An Invitation to Disaster: Corporate Power and Central America’s Environmental Future Under CAFTA

an interview with Ricardo Navarro

Ricardo Navarro is the chair of Friends of the Earth International and the director of the Salvadoran Center for Appropriate Technology (CESTA)/Friends of the Earth El Salvador. He holds a doctorate in engineering, and has 25 years environmental campaigning experience. He is a recipient of the Goldman Prize and Global 500 Awards.

Multinational Monitor: Who's driving the CAFTA process?

Ricardo Navarro: It is driven by corporations, and they are using governments to make it work.

In El Salvador, for example, there are a lot of maquilas -- those are enterprises that contribute only labor in order to produce, say, a clothing product for export. They are very interested in this agreement in order to support their industry, and the government is their voice.

When they go to intergovernmental meetings, the government always takes private enterprise. Why don't they take labor unions? Why don't they take academics? Why don't they take other representatives from civil society?

One especially unfortunate thing is that the agreement is designed to expand the reach of the market, so that a lot of services that are now being provided to people in the region by the public sector are going to be obtained through private enterprise. That is going to generate a lot of problems in our countries.

MM: So in the Central American countries, domestic industry is pushing the agenda?

Navarro: Yes, domestic industry is in agreement with foreign industry.

Domestic firms are increasingly connected to foreign corporations. In the banking sector, for example, there used to be a bank called Ahorromet. In 1997, it was acquired by the Bank of Nova Scotia. Now they have made a deal with a South African firm.

MM: What's the rationale for the Central American governments supporting CAFTA?

Navarro: What they say, above all, is that it will generate jobs. Jobs are needed everywhere in the world, and mechanization is costing jobs everywhere. The unemployment rates in the region are very high. So that's what the governments say: We're going to have jobs.

Second, they say that competition is good because it makes industry more efficient and productive.

Third, they say that goods and services are going to be cheaper.

These are the three things that the government advertises.

We do not need charity, they say, we just need opportunity. So we have opportunity to enter the international market -- that is good for the development of El Salvador and the other countries.

MM: Do you expect that CAFTA, if enacted, will increase exports from Central America?

Navarro: It might increase some exports from Central America, but it's hard to tell whether the these will come from capitalists from this part or another part of the world. It might, for example, increase exports from enterprises where just labor is used. Such enterprises are becoming very common in El Salvador. Some companies hire just women, and pay as little as they can, and export low value-added products. This kind of export might increase.

But at the same time, all of the goods that are going to come from other countries are going to have a very big impact on local production. People are very scared that little agricultural enterprises are going to be destroyed when we get cheaper food imports from countries that have the sometimes more efficient production mechanisms, sometimes even subsidies.

So there will be exports for some sectors, but damage for many others.

MM: What will be the environmental impact of the expansion of the maquilas?

Navarro: Take just one issue: solid waste management. The maquilas generate a lot of waste -- they increase the load of garbage in a society that doesn't have the proper means of disposing of, or having some treatment of, the waste. These kinds of issues aren't considered, and there are not effective controls imposed on the maquilas' production processes and waste generation.

MM: Why are you concerned about privatization and liberalization of services?

Navarro: Look at what happens when you have the opening of the market for things like water. In economic terms, it will make more sense to export it than to provide clean drinking water to the population.

We are afraid that a lot of services that have been more or less available -- albeit not of the highest quality -- are no longer going to be as widely available. If all markets are open, controls are not in place and you just go for whoever pays the best prices -- which is what happens in a market, where you sell to whoever can pay the highest prices -- then it is going to be much more difficult for poor people, who even now can afford many local services only with a lot of difficulty.

In El Salvador, we have recently had major struggles regarding health services. The government had plans to privatize a lot of what we call social security -- public health insurance. We had very big demonstrations in opposition, with 50,000 people on the streets. The protests were led by doctors. Doctors are perceived historically in El Salvador as rich guys who have a nice life -- and they were the ones who were leading the opposition against privatization of healthcare!

Now, we already have privatization of communications, energy and electricity; the next step is water. Of course, there was a big uprising against the privatization of water. So this president promised that he is not going to privatize water.

But you know, these politicians promise one thing today and do another thing tomorrow, so you cannot believe them.

We are afraid that privatization is going to reach all of these services sooner or later. We can talk about CAFTA, but we also have Plan Puebla Panama and the Free Trade Agreement of the Americas. These are different initiatives, but all of them are leading to the same thing -- the opening of the markets for investment and for trade.

MM: What will be the social and economic impacts of opening Central America's agricultural sector?

Navarro: Some countries in the region protect their agricultural goods, but in my country, they are not protected. They are left for the open market. Some food is cheaper. But local agricultural producers cannot compete. They are more and more being destroyed. What can they do? They may come to the capital cities, looking for low-paying jobs; or they will try to get out of the country and go to the United States or Mexico.

So the impact is going to be on one hand social, pushing small farmers out of the jobs they have.

There will be significant environmental consequences of this social dislocation. Pushing out the small farmers leaves the rural areas unprotected, making some rural areas vulnerable to the opening of roads and development. When agricultural production, even of coffee, is not economically feasible, people cut the trees and then they divide the land and sell it for development purposes. For them, economically, this makes sense. But ecologically, they are destroying our resources. We have a very serious problem of water, for example. Every day, there is a complaint that somewhere people are not receiving water. But the development and deforestation of rural areas is undermining our water supplies. So ecologically, we are going to pay a very high price.

It's not just agriculture. If you look, for example, at the fishing industry, the same thing is happening. We used to have a 3-kilometer zone that big fleets could not enter. It was just for the small fishermen using little boats. Now, that has been removed, so even bigger fleets can come very close to the coast. They have big nets, so not only do they catch much more fish, but also other species that the small fishermen would leave alone, like sea turtles. So also in the area of fishing biodiversity, there's going to be an attack with liberalization of markets and removal of regulatory controls.

MM: Will CAFTA generate increased foreign investment in Central America?

Navarro: They always talk about the millions of dollars that are going to come. But although the government always tells us that so many millions are going to be invested by corporations outside of the region when they see that our countries are becoming more efficient, in fact we don't see that capital.

The only capital that we see in Salvador is capital from all the shipments of money that Salvadorans send from the United States. That is the main source of revenue in my country; it is not industry, it is not foreign investment, it is just money from Salvadorans living outside of the country.

There will be opportunities to take money -- by harvesting our biodiversity, for example -- but overall foreign investment levels are not going to be that high.

MM: How will the investment provisions in CAFTA affect the environment?

Navarro: What they say is that foreign corporations must be treated the same as local corporations.

For us as environmentalists, that is a problem, because local corporations in El Salvador are allowed to destroy the environment in order to produce whatever goods they make or to develop a shopping mall.

In El Salvador, the environmental law is not even respected by the government that is charged with enforcing it.

An article in the environmental law says infrastructure projects must be subjected to an environmental impact analysis and the projects must be discussed with the people who will be affected by it. Well, we have big infrastructure development and none of that has happened. Not even the government follows the environmental law.

Now, can you imagine when instead of a Salvadoran construction company, you have Bechtel Corporation coming? How can we stop these people?

CAFTA requires that international enterprises be subjected to rules no more strict than those for national enterprise, but the problem is that national enterprises abuse the law and environment. There is no way to control these people.

MM: So environmental enforcement is failing in El Salvador?

Navarro: They always talk about trying to do things in an environmentally sound way, but it is never put into effect.

To take another example, when the larger fishing boats get one pound of shrimp, they destroy 12 or 13 pounds of other marine life. Some of the boats want only shrimp, not fish, because shrimp has a high price and fish do not. So the fish are just destroyed.

Enforcement of the laws that do exist is a major problem. When you fish, the law requires that you use a special net with a turtle exclusion device, that allows the turtle to get out, but not the fish. Very often, we find fleets that have not installed the devices. When they see the police, they just pull their nets.

Frequently, the police don't come at all.

In El Salvador, environmental protection is being relaxed more and more. We have a police with environmental responsibilities that is being reduced more and more. The police officers are being sent to the more repressive projects of the police, you know, the ones where they control riots. That is a strong force, the riot police, while environmental enforcement is being relaxed more and more.

The environmental law in El Salvador used to say that if you pollute you are responsible. One day we found an industry that was burying some toxics, so we managed to bring these people to tribunal. They were found guilty. The tribunal said, "You really should go to three years in jail, but instead of going to jail you have to do three years of community service" -- whatever that is, maybe giving a talk, I don't know. The most unfortunate thing was, after that, the legislature changed the law.

The changed law says the attorney general's office cannot prosecute environmental abuses like they can any other crime. In order to prosecute an environmental crime, they have to have a request from the minister of the environment.

Before, say three years ago, we could call our friends in the attorney general's office -- among the bureaucrats and officers there -- and notify them of an abuse. They would find a guy and try to fine him and stop him. Now we cannot do that. This shows you the power of private enterprise. They are the ones who rule.

The head of the private association of enterprises, big private enterprises, is now the elected president of the country. What is this?

MM: What are your concerns about how CAFTA might affect the spread of genetic engineering and biotechnology?

Navarro: There is strong pressure from the U.S. corporations to allow genetically engineered crops into the region.

But in El Salvador, you don't need to exert that much pressure.

It is like trying to force a drunkard to drink beer. You don't need that much force, you just show the beer and the drunkard drinks. In El Salvador, it is like that.

The largest Central American seed enterprise in Central America gets its seeds from all over; they distribute the seeds and you really don't know what you are getting. You just know that people say, "The tomatoes stay for days and days, and don't get rotten. And they are so big, and they are so round ..." So we have a concern already about genetically altered seeds entering the market. We are very scared that all these things are going to be in our food and we are not even going to know, because the U.S. argues that even labeling genetically altered foods violates trade rules.

Once genetically engineered seeds are introduced, we'll face the problem with genetic drift. Mexico is already seeing indigenous corn fields being polluted by genetically altered seed that blows from nearby fields.

There is an ongoing dispute between the U.S. government and the European Union. The EU said that we should have a moratorium until these things are proven to be safe, and the U.S. has said that a moratorium violates trade rules.

Of course, El Salvador sided with the United States. Our president is like a servant. Some people have people to clean their boots -- that is like the job of the president of El Salvador regarding Mr. Bush. It is really embarrassing for me, as a Salvadoran, to have that kind of president.

Genetic seeds are not now allowed in El Salvador. The legislature passed a law on this following the discovery of genetically modified organisms in Taco Bell food.

But now the government says we cannot oppose this kind of thing. The idea is that these seeds have better yields, they have vitamins.

In El Salvador, private enterprises are the ones who decide what to do. It is really a scary thing, but corporations are the ones who rule El Salvador.

MM: How strong is citizen opposition to these corporate efforts?

Navarro: Well, we just had national elections. There was a big campaign of fear. The United States government sent Jeb Bush, brother of George Bush, to El Salvador to support the right.

Nevertheless, we got 800,000 votes against the right. I say against the right because of those of us who voted for the left, some may think that the left is good, some of us may think that the right is bad. But at least 800,000 people in total voted for the left; 1.2 million votes went for the right.

The right conducted a big campaign of fear. They would say, for example, that if the left wins, maybe Salvadorans will have to be evicted from the United States -- meaning no more money in remittances. That's millions of dollars for a lot of poor people who have sent their kids very often by illegal means to enter the United States and who depend on the money they send back to El Salvador. These things were being used for blackmail.

Now this is just an election. You also see a growing social movement. It was very impressive to see 50,000 people marching led by medical doctors, not the construction workers union, but high-class medical doctors.

There are also a lot of other civil society organizations. We don't have the strength that we had 30 years ago. After the military war finished, we were tired of the war, we wanted to go to jobs and work. We became part of the system, hoping that the system would be better for the people, at least a higher percentage of people.

That has not turned out to be the case. So now people are getting organized again and I see the flames coming. It's like there was a big fire 20 years ago. Now the fire is just starting again, but you know, flames spread quickly in the right conditions. This is what is happening in El Salvador. But still it is a struggle for people to organize, and I am afraid that this may become a violent future if we don't find ways to satisfy people's needs.