China has been investing heavily in Latin America of natural resources and crude oil. Recently, the country still has pledged to invest $ 250 billion over the next decade to strengthen its presence in the region and compete with the US But this increased Chinese trade and investment in Latin America is also increasing environmental and social conflict, finds a new report published by Boston University.
"The press is full of stories about what the rise of China to the world's largest economy mean for Latin America," Rebecca Ray, Research Fellow at the Global Economic Governance Initiative Boston University and co-author report, he told mongabay.com. "So it was the right time to take an evidence-based approach to the issue."
By analyzing data from eight countries in Latin America, researchers analyzed whether China has truly been an independent driver of social and environmental change in Latin America and the Caribbean, and if the performance of Chinese investors differed other international investors in the region.
According to the report, the impact of the Asian giant in the environment in Latin America is much higher than other countries investing. Latin American exports to China - that focus on the sectors of agriculture and extractive resources such as oil and gas - use about twice as much water as compared to total exports, according to the report. In 2012, for example, Latin American countries exported about 100 billion cubic meters of water that was imported to China. This is almost the volume of Lake Nicaragua, the report said.
"These differences set the stage for potential conflicts, such as mines and plantations for export to China compete with the surrounding communities for water," Ray said.
The report said exports to China also emit greenhouse gases more than 12 percent per dollar, compared to other exports. Emissions of greenhouse gases increase further considering deforestation for freight. A study in 2012 found that nearly 80 percent of deforestation in Latin America, which are produced in Brazil, Argentina, Paraguay and Bolivia, was closely related to agriculture-related exports.
Moreover, these exports support fewer jobs than the total exports of the region. As China's share in exports of increases in Latin America in the next decade, local employment benefits fall, the authors of the report. Overall, Ray said, China's economic activity affects Latin America in three main ways. First is by Chinese investors. Second is the rise of commodities that Chinese demand creates, often resulting in increased production of goods, even without Chinese investors. And third is through the financing of infrastructure projects of China in Latin America.
For example, researchers found that Chinese investment in Brazil has been a major driver of deforestation in the Amazon jungle, which in turn opens the forest to human encroachment and affects the movement of wildlife. These investments include roads, canals and railways of Chinese capital to move goods to ports. Chinese demand for soybeans has also resulted in information exchange on a large scale Cerrado savanna in Mato Grosso, Ray said. The Cerrado is one of the most threatened ecosystems in Brazil.
Overall, the rate of deforestation in Brazil has declined significantly, falling 70 percent in the Amazon deforestation in the last decade. However, recently released data from 2014 indicate that the downward trend may be ending. According to figures from Imazon, a Brazilian NGO, the number of alerts was 2,014 forest and more than double that of 2013.
In Ecuador, too, Ray said the damage is likely to begin soon. "The country has opened up new oil concessions in some of the most biodiverse lands throughout South America, in order to ensure the success of the new Pacific Refinery, a project jointly run by Ecuador, Venezuela and China," he said. "Two of these new concessions run by Andes Petroleum, a joint venture between two Chinese state oil companies."
The impact of Chinese investment in the various countries of Latin America, however, varies. This is partly because host countries have different environmental and regulatory standards. Moreover, there are differences in the way that countries enforce these rules.
So countries that have established high standards of regulation and enforce them, Chinese companies tend to adjust more often. The same companies are up to the standards of the countries that are lax on enforcement.
"The countries of Latin America have some very impressive environmental and social standards - often significantly higher than that of China - but the implementation of these laws can be much more difficult than enacting them," Ray said.
Countries such as Peru and Bolivia, for example, have a high level of regulation when consultation with local communities, according to Ray. Similarly, Ecuador applies higher to projects that have been rejected by the majority of the community environmental and labor standards. But the pressure on governments to approve new projects is also tremendous, Ray said.
"Every day that a mine or oil field is closed for cleaning the environment, and every day that a new project is postponed to ensure that the environmental impact assessment is sound, or indigenous consultation process has been fair It is a day that the government will no royalties from the project, "he added.
Countries then find it easier to cut corners to make sure projects move forward. For example, for new oil concessions in Ecuador, the government did not have the majority opinion of the local community, Ray said. Instead they got the approval of a few leaders.
But the picture is not all bleak. Despite the variety of environmental regulations and compliance levels, the researchers found that some Chinese companies were willing to meet the standards. This sets them apart from some of their Western counterparts, Ray said, sometimes have shorter-term goals and are willing to cut corners to meet quarterly earnings targets.
For example, a Chinese-owned mine occurs at the boundary of the Tropical Andes Biodiversity Hotspot in Peru. When the company, Chinalco, inherited the mine in 2007, he took voluntarily to help the Peruvian government to relocate the 5,000 residents of Morococha, a town near the mine whose water supplies had been contaminated by decades of mining. Besides water, the new city, "New Morococha," promises to have improved infrastructure, as a modern system of water and sanitation. The report notes that this is considered the first case of "voluntary and participatory community relocation in the modern history of Peru."
"It is important to note, however, that this does not mean that Chinese investors are always saints," said Ray. "But instead of our research shows that if local governments are willing to give priority to workers, human rights and the environment, by establishing a high level and monitor these standards by law enforcement , Chinese investors have shown they are willing aa up to them, to do what it takes to continue having peaceful relations in the long term with the central governments of the host countries. "
So Latin American governments must step up their games, Ray said, and ensure that their environment and people are protected.
"I see hope in the way environmental and indigenous labor leaders are learning from what works in other countries of Latin America, and trying to make contact with policy banks in China so that they can tell when there are violations of the rules of China and guidelines on the environmental performance of investments out. "
Chinese investors are also learning from their past failures. Chinese companies, for example, have taken the initiative in recent conflicts around oil mines in Ecuador and Peru, and have taken steps to reduce conflicts with local communities.
"But there is still much work to do," Ray said.
"The relationship between Latin America and China will not be sustainable if governments adopt a hands-off approach and let the environmental and social effects to chance," he added. "But if those same governments step up to the challenge, they have much more leeway to establish the rules of combat than they did in previous relationships with powerful partners.
"In sum, it is for Latin American governments to ensure that this relationship serves the needs of people and the planet. They have the opportunity and responsibility to do so."
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