US embassy cable - 04TEGUCIGALPA1583

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001583 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/CEN, WHA/EPSC, OES/ENV AND OES/ETC 
STATE PASS AID FOR LAC/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV, SENV, EAGR, KCRM, KJUS, KCOR, PHUM, SOCI, HO 
SUBJECT: Maduro Launches Investigation of Forestry Agency 
 
REF: Tegucigalpa 1581 
 
1. (U) SUMMARY: On July 2, Honduran President Ricardo Maduro 
established an "intervention" into the operations of the 
Honduran Corporation for Forest Development, COHDEFOR.  A 
three-person commission was named to conduct an in-depth 
analysis of COHDEFOR's operations, report back to Maduro 
within three months on the administrative and financial 
problems found within the institution, and recommend 
possible solutions.  Maduro's creation of this intervention 
is a partial response to the charges brought by participants 
in the "March for Life" (reftel), which concluded in 
Tegucigalpa on June 30, and a tacit admission of the widely- 
held belief that COHDEFOR has serious resource problems 
which prevent it from effectively carrying out its function 
of administering the nation's forests and protected areas. 
END SUMMARY. 
 
2. (U) On July 2, Honduran President Ricardo Maduro launched 
an "Intervention Commission" (Comision Interventora) for the 
GOH agency responsible for managing Honduras' forests, 
COHDEFOR.  The establishment of this intervention was 
announced to the public on July 6.  The stated objective of 
the Commission is to conduct an in-depth analysis of the 
administrative and financial problems found within COHDEFOR, 
and at the end of three months present a report to Maduro 
outlining possible solutions to those problems.  In 
addition, each employee is to be evaluated to determine his 
or her eligibility for continued employment with the 
institution.  The commission is composed of the Executive 
Director of the Environmental Management Program of the Bay 
Islands and Doctor of Forest Sciences, Jose Flores, 
environmental consultant Luis Eveline Hernandez, and 
Ministry of Natural Resources and Environment (SERNA) 
adviser Joaquin Aguero.  In announcing the establishment of 
the Commission, Maduro cited "serious problems of 
management, administration and financial controls" within 
COHDEFOR, and declared that "actions taken to date have been 
insufficient" to deal with these problems. 
 
3. (U) While initial reports announced that COHDEFOR would 
continue to operate normally throughout the investigation 
period, recent suspensions of managerial tasks have 
temporarily stalled some of the institution's activities. 
As of July 8, the Intervention Commission had taken away the 
signing capabilities of several of COHDEFOR's top managers. 
COHDEFOR Manager Gustavo Morales observed that, by taking 
away their power to sign, the Commission has effectively 
stopped COHDEFOR from carrying out its administrative 
functions.  The decision also prohibits the eleven regional 
directors from signing documents.  Without the ability to 
authorize, for example, the purchase of fuel for employee 
vehicles, Morales noted that COHDEFOR personnel's ability to 
conduct their daily activities would be limited. 
 
4. (SBU) Maduro's establishment of the intervention is a 
partial response to the "March for Life" protests of June 24- 
30, though Maduro and march leader Father Andres Tamayo also 
agreed on the creation of a second commission, the National 
Environmental Commission, to be headed by Father Tamayo 
himself.  Tamayo has called for an administrative purge of 
regional COHDEFOR offices, where allegations of corruption 
have been the strongest. 
 
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COHDEFOR Manager Reacts Positively 
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5. (U) COHDEFOR Manager Gustavo Morales has publicly said 
that he does not oppose the investigation.  He indicated 
that the intervention would determine whether or not 
accusations against COHDEFOR are valid.  Morales stated that 
he and his administrative team would provide all information 
requested regarding COHDEFOR's history and operations.  He 
said that the most serious problem facing COHDEFOR is a lack 
of resources, due to the fact that COHDEFOR receives only a 
portion of its financing from the GOH budget, and relies 
mainly upon licensing fees from logging operations.  Morales 
expressed hope that the proposed investigation would reveal 
the extent of any problems so that the appropriate solutions 
may be identified and implemented. 
 
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Background on COHDEFOR 
---------------------- 
 
6. (U) COHDEFOR was created in 1974 by a populist 
government, as a reaction to the abuses of the private 
sector-controlled forest industry.  The GOH decreed that 
COHDEFOR would have control of all forest harvests, act as 
the only exporter of lumber, and invest to establish 
industries for forestry products.  From 1974 to 1985, 
COHDEFOR functioned as a profitable corporation, but since 
1985 has operated at a loss, as most of its investments in 
forest industries lost money, and only continued operating 
due to continuous GOH financing. 
 
7. (SBU) In its initial years, COHDEFOR's exports of lumber 
and acquisition of equipment and materials were fertile 
ground for corruption.  In the late 1980s, COHDEFOR ended 
its involvement in lumber exports and concentrated more in 
forest management.  The Agriculture Modernization Law of 
1992 decreed that private landowners could manage and use 
their own forest lands, and that only the private sector 
could be involved in the production and marketing of wood 
and wood products.  However, COHDEFOR's poor performance in 
the roles of management and regulation has led to the 
current state of affairs. 
 
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Comment 
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8. (SBU) While the "March for Life" occurred during this 
administration, the issues which it addresses - poor forest 
management, lack of community participation, and allegations 
of corruption - have been with COHDEFOR since its inception, 
though these problems have become more prominent during the 
past decade.  Improvements in management have occurred under 
the leadership of Morales (who is the first forester to ever 
lead COHDEFOR), but the legacy of alleged corruption, and 
perceived unwillingness to allow for public participation, 
are still present. 
 
9. (SBU) A proposed new forestry law is intended to address 
many of the institution's problems, including the issue of 
public participation, and the conflict of interest inherent 
in the fact that the organization charged with protecting 
the nation's forests is itself principally funded by the 
exploitation of those forests.  This bill, however, has been 
controversial since its first reading, and has been 
temporarily placed on hold by the GOH.  In any case, the 
intervention into COHDEFOR's operations should be a welcome 
step to highlight the institution's problems, and identify 
practical solutions.  End Comment. 
 
Palmer