' right to associate, new petitioners may only submit evidence of a different kind of violation--the employment of children, for example--even if violations of the right to associate continue. The case against the president and the USTR was filed in March 1990 in the District of Columbia U.S. District Court. The court decided that the case would not be heard, ruling that the president has absolute discretion in applying the GSP statute because the worker rights provision is sufficiently vague that there are no justiciable standards that could be applied by a court. Collingsworth is appealing the decision, however. In a brief submitted to the D.C. Circuit U.S. Court of Appeals he argues that "all indications are that Congress emphatically intended to create a mandatory worker rights standard and preserve the right of judicial review." If the ILRERF wins the appeal, which will be heard on October 3, the case will be tried on its merits. Collingsworth says that if the case goes to trial, the ILRERF and the other petitioners will be able to provide "reams of evidence" that the administration is failing to meet the requirements of the worker rights provision. Bush administration officials declined to comment on the case. -Holley Knaus ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 Tying Up the South IN A MOVE WHICH MAY increase foreign aid recipients' dependence on the United States, the U.S. Senate passed an "Aid for Trade" amendment to the 1991 Foreign Aid Authorization Bill by a 99-0 vote in July 1991. The amendment, now under consideration in the House of Representatives, mandates a phase-out of direct cash payments to aid recipients, replacing them with credits which can only be used to purchase U.S. goods and services (known as "tied aid"). Implementation of the amendment would call into question the entire purpose of the U.S. aid program, charges a position paper prepared by a coalition of U.S. private voluntary organizations, cooperatives and religious agencies called the Foreign Assistance Working Group. "To place commercial interests front and center in the U.S. foreign aid program would open [it] to increasing pressure to put U.S. commercial advantage before poverty alleviation and human resource development," it states. Critics say that tied aid perpetuates dependence on the donor country and hinders sustainable local development based on technology appropriate to the recipient nation's people and environment. Stephen Hellinger of the Washington, D.C.-based Development Group for Alternative Policies, argues, "By increasing the import of external technologies that are unadapted to local conditions and experience, one perpetuates the creation of two societies: one in the modern sector and one still very much in the traditional sector." Critics also argue that the technologies introduced under tied aid provisions are usually highly capital intensive, thereby minimizing job creation. The Foreign Assistance Working Group states that "promoting capital-intensive development in the wrong approach for low-income countries. One of the principal ... factors contributing to the low standards of living in those countries is the inadequate or inefficient utilization of labor." Existing tied aid provisions in U.S. law have interfered with foreign aid programs achieving their development aims, according to two U.S. government reports. A 1986 Office of Technology Assessment report stated that "congressionally mandated [Agency for International Development] requirements to use American equipment ... have complicated and even hindered project operations" because using U.S. equipment means depending on U.S. spare parts and technical skills, which are often in short supply. And a recent Department of Commerce report says that "tied aid can lead to inefficient and wasteful procurement practices, sometime with relatively low development impact." Much of the impetus for the tied aid amendment came from increasing Congressional awareness of the far-reaching tied aid programs of other countries, particularly Japan and Germany. In arguing for the amendment, Senator Robert Dole, R-Kansas, said, "Our major competitors use their foreign aid to help themselves, especially their exporters, as well as the recipient nation. We should, too." Ironically, Senate sponsors of the amendment drew attention to the harmful effect of other donor countries' tied aid provisions on recipient countries. For example, Senator David Boren, D- Oklahoma, asked that a Washington Post article--which quoted a western official as stating that Japan's tied aid "is skewed in a manner to promote Japanese interests to the great detriment of the development needs of the recipient country"--be reprinted in the Congressional Record. Despite the overwhelming Senate support for the amendment, the Bush administration opposes it. The administration's approach has been to negotiate with other industrial countries to reduce their levels of tied aid. Senate sponsors of the amendment responded to the administration by arguing that the negotiations have failed to accomplish anything. Boren says, "We have waited and we have waited and we have not seen one single change by other countries in our direction." He concludes that it is time to change U.S. policy to "help ourselves while we are helping others." The value of tied aid to the donor country is questionable, however. The 1986 OTA report stated that tied aid provisions "have proven ineffective in stimulating new markets for U.S. goods." And Senator Paul Sarbanes, D-Maryland, pointed out that "it is estimated that about 65 to 70 percent of the total foreign assistance budget is [already] spent in the United States." No studies of the impact of tied aid on the U.S. economy have been undertaken by supporters of the amendment. The amount of money in question may be negligible compared to the total U.S. economy. The amendment would raise the amount of Economic Support Funds which are tied to purchases of U.S. goods from the current $573 million to $1 billion by 1993. Though it is a significant amount for recipient countries, the value of this additional tied aid is approximately eight one-thousandths of a percent of the U.S. gross national product. Finally, according to an Export-Import Bank official, tied aid provisions do not mandate that recipients purchase goods made in the United States by U.S. workers, only that goods purchased are made by U.S. corporations, which may employ less expensive labor anywhere in the world. Thus, the claim by Boren that the Aid for Trade amendment will directly translate into "more jobs for Americans" may be misleading. -Jennifer Kassan ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 RAINFORESTS UNDER SIEGE SACKING GUYANA By Marcus Colchester Marcus Colchester is director of the Forest People's Program of the World Rainforest Movement, a global network of organizations campaigning to save the rainforests and secure the rights of forest peoples. ITS ECONOMY WITHERING under the pressure of foreign debt, Guyana is putting the natural resources of its interior up for sale. The little-known South American nation, which is gradually returning to the global economy after two decades of what was effectively "socialist" dictatorship, has opened the door to multinational corporations from around the world to come and exploit its hinterland resources. Guyana is one of the world's most indebted nations. At the end of 1988, Guyana owed $1.7 billion, more than $2,000 for each of its under 750,000 people. This is an immense burden for a country with a per capita gross national product of only $350. The country has been tightly squeezed by an International Monetary Fund/World Bank debt rescheduling program. In an attempt to check spiralling inflation rates, the multilateral lending institutions forced Guyana in March 1991 to devalue its currency by 56 percent. To boost foreign exchange revenue, the IMF and the World Bank are pushing the country to increase exports of its interior natural resources: timber, other forest products and minerals. Forests for sale Compared to global rates of forest loss, deforestation in the Guyanas has been relatively slow. Indeed, in late 1989, Norman Myers, one of the world's leading authorities on tropical forests, predicted that at current rates the Guyanas would be one of the only areas of the planet to retain substantial blocks of tropical moist forest after 2040. Today, even that dire prediction may have to be revised. Until last year, Guyana was logging a tiny portion of its extensive forests. Total production reached only 94,000 cubic meters of timber per year in 1988, but even that limited production was too much for the country's virtually non-existent forestry service to properly regulate. Yet foreign development agencies have been pushing the country to intensify logging. In 1984, the World Bank's soft loan facility, the International Development Agency, pumped $8.8 million into the industry in an attempt to boost production. In 1989, under the UN's Food and Agriculture Organization- administered "Tropical Forestry Action Plan," the Guyanese Government, with the help of foresters from Canada, developed a new plan to rapidly expand the areas to be logged. Foreign companies have begun to move into the forests in increasing numbers. A Venezuelan company, Palmaven, has gained a concession to exploit 300,000 hectares on the Demerara River, south of Linden. Another 1.6 million-hectare concession was recently granted to a South Korean/Malaysian consortium, Sung Kyong, which plans to make a $63 million investment in logging and plywood production. A Brazilian company is also alleged to have gained logging rights in the North-West District. Logging is rapidly moving south into the interior. The national logging company, Demerara Woods Limited, which accumulated approximately $100 million in debts in the 1980s after installing expensive and inappropriate milling and wood- gasification plants, has been extracting timber south of Mabura Hill. The company was recently sold to two British Trusts for $16.5 million and re-incorporated as Demerara Timbers Ltd. The enterprise has now been massively expanded to embrace approximately 420,000 hectares of forest, with an option for further expansion, and has been capitalized with an extra $40 million from the United Dutch Group. The enterprise looks set to secure a 10-year tax exemption, as well as other fiscal benefits. The deal with the Guyanese government includes maintaining roads north from the concession area to a new port to be built at Charters on the Demerara river. The timber will be transported overseas by United Dutch Shipping, another member of the United Dutch Group. The United Dutch Group is hoping that the new port will be a big money earner, the long-term aim being to turn it into a major export point for the interior not just of Guyana but of Brazil as well. During 1987-1988, Demerara Woods was illegally pushing a road south of Mabura to the middle Essequibo to link with an old cattle trail that winds north from the Rupununi savannahs on the Brazilian border. The road to destruction In 1989, the Guyanese government accepted a concessional loan of $15 million from the Brazilian external funding agency, Cacex, to fund the construction of an all-weather road from the southern border up to the middle Essequibo at Kurupukari. It awarded the contract to the Brazilian mining multinational Paranapanema, which is notorious for damaging the environment and destroying indigenous societies. Within months, a fleet of earth-movers and trucks rolled across the border into the sparsely inhabited Rupununi savannahs, the traditional lands of the Makushi Indians. Human rights organizations were quick to protest. In a letter to the World Bank in October 1989, Survival International pointed out that the consequences of this project were likely to be similar to those long-associated with road-building throughout the Amazon region. "The road link will penetrate right into the Central Guyanese forest Accelerated forest loss seems likely, as are illegal cross-border penetrations by colonists and miners such as have already occurred in Venezuela, Peru, Paraguay and Bolivia. These kinds of problems are likely to be severe and quite beyond the capacity of the Guyanese government institutions to control," stated the letter. "Commercialization of ranching [expected to rapidly develop once the road is completed] in the Rupununi savannahs is likely to have very negative effects on the Indians there: in terms of land invasion, the displacement of indigenous peoples' own herds and introduced diseases." Both Survival International and the Guyana Human Rights Association called on the government to carry out social and environmental impact assessments before continuing with the road building. The government did not comply with these requests, however. The fears of the human rights groups have proved well founded. Independent reports from the region indicate widespread problems all along the course of the road, and the government has turned a blind eye to complaints. According to one study carried out by the University of Guyana, there is "total and unreserved support of Paranapanema at the highest levels of the Guyanese government, [so] it is not surprising that there is no monitoring of the company's workmen at the local level and no official notice to date of the violations of Guyanese laws that are taking place currently in the Rupununi." As a result of the new road, Brazilians have been moving in and out of south Guyana without regulation, and their influx has caused predictable social frictions in this isolated frontier region. In some places, the road has crossed Indian lands, and even cultivated fields, but no compensation has been paid. Community leaders have expressed the fear that the road will lead to the eventual destruction of the Makushi as a people. The roadbuilding has not even provided much employment to the local people. Most of the jobs have gone to Brazilians and most of the supplies for the company are brought across the border. The first stretch of the road to Kurupukari was completed at the beginning of the year and the second stretch north up the east bank of the Essequibo to Mabura is due to get underway soon, though a further $14 million will be needed. It is likely that the road will turn the south of Guyana into an enclave for foreign business interests. The road, as planned, will increase areas accessible to logging fourfold, opening up some 140,000 square kilometers of forest to the timber merchants. Paranapanema, besides being paid for the construction work, also hopes that the project will open up new mining opportunities in Central Guyana, which gold mining enterprises increasingly see as a bonanza area. Mining Boom In fact, mining has long been a mainstay of the Guyanese economy. As revenue from its traditional exports, bauxite, rice and sugar, has declined--the gross domestic product fell 4 percent last year--the government has increasingly turned to mining minerals other than bauxite, especially gold, to make up the loss. Trade liberalization policies, linked to the debt rescheduling package, now offer advantageous terms to foreign mining enterprises. Guyana hopes to boost its gold output from 39,000 ounces in 1990 to a target of 200,000 ounces. The main area of exploitation has been the Northwest District, where multinational corporations based in Canada, Australia, France, Brazil, North Korea and Yugoslavia have been granted mining concessions. A North Korean company has already commenced exploitation of the manganese deposits on the Matthews Ridge, while a Canadian Company, Golden Star Resources, has concessions to work for diamonds and gold in the Baramita area. Both these companies are also reported to be working the gold deposits at Arakaka on the Barima river. Similarly, Paranapanema has been granted mining concessions at Tassawini on the Upper Baramita. That mine was being developed at a cost of $30 million as a joint venture with the Guyanese government All these workings are in the traditional areas of the indigenous Karina people. Golden Star is also operating a diamond prospect on the Mazaruni river, where it is also exploring for alluvial columbite- tantalite. Further south, at Omai, it is developing what it hopes will be the largest gold-producing prospect in Guyana. The mine, alleged to hold some 2.2 million ounces of gold, is to be developed as a joint venture, initially with Placer Dome and now with Fluor Daniel Wright and Cambior Inc. The Canadian venture capital company, Ivanhoe Capital Corp., has bought heavily into Golden Star and plans to transfer these assets to South American Goldfields. Poisoning the rivers Guyana's lack of administrative controls has made regulation of these mines almost impossible. The cyanide used by commercial mines to isolate gold from alluvia and the poisonous tailings generated from crushed rock are a serious threat to water quality and fish stocks. Recently, a number of small-scale enterprises have begun working the river banks, especially on the lower Potaro and Mazaruni rivers, using new "missile dredges"--huge remote-controlled vacuum cleaners which pump water into the alluvial deposits and suck them up to process out the minerals. The dredges dig deep into the river banks, sometimes as far as 70 meters, and liquify the mud and gravel. Indigenous communities report that silting has polluted water supplies and reduced fishing returns as far as 60 kilometers downstream of mining areas. The silt has also blocked waterways, the main arteries for travel in the interior. The Mazaruni Christian Council complains that the river "may soon be a mud-choked gutter almost cleared of fauna and flora and the rainforest at its most magnificent." A study done for the Commonwealth Secretariat last year concurs: "missile mining results in the destruction of the river banks, changes river morphology and hydrology, greatly increases sedimentation in rivers and has profound effects on fish habitats." Yet, since the study's findings were made public, missile dredging has increased. Today, according to the Akawaio Indians, there are approximately 20 such dredges operating in the Upper Mazaruni alone. Pork-knockers and "garimpeiros" The Akawaio of the Upper Mazaruni have a long and sorry experience with mining. Coastal placer miners, known locally as "pork-knockers," started moving into the middle Mazaruni in the 1940s. As the coastal economy went into decline, the pressure from this quarter intensified. Later, from 1973 to 1981, the inhabitants of the Upper Mazaruni river basin lived under threat of expulsion from their homeland due to a Guyanese government plan to construct a major hydroelectric dam across the river. The dam was never constructed, but the Indians did not secure rights to their lands. The indigenous peoples' lack of official land title has left them unable to prevent the progressive invasion of their lands by miners from the coast. The invasion has brought acute and chronic medical problems, cultural decline, economic impoverishment and the development of severe social pathologies such as alcoholism, prostitution and the collapse of the Indians' traditional institutions. Brazilian placer miners, there called "garimpeiros," have also begun moving across the frontier. At first, the flow of these miners was a mere trickle, the prospectors trekking south into the Kanuku and Marudi Mountains. In early 1990, however, the flow accelerated dramatically, with 10,000 miners reportedly crossing into the land of the Patamona Indians at the headwaters of the Potaro river. More recently, "garimpeiros" have been pushing further north into the headwaters of the Mazaruni. These headwater mining camps are almost completely beyond government control. According to the local Indians, mines officers have not even visited the Upper Mazaruni mining district for a very long time. As a result, regulations are not enforced, and it is left to the village captains to negotiate the best deal they can with the miners. Corruption of community leaders is undermining village politics and fragmenting villages. Traditions of cooperation and communal living are being replaced by self-interest and mistrust. Many young Indians have found jobs in the mines, and they are often assigned to the dangerous task of diving to direct pumps and dredges along the river beds. These mine workers say that there have been numerous fatal accidents which have not been mentioned in the coastal press. They also complain that the companies do not pay compensation to injured workers or the families of workers killed in accidents. In the mining camps in the Potaro headwaters, the "wild west" atmosphere common in parts of Brazil prevails. Drunkenness, prostitution and violence are the norm, and killings frequent. Visitors report that practically all the gold extracted leaves the country by way of Brazil, meaning that Guyana gets nothing in exchange for the plunder of its resources. Sci-fi sustainability Meanwhile, as if to offset this wholesale pillage, the Guyanese government revealed in October 1989 that it was setting aside an area of 3,650 square kilometers as a biological reserve. The project was announced, amid much fanfare, at the meeting of the Commonwealth Heads of Government in Malaysia and was followed by an international mission to the region, set up by the Commonwealth Secretariat, to examine and promote it. Outside observers express skepticism about the project. Four hundred square kilometers of the area will be open for mining feldspar and diamonds. A further 1,600 square kilometers of forests will be opened to "sustainable" exploitation. According to a staffer from the Smithsonian Institution, logging concessions have been handed out to Brazilian companies all along the Lethem-Kurupukari road which slices the reserve in two. Many believe that only foreigners will benefit from this scientific and commercial enclave. The final 1,600 square kilometers of the reserve, to be set aside for pure scientific research and eco-tourism, will be opened up to foreign academics and forest enthusiasts. Moreover, some members of the international mission which helped plan the project appear to be preparing to get a slice of the action. The British-based Biofactor is hoping to comb the reserve for new pharmaceuticals. Company researchers are planning to document and investigate the medicinal lore of the local Amerindians, but they have not yet taken any measures to ensure that the indigenous people who provide the information get a cut of the profits. More ambitious still are the government's plans to turn the wilderness area into a "veritable mine of valuable genes that will help [the world] in adapting to new environmental and technological challenges." Gene-hunting bio-technology companies will be invited into the country, monitored by the project's proposed "biodiversity and biofutures program." Bishop Randolph George of Guyana comments, "It is ironic that Guyana has set aside 900 square miles of forests for an ambitious conservation program to be run by outside experts, while ignoring those 'conservationists,' the Amerindians, who have lived for centuries on the same land and conserved it perfectly." Initially, the government's ambitious program had a $65 million price tag on it, but donors have not been as generous as hoped. The "Program for Sustainable Tropical Forestry" has now been put forward to the World Bank to be funded for $3 million through the new Global Environment Facility, with an additional $500,000 from the UN Development Program. Perhaps in response to earlier expressions of concern, the project summary now announces that "special attention would be given to the local Amerindian groups to ensure the protection of their cultures and way of life." Amerindian land claims: the conflict with mining Guyana's 60,000 Amerindians form the main population in the interior of the country. Yet their rights to land have not been satisfactorily secured by the Guyanese Government. Despite the fact that title was promised to all the Indians of Guyana at the time of Guyanese independence, a large number of the Karina (Carib), Pemon (Arekuna), Kapon (Akawaio) and Wai Wai Indians remain without title to their lands. By Ordinance No. 23, 1966, an Amerindian Lands Commission was established to survey Indian areas in preparation for independence. The Commission reported in September 1969, after carrying out an exhaustive study of the situation of Guyana's Amerindian population, and recommended that "Amerindians be given legal tenure for portions of land adequate for their immediate and future needs in areas in which they were resident." In addition to this general recommendation, the report contained detailed recommendations for the titling of Indian lands at community, household and individual levels. Despite the clarity of the Commission's recommendations, the new government seemed reluctant to implement them. For seven years after the Commission reported, the Indians' status remained uncertain and it was not until the human rights group Survival International began protesting about the situation in the mid 1970s that the government finally moved to enact some of the proposed legislation. The Amerindian (Amendment) Act, No. 6 of 1976 gave legal title to land to a number of Amerindian groups, following the recommendations of the Commission and in accordance with the Independence Agreement. However, a number of groups were excluded from this settlement, in particular the Akawaio of the Upper Mazaruni, the Wai Wai of the Upper Essequibo and the Karina of Matthews Ridge--just those areas where the government has subsequently promoted the most intensive extractive enterprises. In the section of its report on the Upper Mazaruni communities, for example, the Commission recommended substantial areas of community land for entitlement and also included a copy of a memorandum in which the leaders of the Upper Mazaruni asked for exclusive use of the total river basin, including a sector which had been de-reserved in 1959 and had been taken over by miners of coastal origin. The Indians were not, however, granted title in the area, apparently because of government plans to develop the region for hydropower and mining. Recent promises to provide title to the Akawaio of the Upper Mazaruni, made by the President of Guyana directly to the Indians, have so far gone unfulfilled. Declaration from the Second Conference of Amerindian Peoples of Guyana, April 11-14,1991 OUR MAIN NATURAL RESOURCES are our forests. They have not suffered from the massive population pressure or economic exploitation prevalent in other places. However, this situation is rapidly changing. The eyes of those who destroyed resources elsewhere are now looking at our forests. In Regions 1, 7 and 9 local and foreign timber merchants and miners are depleting forest stocks previously reserved for the Amerindian communities. Uncontrolled mining in Region 7 is not only destroying natural resources and harming the environment but is also having serious consequences on the moral and social life of our people. In view of the fact that these activities benefit from aid programs of other counties, we call on the donor agencies to ensure that their donations are used to develop and not destroy our land and peoples. We call on the authorities to seek approval from Amerindian communities about developments which have repercussions on lands owned or claimed by these communities. Furthermore, consultation should take place with Amerindians regarding the development of the rest of the interior. Economic and social development must promote a way of life which attracts qualified Amerindians back to their communities. Development must emphasize the well-being of the whole community, not simply quick profits. We have to seek ways and means to promote the full human development of our people by appropriate training and education. We need to renew our culture as expressed through our languages, crafts, songs and dances. Amerindian crafts as a cultural heritage are endangered by the practice of selling raw craft material to outside producers. We need to re-establish craft as an expression of our cultural heritage and as a source of economic benefit. We need to be trained in skills which will help us administer our communities more efficiently, learn technical skills and forestry practices which enable us to be more self-sufficient in many ways. Urgent attention must be given to rectifying the many problems which exist over land titles. Titles in region 7 and 8 and other areas which are still withheld must be granted. The problems of encroachment must be resolved quickly before coastland investors make it impossible. We support the communities which have declared that lands allotted to them by the Amerindian Act of 1976 are insufficient and have asked for the extension of the boundaries. This conference has dealt with the weaknesses of community Councils. Some Councils are not elected, others remain in place for years and most represent the government and not the communities. This selfish and uncaring attitude of Councils encourages similar attitudes in the Regional administration. We have concluded that these threats, challenges and weaknesses all point to the need for independent organizations in our village communities. The Conference has, therefore, approved the establishment of the Amerindian Peoples Association and calls on all Amerindian communities to set up vigorous local units which will not only be the source of the Association's strength but will also be a guarantee of the well-being of our Amerindian peoples. Back to the future As Bishop George has noted, Guyana is now at a cross-roads. Under heavy economic pressure from its foreign debt and at the bidding of international development agencies, the country is hurriedly attempting to cash in its natural resources for quick profits and foreign exchange. The same model of development, based on mining and logging by foreign companies, has been tried and has failed in many other tropical countries. Too often the profits from these enterprises have vanished overseas, while the local populations--after enjoying an ephemeral surge of employment and boom-and-bust wealth--are left to pay the social and environmental costs that result from the absence of regulations of pollution and labor relations. Guyana's sparsely inhabited interior is the traditional preserve of the Amerindians. Yet far from benefiting from the crash development program, they are suffering the take-over of their lands, a rising tide of malaria and other diseases brought in by the miners, the pollution of their rivers and the decimation of the fish and game upon which their livelihoods depend. An alternative development process based on empowering local communities and on the resources and skills of the Guyanese themselves can only come about if the democratic space within the country can be widened. There are encouraging signs that this is beginning to occur. Non-governmental organizations, academics and church leaders are speaking out with increasing confidence. The Amerindians themselves are mobilizing their communities and linking up to forge a national association to promote their interests. Since they are the majority population in the interior, this may represent an important turning point in determining the country;s destiny. As Bishop George put it, "The crucial decisions Guyana has now to take are decisive for the land and for the people--either they both survive or they disappear together. The best defense against disappearance is a strong organization to defend the rights of Amerindian people and to conserve the resources on which they depend." The future of Guyana must lie in the hands of the Guyanese people themselves, but if they are to have a chance of controlling this future the external pressure on Guyana must be lessened. The burden of debt must be removed and the development agencies must adopt a more far-sighted vision of the country's future based on a more prudent use of its natural resources under the control of the interior communities themselves. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 ECONOMICS PROGRESS IN PARADISE? By Samantha Sparks SIBERUT, INDONESIA--The Indonesian island of Siberut appears in the distance as a small, dark green mass in the midst of the Indian Ocean. As one approaches, the green breaks into a kaleidoscope of textures and shades, an awesome variety of tree limbs and leaves. Siberut is a rainforest, one of thousands in the vast, archipelago nation of Indonesia. Like tropical forests all over the world, Siberut holds a rich store of unusual plant and animal life, some still known only to the islanders whose ancestors settled here approximately 3,000 years ago. In fact, for its size--just 4,500 square kilometers-- Siberut contains an extraordinary number of species found nowhere else in the world. Scientists say that 65 percent of the animals and about 15 percent of the plants on Siberut are endemic. Siberut and its inhabitants appear doomed, however. Commercial logging is not the only reason, though it is the most visible and destructive one. Government-backed "development" projects also threaten the island's ancient and delicate world. At the same time, the rapid erosion of traditional culture has led Siberut's people themselves to play a significant role in the rainforest's demise. Siberut is small, but many of the struggles being played out here are being repeated in rainforests throughout the country, and perhaps the world. What is happening here suggests that the challenge of rainforest conservation is more complex than usually acknowledged in the industrial world. Certainly, Siberut offers proof that logging cannot be conducted sustainably in rainforests, even when the timber is supposed to be "selectively" felled. But the social and economic changes taking place on this island also raise questions about many environmentalists' approach to rainforest conservation. Those who call for a halt to logging of tropical forests have largely failed to suggest workable alternatives that take into account tropical countries' national development needs. Moreover, in their efforts to save the world's rainforests, environmentalists may be as guilty of ignoring local peoples' rights and aspirations as commercial loggers and government officials. On Siberut, for example, some environmentalists advocate bans on hunting in most of the forest and on the clearing of trees to make gardens. The Siberut people, not surprisingly, are opposed. When asked about this conflict, Marcel Silvius, Indonesian coordinator for the environmental group Asia Wetlands Bureau, admits, "Our concern [as environmentalists] is not with the present generation." The difference of a decade Only ten years ago, Siberut looked set to become a rare conservation success story. The largest of the four islands that make up the Mentawai archipelago, it had attracted attention from anthropologists and environmentalists since the 1960s. The plants and animals on Siberut evolved in unique ways because the island was essentially isolated from the outside world for a period of about 500,000 years in the mid-Pleistocene era. Siberut's people, known as Mentawai, are one of the oldest representatives of Stone Age culture in Asia. The island is so special that, in 1981, it was named a national biosphere reserve, as part of an international conservation program supervised by the United Nations. The move raised hopes that Siberut's ecological treasures would be preserved. In 1980, after two years of intensive research, the World Wildlife Fund (WWF, now the World Wide Fund for Nature) released a report calling for the protection of the island's rainforest. Endorsed by Indonesian Environment Minister Emil Salim, the report, "Saving Siberut," contained an astonishingly detailed list of prescriptions, ranging from the amount of land that should be set aside as a nature reserve to the clothes and tennis shoes with which local guards should be supplied. The WWF plan, wrote Salim, showed "exactly how nature conservation can take its appropriate place in integrated land-use planning." Today, the hopes of a decade ago are largely gone. On paper, at least, Siberut remains a national biosphere reserve. It has also been the subject of two more lengthy WWF reports. Yet, asked what happened to that first bold plan, WWF scientist Kathy MacKinnon answers, "Nobody put any money or manpower or commitment behind it." The report did result in the creation of a nature reserve, covering about one-quarter of the island. But environmentalists contend this is not big enough, and claim that loggers and local people alike have taken to pillaging the supposedly protected land. On Siberut, a tourist guide named Yuli predicts, "In 50 years, there will be no more forest here." (To protect their privacy, only the first names of Siberut's residents are used in this article.) Underlying the pessimism is one simple fact: the fundamental incentive for destruction of Siberut's forest--the opportunity, however short-lived, to make money--has proved far more compelling than any argument for preservation. Forces of destruction Commercial logging is the most destructive force on the island. Four timber companies, all controlled by Indonesians, work on Siberut. Together, they own the rights to log three-quarters of the forest--all land outside the nature reserve. The companies, say many islanders, ignore the laws for selective harvesting and for replanting of trees. On an island as remote as Siberut, policies drawn up by officials in Jakarta carry little weight "Logging is not sustainable," says Yuli, who worked for three years as a surveyor for one of the firms. "There is no balance between cutting and replanting." Although companies are only supposed to cut trees with a diameter of 50 centimeters or more, "the big trees crush the little ones as they fall," Yuli explains. The tractors and trucks used to haul the logs wreak further damage as they travel to and from the coast. The situation supports what growing numbers of scientists contend: that "sustainable logging" is a contradiction in terms. No matter how reasonable it looks on paper, in reality, even "selective" commercial logging in virgin forests causes widespread destruction and disruption to the trees, plants and animals within. With timber products bringing in some 10 percent of Indonesia's foreign exchange each year, however, the government has no plans to reduce commercial logging. But it does want to take fewer trees from virgin forests, which now supply virtually all of Indonesia's commercial timber. By the year 2010, officials says, half of the timber should come from plantations. Of Indonesia's estimated 143 million hectares of forest land, some 18.2 million hectares are slated for protection as nature reserves. Logging will be prohibited on a further 30 million hectares, the government says, but this land will be open for other uses, such as tourism. The policies, says Tony Whitten, a British scientist, "are improving all the time. But they aren't accelerating fast enough to deal with the underlying problems." Indonesian officials say they are doing the best they can. Herman Haeruman, head of the National Planning Bureau (BAPPENAS), contends, "We try to be very pragmatic. But as with any developing country, our problem is implementation. We need more money." Moreover, he maintains, "It is poverty that is destroying the forests. If we manage the trickle-down effect, from [logging] companies to the people, that might reduce forest destruction." There is no evidence on Siberut to support Haeruman's view, however. Thanks in part to contact with loggers, but also as a result of government policies, the lives of the Mentawai have certainly changed. But they do not appear to have improved. Instead, their economic security is diminishing as better- educated and more worldly outsiders profit from Siberut's natural wealth. In 1954, as part of a modernization campaign, the government of a newly independent Indonesia banned indigenous religion on Siberut, forcing people to choose between Christianity and Islam. The Mentawai were ordered to leave their traditional homes and to move into new villages, consisting of government- designed huts and situated for the convenience of the officials in charge of the modernization effort. Primary schools were built in nearly every big village, and Siberut was included in the long list of remote islands to which doctors from Java were supposed to be sent. There was no attempt, however, to help the Mentawai benefit from the economic changes that soon occurred on Siberut. Says Bintoro Wisnu, a member of the Indonesian environmental group SKEPHI, the Non-Governmental Network for Forest Conservation in Indonesia, "The Indonesian government doesn't pay attention to the forest people. Its priority is investors, local and international." Today, the lopsided results of this policy are apparent everywhere. The Mentawai have been virtually shut out of the timber industry, and work only as low-paid suppliers to the trading companies that exploit Siberut's non-timber resources, principally rattan. Yet they want money to buy modern things. A consumer culture is developing rapidly, obliterating a lifestyle and traditions dating back some 3,000 years. Less tangible than a timber harvest, this shift in human values and ambitions nevertheless represents a great threat to the rainforest. Paying for modernization Three times a week, a small ferry brings crates of beer, cartons of cookies and cigarettes and dozens of sacks of white rice to Siberut from Padang, the capital of West Sumatra. The ferry leaves Siberut stocked full with long bundles of rattan cane and bags of cloves. These days, it carries a more unusual export as well: a special resin, called gaharu, found in only some of the island's ancient trees. Traders from Padang pay the Mentawai to search for gaharu, which is prized as incense in parts of Asia and the Middle East. Since a tree must be cut down in order to discover if it contains gaharu, the trade has resulted in the wanton destruction of thousands of trees. Similarly, the Mentawai have cut down so much rattan to sell that there is hardly any left. Radios are common throughout the island and, where electricity is available, television is as well. Arriving at Siberut's northern dock, a visitor is likely to hear "Rock Around the Clock" and other 1950s U.S. classics blaring from a transistor radio on the beach. At Tiop, a little village three hours inland by canoe, visitors can stop for a beer and some chewing tobacco at the general store--then sit and watch "Wheel of Fortune" on a 26-inch television set. Fewer and fewer Mentawai now go without Western clothes; only some of the older people stick to the traditional loincloth. The young also scorn the full-body tattoo, once a Mentawai trademark. Growing numbers of young men, and a few young women, leave the island to study or work elsewhere; some 600 now live in Padang. With its shops, cinemas and restaurants, the town seems a cosmopolitan center compared to Siberut. For centuries, the Mentawai hunted only with bows and arrows, but today the young men use air rifles. They ignore, or never learned, traditional rituals surrounding the taking of life that kept hunting to a minimum. Now, thanks to modern weapons and modern ways, the rare monkeys and birds of Siberut are dying out. "I would say about half the people on the island want to modernize their lives," says Yudas Sabaggalet, a Siberut native who left the island at the age of six to go to school in Padang. Sabaggalet himself, with his James Taylor t-shirt, sneakers and dreams of higher education in the United States, is a good example of the enormous cultural changes that are taking place. On his rare visits home, the young man seems centuries removed from his mother, who speaks little Indonesian and spends her days in the forest harvesting sago. There is widespread agreement that living conditions have worsened in a number of ways since the timber companies arrived. "Since the loggers came, the river has been dirty. We can't drink water straight from the river anymore," says a man named Asmin, voicing one common complaint. Yet the Mentawai appear divided in their attitudes toward logging. Some, like 20-year- old Amril, are angry that they cannot get jobs with the timber companies, because they want to make money. "I would like to buy a car," says Amril. "It would be so easy to visit my cousin in the next village." Currently, Amril makes the trip on foot, or hitches a ride on a timber company truck. He talks of having electricity, so that his house, like those in the logging camp nearby, could be lit at night. "I don't like the idea of cutting down the forest," the young man says, "but the company is doing it slowly and plans to replant." The timber companies hire very few Mentawai, claiming that they are unable to keep up with the work routine. "They show up when they need money, then disappear into the forests for weeks," complains Miruwan Hamta, assistant to the director at P.T. Cirebon Agung. Of the company's 250 workers, only 20 are Mentawai. However, at the government's suggestion, the company has "helped" the Mentawai, Hamta claims. "Every month we donate 200 liters of benzene to the village leaders, and every year since 1973 we have donated for a small party to celebrate independence day." The company has also built schools and dormitories for students, she says. Growing pressures While logging continues unabated on Siberut, the government is stepping up its efforts to attract non-timber industries to the island. One scheme to replace about half the forest with a palm oil plantation was recently aborted, perhaps as a result of pressure from Indonesian and foreign environmentalists. But the chair of West Sumatra's development planning board leaves no doubt that the government has plenty of other projects planned. "We must accelerate development on Siberut," the chair, Rustian Kamaluddin, insists. "We want more funds to go to these islands, and we have presented a request to this effect to the government in Jakarta." He gestures to a map on the wall. It shows Siberut as an almost unbroken expanse of green. But Kamuluddin, looking to the future, sees the island as a productive part of his domain. He and other local officials say they are looking for investors who will produce rubber, palm oil, rice and cassava on Siberut for commercial use. Conservation of the rainforest, so important to environmentalists, is simply not among Kamaluddin's concerns. Siberut's ecological wealth, insofar as it cannot be eaten or sold, appears irrelevant to him. In Indonesia, where about 70 percent of the country is forest land, Kamaluddin's perspective is widely shared. "Land [for development projects] must come from the forest," explains C. Chandrasekharan, a consultant from the United Nations Food and Agriculture Organization to the Indonesian government. The country's 1.7 percent average rate of population growth--higher in the rural areas--also makes it inevitable that tropical forests will be lost as communities grow. Moreover, some of the issues that inspire rainforest defenders in the industrialized world have little relevance to day-to-day reality on Siberut or indeed, in Indonesia as a whole. The idea that tropical forests should be preserved because they act as the cleansing "lungs" of a polluted world, for example, is often countered here with the suggestion that industrial countries should concentrate on reducing pollution, for which they are overwhelmingly responsible. Likewise, the fact that tropical forests may contain plants that have new medicinal or industrial use does not carry much weight in a country where children die every day from diseases which could easily be prevented with existing medicines, and where industry is still at a rudimentary stage. For Siberut and other Indonesian rainforests, time is running out. "Indonesia could have the best system of protected areas in Southeast Asia," says Silvius, of the Asia Wetlands Bureau. "It has a sensible plan--they've looked at the whole country and put priorities on the areas for protection." But the plans that look good on paper aren't being put into practice. Six out of the 20 "priority areas," in fact, have already been destroyed. Sums up the WWF's MacKinnon: "The problem is not with the policies. It's that the policies are not being implemented. There's a lack of funding, there's a lack of trained personnel, and I think there's a serious lack of commitment." But until they see economic alternatives to development strategies based on intensive resource exploitation, neither the government nor the people of the island is likely to exhibit that commitment. Articulating such alternatives will have to be an integral part of environmentalists' agenda if they hope to succeed in preserving the world's rainforests. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 INTERVIEW EMPIRES IN DECLINE An Interview with Paul Sweezy Paul Sweezy is the long-time editor of Monthly Review, an independent socialist magazine published out of New York He is the co-author of the ground-breaking Monopoly Capital, and author or co-author of more than a dozen other books. A former assistant professor at Harvard University, he has held visiting professorships at Cornell, Stanford, Yale, the University of California, the New School for Social Research, Manchester University and many other schools. Multinational Monitor: Why did the Soviet system fall apart so suddenly after the coup? Paul Sweezy: I think that it didn't really fall apart at this time. The basic changes came before this particular crisis. The coup, obviously an amateurish, bungled job, accelerated matters somewhat. It cleared away certain obstacles to a process--the disintegration of the old command, centralized system of the economy--which was already underway. On the other hand, I don't think that very much has really changed. I don't see that Gorbachev lost anything--I think he gained power, as a matter of fact, insofar as he or Yeltsin or anyone else as an individual can have any power. These processes are very elemental processes and one need not be--or should not be--surprised when episodes like the attempted coup or crises of that kind occur. I'm sure that they will. I think the process has been underway for two years now, is continuing and will continue. I don't know where they are going, but Marxist analysis ought to have some kind of framework within which to put historical events of this kind. Marxists should be thinking in terms of classes and class struggles and they are not. MM: What are the underlying structural causes of the disintegration of the command economy? Sweezy: The Soviet economy had gone into a stagnation during the Brezhnev era. The outward manifestation of this was, of course, a slow-down in the rate of growth which was apparently, from what we know now, much steeper than what official statistics showed at the time. The centrally planned system was enormously effective early on, after the revolution, in solving the problem of making the Soviet Union a formidable military power. It never had succeeded in solving any of the problems of the peacetime economy, nor did it really try to, because the Cold War forced the Soviet Union to continue as a military-dominated dictatorship even after World War II. If, at the end of World War II, when the regime was popular and success had been achieved,it had been feasible to transform their economy into a peacetime economy and to loosen up the dictatorial regime, I think there would have been a chance for the Soviet Union to develop into something quite different. [Instead], the Cold War ensued. The United States almost deliberately, as a matter of policy, imposed the Cold War with an intention of forcing the Soviet Union into an inescapable bind from which it could never really transform itself into an attractive socialist economy. Having missed that potentiality, the system from then on deteriorated. It did have the recuperative power to reconstruct the society. But after that it began to wind down. Out of necessity it used its resources, its best resources, its best man- and woman-power for military purposes. This began to take its toll, and I think that is at the origin of the stagnation of the 1970s and 1980s.... I edited a book called Post-Revolutionary Societies which was published in 1981, four years before Gorbachev came to power. In it, I spoke of the stagnation of the Soviet economy in parallel to the stagnation of the capitalist world economy, with both of them having similar manifestations in the slow-down of growth of the economy but no way out of the crisis. Gorbachev recognized that something had to be done. I don't know if there was any way other than what he did--he had to open it up. For that, he gets credit, whatever happens. He opened up. He accepted the implications of the Cold War: that the Soviet Union had lost it; that they had to let the Eastern European countries go their own way. All that was implicit in the collapse of the system which had fought World War II, won World War II, succeeded in reconstructing the economy but never in making a transition to a system which would operate in peacetime, [in part because it] never had peacetime. MM: What would be the main elements of a Marxist analysis of the current situation in the Soviet Union? Sweezy: From a Marxist point of view, every society has to be first conceived and understood as a class society--that is every society that history has dealt with for the last 15,000 years, since the agricultural revolution. They are all class societies. If you want to understand them from a Marxist point of view, you have got to [identify] the class structure, the subordinate and dominant classes, the modes of extracting surpluses. Nobody seems to be applying that framework to the Soviet Union today, and there are reasons for it. The class structure of the Soviet Union is extremely fluid and undefined, very difficult to deal with. I don't know of any good work, theoretical or empirical on this subject. The capitalist class, which they want to get, doesn't exist in the Soviet Union. The working class does exist--it is perhaps the most clearly formed class in the Soviet Union--and consists of those who would not be able to survive if they did not have their wages or unemployment insurance. That class is what Marx calls a class in itself, as it exists. It is statistically measurable; the working class is probably 75 to 80 percent of the Soviet population. But it has a history which has prevented it from developing its own ideas, from recognizing its interests. It is a class in itself, but it is as far as you can get from a class for itself, by which Marx meant a class which is conscious of its existence as a class, knows its interests, has some kind of leadership and organizations to carry through. The best example in the developed capitalist world of a class for itself is the monopoly capitalist class of the United States, Japan and Germany. They are enormously powerful, very well aware of their interests and have the political means to carry out their project. Nothing like that exists in the Soviet Union. [Soviet leaders] want to create a capitalist system, but they do not have a capitalist class to help them. People like Gorbachev and Yeltsin and these individuals who are thrown up by historical turbulence are in no condition, really, to provide the framework within which a capitalist project can be carried forward. You have to remember that the development of a capitalist class in the West took at least a couple of centuries. In the Soviet Union, what they want to do is get the mode of production [now] and [develop] the class later, or at the same time. It is a historical problem without any precedent. MM: To what extent can foreign capital and foreign investment fill that role or stimulate others to fill it? Sweezy: I don't think it can fill the role at all. Or, let's put it this way: to the extent that it fills the role, it will lead to what I think can best be described as a Latin Americanization of the Soviet Union. In other words, it will make it into a colonial area. I think the Soviet Union is too big and unwieldy; I doubt that can be done. Certainly the idea that foreigners are going to go into an area as big and complex as the Soviet Union and do the job is an illusion. They could conceivably set up what would in effect be colonies or plantations, perhaps, which would be sources of wealth for some segments of the Western capitalist economies, but it wouldn't have anything to do with creating a capitalist society in the Soviet Union or Russia. MM: Do you have any predictions about where the Soviet economy may be headed? Sweezy: I think it depends very much on whether the working class in the Soviet Union and particularly in Russia and the Ukraine develops in the direction of self-organization and becoming conscious of its interests as a class, its potential power, its interests, and so on. To what extent that may happen at the present time, I really don't know. I have seen some reports which indicate that there are at least some areas--the coal miners, the auto workers, maybe the transport workers-- where there is some movement. Looking at the history of capitalism [in the West], the emergence of a working class and its development of its own institutions, its own ideology took a long time--pretty much the whole nineteenth century. It was much more reformist than revolutionary in terms of what Marx expected, but, at any rate, by the end of the nineteenth century, by the First World War, you had an international working class movement with its own institutions and well-developed ideas. But look how long it took. Can we expect anything to go very much more quickly in the Soviet Union? I would say one thing we should have learned more than anything else is the general rule that everything goes slowly in history. It may go faster than it did earlier in history, but even fast history is pretty slow by the timetable of an individual's life. Usually, you have to think in terms of generations and not in terms of years or decades. So I think the processes are going to be long and drawn-out, and many surprises can come up. MM: How eager is the Soviet populace for a market economy to be imported? Sweezy: It looks to me from what I have read that they are not very eager at all. They do not seem to have much enthusiasm for a market economy, though it might be good for them. Some kind of order probably is necessary and I think markets--without actually involving a full-fledged restoration of capitalism, maybe something along the lines of the New Economic Policy of the 1920s--[might be beneficial]. MM: To what extent does Communist ideology still have adherents among the general population? Sweezy: Communist ideology [in the Soviet Union] had become a rigidified set of doctrines which was more ideological than scientific; [it] had become an instrument of rule rather than [a tool of] serious analysis. Under Stalin, it became rigid, and from then it degenerated even by Stalin's standards. He at least had some interesting theories and thoughts about things like markets and nationalism which were not simply ideological constructs. But by the time of Brezhnev, communist ideology had been totally distorted from any of its roots in Marxism. And the way it was taught in the schools was apparently totally boring and stupid. [So young people] naturally have no idea what Marxism is all about. I would expect that now the possibility may exist for Soviets to begin to study Marx and Lenin and Trotsky and some other theorists who were very creative thinkers. We have the same problem here of course. Our theories of democracy are rigidified and stultified. MM: What elements from the old Soviet system are worth salvaging, either for the Soviet Union or for other societies? Sweezy: I think the elements which are worth salvaging are perfectly clear: the social security system, the health care system, the educational system. Those were the only things that kept the old system going as long as it did. After all, people did have a certain sense of security. That is what they are losing all over Eastern Europe now. Not as much would have been done in the social security systems in Western Europe if the Soviet Union did not in a sense provide an example with which they competed. Though the Swedish and the German and the English examples go back long before the [Russian] revolution, I don't think they would have been as thorough as they were but for the Soviet example. Those things are not only salvageable, but they are essentially here to stay. MM: How is the end of the Cold War and the dissolution of the Soviet Union going to affect Cuba? Sweezy: I really do not know.... I think the United States is behaving very foolishly and stupidly toward Cuba. They obviously would like to restore the old order in Cuba, but I don't think that the Cubans will have any enthusiasm for that. To be restored at all, it would have to be in a bloody dictatorial form. If, at the present time, the United States would say, "Alright, let's trade with Cuba and treat them like another country," that would be a real challenge for Fidel--I don't know what he would do then. It might be the best way for the United States to win the battle of Cuba. On the other hand, I don't think our ruling class would ever have the sense to do that. MM: What are going to be the main effects of the end of the Cold War on the U.S. economy? Sweezy: The collapse of the Cold War is a genuine watershed in the post-World War II development of capitalism and in particular for the United States. The U.S. economy has been sustained--with whatever qualifications you want to make--by the Cold War for 40 years. That hasn't been suddenly eradicated, but it will never be the same. I don't think there is ever going to be a plausible enemy like the Soviet Union which can make this country easily and willingly swallow wasting 5 or 10 percent of the gross national product on military expenditures. [Yet this] has been the sustaining element for the relatively prosperous development of capitalism. So we are in a period of chronic crisis, I believe. Capitalism, at heart, is a system of capital accumulation, and the capital accumulation process is in a shambles. There is nothing like the historic role of private capital accumulation to underpin the whole economy. And without that and without the Cold War, I don't see any plausible alternative, with the possible exception of a very highly developed welfare state society--but that is politically far out of reach now. Otherwise, I cannot see what is going to make the system work in any reasonably satisfactory way in terms of secure, reasonably [harmonious] interclass relations. I think that is all down the drain with the Cold War, and I don't think the people who think seriously about these questions have begun to grasp what is going on. There has been a drastic, basic change in the global conditions under which capitalism developed. Again, you need to use a class analysis to understand our capitalist class, the most powerful class the world has ever seen, but one which has no thoughts, no way of understanding itself. It knows what its immediate interests are but not its long-term interests. MM: Many business groups have suggested that free trade is a means to spark worldwide growth. Sweezy: I think free trade on a global scale is in retreat, very definitely. The global capitalist economy is being regrouped into three empires or spheres of influence--the United States in the Western hemisphere, Germany in Europe and Japan in Asia--and these are more and more be coming blocs. They may have freer trade within the blocs, but if you average the trade freedom on a global scale, I think you'll see it is going downhill, not uphill. [In any case], you can't be serious to think that free trade is going to solve the problem of a shortage of private capital accumulation. [Trade] is too small. MM: How do you expect relations between the United States, Japan and Europe to evolve? Sweezy: It will take some time before we can see that very clearly. I think the U.S. relative economic decline will probably be speeded up. To what extent this can be compensated by military domination remains to be seen. I think it is going to depend to a considerable extent on what happens internally. If the U.S. population does not react in some way to militarization and world domination, it can probably go on for quite a long time with terrible disasters. The Gulf War is just the beginning of what could happen. I put whatever hopes I have at the present time on a kind of reanimation of domestic opposition to the whole shebang--the whole range of international and domestic policies. But I have to say that I don't see many signs of that reanimation. Still, one who lived through the 1930s--as I did--is always looking for signs of an uprising from below such as took place in the thirties and wondering why it doesn't happen. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 LABOR ORGANIZING THE SOUTH By Robert Weissman "PEOPLE IN THE TEXTILE INDUSTRY HERE are among the most unfairly treated people in America," says Pete McIntyre, a fixer with the Fieldcrest Cannon Co., a textile firm headquartered in central North Carolina. "We are overworked, work in unsafe conditions with unsafe equipment and receive low wages." Blue collar workers have "no rights, no say-so," he states. Things are done "the company way or no way." Working conditions at Cannon Mills, where McIntyre is employed, have become increasingly difficult in the last 10 years, he says. "In the last 10 years it went downhill in terms of caring for people." The company was sold twice in the last decade. In 1982, the Cannon family, which had owned and run Cannon Mills from its beginnings at the turn of the century, sold the company to a California financier, David Murdock. Long-time owner Charlie Cannon ran the company in a paternalistic style and owned much of the property--including the houses surrounding the company's mills--in Kannapolis, North Carolina, a classic company town. When Murdock took over, many jobs were cut and the remaining jobs were "stretched out" (meaning workers had to take on additional responsibilities or work at a faster pace). In 1985, Murdock sold the company to another textile corporation, Fieldcrest. Under Fieldcrest, more jobs have been eliminated and the remaining jobs have again been stretched out. "Every time they sell the place, working people have to pay for it," says McIntyre. Many Fieldcrest Cannon mills are unionized,but the old Cannon Mills is not. Given the hardships inflicted on its workers in the last decade, it would seem to be ripe for union organizing. In 1985, before Murdock sold the company, the Amalgamated Clothing and Textile Workers Union (ACTWU) attempted to organize the company. An election was held, and the union lost by a vote of 5,982 to 3,530. Six years later, ACTWU decided to try to organize the plant again. Following three months of intense campaigning by both the union and the company, an election was held August 20-21, 1991. The union improved its performance dramatically. The final vote count was 3,233 to 3,034 against the union, but ACTWU has charged Fieldcrest Cannon with illegally instructing clerical workers who were not part of the bargaining unit to vote. Union activists are hopeful that the National Labor Relations Board will order a new election, and believe they will ultimately succeed in organizing Cannon Mills. If ACTWU is successful in organizing Cannon Mills and adding several thousand new members to its union, it will have won a major victory: the biggest union organizing victory ever in the Carolinas, in fact, and one with significant implications. A corridor of textile mills weaves its way through North Carolina's Piedmont region, and most of these mills are unorganized. A victory at Cannon Mills could have a ripple effect, sparking organizing efforts at neighboring mills. Conflict in Kannapolis Progressive elements in the labor movement have long made "Organize the South" a rallying cry, but with little effect. Most unions do not even attempt to organize in the region, believing it to be too difficult. As a result of both the South's unique impediments to unionizing and labor unions' reluctance to devote resources to the region, the South has the lowest levels of union membership in the United States. The struggle to organize Cannon Mills highlights many of the difficulties of organizing in the South, but it also suggests that they can be overcome. The most significant obstacles to organizing the South are actually the same as those posed throughout the rest of the United States. Employers can make increasingly credible threats to workers that they will lose their jobs if they unionize. Labor law prohibits corporations from threatening to close plants if they are unionized or to fire workers for supporting a union, but companies are able to circumvent this restriction by claiming that workers may lose their jobs due to business developments directly related to unionizing. They point to competition from producers--often U.S. companies--employing low- wage labor in foreign countries, and claim that their plant will not be able to compete if it is unionized. They assert that strikes accompany unions and that they will permanently replace striking workers [see "Replacing the Union," Multinational Monitor, April 1991]. And they employ anti-union consulting firms to effectively package their message to workers [see "Confessions of a Unionbuster," Multinational Monitor, April 1991]. Fieldcrest Cannon's "scare tactics made the difference" in the August election, according to McIntyre. Fieldcrest Cannon representatives did not respond to repeated requests from Multinational Monitor to answer these and other claims of ACTWU supporters. The company told workers that they would put their jobs in jeopardy if they supported the union. One company leaflet asked, "What do Fieldcrest Cannon's Bedspread Mill and Sheeting Mill in Eden have in common?" Its answer: "Both plants were unionized by ACTWU. Both plants closed due to economic conditions. Union dues didn't buy job security." Another leaflet, pointing to the same closed factories, said, "The future depends on profitability, not unions." A radio advertisement opposing the union urged workers not to be left "home alone." Fieldcrest Cannon also emphasized the possibility of strikes and the hiring of permanent replacement workers. After referring to the economic costs workers bear during strikes, a letter from James Fitzgibbons, chair of the board of Fieldcrest Cannon, sent to all Cannon Mills workers and addressed to "fellow employees" stated, "We know how ACTWU operates. They would not hesitate to pull you out on strike if they thought it would serve their purposes." If there was a strike, Fitzgibbons wrote, "We would exercise our legal right to hire permanent replacements for anyone who went on strike over wages, benefits, or other 'economic' matters.... We would hate to see it come to this, but we would use every legal means to keep our plants running. We will never give in to the ACTWU." Individual supporters of the union were harassed as well. McIntyre says supervisors told workers that, if the union lost, they would "remember" those who supported the union. One staunch union supporter told Multinational Monitor that he was harassed on the job because of his support for the union, that he "could feel the supervisor watching over him," even when he was just taking a cigarette break. In the face of the power culture These types of threats and harassment are effective everywhere in discouraging workers from supporting unions, but they work especially well in the South, where the regional culture militates against resisting authority. Workers in the South, says Robert Freeman, a longtime organizer in North Carolina for ACTWU and its predecessor union, "are under the impression that whatever the company tells them is the truth, that it comes straight from heaven." In some ways, the plantation culture still exists in the South. Jack Sheinkman, president of ACTWU, told the August 31 Solidarity Day labor rally in Washington, D.C. that "in the South, textile mills stand on old cotton fields--but the plantation mentality hasn't disappeared. Today's mill owners are yesterday's slave owners." The lingering effects of the plantation economy are evident at Cannon Mills, where black and white workers--as they do at other companies--refer to their supervisors as "bossman" or "Mr. Bossman" without intending any irony. Some reportedly call their supervisors "overseers." The challenge unions pose to business is unfamiliar to many workers who are not well acquainted with unions or unionism, and it brushes up against what Jerry Tucker, former director of United Auto Workers Region 5, which includes Arkansas, Louisiana and Texas, and currently the coordinator of the dissident New Directions Movement, calls the "power culture" of the South. Tucker says that, in much of the rural and small-town South, "a business elite directs all of the economic activity in league with bankers." In many places, the Chamber of Commerce exerts a virtually unchecked influence over local politics. Business power is especially strong in company towns like Kannapolis. The black-white divide Intertwined with the plantation mentality and the cultural dynamic of the South is racism, long a tool used by employers to pit workers against one another. "Dividing workers based on race is a time-worn ploy" of employers, says Tucker, noting that it is by no means limited to the South. Companies "do it as consistently today as ever," he says. In the early part of the twentieth century, companies would often hire blacks to cross picket lines set up by white strikers and to work as scabs. That is a thing of the past; today, black workers are usually more pro-union than whites. One of the main ways employers now use racism is to scare white workers by contending that "blacks will take over the union," says Mark Fleischman, director of organizing for ACTWU's Southern region. They also try to turn blacks against the union by arguing that the union is run by white outsiders, he says. Though one area where many Cannon Mills workers live is considered a stronghold of the Ku Klux Klan, race was not a major issue in the Fieldcrest Cannon union drive, according to union organizers. Race relations at the Cannon Mills are generally held to be pretty good. One leaflet opposing the union and signed by an otherwise unidentified "Concerned Citizens of Cabarrus & Rowan Counties" did ask, however, "Why do union organizers target plants where more than 25 percent of the workforce is black?" It answered, "They take blacks' votes for granted." At other companies, race is a more fundamental issue. Ida Boddie, a worker at the Rocky Mountain Undergarment Co. and a member of Black Workers for Justice, a group of African-American workers in North Carolina and Georgia, says company favoritism toward whites divides workers at her overwhelmingly black worksite. Whites "get more money for doing the same jobs" as blacks and also "get better jobs.... That's the way [the company] keeps them separated from us," she says. The union and the South The special obstacles notwithstanding, it is clear that the South can be organized. ACTWU and a few other unions have devoted resources to the region and been successful. Most unions simply do not try to organize in the South, creating a self- fulfilling prophecy that it cannot be done. Freeman argues that Southern workers "have never been educated on who their enemies are." Once unions succeed in doing that, he says, Southern workers will join. Tucker says that the South' s anti-union ethic "does not stand up when unions take the time to work in the community" to show workers that supporting a union is in their interest. Once Southern workers are organized, he says, they can be "more dedicated advocates [of unions] than their counterparts in the North." The historic importance of organizing the South was to remove corporations' ability to threaten to shift production facilities from the unionized North to the South, where workers received lower wages and fewer benefits and unions did not interfere with management's prerogative to organize the workplace. While the U.S. South is "still a major battleground," says Tucker, its strategic importance to the labor movement is diminishing. If the proposed U.S.-Mexico free trade agreement is enacted, he explains, U.S. companies will be able to transfer production to Mexico without penalty, and Mexican wage and benefit levels will set a new low standard with which U.S. workers--in both the North and the South--will be forced to compete. But Fleischman sees a continuing political importance to the South. "As the South goes, the country goes," he claims. He believes labor organizing in the South could make the region more politically progressive. "Politically, the South is horribly conservative for all the wrong reasons.... An active labor movement, if it were able to do significant organizing, would be able to move [the region] along the political spectrum very quickly." And, of course, union organizing is critically important to the Southern workforce, the most exploited in the country. Bonnie B. Quick, vice president of ACTWU Local 1584 and a worker at Cone Co., a textile firm in Salisbury, North Carolina, was active in aiding the organizing drive at Cannon Mills. She speaks with passion about her father, a retired textile worker, who lives with her mother on their social security checks. Her father has lung problems, which she suspects are due to brown lung, a condition contracted by breathing cotton dust; he has arthritis in his feet, which she believes is a result of his standing at work for 42 years; and he has severely impaired hearing, which she thinks comes from his working with loud machinery for so long. Quick says that her father does not apply for workers' compensation because he "does not want to fight the company." Now Quick herself is beginning to suffer ailments related to working in a textile mill. "I hope my children never have to work in a cotton mill, but they might," she says. "If they do, I want it to be better for them than it was for my dad and me." That is why she is active in the union, she says, and that is why workers in the South need to be organized. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 CORPORATE PROFILE TRASHING THE FUTURE By Brian Lipsett Brian Lipsett is a research analyst at the Citizens' Clearinghouse for Hazardous Waste. As MAJOR CORPORATIONS rush to co-opt the rhetoric and image of the environmental movement--and in some cases to co-opt the environmental movement itself--one company is far ahead of the pack. Reviled by grassroots environmental justice activists, Chicago-based Waste Management, Inc. (WMI), the largest U.S. waste disposal company, has, with some success, sought to portray itself as an enlightened, ecologically minded corporate citizen. The best refutation of Waste Management's claims is its own record. During the company's rapid rise to the top of the waste disposal industry, WMI has left a trail of broken laws, poisoned communities and angry people. The company holds the dubious distinction of being the most heavily fined disposal firm in the country and is financially responsible for cleaning up a record 130 Superfund dumps. It has also chalked up a long list of felony convictions for price fixing. Despite its legal problems, the company's sales and profits have skyrocketed. WMI's chief executive officer, Dean Buntrock, inherited Ace Scavenger Service, a Chicago garbage company, from his father-in-law in 1957. That year, the company had revenues of $750,000. In 1968, the merger of Buntrock's Chicago outfit and Wayne Huizenga's (his Florida cousin-in-law, now head of Blockbuster Video) garbage business led to the creation of Waste Management. In 1971, when the company's stock was first offered on Wall Street, its market value was $20 million; today, it is $19 billion. WMI's total 1990 revenue was $6.03 billion and its net income $685 million. In addition to hauling garbage and operating landfills and transfer stations in virtually every U.S. state, WMI, through its 76 percent-owned subsidiary, Chemical Waste Management (CWM), operates nuclear and chemical waste landfills and incinerators and conducts toxic cleanup work for the U.S. government. Other divisions handle asbestos abatement and pest control services. Waste Management International operates in Europe, Kuwait, Argentina, Australia and many other nations. Yet WMI has not had only good fortune. Recently, WMI and CWM's stocks (which are sold separately) have recently been on the slide. In August 1990, Barron's Magazine reported that WMI was padding its books (albeit legally) to show inflated earnings. WMI denied the charge, but its stock value plummeted $1.2 billion in heavy trading the day after the magazine hit the streets. Stock values have continued to slide since then. WMI officials blame a weak economy for their stock woes. But news about fines, explosions and negative court rulings may be the actual root cause. This is not a new experience for WMI: in March 1983, a number of environmental penalties and critical articles in major newspapers forced the company's stock value down by $1 billion over two days. In response, WMI launched a television and print ad campaign which, among other things, featured an endangered butterfly that WMI claimed to be protecting while operating a landfill. Said Buntrock, "I feel there's been too much emphasis on problems. It's time the public begins to hear about solutions." An environmental miscreant The fundamental solution that the environmental movement offers for toxic waste disposal problems is to stop producing waste. Environmentalists have called for industry to drastically reduce or eliminate the creation of toxic waste during the production of goods and for businesses and consumers to dramatically increase their recycling efforts. But, as "Trash into Cash," a recent Greenpeace report on WMI's environmental crimes and misdeeds, argues, "WMI is the leader of an industry inherently at odds with such positive approaches to the toxics crisis. Without waste, the industry would have no business." The report goes on to assert, "To maintain its status as one of the best buys on Wall Street, WMI requires a constant increase in waste. Its main line of business is at odds with the continued well- being of humans and other forms of life on earth." "Even if WMI operated as a model corporate citizen," the Greenpeace report says, "its daily operations would contribute in major ways to the destruction of the environment." But the company falls far short of such standards. Waste Management has been hit with a bewildering array of fines and citations for environmental violations. The Wall Street Journal reports that the company has paid more than $50 million in penalties and related settlements for environmental violations. At least 45 WMI waste sites have been found to be out of compliance with federal or state environmental regulations, according to Greenpeace, and, between 1984 and 1987, the company was issued more than 600 pollution violations. In recent years, WMI and CWM have been slapped with some record environmental penalties. In February 1990, Chemical Waste Management agreed to pay the state of Illinois $280,000 to settle violations stemming from the release of a cloud of toxic gas from its Sauget, Illinois hazardous waste incinerator. In July 1990, CWM settled charges that it had accepted waste banned from its Emelle, Alabama landfill for $123,000. In September 1990, CWM agreed to pay $3.75 million to settle EPA charges that the company had frequently overstuffed its South- Side Chicago hazardous waste incinerator, disconnected monitoring equipment, and routinely spilled PCBs without reporting the accidents. According to Greenpeace, one former worker at the incinerator reportedly said, "Breaking regulations was more the routine than the exception." In February 1991, an explosion at the incinerator forced its indefinite closure, pending a state investigation into the causes of the incident. WMI and CWM's record may be catching up with them. In their 1990 10K reports filed with the Federal Securities and Exchange Commission, WMI announced that it was potentially responsible for cleanup costs at 105 Superfund sites and CWM cited an additional 25 sites where it was potentially liable for cleanup costs. The average cost of cleaning up one site is $25 million. WMI's potential liability is thus very great, especially since it carries only $10 million in pollution insurance. WMI admits that it cannot secure adequate liability insurance for itself or its subsidiaries. Image is everything A company which cares about its image but has as poor a record as Waste Management must naturally devote significant resources to public relations efforts. WMI has learned that nasty publicity can be counteracted by spreading money around. Accordingly, WMI has dumped money on the media, government officials and environmental organizations. For example, WMI sponsors National Public Radio's news program "All Things Considered." Critics have dubbed the show "Almost All Things Considered," complaining that it avoids stories about WMI's troubles. The company is a major contributor to political campaigns--and its donations have not always been above board. The Greenpeace report says that a federal Securities and Exchange Commission investigation determined that WMI operated a secret slush fund for unlawful political contributions in Florida between 1972 and 1974. The report further notes that the WMI Employees' "Better Govemment Fund" was the seventh largest corporate political action committee (PAC) in the 1988 U.S. elections, giving over $430,000 to candidates for U.S. Congress from 1987 to 1988. In 1990, according to the Institute for Responsible Politics, the PAC made $392,880 in political donations. WMI has also made it a practice to hire former federal and state employees. WMI's vice president in charge of ethics, Joan Bernstein, was once a top EPA attorney. Other WMI employees include Angus McBeth, formerly of the Department of Justice, and Jeffrey Miller, formerly Director of Enforcement at EPA. Former Reagan Chief of Staff Howard Baker Jr. now sits on the company's board of directors. WMI's deep pockets have enabled it to make significant inroads into the environmental community. Since 1987, WMI has made donations of more than $50,000 to the National Audubon Society, the National Wildlife Federation, the Nature Conservancy, the International Union for the Conservation of Nature and the World Wildlife Fund/Conservation Foundation. WMI executives sit on the boards of the Center for Marine Conservation, the National Audubon Society and the National Wildlife Federation (NWF). WMI's strongest ties may be to the National Wildlife Federation, an environmental organization that has gone so far as to defend WMI's environmental record publicly. NWF President Jay Hair, in a letter to a number of people who objected to Dean Buntrock's presence on the NWF board, stated, "Waste Management, Inc. is conducting its business in a responsible manner." A former NWF staffer says that Jay Hair and Dean Buntrock are hunting pals. According to this source, Hair uses Buntrock's corporate jet for personal and NWF business. Hair's relationship with Buntrock has landed him in hot water more than once. In one instance, the EPA Inspector General investigated a breakfast meeting set up by Hair at which Buntrock successfully lobbied EPA Administrator William Reilly to prevent state governments from enacting stronger hazardous waste laws than the federal government. Hair denied any impropriety and the IG cleared Reilly, Hair and Buntrock of wrongdoing. A subsequent congressional investigation, however, blasted the Inspector General for conducting a shoddy investigation of the incident. WMI has made several attempts to become a member of the Environmental Grantmakers' Association (EGA), a loosely knit group of foundations that fund environmental organizations and projects. Several environmental groups protested proposals to allow Waste Management to join the EGA, charging that it would be outrageous to give WMI a role in setting the agenda for the environmental movement. Several EGA members also objected. In 1990, WMI was formally rebuffed. In a letter, EGA board members stated, "It is readily apparent that Waste Management Inc. has engaged in a pattern of abusive corporate conduct involving repeated violations of both criminal and civil laws, with the effect of endangering and degrading the environment." In spite of this, several EGA members continued to urge that WMI be allowed to join the association, and earlier this year, the company was successful in gaining entry into the organization. Jack the Ripper's recycling program With environmentalists charging it with interfering with efforts to reduce waste and promote recycling, WMI has publicized its recycling program. "We believe recycling is an important component of an effective integrated waste management plan. We annually invest millions of dollars in the company's recycling program, representing the largest recycling program in the world," says Geri Powell, a WMI spokesperson. "The program," she adds, "was a vision of our chairman Dean Buntrock, who saw a need for recycling and the importance of it to the environment." Critics denounce the company's recycling program as cynical and, in some cases, fraudulent. They argue that the company's motives were revealed in 1988 by a company official who told his colleagues that their recycling efforts were valuable because they would "keep those yah yahs [recycling advocates and grassroots opponents of waste dumps] off our backs." Father Joseph O'Brien, of Our Lady Star of the Sea Church in Port Isabel, Texas and a leader in the successful fight to stop WMI's ocean incineration plans for the Gulf of Mexico, says, "Calling WMI CEO Dean Buntrock a recycler is like naming Jack the Ripper Surgeon General." Several incidents reveal the hollowness of WMI's recycling claims. In Oceanside, California, grassroots leaders blew the whistle on an illegal WMI transfer station which was calling itself a recycling center. The complaint led the city to order WMI to shut down or go through a required permitting process. Grassroots leaders in Camden, Arizona witnessed WMI dumping newspapers collected for recycling in a landfill. WMI did not deny the charges of fake recycling. A Lafayette, Louisiana resident photographed WMI haulers mixing regular garbage with yard waste collected for composting. A Pattern of Racism WMI's plans to locate incinerators and landfills in cities and towns across the United States have sparked tremendous grassroots opposition. Much of the opposition has come from predominantly black and Latino communities where, critics charge, a disproportionate number of WMI's most toxic operations are situated. According to Greenpeace's Charlie Cray, the author of "Trash into Cash," WMI's "racism is inherent to the siting of their facilities, and against their workers." Hazel Johnson, a resident of Altgelt Gardens, a group of townhouses in Southside Chicago, and leader of People for Community Recovery, says, "The majority of places WMI is located are where mostly black people live." She adds, "Their landfill is in our backyard. The hazwaste incinerator is a mile away.... The odor makes us sick." In Kettleman City, in Central California, the California Rural Legal Assistance Center has filed two lawsuits on behalf of a citizen organization, People for Clean Air and Water (PCAW), against Chemical Waste Management and the state of California. The suits allege civil rights violations and violation of due process in the siting of an incinerator in Kettleman City. Forty percent of the residents of Kettleman City do not speak English and documents and hearings on proposals to site the incinerators were not translated into Spanish. Luke Cole, an attorney with the California Rural Legal Assistance Center, says the fact that each of the three existing and two proposed WMI hazardous waste incinerators is in a neighborhood composed largely of people of color shows a clear racist pattern of targeting minority communities. The population surrounding WMI's incinerator sites in Sauget, Illinois is 77 percent African-American, in South Chicago, 70 percent African-American and 14 percent Latino; in Port Arthur, Texas, 75 percent African-American; in Kettleman City, 95 percent Latino and in Emelle, Alabama, 80 percent African-American. Chuck McDermott, a spokesperson for WMI, says it is "troublesome" that "the poor are asked to bear more than their fair share of pollution," but that "race has not been a consideration" in WMI's siting of incinerators and dumps. "The criteria [WMI] uses to select sites," he states, "are environment and market driven." He also notes that WMI did not have a role in siting many of its facilities, which were bought from other companies already operating them. But PCAW's Mary-Lou Mares is not convinced by such arguments. "I think that they purposely site these things in minority communities. Can you see putting them in Beverly Hills?" she asks. "People in these communities don't have time to fight causes like this, they're too busy feeding their families. But people are starting to wake up." Going global Aiming to continue its rapid growth, WMI is turning its attention to overseas markets. Ten percent of the company's revenue already comes from its international division, according to Greenpeace's report, and the company's manager for Far East business development has predicted that Asia will replace North America as the biggest WMI customer within 20 years. WMI's operations in Europe--where it reportedly holds contracts with more than 300 communities--and in other countries, such as Mexico, are also growing quickly. The most significant check on WMI in the United States has been the grassroots environmental movement. The efforts of local groups have made it extremely difficult to site a new incinerator anywhere in the country and have cost WMI a number of government contracts. Now, as WMI eyes new, global markets, the U.S. environmental justice movement--if it hopes to restrain Waste Management--will be confronted with the immense challenge of sparking and working with similar movements in other countries. The Fix Is In WMI HAS BEEN BESET by price-fixing charges since early in its corporate history. In 1962, the Wisconsin Attorney General charged Dean Buntrock and 16 other defendants with price fixing. The suit alleged that Buntrock and others had "threatened physical harm to the owners of competing ... disposal firms, corporations or persons ... and their families ... if they offered or submitted competitive bids to accounts handled by the defendants." The judge in the case entered a temporary injunction against the practices which stood until 1970, by which time Buntrock owned most of his co-defendants' businesses. Throughout the last 20 years, the company has been hit with legal challenges over price-fixing activities. In 1971, the Illinois Attorney General sued WMI and several other companies for price fixing through a trade organization comprising 95 percent of Chicago's trash haulers. The organization, Chicago and Suburban Refuse Corporation, paid a 550,000 fine and promised not to do it again. In 1974, a WMI subsidiary was found guilty of price fixing in Wisconsin. In 1980, WMI was indicted in Atlanta for engaging in price fixing with Browning Ferris Industries (BFI) and SCA Services. In 1984, the company was convicted. A local WMI manager was sentenced to one year in jail but served 45 days. According to an FBI memorandum on the case, investigators believed that the "activities in Atlanta were probably directed by corporate officials from the company headquarters." The company's antitrust violations have continued during the company's recent boom. In 1987, WMI pleaded guilty to price- fixing charges in Toledo, Ohio and paid a $1 million fine. In 1988, WMI pleaded no contest to price fixing in Broward and Dade Counties, Florida. In March 1989, WMI pleaded no contest to charges of price fixing in Los Angeles, paying $1 million. In December 1989, WMI pleaded guilty and agreed to pay $1.5 million to settle price fixing charges in Orange and San Diego Counties, California. WMI claims the violations are isolated acts committed by renegade employees acting in violation of company policy. Geri Powell, a Waste Management spokesperson, says, "There have been a few isolated violations concerning anti-trust charges. However, only a handful of Waste Management's 500 local operating divisions have been found in violation of criminal laws. In every instance where illegal activity was uncovered, investigations revealed the individuals were acting on their own." A case settled in 1990 contradicted these assertions, however. A civil class-action suit filed in 1987 in Philadelphia, Pennsylvania, alleged that WMI and its largest "competitor," BFI, had engaged in a nationwide price-fixing conspiracy for 10 years. In 1990, WMI and BFI settled, agreeing to pay the plaintiffs, a group of their customers, a total of $50 million in penalties (WMI paid $19.5 million, BFI paid $30.5 million) and split $13 million in attorneys' fees [see "Busting the Trash Trust," Multinational Monitor, January/February,1991]. Both companies denied any wrongdoing but the evidence in the case clearly indicated that top WMI and BFI officials had not only condoned price-fixing activities, but directed and participated in the scams. -B.L. NAMES IN THE NEWS (omitted here; unscannable) ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 9, SEPTEMBER 1991 BOOK REVIEW SOUTHERN RENEWAL The Challenge to the South A Report of the South Commission New York: Oxford University Press, 1990 315 pp., $13.95 Reviewed by Robert Weissman It is almost impossible to comprehend how devastating the last decade has been for people living in the Third World. Statistic piles on top of anecdote on top of statistic to create a mind- numbing array of facts, figures and stories describing mass impoverishment and misery. "For many in the South, the hope has faded; the prospects have become gloomier than they were perceived to be only a decade ago," concludes the South Commission, a committee chaired by former Tanzanian President Julius Nyerere and made up of leading Third World academics and politicians. The Challenge to the South, a report prepared by the South Commission, aims to diagnose the causes of the economic catastrophe which beset the Third World in the last decade and to prescribe solutions to put the South on a path of sustainable growth. In the post-World War II period, up through the 1970s, the Third World experienced relatively rapid growth and gradual poverty alleviation. But the South Commission argues that the seeds of the misery of the 1980s and 1990s were sown during that time. In most nascent Third World economies, governments were the main actors, often out of necessity. But, according to the South Commission, anti-democratic structures led to inefficiency. State efforts at planning were over-centralized; corruption drained state treasuries and interfered with the advancement of the national interest; and dictatorships or military-dominated governments siphoned off money to build up huge armies and stockpile weaponry. The growth that did take place in the Third World was often not self-sustaining, as the developing countries remained dependent on industrialized countries. Third World countries industrialized slowly, or not at all; they did not develop scientific and technical institutes or a cultural emphasis on the importance of science; and they maintained dependence on Northern markets, in agricultural goods and natural resources. Most importantly, economic growth did not automatically translate into shrinking poverty or lessened inequality in the Third World. As the South Commission notes, "The undoubted economic growth in the South rarely removed the structural inequalities and cleavages; despite the emergence of a middle class, in many countries the gap between rich and poor became wider." Yet, states the Commission, "it is arguable that, for all its flaws, the development experience of the South until the end of the 1970s could have provided a base for improved living standards and human development." The sudden changes of the 1980s, "leading to a development crisis of unprecedented severity," made it impossible to know whether this could have been possible, however. The largest burden on the countries of the South was the exponential growth of their international debt. With debt- related payments consuming an ever-greater share of export earnings and the International Monetary Fund and World Bank pushing draconian austerity plans, national economies virtually collapsed. A chronic decline in commodity prices exacerbated the economic crisis. The greatest suffering, as usual, was borne by the poor. Meanwhile, the Northern countries, led by Reagan and Bush's United States, became increasingly hostile to Southern calls for measures to reduce international disparities in wealth. The Group of 7, made up of the world's leading industrialized countries, sought to coordinate the world economic order without the participation of the rest of the world. Industrialized countries progressively shaped the General Agreement on Tariffs and Trade (GATT) into a tool to promote the interests of Northern multinational companies at the expense of the Third World. The Challenge to the South puts forth a series of recommendations about how Third World countries should respond to this onslaught. It puts greatest emphasis on the need to establish some sort of international arrangement which, recognizing that the Third World debt will never be repaid in full, offers relief to debtor countries. Yet the South Commission does not focus most of its attention on North-South relations. This grouping of prominent Third World representatives deserves credit for its willingness to openly criticize developing country governments and policies and to suggest far-reaching changes. To correct the problems of the post-World War II development model, the Commission calls for: resources to be shifted from military to non-military programs; democratization; and an end to corruption. It also recommends: that more attention be paid to the needs of rural communities and the agricultural sectors of Third World economies; that the state play a narrower economic role, focused on spurring capital formation; and that more resources be devoted to scientific and technical programs. Underlying its laundry list of suggestions is a concern that the Third World become self-reliant, especially in feeding itself. "The economic domination now experienced by the countries of the South in varying degrees can begin to be overcome only through ... determined, self-reliant action," the report states. The Challenge to the South also emphasizes the importance of collective action on the part of the South. Its most concrete suggestions are for the formation of institutions such as a South Bank, a South Secretariat and a debtors' forum. The South Bank would focus above all on promoting trade between Third World countries. The South Secretariat would provide technical assistance to Third World countries in their negotiations with Northern countries in forums such as GATT and in their efforts to increase South-South cooperation. And the debtors' forum would bring the world's debtor countries together to share information and to strengthen their collective hand in negotiating with private and public creditors. Although these are valuable suggestions, The Challenge to the South's emphasis on collective action and South-South relations leads it to highlight the commonalities of the Southern countries at the expense of recognizing differences between and within countries. Internal class differences are largely overlooked; they are not significantly considered in the South Commission's diagnosis, and the Commission's prescriptions, for the most part, do not focus on solutions to the problems of the lower classes. Since wealth inequalities within Third World countries are actually more severe than those between the North and South, this failure to focus on internal class differences is a serious problem. Parts of the book do discuss land reform and meeting the basic needs, including health and education, of poor people. But these proposals are not emphasized, and the South Commission does not call on governments to make them a top priority. Because the book has a written-by-committee style and because it makes an enormous number of suggestions, those points that are not emphasized tend to get lost. The recommendations dealing with the need for the South to improve its scientific base, on the other hand, are over- emphasized. The Third World is undoubtedly hurt by its technological dependence on the North, but it is arguable to what extent technology, rather than political will, is necessary to alleviate extreme poverty in the South. By privileging technological advancement and calling for Third World countries to adopt environmentally and socially unsound technologies, The Challenge to the South falls short in its mission to outline a sustainable development policy for the Third World. It urges the establishment of an independent Southern expertise in nuclear power, but does not mention the importance of less glamorous--as well as cheaper and decentralized--energy efficiency technologies. It also endorses=-albeit with a few cautionary caveats--the Green Revolution, which promoted chemical-intensive and capital-intensive farming and is alleged to have increased food production in India and other countries. But it does not sufficiently note the severe environmental problems that this skyrocketing use of pesticides and fertilizers caused or the costs of losing biological diversity due to the introduction of uniform varieties of seeds. And it does not even mention the devastating harm that the Green Revolution inflicted on small, poor farmers who could not afford expensive inputs like fertilizer and pesticides. Its failure to analyze internal class differences and its overconfidence in technology do not take away from the importance of this book, however. There is no question that the central message of the South Commission--"to get ahead, the South must rely primarily on itself"--is correct. With the Soviet counterweight a thing of the past, the IMF and the World Bank unremittingly forcing Third World countries to adopt austerity measures and the industrialized countries demanding in the GATT negotiations that Third World countries tear down their few remaining protective barriers, there is no where else for the South to turn. The first step must be a thorough discussion of the problems and alternatives facing the Third World. The Challenge to the South, a serious attempt to sketch out an economic program for the Third World, is a good beginning. R E S O U R C E S Organizations World Rainforest Movement 87, Cantonment Rd. 10250 Penang MALAYSIA Down to Earth International Campaign for Ecological Justice in Indonesia P.O. Box 213 London SE5 7LU UNITED KINGDOM WALHI Jl. Penjernihan I/15 Kompleks Keuangan Pejompongan Jakarta Pusat INDONESIA 10210 Rainforest Action Network 301 Broadway, Suite A San Francisco, CA 94133 TAPOL Indonesian Human Rights Campaign 111 Northwood Rd. Thornton Heath London W2 lDY UNITED KINGDOM Survival International 310 Edgeware Rd. London W2 lDY UNITED KINGDOM Asia-Pacific Peoples' Environment Network c/o Sahabat Alam Malaysia 43, Salween Rd. 10050 Penang MALAYSIA SKEPHI P.O. Box 88 JATRA Jati Rawamangun Jakarta Timur INDONESIA Black Workers for Justice P.O. Box 1863 Rocky Mount, NC 27801 International Labor Rights Education and Research Fund 100 Maryland Ave., NE Washington, DC 20002 Amalgamated Clothing and Textile Workers Union 15 Union Square New York, NY 10003 United Food and Commercial Workers International Union 1775 K Street, NW Washington, DC 20006 Citizen's Clearinghouse for Hazardous Wastes P.O. Box 6806 Falls Church, VA 22040 Waste Management, Inc. 3003 Butterfield Rd. Oak Brook, IL 60521 Books, Reports & Periodicals Guyana: Fraudulent Revolution London: Latin America Bureau, 1984 "The Tropical Forestry Action Plan: What Progress?" By M. Colchester & L. 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Sweezy New York; Monthly Review Press, 1980 "The Climate for Workers in the United States, 1990" Southern Labor Institute 60 Walton St., NW Atlanta, GA 30303-2199 "Trash Into Cash: Waste Management Inc.'s Environmental Crimes and Misdeeds" By Charles Cray Greenpeace 1436 U Street, NW Washington, DC 20009 .