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Atentique´s environmental and economic development

shrinkage in globlalization era

José G. Vargas-Hernández1

Abstract 
 
This paper focuses on the effects the transfer of ownership from a state‐owned Paper Mill Company to a corporate private 
ownership has had on environmental and economic shrinkage in Atenquique. This transfer was the result of the ongoing 
economic process of globalization, after the industrial boom of the paper mills during the second half of the last century. The 
paper also focuses on how the employees of this Paper Mill Company live and how they have been affected by globalization 
and how they feel about their paper mill’s new corporate owners. The methodology used was descriptive and exploratory. A 
sample of ten workers at the company who lived in Atenquique was chosen for an interview. After being inhabited the town of 
Atenquique developed in terms of population, society and economy. On the other hand the Industrial Company of Atenquique 
grew during the period when it was a property of the Mexican State. After the company’s privatization, the town started to 
decline and shrink in three above‐mentioned variables. The impact on the environmental and economic development has 
initiated the shrinking and declining of Atenquique and the surrounding cities and towns. 
 
Key words: Atenquique, environmental development, economic development. Shrinkage, neoliberal model, globalization. 

Resumen
 
Este trabajo se enfoca en el impacto de la declinación económica y ambiental que ha tenido la transferencia de la propiedad de 
una compañía papelera propiedad del Estado a una propiedad privada corporativa como un efecto de los procesos económicos 
de globalización, después de la bonanza industrial de la fábrica de papel durante la segunda mitad del último Siglo. El trabajo 
también se enfoca en cómo los empleados de esta compañía papelera que viven en un pequeño poblado han sido afectados 
por la globalización y cómo se sienten acerca de los nuevos dueños corporativos de la compañía papelera. La metodología 
usada fue descriptiva y exploratoria. Una muestra de diez empleados de la compañía que vivieron en Atenquique fueron 
seleccionados para una entrevista. El pueblo de Atenquique fue fundado y creció en términos de población, desarrollo 
económico y social en la misma proporción que lo hizo la Compañía Industrial de Atenquique durante el período que la 
Compañía fue propiedad del Estado Mexicano. Después de que la Compañía fue privatizada, el pueblo empezó a declinar en 
población, desarrollo económico y social y lo más desastroso, es el peligro ambiental. El impacto en el desarrollo ambiental y
económico ha iniciado la declinación de Atenquique pero también de de las ciudades y pueblos que lo rodean. 
 
Palabras clave: Atenquique, desarrollo ambiental, desarrollo económico, declinación, modelo neoliberal, globalización. 

1
Profesor Investigador miembro del Sistema Nacional de Investigadores
Departamento de Mercadotecnia y Negocios Internacionales
Centro Universitario de Ciencias Económico Administrativas U de G.
Periférico Norte 799 Edificio G-306
Zapopan, Jalisco C.P. 45100; México
josevargas@cucea.udg.mx
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1. Introduction

During the 1990s a period of restructuring in the paper mill companies started in México, a
process that has been characterized by large corporate owned companies consolidating
to become larger, more vertically integrated, more transnational, less diversified, and
leaner. These changes and developments were caused by the long term trends toward
economic process of globalization. As the economic processes of globalization continue,
its effects on local communities are uncertain to their residents’ perceptions (Brady and
Wallace 2000:91). Global competition and capital mobility have changed the incentive of
new corporate owners for community concerns (Miller, 2006).

A Mexican-based forest products private company recently purchased the paper mill in a
paper mill town, Atenquique, a small community in the Southern region in the State of
Jalisco. When the paper mill company was founded it was state-owned and financially
supported housing, schools and other community activities for its employees and workers.
However the state owned company was sold to a private corporation and after the transfer
of ownership, employees had distrust and fear on the new corporate owners. In a similar
way, it has been reported already by most of the literature about the effects of
globalization focusing on how owned corporations are perceived as they take off state-
owned companies.

It has been said that in Atenquique the inhabitants used to live like a great family. Family
meetings were characterized by the warm environment of friendship, the spirit of solidarity
at work and the affinity of aspirations. This unification and fraternity of Atenquique was the
contribution and worrying of the Compañía Industrial de Atenquique, a paper mill factory,
to provide the township with adequate infrastructure, buildings and installations to promote
living together among the workers and their families. For this reason the company had
restaurants, movie theaters, casinos and reading rooms. The company also offered
swimming pools, football fields, basketball courts, gyms, etc., to foster sports among the
population living in Atenquique (Medina Enriquez, 1988).

To develop social relationships among the population the company supported the
formation of clubs and workers, employees and their families' membership to participate in
contests of speech, poetry, conferences and theater performances. Attendance of famous
writers, poets and intellectuals was encouraged as well as the performance of music
concerts. Employees and workers formed the Mariachi Atenquique who used to perform
every Sunday evening in downtown. Dancing schools received support. In sum,
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Atenquique conducted intense social and cultural activities as part of better life quality. It
was the time when the economic and environmental development of Atenquique was at
the rise.

Compañìa Industrial de Atenquique was one of the showcases where the emergence of
economic institutions structured under the dominant ideological paradigm of the Mexican
revolutionary State concerned for the welfare of employees, workers and all the
stakeholders. In fact, the company was public and state-owned enterprise, and
concerned about creating sources of employment and welfare for the post-revolutionary
generations of Mexicans living in the southern region in the State of Jalisco. However, this
situation doesn’t exist anymore. The economic and environmental development of
Atenquique and the surrounding Region of Southern Jalisco is shrinking and the main
turning point was the privatization of the Compañìa Industrial de Atenquique as a result of
undergoing processes of economic globalization.

2. Materials and methods

The methodology used was descriptive and exploratory. A sample of ten workers at the
company who lived in Atequique was chosen for an interview. The sketch of the interview
had five questions:

1) Since when do you live in Atenquique?

2) Since when do you work in Atenquique?
3) What are the most important changes that you have lived in Atenquique?
4) What are the most important labor changes that you have had in your work?
5) Have these labor changes affected you positively or negatively?
All the selected people to be interviewee had provided valuable information.

3. Location of the Village of Atenquique

The village of Atenquique (19°32'N 103°30'W), is located South of the State of Jalisco, at
the East foot of the Colima peaks, over the middle of the ravine of a precipice at 1030
meters above the sea level. The precipice of Atenquique is 24 kilometers large, located in
the East bank of the Volcano Nevado of Colima together with other precipices The
Plátanos and Arroyo Seco, form the Atenquique Basin. The Atenquique basin has a form
of long funnel West-East oriented joining the Túxpan River. Atenquique is located 7 m
(11.3 km) west of Túxpan, on Mexico Highway 54 (Fig. Nº 1)..
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The Volcán Colima is a decadent volcano and the most active in Mexico. Currently it is
approaching its climactic phase and a major eruption could occur in the next decade.
Volcanic debris flows are likely to occur in the two major drainages to the east and west of
the volcano, Rio Túxpan and Rio Armería respectively. Unfortunately, as a large lumber-
producing town, Atenquique is at high risk for moderate to large lahars because it is near
the volcano and at the bottom of a deep canyon. At this location the hydraulic radius of the
largest model lahars (108 m3) would be about 75 m and that of the intermediate flows (107
m3) would be about 40 m. Atenquique would be inundated and devastated by such
mudflows (Sheridan, Michael f., Hubbard, Bernard, and Hooper, Donald, no dated) The
largest lahars (108 m3) would have a peak depth of about 60 m and a run about 120 km,
reaching the sea. The smallest lahars examined (105 m3) would have a peak height of
about 7 m and would only reach about 15 km distance. These models should be helpful
for a risk planning at Volcán Colima (Paul and Sheridan, no dated.) Atenquique is a
lumbering center, soda and wood-pulp mills.

Fig. Nº 1 México,  Jalisco. Localization of the Village of Atenquique 

Source: Instituto CIFOT, Dpt of Geografy, Facultad de Filosofía y Letras, UNCuyo, Mendoza, Argentina

4. Brief history of the town

Atenquique was the site of battle of Atenquique in 1858. Before the construction of the
paper company in Atenquique, this village only had 50 inhabitants. The village was
created in 1946 as the consequence of installation of a paper mill named Compañía
Industrial de Atenquique, S.A. (CIDASA) as a strategic point to capture the water of two
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rivers, Atenquique and Tùxpan, vital for the industry. The Compañìa Industrial de
Atenquique was inaugurated in October, 1946 and became the largest in the Southern
Region of Jalisco. Immediately after the establishment of the company, Atenquique had
more than 4, 000 inhabitants. Since then, the labor force comes from the neighboring
cities and towns being thankful to this employer.

On the 16th of October, 1955, an intense storm of 140 mm that lasting 3 days, suddenly
originated a series of fluxes of rubble and debris devastating almost the whole Village of
Atenquique. On the 16th of October, 1955, a strong current and flooding from the
Atenquique Creek caused the death of tens of persons and destroyed the church, a
school, business and shops buildings and around 20 homes. The issue was that a slope
of high inclination collapsed near the village which was enough to cover some meters of
the church that today only shows the highest part from the central garden. It also affected
the industrial plants and killed 23 persons and some people saved their lives in the
campanile of the church. The flooding left desolation and affected the operations of the
paper company for 2 Months, railroad and other roads were truncated and the material
damages were estimated in 10 thousand million Pesos at that time. This catastrophic
event obliged to make new plans for Atenquique (Redacción Del Sur, 2005). The
inhabitants helped to repair the damages of the Company.

After installation of the paper Company in the locality of Atenquique, which was only a
camping spot, the population had duplicated in only 20 years from 1950 to 1970,
consolidating itself as a pole of regional attraction. Atenquique grew larger until it reached
a peak of 291 households with a population of 1,645 in 1990 as it is shown in table 1 that
takes account of the larger localities out of 82 in the municipality of Túxpan (Fig. Nº 2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Fig. 2. Population for the years 1990 and 1995 in the main localities of the Municipality of 
Túxpan 
 
Name of localities Population (Year/inhabitants)
1990 1995
Cabecera Municipal 25,895 26,219
Atenquique 1,645 1,237
La Higuera 1,479 1,410
San Juan Espanatica (El Pueblito) 908 792
Pozo Santo 868
Platanar 582
Source: INEGI (200O).

For the case of Atenquique, it can be determined that there were 1,645 inhabitants in
1990 while there were only 1,237 in 1995, marking a trend towards a shrinking population
(Fig. Nº 3).

Comparing the population that had Atenquique in 1988 and the Population Atenquique
has in 2007, the results are:

Fig. Nº 3. Population of Atenquique 
 
Year Population attending Total population
school
1988 750 3700
2007 139 310
-611 -3390
Source: Own estimations after counting and taking a census.

5. The history of the Company

Although the area of the Nevado de Colima was declared “protected zone” in 1934 and
considered national park in the times of President Lázaro Cárdenas, the decree was
modified two years later in 1936 to give opportunity to the company in Atenquique to
exploit the forest. The 3rd of August of 1936, by decree was created the National Park El
Nevado after the visibility of strong interests for the forestry wealth existing in the area.

The lad reform implemented in México during the 30s and 40s gave shares of communal
land (Ejido) to poor peasants (ejidatarios) of expropriated land from large states’ private
owners, generally called haciendas. In order to exploit their land, the ejidatarios cleared
the forest and leveled the ground through irrational felling of large forest surfaces.
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The large owners of property organized in the enterprise Unión Forestal de Jalisco y
Colima in 1940 to maintain control of forest resources and protect against possible risks.
Union Forestal de Jalisco y Colima was formed on the 14 of September, 1940 with the
association of the larger landowners of the Southern Jalisco who controlled the forests not
only of the Volcanoes of Colima but also the Mountains of Sierra del Tigre, El Halo y la
Leona.

On the 26th of November 1940 the decree was modified again and on September 7, 1941,
the Compañìa Industrial de Atenquique, S.A. (CIDASA) was founded to take advantage of
forest resources in the Southern Jalisco. The decree established the concession for forest
exploitation in the Southern Jalisco for 50 years in favor of CIDASA for the elaboration of
chemical celluloses, mechanical past, paper, synthetic fibers and diverse plastic materials.

The paper company in Atenquique was created by local investors and promoted by a
German military. The Mexican federal government granted one million eighty thousand
hectares in a free concession for a free exploitation during 50 years. This extension
represents 1.7 of the forests in all the Mexican territory.

The Industrial Company of Atenquique, was a state owned paper mill enterprise. Since
the beginning, the Company had been befitted by fiscal incentives. The Company
diversified its productive activities in a conglomerate integrated by the lumber exploitation
cellulose extraction, and packing manufacturing.

The 22nd of March, 1945, an industrial forest exploitation unit was created in favor of
CIDASA with a concession for exploitation of timber on a surface of 225,000 acres. This
area was distributed in 17 municipalities in the Southern region of Jalisco, with an annual
production varying between 60 and 70 percent of the global production of the State. On
the 27th of March, in 1945 the Industrial Unit of Forest Exploitation (Unidad Industrial de
Explotación Forestal or UIEF) was created by decree to consolidate control of forests
adoption a legal regime. In 1945 it the Dirección Técnica Forestal (Technical Forestry
Direction) was created with employers paid by CIDASA, thus, being the organization in
charge of technical surveillance of exploitation on the payroll who takes advantage of the
forests. Between 1946 and 1948, the first forest inventory named General Project of
Ordination was carried out (Fig. Nº 4).

 
 
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Figure 4. Partial view of Atenquique 

Source: José Vargas

There was a world crisis of paper in 1954 that benefited the expansion of CIDASA.
Because of that the forest exploitation was consolidated as the main economic activity
given the potential and magnitude. In 1963 and 64 the CIDASA plant was modernized and
amplified. Between 1964 and 1968 the second forestry inventory took place. As an
immediate consequence of these agreements, the exploitation of the forest resources was
accelerated. By 1969 the modernization of the plant was already consolidated
incorporating new techniques and processes.

In 1971, CIDASA became a parastatal enterprise due to financial problems. In 1972,

another decree widened the uses of the exploited lumber by the UIEFA (Unidad Industrial
de Explotación Forestal de Atequinque). At the beginning, it was allowed to be used for the
elaboration of cellulose, cardboard and paper. Later, it would be used for wood, triplay
and other products. Later, a manufacturing plant of triplay was installed although the
Oyameles were scarce after a fierce exploitation.

Relationships between inhabitants of neighboring municipalities, more specifically

between the cities of Túxpan and Cd. Guzman were considered familiar communion
because the company was “the heritage of our fathers”. General wages were at the rank
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between 150 and 160 pesos ( 15-16 US Dollars) per day, although some workers earned
more than 300 pesos (30 US Dollars) justified by the high productivity and personal
qualifications.

GIDUSA was founded in 1980 and has been the only one producer that integrates
vertically the whole productive process of cardboard and packing from the lumber
exploitation, cellulose, manufactured paper and products. After the Mexican economic and
financial crisis of 1982, the economic policy addressed the problem gradually dismantling
the State, selling and privatizing public enterprises, merging, transferring, canceling and
settling down major companies and taking out from the parastatal sector's minor
companies. After the end of the exclusive concession to Atenquique in 1990, the
Company was sold to the Durango Group.

Under the ongoing structural reforms and privatization programs, the Industrial Company
of Atenquique, a conglomerate producing paper and the most important in Latin America,
was sold to the is the Grupo Industrial Durango. The firm provided 65 percent of packing
of cardboard utilized by the Mexican export sector, 80 percent of Mexican packing utilized
by the Maquila (in bound industry) sector and 40 percent of the packing consumed in the
country. In 1987, the government sold the conglomerate to the Grupo Industrial Durango,
S.A. de C.V. (GIDUSA) that belongs to the Rincón Arredondo family.

The company was an economic empire in the southern region of Jalisco because it used
resources conceded by decree that belonged to Ejidatarios (Holders of one right to exploit
a plot of land) and small property owners. GIDUSA is the major lumber Company and the
major manufacturer of brown papers and packing of cardboard in Latin America. It also
owns 26 manufacturing plants in México and 5 more in United States. Nowadays, the
Industrial Company of Atenquique is one of the subsidiaries of Grupo Industrial Durango.

Also, Grupo Durango owns Productora e Importadora de Papel (PIPSA), that controls 90
percent of the newspaper paper in the national market. In 1998, Bancomext gave 80
million US Dollars to GIDUSA in order to pay its debts to the banks after shopping PIPSA.
The federal government remitted their debts for the acquisition of PIPSA, although it was
sold off at half its value (Proceso, 1999).

The problem initiated the third week of April, when 97 workers out of 650 were fired
because their contract was rescinded without any reason and later another 30 workers
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more. On the 21st of April, after the Company stopped production due to maintenance, it
declares that it is not competitive. At that time, the workers went on strike outside the
facilities of the Company waiting a solution for the conflict.

The firm shut down operations on the 26 of April, 2001 firing employees and workers. The
company of paper Kraft was closed due to the increase of production costs, and more
specifically the labor costs. After half a Century of operating, the Industrial Company of
Atenquique closed the doors. It transcended that the Company had taken out equipment
of the plant, which in turn had motivated protests of employees.

Under the argument that the Company was operating with high costs, the plant was shut
down and 900 employees were fired. It was quite difficult to think that an Industrial Group
like this had economic difficulties. Actually, the main reason to close Atenquique was its
high cost of manpower (Milenio, 2001).

There were two different versions of the company closing: The workers argued that the
ambition of shareholders and managers from the Grupo Durango was the main cause.
The Union strategy was to avoid the definitive closing down of the plant.

The second version argues that a weakness was the traditional collective contract of labor
signed 55 years ago with an addendum of benevolent clauses that benefited the
employees and workers as the result of negotiations between the labor union in one side
and in the other, the representatives of the state and the company. However, it was
argued that higher labor costs were the result of the lack of flexibility to change labor
culture. The owners argued that in Atenquique the oldest and least competitive labor
contract in the national paper mill industry exists. The firm declared that the collective
labor contract includes clauses, terms and benefits difficult to understand (Milenio, 200l) in
an economy of high competitiveness and open borders to imports.

The company argued that the lack of profitability was due to high labor costs. Therefore
the origin of the conflict was to eliminate the collective contract and to hire personnel
under a new scheme of labor conditions designed to lower the labor costs. However, the
Company accepted that the main problem was the age of workers, who were older than
35 years old. The threat was to locate the plant to a place where the Company could
achieve higher profitability. The message was clear: to suspend the labor contracts that
threatened the principles of productive efficiency. The closing of Atenquique meant that
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labor rights achieved in half a Century can be nullified by management and fired 650
union workers, 120 employees of trust and 130 eventual workers.

The collective contract set a daily production limit of 240 tons of paper while before the
strike the production was more of 350 tons.

During the visit of the Governor of the State of Jalisco to Tamazula de Gordiano, a
neighboring city to Atenquique, Guillermo Legarret González, and General Secretary of
the National Union of Paper industries exposed this situation of the workers at GIDUSA.
The Governor dialogued with the workers of the firm and offered support to solve the
conflict (Comunicación Social (2001). During the labor conflict, the Municipal President of
Túxpan, Tranqilino Rúa Laureano, affirmed that the workers had his moral support to find
out the way out of the conflict.

On May 16, 2001, The State Congressman Ramón León Morales submitted an
agreement point to the Permanent Commission of the Congress which was turned to the
Social Welfare and Labor Commission. The mandate of this point of agreement was to
find a solution to maintain the source of labor and respect the labor and contractual rights
of employees and workers.

However, after having several meetings between the managers and the employers to
settle down the amount to be paid to the fired workers as liquidation, they did not reach
any agreement. After the paper plant closed and fired all the workers and employers, it
was announced that the Economic Promotion Secretary of the Jalisco State Government
would sustain the economic reactivation programs to create employment in the Southern
Jalisco after the closing of the GIDUSA plant.

In meetings between the Secretary of Labor, leaders of the Union, and representatives of
the Village of Atenquique, the Company accepted to pay for maintenance of primary
services. They also agreed to review the collective labor contract to settle benefits to
workers in order to reduce the costs of paper production. Also, the Company agreed to
sign a new contract hiring all the employees. The Company and workers accepted the
commitment, although the Company decided not to accept it. The Secretary of Labor had
to intervene to reach the agreement after the workers had to agree on receiving only part
of the benefits as part of the deal to settle the collective labor contract.
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The labor conflict in the paper GIDUSA plant was part of the strategy of the Company to
overcome the labor collective contracts to reduce labor costs. All the workers and
employers were fired ending the collective labor contract that had been enforced for 55
years, with an estimated cost of 160 million pesos. Once settled this collective labor
relation, Atenquique could open the plant without the heavy burden of the payment of
labor benefits.

On the 3rd of September, 2001, GIDUSA declared it was ready to open again (El
Financiero, 2001) investing 50 million dollars (Rodriguez, 2001). The Company was
named Compañía Papelera de Atenquique S.A. de C.V. The new company began
operations in September 2001 with around 50 percent of the labor force. Since then
management of the firm has been requesting new attitudes toward the multifunctional job
assignments, supported by programs of training and productivity. Overall, salaries are
lower than before. Starting on February 2007, the firm changed its name again to
ATENSA, S.A. de C.V., Empaques de Carton Titàn, S.A. de C.V.

6. Results and discussion

Reviewing the data from the individuals living in Atenquique and working at the company
reveals that 90 percent of them began living and working there before the crisis.
Regarding the question “what are the most important changes?” from those interviewee
who had lived in Atenquique, it is quite interesting to find that 100 percent reported that
these changes are related to facts of the Company’s cycle life, such as change of
ownership in 1987 when it was privatized and sold to the Grupo Durango. The older
interviewee commented that they started to work in the Company or other companies
clustered such as Unión Forestal de Jalisco y Colima, Aserraderos Tècnicos, etc.

Another important change commented was the closure of the Section XI of the Union
Workers in the year 2001, when most of the workers were fired. In order to cancel the
workers Union, the Company closed operations and declared bankruptcy. Only part of the
union workers were hired under contract, just to find that after the end of this contract they
would be transferred to other clustered company with the same terms and conditions of a
new contract.

Answers to question 4: “what are the most important changes they have had in their
work?” implied explicitly the time when the interviewee began to work for the Company
and the required competencies to for a good performance and higher productivity at work.
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Other answers reported that the most important changes for the employees and workers
who lived in Atenquique were the adjustment and adaptation to the work, job promotions
in the company, changes in the information and data systems, personnel reduction and
new hires.

It is interesting to find that all the interviewee agreed that the turning point was marked on
September 2001 when after the crisis, the Union was eliminated and the new named
company began operations again hiring workers without experience and without fringe
benefits and job requirements. The pressures were higher on efficiency, productivity, with
less resources and new challenges. The employers kept the same wages while the
workers have lower salaries and fewer fringe benefits than when the company was owned
by the Mexican State.

They also agreed that there’s been more pressure and the labor environment and labor
climate are tense and stressful in contrast to the times when the company was owned by
the Mexican State. Employees and workers had a more relaxed environment, less
pressure on assignments and more personnel assigned to perform the same duties. Now
under the new management the stress increases when the employees and workers are
required to take care of resources and some fringe benefits such as tires for cars, gas
bonuses, profit sharing, etc., have disappeared.

One of the interviewee captures the situation stating that during that time supervision was
difficult because the operative personnel with Union membership were lazy and negligent.
When the new Company started in September 2001, after the declared bankruptcy and
crisis of the former Company, all the personnel with union membership were fired, some
of them were hired but most of the personnel were new hires.

The responses to the last question “have these labor changes affected you positively or
negatively?” answers can be also analyzed in terms of their personal job experiences at
the company, more participation of workers, earning more money, more labor options,
learning more, and the opportunity to have a job. Most of them declared that the labor
changes at the company have favored them because they have received more training.
One of the respondents concluded that he has been more motivated by all the events
caused by the globalization changes, commercial treaties, and unemployment have
caused that people value the sources of jobs more and the struggles for the company to
survive in the Southern Region of Jalisco.
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Other interviewee reported that labor changes have benefited him because he has
achieved promotions in rank and salaries. Furthermore, other interviewee declared that
although the labor changes are more stressful and with more pressure, however, he
perceived that the changes have been positive. He also argued that because of the
devaluation of the acquisitive power of wages, he needs to achieve the goals to keep the
job. In general terms the employed people at the Company perceived that since they
started to work they have improved attitude and productivity of personnel which is
positive. Personnel have squired more abilities and became multifunctional: a mechanic
now knows welding, painting, etc. Before, he worked always with a partner, and now he
works by himself.

Among the negative impacts of the labor changes at the company reported by all the
interviewee persons, are that they work under more pressure, more time than the
ordinary labor day of eight hours, without receiving overtime payment or negotiation of
worked hours in exchange of more flexible time when required for personal problems such
as health attention, etc. Other effects are the lower salaries and less employees and
workers. An interviewee declared as the negative effect the job pressure and stress when
achieving productivity goals, better results with less costs.

Another negative aspect reported by an interviewee was that labor environment is heavy
and stressful. The managers of the company are obliged to have profits alongside
pressing and obliging personnel to get better performance. He states that “it has been
managed psychologically to make us believe that we are the owners of progress and we
are responsible of good results”. It is a scaling upwards objective, always improving
productivity.

A. Economic impact

Once the “economic motor of Southern Jalisco for more than 55 years closed the doors,
the labor conflict was a social and economic conflict not only in the region of South of
Jalisco, but also at the level of the State of Jalisco started. The labor conflict had not only
an economic impact, it had an affective implications. 95% of the workers of the Company
in Atenquique were from Túxpan, a municipality that had 33 thousand inhabitants. The
main economic activity of Tùxpan is the agriculture of sugar cane and vegetables.
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From March 1995 to December 2000, investments in the Southern region of Jalisco added
55 million US Dollars, which represents 98 % of the total in the State of Jalisco.
(Secretaría de Promoción Económica del Gobierno del Estado de Jalisco, 1995-2001).

The company provided more than 1,000 direct employments and more than 4, 000
indirect employments which had an economic impact not only in Atenquique but the
neighboring cities of Túxpan and Cd. Guzmàn and the towns of Zapotiltic and Tecalitlàn. It
was calculated that the economic spill over was around 150 pesos daily per employee as
an average which amounts to a total of 750 thousand pesos per day or 22’800,000 per
month.

650 workers plus 300 employees were affected by not earning their salaries with an
impact on the living standards of 4, 750 inhabitants. It was estimated that 4 out of 10
families of the municipality of Túxpan depend on the Atenquique worker’s income. More
than 600 families were directly damaged in their income. The immediate impact on local
economy of Túxpan was the falling down 60% of sales and consequently less than this
percentage, although it was not estimated, on the falling down of sales in the regional
market of Cd. Guzman.

An study of the State Legislatura concluded that the multiplication effects of the salaries
spill over were estimated around 800,000 pesos per month only in the municipality of
Túxpan, but should consider as an impact on Mazamitla, Tecalitlán, Tamazula de
Gordiano, Tolimán, Zapotiltic, Zapotlàn el Grande and other locations in the State of
Colima, limiting consumption and eroding the living conditions.

The economic effects of the labor conflict were visible at the Tianguis (the street market)
on Sunday, where fewer customers than before had gone to buy. The earned wages as
the direct economic sustainability of families and also indirectly were dependent of the
labor conflict. For example, as a consequence of the labor conflict, it was estimated a
reduction of around 40 percent in income of restaurants.

Seniority average of workers and employers was around 20 years of service who had a
legitimate aspiration to achieve pension. Most of these workers had not any other
opportunity to be employed or to start their own business because of the backward
economic development of the region. For this condition the region has been fiscal favored.
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The social impact in the analysis of the State Legislature implied that the closing of the
Company could origin familiar disintegration, health, nutrition, education, migration and
criminal problems. The Economic Promotion Secretary announced that they have a
diagnostic to find solutions and economic alternatives to the problems derived after firing
the workers.

The municipal President of Túxpan suggested that some corrective measures were taken
in order to attract more investments to the municipality just to avoid being highly
dependent on one Company. Korean entrepreneurs involved in the metal mechanics
industry pretended to establish a plant in the municipality of Túxpan. It was viewed as an
alternative to create employment, but unfortunately, the negotiations went wrong. In Fact,
the municipal President Rúa Laureano had bet to the Korean investment which should
have generated 3,000 employments in the short term and 10,000 in the long term,
although women were to be employed. This plant could interrupt the trend toward
migration of young generation that leaves behind towns without young men.

b. Environmental impact

Starting the second half of the past Century, the environmental degradation on the area
has been significant and has reached to alarming dimensions and has surpassed the
natural capacity of natural regeneration of forest communities. The most serious problem
of the Southern Region of Jalisco has been the irrational deforestation which has started
since the beginning of the CIDASA, today GIDUSA. The Federal Government also
modified the limits to shrinking the protected area, from 2,300 meters above the sea level
to 3,000 meters. Besides the limits were never well defined which have always been
confusing.

Thus, the Company took advantage of the National Park and ruined the forest resources
of the Nevado of Colima`s area brutally. When the Company started to exploit the forest, it
had the capacity to transform around 200 thousand cubic meters of lumber per year,
which represented an enormous quantity of falling trees.

The abundant ecological resource supply without almost any restrictions motivated that
the company overexploited more than 230 thousand cubic meters of lumber annually,
above the sustainable capacity of regeneration of forests. In this way, Atenquique raised
its production to more than one million cubic meters of lumber, five times more than the
capacity of regeneration of the forest. This caused an ecological debacle of the forest.
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After 50 years of forest exploitation the outcomes are the secondary vegetation and
deforested areas utilized for agriculture and cattle, infrastructure and commercial
exploitation. The company subutilized the forest resources not having any planning of
byproducts derived from lumber. The Company exploited the pine for manufacturing paper
and the holm oak for the furniture industry, but never exploited hundred of tons of shaving
that were spoiled. Besides, the interests have been for other local communities who have
taken advantage. There is not other form of getting away but to maintain a client
relationship with the lumber industry that manages the forest.

Many owners of forest decided to exploit the resources on their own springing up and
proliferating sawmills around Cd. Guzman, where more than 25 are operating and
exploiting with no reason the forests, argues García de Alba, (2004). This irrational
exploitation of forests is the cause that hills collide originating in a sudden manner the
fluxes of rubble and debris. After the natural forest disappears, the roots of the trees can
not retain and compact the ground. Because the high slope of the hills, the water erodes
the ground and cause the removing of materials.

Several systems of forest management had been implemented according to the needs,
such as the Mexican Method of organizing irregular forests (Método Mexicano de
Ordenación de Bosques Irregulares or MMOBI), Forestry Development Method (Método
de Desarrollo Silvícola or MDS), Jalisco Coastal Plan (Plan Costa de Jalisco), Integral
Management Plan for the Region of Atenquique (Plan de Manejo Integral para la Región
de Atenquique or PMIFRA), Forestry Conservation and Development (Sistema de
Conservación y de Desarrollo Silvícola, or SICODESI), Integral Management System
(Sistema de Manejo Integral or SIMANIN). However, the results of implementing these
plans are not positive.

After the earthquake of Armería on 21 January 2003; the geomorphology dynamics of the
Atenquique basin has been accelerated. This dynamics can generate flows of detritus in
the short term as it had occurred in October 1995 that had destroyed a great part of
Atenquique. It is necessary to incorporate in the urban development plans the risks by
flows of detritus in the locality of Atenquique. Natural phenomena, such as the crawling of
hills and solifuction when de materials suddenly and fast split apart as flood, cause these
natural disasters.
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The other area of high landslide concentration was along a 6-km stretch of the Barranca
de Atenquique, a deep, steep-sided canyon cut into the eastern flank of Nevado de
Colima. On the south flank of Volcàn de Fuego and along several smaller canyons south
of the Barranca de Atenquique, moderate landslide concentrations evidently involved
similar materials to those along the Barranca de Atenquique.

GIDUSA spill over the sewage on the river Túxpan polluting the running waters pitting at
risk any forms of living.

Recommendations

At macro level, it is necessary to change the existing framework of the Mexican

Constitution and the regulatory national and state laws regarding the environmental and
natural resources sustainability issues, and more specifically the law concerning the
conservation of forest, in such a way that the exploitation of lumber should be more
rational and under principles of community sustainability. New legislation and the creation
of new institutions to foster the sustainable development of forests and jungles are
needed.

Forest has been raised to the category of national security issue with full recognition of its
implications on economic development and under the banner the federal government took
up the Forestry National Plan. However, there are evidences proved by different studies
against the official figures that the forest issue has fallen to priority number 40 or more
under the federal government leading forest and jungles to total extinction. The causes of
forest and ecological deterioration and its implications on economic growth and social
development is linked to the application of inappropriate public policies. Public policies are
desperately needed to improve the economic growth and social development of the
communities that have depended largely on natural resources at protected natural reserve
areas.

The government budget for forestry needs to be increased from 0.01 percent of the overall
budget and support programs are also required to be targeted broadly to forest areas.
Finance to bring change is lagging far behind. PROFEPA, the Federal Agency for Natural
Resources Protection has the duties of environmental surveillance and auditing, industrial
inspection, managing denounces and implementing revisions of legal dispositions, faces
many challenges in the procuration of environmental justice and has been charged of
corruption. Corruption is endemic among officials because of the low salaries of the
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inspectors, thus to cut down corruption activities is required to raise wages. Illegal
activities in timber extraction in forest communities cause deterioration of forests and
disrupt the community life. The new measures on over regulated activities have proved to
be more harmful to community practices for sustainable management and use of natural
resources.

Deforestation will remain a large problem in Southern Jalisco with serious consequences
in the soil erosion, which in turn threatens the biodiversity life, disappearance of natural
habitats and change of microclimates. A number of initiatives are required to resolve the
problems of illegal activities in timer extraction such as illegal wood cutting, from protected
forest land areas. The forest around the cities, townships and villages had been
devastated by small scale logging concessions. Actions aimed to slow down deforestation
and to increase reforestation should be encouraged and taken by local governments but
also by communities and small private land owners and holders of communal land (ejidal).
Local governance, forest management programs and an incentives plan to foster the
sustainable use of natural resources is required for the practice of community forestry. In
places where community forestry is practiced, local governments and landholders tend to
protect natural resources.

Communities in the Southern Jalisco, such as Atenquique that had been depending on
forestry and lumber before for income need desperately to diversify economic activities
such as environmental and rural tourism to take advantage of the surrounding nature
treks. Forestry can be linked to ecotourism and other environmental activities and non-
timber products such as botanicals, art crafts, etc. Besides, local government should
promote alternative employment programs on sustainable management of natural
resources.

An integral perspective of the implications that natural resources management such as

forest and economic and social development should be the foundation for any strategic
planning of regional development involving all the actors and agents to generate the
appropriate conditions for community´s welfare.
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References

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