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Cablegate: Brazil: Update On the Proposed Tropical Forest Conservation

VZCZCXRO3302
RR RUEHAST RUEHDH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHSL RUEHTM
RUEHTRO
DE RUEHBR #1131 2541032
ZNR UUUUU ZZH
R 111032Z SEP 09
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 5058
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHSO/AMCONSUL SAO PAULO 4532
RUEHRI/AMCONSUL RIO DE JANEIRO 8180
RUEHRG/AMCONSUL RECIFE 9919
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

UNCLAS BRASILIA 001131

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: SENV EFIN EAGR EAID KGHG BR
SUBJECT: BRAZIL: UPDATE ON THE PROPOSED TROPICAL FOREST CONSERVATION
ACT (TFCA) PROGRAM

(U) THIS CABLE IS SENSITIVE BUT UNCLASSIFIED AND NOT FOR INTERNET
DISTRIBUTION.

1. (SBU) SUMMARY. A recommendation to proceed with creation of a
program under the Tropical Forest Conservation Act (TFCA) is being
considered at the highest levels of the Ministry of External
Relations (MRE). The Environment Ministry, the environmental
community, and the Embassy have been urging - and will continue to
press - for a response from the MRE soon. Embassy believes that in
the end the MRE will give a positive response. In addition, the
Brazilians may well suggest renewed consideration of their proposal
to include the entire debt in the TFCA program and not just US$20
million now on the table. END SUMMARY

2. (SBU) After extended internal debate and ironing out technical
issues, the proposal to establish a Tropical Forest Conservation Act
(TFCA) program in Brazil is before the Deputy Minister of External
Relations (MRE) Samuel Guimaraes, according to the MRE's Director of
the Environment Department, Ambassador Luiz Figueiredo Machado. The
Vice Minister of the Environment, Izabella Teixeira, is pushing
forcefully for creating a TFCA program and the MRE - at the working
level - and the Finance Ministry support. The three ministries have
hammered out an arrangement with FUNBIO, a well-respected
non-governmental, environmental financing entity, to assist in
implementation of the program. Figueiredo Machado and his deputy,
Fernando Coimbra, the Director of the MRE's Environment Division,
have told the Embassy that the MRE (at least at their level) is in
favor of concluding the agreement and going forward with creating a
TFCA program.

3. (SBU) The Environment Ministry is very frustrated the MRE's slow
pace, according to Fernando Lyrio, the Director of the International
Affairs Office. Moreover, the environmental community is impatient
too. In a letter dated August 12, an environmental coalition group
called the "Pact to Restore the Atlantic Forest" wrote to
Environment Minister Carlos Minc calling for urgent action on the
TFCA proposal. This Pact includes 123 organizations, including the
Environment Secretariats of five coastal states (e.g., Sao Paulo and
Rio de Janeiro), and 13 large businesses (e.g., Vale and Citibank).
A copy of this letter has also been sent to Minister of External
Relations Celso Amorim. According to Lyrio, Environment Vice
Minister Teixeira plans to redouble her efforts to persuade the MRE
to make a favorable decision now and delay no further.

AMOUNT OF THE DEBT TO BE INCLUDED IN THE PROGRAM

4. (SBU) In the negotiations during 2008, the Brazilians had
pressed for including all of the outstanding debt to the USG in the
TFCA program. The USG offered US$20 million of the debt and a
willingness to consider a proposal for a second tranche, possibly
for the entire balance. Now, that the debt has been reduced through
payments, it is likely the Brazilians will renew their request for
including all of the debt within the TFCA program and not just the
US$20 million. Embassy would be supportive of such a proposal,
since the additional amount is shrinking rapidly and, thus, should
not pose a significantly greater financial burden for the USG. At
the same time, agreeing to convert the entire debt would get more of
a positive response from the Brazilian Government and the Brazilian
public than a limited US$20 million amount with a possibility of
more in the future. Finally, any additional funding would be put to
good use. There is no shortage of excellent possibilities for
conserving tropical forests in Brazil.

5. (SBU) COMMENT. Embassy will continue to press the MRE and other
interested ministries and parties to respond soon and positively to
the proposal for a TFCA program in Brazil. In the end, the Embassy
expects that the MRE will give a green light for a TFCA program and
so encourages Washington now to start taking a second look at
including the entire debt rather than going through two or more
tranches. END COMMENT.

KUBISKE

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