Green colonials

An international project to buy large parts of the Amazon rainforest has run up against stiff resist

An ambitious scheme to save the Amazon forest, devised by a Conservative fundraiser, has antagonised the Brazilian government and appears to be in danger of sinking amid accusations of "green colonialism". An angry President Luiz Inácio Lula da Silva said: "The Amazon is not for sale." The scheme, which involved buying a chunk of tropical forest, ignores Brazil's own proposal for an international fund to compensate forest-rich countries for preserving, instead of clearing, the forest and rides roughshod over the legitimate rights of forest communities.

Johan Eliasch, the Swedish tycoon who is also a deputy treasurer of the Conservative Party, hit the headlines in March after announcing the purchase of a large area of forest in the west of the Amazon basin. He will be travelling to Brasilia later this month to try to salvage his project. "He may genuinely want to save the forest, but he went about it all the wrong way," said a Brazilian government source. "He created a figurehead company to get round Brazilian legislation limiting the amount of land that can be purchased by a foreigner, and he failed to consult the proper authorities. He is in real danger of losing the land."

If Eliasch's purchase founders, it could also bring down a much bigger scheme, called Cool Earth, launched jointly by Eliasch and Labour MP Frank Field, who says he read about Eliasch's purchase and was inspired by it. Their project, which will be officially launched in December, was leaked to the public last month by an enthusiastic David Miliband, the Environment Secretary. The idea, as originally reported, was to create an international body to buy tropical forests around the world (mainly in Brazil) and to sell single trees, electronically tagged, to individuals as well as corporations.

On its website (www.coolearth.org), it speaks of attracting "unrivalled levels of corporate funding" and harnessing the "biggest names in business" to halt climate change. Cool Earth does not expect its investors to be averse to earning a bob or two, along with saving the planet: it hints that investing in the Amazon could be a canny financial move, as standing tropical forests may soon benefit from tradeable carbon credits.

Not surprisingly, after Eliasch's original scheme caused a furore in Brazil, Cool Earth was quickly reformulated. "Our project was inspired by Eliasch's purchase, but it is very different from it," said Matthew Owen, who is in charge of Cool Earth's day-to-day management. "We don't intend to purchase private land but to lease public land, and we will be working closely with the Brazilian authorities. We have had a massive response, with more than 5,000 companies and individuals expressing interest."

Yet doubts remain over the effectiveness of any conservation scheme that involves foreigners owning, or managing, land in the Amazon. A few weeks ago, we were the first foreign journalists to visit Eliasch's estate; a journey that, according to local inhabitants, he has yet to undertake. The only way to get there is by boat from Manicoré, a sleepy town beside the Rio Madeira, a 1,000-kilometre tributary of the Amazon.

Eliasch's land lies to the west of Democracia, a hamlet of fewer than 200 inhabitants, 30 kilometres upstream from Manicoré. It does not take long in this small community of nut collectors to discover that, along with the land, Eliasch has acquired a number of complex problems. There is the question of how much land Eliasch has actually bought. He has repeatedly spoken of 161,000 hectares, but José Cardoso, the administrator of Gethal, the bankrupt logging company which Eliasch purchased to obtain the land, told us that his company only had legal land rights to 45,511 hectares.

So where is the rest of the land? Cardoso laughed. Although he would not elaborate, he seemed to suggest that Eliasch had been duped, as has happened to others before him in the Amazon. Back in London, Eliasch refused to give us an interview or answer written questions.

There are other even more serious issues. Four kilometres down a dirt road from Democracia, half-hidden among the trees, is a smaller village called Terra Preta. The huts, raised above the ground on stilts, have thatched roofs and, often, open sides. One family has a tiny monkey and a couple of wild boars as pets. This poor community of 48 inhabitants could wreck Eliasch's plans: they have recently rediscovered their roots as Mundurucu Indians and are claiming the area as their own, as they are entitled to under Brazil's constitution.

The Indians mean business. In mid-2005, they placed trees across the road to stop Gethal taking timber to the river. Infuriated, Cardoso called in the Manicoré police. The Indian men were out hunting when two officers arrived. Three boys, in their teens, painted themselves in the red war paint that Indians use when they are angry, armed themselves with clubs and spears, and ordered the policemen to leave. Apparently fearing a full-scale attack by a larger group, the policemen fled. There has been no logging since then and this may have been one of the reasons Gethal put the land up for sale.

Other problems loom. An 85-kilometre road already bisects Eliasch's land, connecting it to a planned 1,000-kilometre highway from the Amazon capital, Manaus, to Porto Velho. And an illegal road is being built without federal authorisation from the Trans amazon high way to Manicoré. Once these roads are completed, land thieves, loggers and cattle-rearers will move in, paving the way for the big farmers who will plant soya and biodiesel crops for export.

The government is creating huge parks and reserves in an effort to protect the rainforest from this onslaught, and state-of-the-art satellite programmes to monitor fires and deforestation are in place. Yet there are too few guards on the ground to police such a vast area. Studies have shown that the best barriers to deforestation are indigenous reserves and traditional communities, like the ones at Democracia and Terra Preta.

If Eliasch really wants to help preserve the forest, he should hand over his land to these communities. But nothing in his background suggests that this is the route he will follow. He made his fortune through buying near-bankrupt companies, restructuring them and selling them on. A friend of Prince Andrew, he appears regularly in Brazilian social columns as a member of the jet set, accompanied by socialite Ana Paula Junqueira, a rancher's daughter with her own political pretensions.

More questionable is the pedigree of one of the men he admits to consulting about his Amazon plans - self-made millionaire and former senator Gilberto Miranda, who made his fortune when the military regime created a controversial tax-free industrial zone in Manaus.

In the 1990s, his name was linked to several government scandals involving multimillion-dollar contracts - one of them for an Amazon radar surveillance system. Even more damaging for someone who wants to be taken seriously in the conservation stakes, in 2001 a judge found Miranda guilty of "environmental damage" after he built a heliport on a tropical island off the southern Brazilian coast.