Cash crisis 'lax' on environment

Cash crisis 'lax' on environment

WASHINGTON (Reuters): The world financial crisis that has gutted the economies of countries such as Indonesia, Russia and Brazil is also hurting their environment, an environmental advocacy group said on Thursday.

Friends of the Earth said the fallout from the crisis has led to lax environmental policies, increased logging and other harmful practices.

In Indonesia, where slow growth and high inflation has led to a 15 percent drop in industrial production, pollution actually rose by 18 percent despite the closing of many factories that produce waste, the group said.

Matthew Siegel, an international policy consultant for Friends of the Earth, said this rise occurred because the government could not afford to spend resources on cracking down on companies that did not properly dispose of their waste.

The Indonesian government also lifted a log export ban and cut the log export tax in order to generate revenues, leading to increased logging.

In Russia, the cash crisis has forced the Russian government to consider cutting trees in Siberia, which had previously been considered too remote to profit from.

Friends of the Earth said Brazil cut its spending on environmental programs by two-thirds in order to meet targets laid out in its loan repayment plan with the International Monetary Fund.