The shameful business that generates millions of dollars in Haiti and accelerates climate change
18 April, 2018
Haiti’s largest industry is ghostly. The charcoal business generated US$300 million in 2012 according to the Office of Mines and Energy. The money changes hands without putting a name and a face on those who pocket the colossal sum. It’s a total lack of transparency.
Carbon production is done by farmers in wooded areas in Grand’Anse, on the country’s southern and northwestern sides. The wood, turned into carbon, satisfies 70% of the country’s energy needs and is used to cook, in laundromats and bakeries, among others.
None of the knowledgeable sources of this informal industry were able to give Le Nouvelliste and the Center for Investigative Journalism the names of the entrepreneurs behind the savage exploitation of this non-renewable resource, which is wood. However, three sources consulted for this investigation claim that these phantom entrepreneurs sell coal to retailers in major cities. Most of the consumption takes place in large cities, such as Port-au-Prince, Cap-Haïtien, Gonaïves, and Cayes, among others.
The former Haitian Minister of the Environment, Dieuseul Simon-Desras, confessed that throughout his mandate he could not identify a single entrepreneur who financed this business. In addition, he said that there has been no real will from this or previous governments to fight against this trafficking.
Also René Jean-Jumeau, former Minister in charge of Energy Security, confirmed the lack of willpower on the part of the governments. “There is no real will to rationalize the use of coal. A real will to manage the problem of charcoal passes through a rational and sustainable production and the use of alternatives, like other forms of coal or a portion of propane and agricultural waste,” said the man who is currently the executive director of Haiti’s Institute of Energy, a private institution.
A high ecological bill
The uncontrolled tree-cutting leads directly to deforestation and causes erosion, landslides and floods. Several experts confirm that Haiti’s high vulnerability to the effects of climate change is mainly related to accelerated deforestation and the weakness of its government to curb this problem.
Over the last century, the country’s natural forest cover has declined from 60% of the land area to 4%, according to the United Nations’ Food and Agriculture Organization (FAO.) Deforestation has damaged the integrity of ecosystems, increased the risk of natural disasters and threatens biodiversity, which is essential for the healthy production of several agricultural and forestry species.
Haiti’s brutal deforestation, which has reached almost 98% of its territory, is attributable to the absence of a forest policy, lack of forest guards (who are poorly paid and poorly equipped,) the extreme exploitation of this resource and, finally, to its unrestricted use by the vast majority of the population.
Coal sale is a profitable activity
Haiti’s Bureau of Mines and Energy (BME), an autonomous state agency, confirms in one of its publications that this activity generates an abundant source of income. In fact, the production and distribution of coal slaughters a low-skilled workforce in rural and urban areas. That is, deforestation and carbonization provide a significant income for the rural poor. In urban areas, it is mainly retailers who depend on the industry to generate their living income.
“Unlike agriculture, which depends on rainfall and follows specific harvest cycles, charcoal is a means of obtaining income to meet urgent economic needs, to pay school tuition and expenses related to ceremonies such as weddings and funerals, or costs of medical care,” says a report by the United Nations Environment Program (UNEP,) published in October 2016.
Coal and firewood are relatively easy and cheap to produce, and their supply chains are unregulated.
For businessman François Chavenet, former president of the Chamber of Commerce and Industry, it is necessary to distinguish between people who prepare (coal) and those who finance it. Then there are those in the business of coal finance and transport.
“Since this is a business that does not honor [the person who does it], many people who finance it will not reveal themselves or admit it publicly,” said Chavenet, estimating that it is easier for them to hide behind a truck driver who gives the impression of that he is the character that does business, when, in fact, he is financed by someone else.
A complex and impenetrable sector
Most supply networks in rural areas generally operate with intermediaries, either in regional urban centers or in the main markets of Port-au-Prince, the capital. “They can be intermediaries that seek to redistribute coal among sellers, who in turn sell it in smaller quantities, or who want to buy large quantities in rural areas to sell it to other intermediaries or to sales deposits in the capital, which in turn sell and distribute this coal,” said François Chavenet.
While the existing wood energy sector supply networks may seem disorganized, in reality they cannot function properly without great creativity, ingenuity and perseverance. Like many types of companies, they depend, above all, on reliable social relationships and logistical networks. “They are also extremely complex and difficult for a foreigner to penetrate,” UNEP concluded after a survey of coal and fuel supply chains in southern Haiti in September 2016.
Simon Dieuseul-Desras, former Minister of the Environment, was not successful either. He said that during his tenure, which lasted a year, he tried to identify the “rich businessmen” who finance this lucrative business to hunt them down, but ultimately gave up. Disillusioned, the former minister disclosed to Le Nouvelliste and the Center for Investigative Journalism the lack of will by then acting president, Jocelerme Privert.
Since February 7, 2017, Haiti has a new democratically elected president. Has the deal changed? Has Jovenel Moïse, since the start of his presidency, sent a clear signal announcing his firm will to fight against this trafficking? For the time being, he has just followed in the footsteps of his predecessors by announcing an extensive reforestation program aimed at planting more than 10 million bushes throughout the country.
And this is a good investment that benefits carbon operators.
“If we had to analyze this chain of US $300 million, we would see that 20 to 25% [of this amount] goes to the person who prepares [the coal,] and the rest is divided between the one that transports it and the one that finances it or the Port-au-Prince market reseller,” said François Chavenet, originally from southwest Haiti, one of the last forested areas of the country where coal exploitation is excessive.
The charcoal production supply chain includes: producers, transporters, traders or intermediaries at multiple levels, and women who sell retail or in small quantities in the markets.
According to the businessman, the coal that is bought in the department (Haiti’s administrative division, the country has 10 departments) of the Grand’Anse (southwest of Haiti) at a certain price, sees its value multiplied by three or four upon its arrival to the of Port-au-Prince market. In half a day, the coal that leaves Grand’Anse acquires four times its value. “There is no Wall Street product that currently offers such performance,” says Chavenet.
In addition, coal and firewood prices have remained stable over the past two decades, says UNEP. This merchandise has no season. It follows the same rhythm every day. However, as spring approaches, there is a certain shortage of coal and a relative increase in price due to the lack of availability of suppliers that are too busy in sowing activities in the fields.
The UNEP survey found that “production levels are higher towards the end of the year, from September to December, although more than half of the coal producers reported working throughout the year.”
An application that does not weaken
In urban areas, it is estimated that 90% of households cook with charcoal. In Port-au-Prince, this represents at least 600,000 households, according to UNEP estimates, each using the equivalent of one pot (one pot is a five- to six-pound coffee box) of coal per day for cooking. According to this calculation, it is estimated that between 2.5 and 7.3 million bags of normal-sized coal are consumed in Port-au-Prince each year. In rural areas around 80% of households use firewood (usually collected on land) for their culinary needs.
In addition, in (small and medium) microenterprises that include restaurants, bakeries, laundry and distilleries; coal and firewood are the main sources of available energy.
Even if it was impossible for him to identify a person responsible for taking advantage of this lucrative business, François Chavenet knows that the true coal players are not in the Grand’Anse, an area hit hard by Hurricane Matthew’s passage in October 2016. They are elsewhere.
Studies conducted in the late 1980s estimated that almost 35% of the coal sold in the Port-au-Prince markets originated in the south-western peninsula and was transported by road and sea, while the majority came from the northwest. Since then, the southwest peninsula has become the main source of the capital’s coal supply.
An April 2014 survey conducted by the Ministry of the Environment in Grand’Anse estimated that around 6,000 bags of coal left the department daily for Port-au-Prince. This represents 60,000 kg of coal made from 372,000 kg of wood using the estimated conversion rates.
The visible part of the iceberg
Meanwhile, in the markets of Port-au-Prince, coal is sold by the bag. But, retailers make it available to households that do not have the means to buy it wholesale. “Consumers who buy coal at the retail level pay the container by its weight,” says one of the retailers in one of the capital’s markets. “The value of coal is linked to the cost that drivers incur to transport the city,” the merchants said.
They come largely from the country’s remote areas. Some live in the markets’ vicinity to facilitate their work, others sleep in sales deposits in the markets because, given the exorbitant cost of rent, they say their retail business does not allow them to have a roof over their heads.
Everything seems to indicate that the impossibility of locating the players in this trade, prevents the government from regulating it. Facing a succession of failures over the years, the various governments have ended up letting it flow completely. To date, attempts to improve chaotic and unregulated supply chains in the sector, particularly coal, have included strong legal directives from the government to prohibit the production and trade of coal, without encouraging the introduction of alternatives. “These guidelines are often not met or are not fully respected due to a lack of resources and, therefore, have little impact on the volume of coal produced and the resulting pressure on Haitian ecosystems,” says UNEP.
Since the 1960s, a large number of programs and projects for coal replacement funded by foreign aid have simply failed. Despite several campaigns orchestrated by local and international nonprofit organizations (NGOs), the relevant authorities are not making any effort to help people use other sources of energy to counteract the damage caused by the use of this product. It already costs very expensive for the country’s ecological environment.
In May 2014, former Prime Minister Laurent Lamothe declared that the exploitation of coal in Grand’Anse was prohibited. A real fiasco. Overloaded trucks continue to use national roads with everyone’s knowledge.
Furthermore, UNEP says this strong method for regulating contributes little to mitigate the lack of governance and the sector’s formal organization and does not take into account the need to propose other solutions and offer incentives for households and micro-enterprises to use alternative sources of energy. “In addition, local authorities do not have the necessary human resources to effectively support and implement this prohibition.”
The Dominican experience
If the state has not managed to regulate Haiti’s timber market — an illegal, informal and totally muddy market — the Dominican Republic has succeeded, thanks to a real public policy, and the public policy of not relying more on wood as the main source of energy, said Francisco Domínguez-Brito, current Dominican Minister of Environment and Material Resources.
“The Dominican Republic’s greatest success in deforestation has been the substitution of coal as fuel for cooking. Not long ago, the Dominican Republic also cut down its forests to make charcoal. The consumption of coal by Dominican households was reduced by 80%,” says Dr. Yolanda Marina-León, researcher and coordinator of the Remote Sensing Laboratory for Basic and Environmental Sciences.
The state has established a large subsidy for propane gas, says León, so cooking with gas is cheaper than buying coal. Entrepreneurs have invested to install gas plants throughout the territory and it is relatively easy, even for a poor family, to have regular and cheap access to propane cooking gas.
Meanwhile, Domínguez-Brito suggests that Haiti conduct the process that was done 30 and 40 years ago in the Dominican Republic where there was a massive distribution of stoves and gas tanks so that people would change the consumption of firewood and coal for gas.
“Coal is like cocaine and you have to pursue it,” said the former prosecutor and attorney general of the Dominican Republic, who also suggests Haiti, in addition to an intense program of delivery of stoves and gas tanks, should have a much stronger policy to avoid tree cutting.
Each year, between 30 and 50 million trees, equivalent to 4.3 million tons of wood, are consumed in Haiti. Charcoal production amounts to 1.3 million and small and medium enterprises (SMEs) absorb the remaining 3 million.
And sometimes this production is not enough. “When coal has more demand, since Haiti’s forests are shrinking, the easiest source is to get it out of the Dominican Republic,” says Yolanda Marina-León, explaining that “it is a big business […] one of the driving forces of the deforestation in the border area, even in the Dominican part.”
For former Haitian minister, Simon Dieuseul-Desras, the government’s inaction is responsible for all the misfortunes and disasters known in Haiti in recent years, adding that preventive measures are not taken to counteract the phenomenon of climate change.
According to research Le Nouvelliste published in February 2017, to reduce the weight of coal to less than 30% of the national energy matrix, Haiti would need almost $500 million, or half of the value of its balance of payments, to finance this change. And another $500 million would be needed to finance the elements that accompany this change. In fact, Haiti needs at least $1 billion (half of its national budget) to change this paradigm as a financial challenge to an energy transition that reduces wood consumption.
“Haiti has to learn from things that have been done here — the bad things and positive things in the environmental issue — and analyze it in a context not of a country, but as an island, as a region, because what happens on one side or another of the island will have an impact on the total population,” said Amadeo Escarramán, coordinator of the Inter-American Institute for Cooperation on Agriculture (IICA), in the Dominican Republic.
What solutions are there for coming years?
Coal will continue to be a pillar to meet the energy needs of Haitian households in the coming years, for both practical and cultural reasons. UNEP believes it is necessary to establish a system that ensures that coal is produced in a sustainable manner that meets the population’s economic needs, while at the same time achieving the preservation of natural forests.
It is in this context, four years ago, thanks to funding from the United Nations Development Program (UNDP), an innovative and ambitious project was launched in the northeast part of the country. It is a 20-hectares energetic forest of established in one of the country’s driest areas, where the main economic activity is charcoal production and the raising animals in the outdoors. Energetic forests are those that are established with the goal of obtaining firewood for thermal energy generation. To date, according to Obéi Dolcé, director of the NGO “Village Planète,” which provides technical support to the local NGO — Association des Planteurs de Desrac — in charge of forest management, it is the only forest of this kind in Haiti. He recognizes that other organizations want to replicate the same project in other parts of the country.
For Obéi, the forest brings more vegetation, and increases humidity and rain in the area. Properly managing the forest requires residents to know how to do it, as they cannot cut trees as they used to. Now they know that when cutting them to make charcoal, they should not tear them out by the roots, but should cut only the tree’s branches so that they can regenerate and revive. And since it is an arid zone, they must harvest the wood in rainy weather.
Agronomist Dolcé confesses that initially, it was not easy to link the people of the area to the project, but now it is the people who supervise it. Recently, during an intense drought period, a fire broke out in the middle of the forest. It was those people who ran to put out the fire. “It is this dynamic that will save Haiti from savage deforestation,” said the agronomist.
But with a natural forest rehabilitation rate estimated at only 26% of consumption, Haiti will continue to have a deficit ratio between the trees planted and the trees cut each year if it does not encourage a concerted replanting effort, UNEP warns, acknowledging that firewood supply remains an area that international cooperation for development in Haiti does not sufficiently address.
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