SURINAME AND CHINA SLOW DANCE--BUT NOT TOO CLOSELY

C O N F I D E N T I A L SECTION 01 OF 02 PARAMARIBO 000460

SIPDIS

SIPDIS

OES FOR JMIOTKE AND ACOVINGTON, EAP FOR JYAMAMOTO, EEB FOR
TSAEGER, WHA/CAR FOR JROSHOLT, INR FOR RCARHART

SIPDIS

E.O. 12958: DECL: 08/28/2017
TAGS: SENV CH NS
SUBJECT: SURINAME AND CHINA SLOW DANCE--BUT NOT TOO CLOSELY
REQUEST FOR REPORTING ON FOREIGN ACQUISITION OF NATURAL
RESOURCES IN SURINAME BY CHINESE FIRMS

REF: (A) 2007 STATE 93848 (B) 2002 PARAMARIBO 1020
(C) 2007 PARAMARIBO 441

Classified By: Poloff for reasons 1.4 (b) and (d)

This cable is the sixth in a series on Chinese (most recent,
reftel C) activities in Suriname in the spring and summer of

2007.


1. SUMMARY (C) Despite mutual commitment of Suriname and
China to their bilateral relationship, progress in achieving
tangible results is slow. China's hopes of tapping into
Suriname's riches have been tempered by bureaucratic
processes, ill-conceived projects, environmental concerns,
and public opinion. Thus, to date, Chinese investment has
had no discernible impact on the environment. END SUMMARY


1. (C) Per confidential cable (reftel A),post responds to
questions posed in paragraph 3.

a. Chinese companies have not yet finalized any major
plans or purchases related to investment in the forestry and
forest products sector, wildlife, energy, or live marine
resources in Suriname. However, the potential is great, and
Chinese firms and the Chinese Government are showing interest
in some opportunities, for example, in bauxite mining,
offshore oil exploration and drilling, and palm oil
production. To date, these proposals are more theoretical
than factual, but the dollar amounts under discussion have
been substantial. For example, on August 24 media reported
possible Chinese investment in the bauxite and oil industries
to the tune of $500 million (septel). A Dutch-Chinese
consortium recently showed interest in rehabilitating the
port of Paramaribo, upgrading the airport and setting up an
automobile assembly plant. Chinese Government and private
firms have also financed and built roads and constructed the
Surinamese Ministry of Foreign Affairs headquarters, in part
to buy good will with the GOS and the public. However, it is
difficult to assess the environmental impact, if any, of
these projects. The recently announced repaving of the road
from Paramaribo to Lake Brokopondo by Chinese road companies
would open up the interior of Suriname to increased
agriculture and logging.

b. There is no current discernible environmental
impact, as such purchases or investments have yet to be
undertaken.

c. There are few domestic environmental codes or
regulations that would mitigate potential environmental harm
from such investments. However, environmental impact
assessments taken for large projects, although not required
by law, are taken into consideration by the GOS before a
project is approved. Impact assessments are provided and
paid for by project developers.

d. The capacity of local governments to enforce
environmental codes and regulations (if regulations existed)
would be questionable since Suriname lacks resources,
manpower, equipment, and technical expertise to enforce
regulations.

e. Applicable requirements of financial institutions
related to environmental protection, such as environmental
impact assessments required by many multilateral financial
institutions, are unknown in Suriname.

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STALLED PROJECT
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f. Other information:

Perhaps the most environmentally-unfriendly Chinese proposal
to date is the Patamacca palm oil project in the eastern
district of Marowijne (reftel B),which appears to be stalled
for the moment. The proposal calls for the clear cutting of
40,000 hectares of rainforest to set up a palm oil plantation
and processing plant. The proposed site contains many
Surinamese hardwoods, which would be harvested by the Chinese
investor in order to finance the palm oil project. There are
genuine concerns about the economic viability of the project.
Furthermore, there are serious concerns that deforestation
generated by the clear-cutting could cause serious flooding.

PARAMARIBO 00000460 002.2 OF 002


According to Richard Kalloe, former Minister of Trade and
Industry, the area receives approximately 2,500-3,000
millimeters of rain per year, and soil erosion and
flash-flooding could affect the low-lying lands around
Patamacca. Finally, local Maroon inhabitants, descendants of
former slaves, believe many of the 5,000 advertised jobs
would go to cheaper Chinese immigrant laborers.

COMMENT: The Chinese likely look to resource-rich Suriname as
a potential supplier of wood, bauxite, and oil and have
invested heavily in developing a strong relationship with the
GOS via major construction projects and exchange visits of
VIPs. However, the GOC is running into numerous speed bumps
that are slowing its progress. The recent influx of Chinese
immigrants has generated resentment among many Surinamers
that has been exacerbated by Taiwan,s aggressive and highly
public efforts to court Suriname. Surinamers are offended by
what they view as stern reproaches by the Chinese Ambassador
to government officials and private Surinamers regarding
contacts with Taiwan.

COMMENT CONTINUED: Thus, while the GOC appears to be reeling
on the public affairs front, the advantages of announced
Chinese development assistance and investment remain
illusive, prompting the man on the street to quip, "The
Taiwanese give us assistance; the Chinese just talk about
giving us assistance." Despite the GOS,s repeated
affirmation of its "one-China policy," the government's
insistence on environmental and social impact studies of the
Patamacca palm oil scheme suggests that the GOS is not
willing to sell the jungle to Chinese investors whole-cloth
just yet. As is often the case in Suriname, the result of
bureaucratic delay may be the preservation of the status
quo--and a small slice of the rainforest.
END COMMENT
GENTON