TED Case Studies

Panama Canal and Ecology

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       CASE NUMBER:  118 
       CASE MNEMONIC:CANAL 
       CASE NAME:Panama Canal and Ecology

  A. Identification

  1. The Issue

     The Panama Canal is threatened by the depletion of the
rainforests surrounding the canal.  The canal is run on fresh
water which only comes from Lake Gatun in the middle of the
canal.  The rainforests supply a continuous source of fresh water
to the lake.  The Canal Zone is the area surrounding the canal
and which has been protected from depletion for many years by the
fact that the area was under United States control in the form of
military bases.  A treaty signed between the United States and
Panama is gradually reverting the canal zone into the hands of
the Panamanian government.  The government has so far been
ineffective at preserving the areas they control as squatters and
basic neglect are damaging the rainforests.  The issue is: can
the Panamanian government preserve the forests and what are the
consequences to Panama and the canal if the rainforest are
destroyed?

  2. Description

     The Panama Canal was completed in 1914 by the United States.
The 51 mile long route cuts through Panama at the narrowest
conceivable spot to connect the Atlantic and the Pacific oceans.
The Canal was made in a series of locks, three on each side of
Lake Gatun.  The Canal is not built at sea level as the two
different bodies of water are at much different levels.  The lock
series elevates or lowers the marine traffic along the waterway
to compensate for the different levels.  The locks work by means
of gravity.  No pumps are used.  Only fresh water is used in the
Canal, no sea water.  Lake Gatun, situated roughly in the middle
of the waterway, provides all of the fresh water to run the
locks.  A 10 mile wide watershed area spans both sides of the
Canal to ensure a continued supply of fresh water.  This
watershed or Canal Zone and the running of the Canal have been
under the control of the United States with U.S. military bases
serving as de facto ecological reserves.  By building this
canal, shipping has been given an enormous advantage as ships no
longer have to sail around the tip of South America to reach
either ocean and sailing time is drastically reduced.
     A treaty made between the United States and Panama in the
late 1970s has the Canal and the Canal Zone gradually being
turned over to the control of the Panamanian government.  By
midnight December 31, 1999, US military presence in Panama and
control of the Canal will completely cease.  The issue of
control had been a major source of contention during the time of
the treaty signing but times have changed.  Panamanians want the
canal...but fear it will be mismanaged.
     The problem which now exists is that the areas that have
been turned over to the Panamanian, as per the specification in
the treaty, have not been well maintained.  The rainforests under
Panamanian control are disappearing due to squatters, farmers and
general neglect.  Should the rainforest be depleted to the point
where the water Lake Gatun is no longer adequately replenished,
the canal will no longer be able to operate.
     Why have the rainforest under Panamanian control been
neglected to this point?  The history of the Panamanian
government has not been one of stability or efficiency.  Former
military controlled governments placed limits on the amount of
land farmers could clear and required them to obtain permits
before cutting trees in forested areas.  But these rules were
seldom enforced.  Nor did the government set a good example. In
addition to allowing illegal logging, the military participated
in the destruction of the land and the new civilian government
has impounded more than 1.5 million cubic feet of timber sold to
China by the former de facto ruler, General Manuel Noriega.  
     The government has been better since Noriega has been out of
power and recent elections have brought new people into positions
of authority over the fate of the canal.  In 1947, more than 70
percent of Panama was forests, whereas now, less than 30 percent
remains forests and expectations are that the figure will be 15
percent by the end of the century.  Farmers, loggers and
industry have over 2,000 acres of land being cleared each week.
     Loss of any rainforest have become a major issue in terms of
possible global warming and ozone depletion but loss of the
rainforests in Panama will have a direct impact on the people in
the country.  Should the watershed area be depleted and Lake
Gatun could no longer provide enough water to run the locks, the
economy of Panama would be devastated.  As it is now, over 5,400
Panamanians are employed at U.S. bases.  The Panamanians will be
able to make up the losses from those jobs and more as the
military pulls out by taking over the jobs the US personnel had
in running the Canal.  Should the Canal go dry, all of those jobs
will disappear. 
     Another consideration for the more than 700,000 people who
live in Panama City and the surrounding areas, is the loss of
fresh drinking water.  Lake Gatun supplies the water to Panama
City and with the loss of the rainforests, the availability of
fresh water dwindles.

   3.Related Cases

PANAM Case
CANALTH Case

   4.Draft Author:  Andrea Quinn

   B.LEGAL Cluster

   5.Discourse and Status: DISagreement and ALLEGE
     The Panamanian government and the NGOs disagree on the
seriousness of the depletion of the rainforests surrounding the
Canal and the measures needed to be taken to preserve them.  The
NGOs in Panama want to make the government take more
responsibility for the future of the Canal but no formal measures
have been taken as yet. 

   6.Forum and Scope: PANAMA and UNILATeral

     The Autoridad Porturia Nacional (APN), Association for the
Conservation of Nature (ANCON), the people of Panama, and the
Government of Panama are involved in the problems involving the
future of the Panama Canal and the Zone.  The problem is
confined, at this time, to Panama but the potential for it to
spread and become a multilateral problem does exist. 

    7. Decision Breadth: 1 (Panama)

     At this time the problems are confined to Panama but may
expand to effect all countries that use the Canal for shipping as
well as the rest of the earth since the ecology of Panama will
pretty much be destroyed. 

   8.Legal Standing: TREATY

     The NGO's are the ones that are most active in trying to
solve the problem with the rainforest in Panama while the
government basically makes a show of trying to help and
accomplishes little. 

   C.GEOGRAPHIC Clusters

   9.Geographic Locations
       a.Continental Domain:North America [NAMER]
       b.Geographic Site:Southern North America [SNAMER]
       c.Geographic Impact:PANAMA

  10.Sub-National Factors: NO

  11.Type of Habitat: TROPical

   D.TRADE Clusters

  12.Type of Measure: ADMINistrative

     The measures that need to be taken in order to save the
watershed are not only administrative initiatives but enforcement
of those initiatives.  The government has set aside much of the
remaining forests as parks or preserves but continues to ignore
the meaning of this action by allowing farmers to clear land and
inviting foreign investors to consider land along the Canal for
possible condominiums and resort sights.  The government should
also seriously consider drafting an agreement with the United
States to continue management of the Zone since the United States
has the personnel and equipment in place.  The United States has
had good success keeping the Zone safe, while the Panamanian
government has had less than good success keeping even a forest
safe. 

  13.Direct vs. Indirect Impacts: INDirect

     The measures taken will affect the forests within the Canal
Zone which in turn affect the Canal. 

  14.Relation of Measure to Environmental Impact
       a.Directly Related:No
       b.Indirectly Related:YES  TRANSport
        c.Not Related:NO
       d.Process Related:YES  HABITATat Loss

     The water in the Canal, which keeps everything afloat, will
be drained slowly away as the rainforests no longer exist to
produce water to run in to the Canal.

  15.Trade Product Identification: TRANSportation

  16.Economic Data

  17.Degree of Competitive Impact: LOW

  18.Industry Sector: SERVices

     The group includes transportation of goods from one ocean to
another, service industry employment for the Canal and drinking
water for the people.

  19.Exporters and Importers: MANY and MANY

     While many countries use the Canal for transporting goods,
their is no real trade involved in this case, only a service.

   E.ENVIRONMENTAL Clusters

  20.Environmental Problem Type: WATER

  21.Name, Type, and Diversity of Species 

     Panama has over 10,000 species of plants, of those 1,250 are
know to exist only in Panamanian forests.  Over 1,200 species
of trees and 900 species of birds have survived to date. 

  22.Impact and Effect:  LOW and REGUlatory

  23.Urgency and Lifetime: LOW and 100s of years

     In regard to the watershed and the wild life within, in some
places problems will not surface for a number of years, but in
other places people have to act right now.

  24.Substitutes: Conservation [CONSV]

     Conservation is the only way to help the watershed.  The
canal could be adapted, possibly, to work on pumped sea water but
the cost would be high.  Other possible measures to help save the
watershed is education for the people on new and better farming
or grazing techniques.  Awareness campaigns and enforcement of
environmental regulations would help also. 

   F.OTHER Factors

  25.Culture:  YES

     The farmers need the room to grow crops and raise livestock. 
The squatters need a place to stay. The culture in Panama has
been relatively laid-back in community awareness. The people do
what they can to survive and the government has not tried to help
the people work together to help solve their problems. 

     We know that slashing and burning the land is dangerous for
the lake, "and...there won't be water for the people of Panama
City, but why should I care about the people of Panama if it will
mean my family can't eat?  I would respect the government's
restrictions if the government gave me a solution as it promised
to do.  To me everything looks as it did before. I don't see any
problem of erosion.  When it rains, the tree bear fruit."

     The people have learned to be self interested.  What is
happening in their own lives is what is important and the
government is seen as an ineffectual bureaucracy as a result of
past cultural experience.

  26.Trans-Boundary Issues: YES

     The issue of the Canal will effect every country that uses
the Canal to ship goods.  The depletion of the forests that
provide the watershed will eventually cause the Canal to either
shut down or be reworked which would raise the cost of using the
Canal substantially.  In addition to the Canal being affected,
the surrounding rainforests would be affected by the loss of the
moisture produced by the Canal Zone.

  27.Rights: YES

     The depletion of the rainforests not only endangers the
Canal but the drinking water for the people of Panama City. 
Also, the amount of jobs that would be effected should the Canal
be inoperable would devastate the economy of Panama and reduce
many people not already in poverty to that level.

  28.Relevant Literature

Blakey, Scott. Perils of Rainforest Destruction Explored in PBS
     Documentary.  Chicago Tribune.  Thursday, November 5,
     1992, Tempo, 11C.
Diuguid, Lewis H. "US Study of Canal Pacts Cites Peril to
     Watershed."  The Washington Post.  Monday, October 10,
     1977, A30.
"Is There a Plot to Privatize the Canal? Local Amendments Said to
     Dovetail with US Move."  Latin American Newsletters,
     Ltd. December 1, 1994, 544.
Jukofsky, Diane.  "Problems and Progress in Tropical Forests;
     Special Coverage: Forests on a Shrinking Globe."
     American Forests 97/7-8, July, 1991, 48.
Nixon, Will.  "Protecting Panama: The Land Made Famous By Noriega
     Needs to Protect Its Rainforests."  E 5/4. August.
     1994, 20.
Otis, John.  "The Vanishing Point."  The San Francisco Chronicle.
     Sunday, December 25, 1994, 2/Z5.
"Panama: Special Report - Ports Industry Image Recovers Under
     Stable Leadership of APN."  Lloyds List.  September 7,
     1993.
"Parting the Green Curtain: The Evolution of Tropical Biology in 
     Panama."  Federal News Service.  Friday, August 18,
     1989, News Makers and Policy Makers Section.
Petit, Charles.  "Crusader for Colon."  The San Francisco
     Chronicle. Sunday, January 28, 1990, 19.
"The War on Panama's Rainforest."  The San Francisco Chronicle.
     Sunday, January 28, 1990, 22.
Robinson, Linda.  "Some Mixed Signals for Uncle Sam."  US News
     and World Report.  October 25, 1993, 37.
Sheppard, Jr., Nathaniel.  Forests Get Wiped Out in Panama.
     Chicago Tribune.  Sunday, March 10, 1991, 6C.

                            References