AGÊNCIA DE REPORTAGEM E JORNALISMO INVESTIGATIVO

The land belongs to the indian, but whose is the carbon?

An Irish company has purchased rights to the carbon credits of the indigenous land of the Munduruku Tribe in the Amazon. They promised US$ 120 million over 30 years, but experts say the contract is illegal

The promotional video of the company Celestial Green Ventures contains pictures of a meeting held at an unidentified location in the Amazon. In front of the photos and with background music, the company’s CEO, the Irishman Ciaran Kelly, explains: “We sat down with the local community, we had a very open discussion, we said what we planned to do, what were their responsibilities and what were ours. We said, if you agree, we go ahead.”

The company’s head of operations in Brazil, a Portuguese man called João Borges de Andrade, appears in the photos, too, surrounded by the local population. “I like meeting these people, they are very kind and very friendly. It’s moving.”

Celestial Green works in a new sector that is getting stronger day by day in hidden corners of the Brazilian Amazon: the selling of carbon credits based on avoided deforestation and the conservation of forests. For these credits, the company has sought indigenous groups from different various tribes and, according to its pages on twitter and Facebook, has signed contracts with the Parintintin in the state of Amazonas and the Karipuna in the state of Amapá.

Celestial Green holds meeting with Munduruki IndiansOn 22 September 2011, the same Joao Borges of Celestial Green attended a meeting about a carbon credit contract with the Munduruku Indians in the municipal hall in the town of Jacareacanga in the state of Pará. As soon as she found out about it, the missionary Izeldeti Almeida da Silva, who had been working with the Munduruku for two years, rushed to the meeting: “I was really surprised. Later I spoke to one of the indigenous leaders and he said the company had been negotiating with a small group of indigenous leaders for some time.”

When she went into the meeting room, says the nun, she found it packed. They were all there: caciques, cacicas [women indigenous leaders], women and children. Many were dressed for war: painted, with bows and traditional clothing. Both sides took photographs. “The warriors, both men and women, were very angry with the people who were trying to talk”, says the cacique Osmarino. “The women warriors almost attacked them.”

According Izeldeti, the company representative could barely make himself heard. “They [the caciques and cacicas] were shouting in a loud voice that they were tired of being deceived. They said, ‘we know how to take care of the forest, we do not need help.’ The warrior womenMunduruku Indians at meeting with Celestial stood in single file, each one talking in Munduruku. They put their arrows close to the heart of the company representative, rubbed them on his neck. He said he did not understand Munduruku but did not like what was going on because it was threatening behaviour.” However, in the end the contract was signed on that very day – both the company and the Indians confirmed that.

According Izeldeti and Osmarino, however, the contract was signed against the will of the majority of the Munduruku population .

The owners of the carbon

Totally unknown in Brazil, Celestial Green, based in Dublin, says it owns the rights to the carbon credits of 20 million hectares in the Brazilian Amazon – which is equivalent to the combined territories of Switzerland and Austria. According to the company, its 17 projects in the region have the potential to generate more than 6 billion tons of carbon credits.

The credits for avoided deforestation, or REDD (Reducing Emissions from Deforestation and Forest Degradation), are not “official”, that is, they cannot be sold in markets regulated by the Kyoto protocol. This protocol will only accept the sale of credits by a company in a poor country that agrees to change its technology for a cleaner one; it can sell on the market the credits it obtains for the pollution that has been avoided.

In the case of forests, there is not yet any official mechanism that allows the sale of credits for forest that has not been felled, avoided deforestation.

For this reason, carbon credits related to forests are traded on an unregulated voluntary market; companies like Land-Rover, HSBC, Google and DuPont buy these credits to show that they are doing something good for the environment. The market is much smaller than that resulting from projects approved under Kyoto; in 2010, the turnover was approximately US$400 million compared with US$140 billion in the “official” market.

In the race for the invisible – carbon credits for deforestation that hasn’t happened – the Irish company Celestial Green got ahead of the pack: it rapidly held negotiations, without any involvement of the Brazilian government. The company promises to evaluate the potential for carbon credits afterwards, but first, through a contract, guarantees its possession of them and its access to the land to make the evaluation.

Municipal districts that have deals with Celestial Green
Municipal districts that have deals with Celestial Green
The Munduruku

The proposal to the Munduruku was made in June of last year. According to reports from the Indians, the suggested deal divided the group. Celestial Green offered US$4 million a year for 30 years for the carbon credits of the 2.3 million hectares of Indian land – a total US$120 million. In return, it would have all rights to carbon credits as well as “certificates and other benefits” to be obtained “from the biodiversity.”

“First, he [the representative of Celestial Green ] said that the project is to defend indigenous peoples. He said it meant that neither white men nor indigenous men could interfere with our land. When I heard this conversation, it was good”, says Osmarino Manhoari Munduruku, chief of one of the 111 villages where altogether more than 6,000 Munduruku live. “Then he sent a paper to the association. We have seen that, where this project is, we cannot farm, nor hunt nor fish. Today we plant cassava, potato, sugar cane, sweet potatoes, bananas. We fish, hunt, extract timber when we need it. But they say that we can’t go on with this, that they will give money to us to buy food. And the Indians cannot do anything on their land, nothing, nothing, nothing. Then most of us thought that the project wasn’t right.”

Pública had access to the text of the contract sent by indigenous leaders to CIMI, the Indigenous Missionary Council, after the first negotiations by the company. The document clearly reveals the general outline of the agreement sought by the company.

“This contract gives the company the right to perform all kinds of analysis and technical studies, including unrestricted access to the entire area by its agents and representatives”, says the document. If the negotiated areas are not suitable for carbon capture, the contract will not be valid. Either way the company had secured the right to make a detailed survey of the entire Munduruku area.

The contract forbade any changes in the environment: “The owner undertakes not to carry out any works in the contract area, or any other activity that might affect the quality of carbon sequestered or contribute in any way to adversely affecting the imager of the company image or of the project.”

Another contentious issue is the way the company is guaranteed “rights to carbon credits obtained, whatever the methodology used”, and “all rights of any certificates or benefits that are obtained through the biodiversity of this area.”

Moreover, the Munduruku will no longer receive payment if they do not submit their activities to the scrutiny of Celestial Green: “The owner undertakes to maintain the property in accordance with the methodologies established by the company.”

According to experts we consulted, such a contract is unlikely to be legally binding. First, because it is based on wrong legal principles. The analyzed text refers to the Munduruku as “owners”, when indigenous lands belong to the the Brazilian state. Second, it violates the “principle of exclusivity of use” given to approved indigenous land. “It’s totally illegal. The company behaves as if it is the owner of the natural resources and it gives itself the right to enter whenever it wants to monitor what is going on. In some clauses, it takes over the role of the state”, says John Camerini, a lawyer from the NGO Terra dos Direitos.

For the anthropologist Miguel Aparicio, coordinator of the Programa Operação Amazônia Nativa, the case of the Munduruku should serve as a warning to the government. “It’s a clear-cut example of the attitude taken by “carbon biopirates”. The rules ignore the indigenous right to have exclusive use of their lands, recognized by the Brazilian Constitution. The proposed contract gives the Brazilian government grounds for urgent intervention.”

Since the carbon credits market is new, the Brazilian government has not produced any guidelines to regulate these negotiations. But given the urgency of the matter, 15 organizations and movements related to indigenous peoples have prepared a letter of Social-Environmental Principles and Criteria for REDD . Some of these principles are the participation of the entire affected population in decision-making and transparency about the details of the contract and the market they are entering.

The Munduruku case was reported in September last year in environmental activist Telma Monteiro’s blog. Cláudio Henrique Dias, the Federal Prosecutor in Santarém, has opened an administrative procedure to investigate the case. He requested a copy of the contract with the Pussuru Association, which represents the Munduruku, and brought in Funai.

Carbon brokers or bio-cowboys?

A different view comes from José Antonio Fernandes do Nascimento, MA in Chemistry from the Federal University of Amazonas and secretary and council member of the Instituto Amazonia Livre. The Institute has a project with Celestial Green for “monitoring and data collection on the forests and communities that might be deforested in 20 or 30 years”.

Nascimento, who has worked with the company for about a year, claims the contract signed with the Munduruku does not limit the Indians’ use of the land: “The only thing the contract says is that they [the Indians] must preserve the resources and report any use of them.” According to Nascimento, the plan is to establish a council of “financial institutions, indigenous representatives and the the NGO Instituto Amazonia Livre” to discuss this. “It’s not top down. It is a project between equal partners. It is a mutual exchange, because they consume, but they know that [the resources] will run out.”

Celestial Green is not exactly a transparent company. The company’s website, which has been “under construction ” for a few months, has no more than a general description, although it says the company has been negotiating with local governments, landowners and Indian tribes in the Amazon region for the last three years.

The stated objectives of the projects of Celestial Green, whose chief executive is Irishman Ciaran Kelly, are: “to achieve profitability for all investors”, “to protect forest areas at risk from the devastating effects of illegal logging, illegal mining and burning”, “to protect the biodiversity present in these areas and conduct important activities of data collection” and “to provide jobs, education and basic medical care for residents of project areas”.

According to the site, the company is “also in negotiations with stakeholders in Panama, Asia, Vietnam, Malaysia, South Korea and China”. The section of the site that invites the visitor to find out more about “our projects” is “under construction”. No more details.

On June 27, 2011, the company announced vaguely that it had “increased its contract base in the Brazilian Amazon”: “Celestial Green Ventures Plc has increased the size of its contracted land base by 1,203,226 hectares (6.5% increase) with the signing of 5 new contracts entitling the Company to the production of any type of carbon credit on these lands for the next 30 years.”

According to the releases, “by increasing the size of its current portfolio, Celestial Green is executing on its commitment given when the Company listed in Frankfurt in May which was to double the size of the Company’s contracted land base to 40m hectares” (twice the area of Switzerland and Austria combined).

More recently, in February this year, the company announced on twitter new contracts with the municipalities of São Gabriel da Cachoeira, and Apuí Boca do Acre, Amazonas, with a total of 11 million hectares where the carbon will be under its control.

The “Borba project”

The company has a case that it claims is successful: the so-called “Borba project”. The project, agreed in 2010 with the mayor of Borba, Borba municipal districtwhich is a municipality of 20,000 inhabitants in the south of Amazonas state, has not yet not had its credits validated – a Scottish company, Ecometrica, is still working on a methodology to measure and validate the credits generated, in other words, how much carbon will not be released into the atmosphere as a result of the protection of the areas. “An official statement will be released at the proper time” is all the company will say.

According to a release that was later deleted from the site, the Borba project consisted of the signing of a contract with the mayor, brokered by FEAMA (Amazon Ecological Foundation) – an NGO headed by Brazilian Romeo Cordeiro da Silva. FEAMA has no website or contact number.

The agreement gave rights to credits from an area of 1,333,578 hectares, about one third of the area of the municipal district. When questioned by Pública, neither the secretary of the municipal administration, José Ricardo Sá de Souza, nor the environment secretary knew of the agreement.

Pública eventually met the mayor, José Antonio Muniz Cavalcante, who did not explain why his secretaries were not informed of the case. “Celestial Green appeared, and spoke to the association of municipalities. As we have a municipal reserve, we signed a contract that gives them the right to negotiate the carbon in this area. They came to the city, did a project and collected a lot of material. But we have had no benefits. This contract is really already invalid because the deadline must have expired by now. And we had no come-back, at least nothing of what they proposed to pay us has been paid.”

Even though Borba’s credits have not been validated, the British investment company Industry RE announced on June 7, 2011 the purchase, apparently without the knowledge of the city authorities, of one million of these credits for resale to other companies. The company said, in a brochure, that it will charge £10 for each carbon credit.

Industry RE has the attractive website My Tree Frog , on which anyone can buy carbon credits from anywhere, thus “cancelling” their own ecological footprints.

According to a statement by director Ian Hamilton in early March to the site Economic Point Carbon News, Borba credits will be used to compensate for the emissions of a Coca-Cola subsidiary in the Middle East and a unit of the Japanese electronics giant Canon.

An Industry RE brochure selling these Borba credits says that Celestial Green has access to an area of 18,192,193 hectares for 30 years, including agreements with various municipal authorities in the state of Amazonas. The largest areas are in the state of Amazonas: 2,954,902 hectares in Barcelos, 1,066,862 hectares in Caruari, 1,761,189 hectares in Manipur, and 1,440,585 hectares in Canutama – apart from Borba, of course.

According to the document, Industry RE not only works with carbon credits, but also wants to “expand its parameters” to include the development of energy and clean water, reforestation, sustainable forest management and conservation.

In addition, Celestial Green owns 10,000 hectares in Rondônia, land acquired from Capital First Merchant Bank Limited. But that’s another story.

From vinyls and gold to the dream of preserving the environment

The “Rondônia project” is the oldest project of Celestial Green Ventures, or rather Celestial Green Investments (CGI), an investment company based in Kent, England, whose CEO is also Irishman Ciaran Kelly.

The project is based in an 10,000-hectare area in Rondônia has been described in detail in a document – filed with the US Securities and Exchange Commission, – recording the purchase of shares in CGI by investment firm Apollo Capital, based in Miami – with Ciaran Kelly as one of the directors.

Before investing in sustainable businesses, Apollo Capital pressed vinyl and copied CDs and DVDs. On its website logs it registers huge investments in Venezuela Central Bank bonds, Petrobras and also quartz mining in Bahia, Brazil.

This area in Rondônia, located in Machadinho d’Oeste, is adjacent to the land of the Cinta Larga Indians and was bought by Apollo Capital from the Brazilian company Capital First Merchant Bank Ltda along with the concession for mining gold and diamonds, a fact celebrated on its website.

Some months later, Apollo and Celestial Green changed their minds: they decided to not do the mining in the area and sell credits for the carbon not released because of their decision. “Celestial Green believes that the development of mining operations would have a catastrophic ecological impact,” says the registration document. Carbon credits from the “Rondônia project” are available to users of the Tree Frog website. If you want to lighten your ecological footprint,you just need to click.

“Our people”

Not even the team that makes up the company is listed on Celestial Green’s website. When Pública began to investigate Celestial Green, the company listed 29 people as his team, including several Brazilians. Two days later the list disappeared.

Pública tried to contact some of these supposed staff members. On 8 March we spoke to Professor Eder Zanetti, who is doing a PhD in forest management at the Federal University of Pará, and is an experienced consultant on carbon credits projects. Zanetti headed the division of global climate change and forest environmental services in EMBRAPA’s National Forest Research Center (EMBRAPA is the Brazilian government agricultural research and training organisation).

On his cellphone, asked about his relations with the Irish company, he expressed surprise: “I know nothing about it, no. I’ve never even heard the name [Celestial Green]. ” He said his advice was sought by “several international companies wanting to do business with indigenous land here in Brazil.” In the last two years the demand had increased. “But I’m not doing consulting for any project at the moment.”

Later, by email, Zanetti confirmed: “In fact I could not understand the nature of my involvement with this company. I cannot say if it is serious or not, because I could not navigate the site to see who the owners are. I’m definitely not one of their staff.”

Another Brazilian listed on the site explained that he acts as a consultant for one Celestial Green project. Vivaldo Campbell de Araújo was a representative of IBDF – now IBAMA (the Brazilian environmental agency) – from 1971 to 1978. He says he did not know his name was on the site, but had requested anonymity. He did not want to be listed as a member of the company. “As you know, there’s a lot of speculation.” According to him, he has been a consultant for a sustainable management project for about eight months. The project aims “to show the alternatives for retaining carbon, but changing the forests by switching to more valuable species.”

Contract under question

Pública repeatedly tried to contact Celestial Green. By telephone, employee Paula Cofré, a Brazilian born in Chile, explained that the CEO Ciaran Kelly does not give interviews over the phone – just by email. With a degree in journalism from the Catholic University of Paraná, Cofré has worked for the company for about six months. She was initially hired as a secretary and is now “senior administrator and personal assistant to the CEO.” She said the Portuguese representative João Borges does not usually give interviews.

Paula confirmed the signing of the contract between Celestial Green and the Mundukuru and said the company does not have an office in Brazil. “We have people working in Manaus, but have not yet opened (an office).” Pública sent a draft contract obtained by CIMI, asking the company to confirm whether there was any difference from the signed contract. “I know they don’t give details on the contracts, the value, these sort of things,” said Cofré.

Finally, the CEO gave a reply that was a non-reply: “We can categorically state that CGV PLC contracts would always have the company letterhead, would be signed on each page by a representative of the company, would be notarised and would also carry our company stamp.”

Shortly afterwards, José Antônio Fernandes do Nascimento, of the Free Amazonia Institute, an NGO working with Celestial Green on some projects, phoned Pública and read Annex 1 of the contract, confirming that it is the same text – including repeating the amounts agreed.

In his interview on Celestial Green notepaper, Kelly said that “Celestial Green Ventures cannot disclose any financial agreement that we have in place with our partners.” However, he added, “our first full year accounts will be submitted at end of July 2012”.

Pública will wait and see.

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