Carbon Colonialism: Four Corners investigates NIHT Inc’s REDD project in Papua New Guinea
A recent investigation by ABC's Four Corners uncovered commercial logging taking place inside NIHT Inc's REDD project.
A recent Four Corners investigation for ABC Television uncovers serious problems with REDD in Papua New Guinea. The programme starts with Four Corners journalist Stephen Long in the airport in Port Moresby. He travels to New Ireland, to investigate NIHT Inc’s REDD project there.
The full programme is available on ABC’s YouTube channel and a transcript is available on ABC’s website:
Four Corners also takes a look at Mayur Resources’ attempt to redevelop the Kamula Doso REDD project and Kanaka Management Services’ REDD project in Oro Province. This post focusses on NIHT Inc.
REDD-Monitor first wrote about the US-based company NIHT Inc’s operations in PNG in November 2020:
In June 2021, REDD-Monitor reported on a letter from the Kamlapar Incorporated Land Group. The letter was addressed to PNG’s Climate Change & Development Authority and David Antonioli, CEO of Verra, the Washington DC-based company that registers and verifies carbon offsetting projects. The Kamlapar Incorporated Land Group described NIHT Inc’s operation on their land as “illegal”:
Verra took no action following the letter and NIHT continued to sell carbon offsets from the project.
In October 2021, REDD-Monitor reported on another letter to the Climate Change & Development Authority, this time from eight NGOs in PNG. They wrote that NIHT Inc “is a big concern for its breaches of legal and proper process”:
In June 2022, REDD-Monitor wrote about the misleading statements that NIHT Inc had made about its REDD operations in PNG:
I sent the post to Steve Zwick, Verra’s Senior Manager, Media Relations. Verra took no action.
In September 2022, REDD-Monitor reported on two more letters from communities concerned about NIHT Inc’s REDD operations:
NIHT Inc REDD project: Benefits have not reached communities
Four Corners journalist Stephen Long heads to New Ireland, where NIHT Inc has started the first phase of its REDD operations in PNG. Several Australian companies have bought carbon offsets from NIHT Inc.
“It’s an idyllic setting,” Long says, “but it’s obvious how tough life is.” NIHT Inc claims that it is going to alleviate poverty. The company started out as a logging company: New Ireland Hardwood Timber.
An NIHT Inc promotional video states that,
Our validation, verified and registered generation of carbon credits through scientific process can serve endangered tropical rainforests in Papua New Guinea and have generated historic economic growth and social transformation for the people.
Long reports that benefits from the project have not reached the communities living there, years after the project started. One community member, Dulcie Darius, tells Long,
“You can see the people, you can see the mothers, you can see, you can feel, how we are living at this very moment. I would like to say on behalf of mothers, families, that we are really starving at this very moment. . . . I’m not talking about food but I’m talking about financial side. I would like to give an example like school fees, that’s the main problem.”
NIHT Inc has issued more than 1.3 million carbon offsets from the project for up to A$26 each (about US$18). NIHT Inc refused to tell Four Corners how much it had made from its REDD project in PNG.
The communities living there say they have received 200 PNG Kina each (about US$55). “It’s not enough,” Domen Gibson, a teacher from the community, tells Long. She shows Long the classroom, which has burned down. She had hoped to be able to build a better school with the millions that NIHT Inc promised.
Long speaks to International development expert, Andrea Babon. “I would describe the NIHT project as highly problematic,” she says.
“What NIHT has done, possibly to curry favour and get additional clans to sign up to be part of an even larger carbon credit project, is they’ve distributed money far and wide across a whole half of an island and this has got the actual customary land-owners really upset. Because they are the ones whose land NIHT is currently operating on who are selling carbon credits from the forest that they own and yet all these surrounding areas are getting money.”
A visit to the Kamlapar clan
Long visits Kait village, which belongs to the Kamlapar clan. The NIHT Inc REDD project covers land owned by the Kamlapar clan. He speaks to Anton Topen and Sionel Topen who show him the contract that they signed with NIHT Inc. Sionel Topen explains why he signed:
“Because I myself, I don’t understand and I have no legal advice to advise me whether to sign or not to sign. . . . There’s no honesty, no accountability, in the company.”
Long speaks to George Akia, a lawyer in Port Moresby. Akia has taken up the cause of the Kamlapar clan. Akia explains that the contract includes a clause stating that NIHT Inc will pay the Kamlapar people 56% of the revenue from the sale of the carbon credits from the project. He clarifies that that implies the gross revenue. But another clause in the contract refers to net revenue and allows NIHT Inc to deduct “any unusual costs associated with issuing the carbon credits”.
“It means that NIHT has the unfettered discretion to take out whatever costs it wants to and ultimately minimise the payment to the customary landowners,” Akia notes. “It’s totally unfair. It’s one-sided.”
NIHT Inc told Four Corners that it only deducted costs related to the certifying, issuing, and marketing of the carbon offsets. Akia comments that,
“In Papua New Guinea, land is connected to people. Land is where they make their garden, they survive out of it, they build their house, they associated themself to land. And for a company like NIHT to go to Kamlapar and benefit out of their land which they own dearly, that’s appalling. It’s something that boils blood.”
Commercial logging inside NIHT Inc’s REDD project
Long asks his driver to show him the pristine rainforest. Instead, they find an area of forest being logged. “There is rainforest here,” Long says, “but there’s also utter devastation from logging within the NIHT carbon credits project area.”
It’s a commercial logging operation. Until Four Corners’ investigation, this logging was hidden to the outside world. Companies that bought or were considering buying NIHT’s offsets knew nothing about the logging. NIHT admitted to Four Corners that logging has been going on since June 2020. NIHT claims that the logging does not affect the offsets it has already sold. But it will substantially reduce the number of offsets issued in the future.
Nason Audy, a community leader in the village of Watpi, tells Long that the landowners signed a contract with a logging company because of NIHT Inc’s delays and failure to fulfil their promises to build schools, church, roads, health centres, and houses for local people.
The companies that bought NIHT Inc’s offsets
“How many businesses would have bought credits had they known what’s been happening on the ground?” Long asks.
Some of the companies that bought offsets from NIHT Inc’s project include Australian Mutual Bank, Active Super, Gilbert + Tobin, Corrs Chambers Westgarth, Planet Ark, Nespresso, and the Sydney Opera House.
A company called Pangolin Associates sold a large number of the carbon offsets from the NIHT project. Here’s how Pangolin advertised offsets from the NIHT project in October 2022:
Predictably enough, since the Four Corners investigation, Pangolin has removed all mention of NIHT from its website.
NIHT told Four Corners that it is supporting the provincial government’s efforts to stop unwanted logging and has stopped two cases of logging in the project area.
Four Corners notes that Verra “gives these projects the tick of approval, but it doesn’t directly examine them”. Instead, Verra relies on third party auditors and reviews documents that they submit.
“Verra themselves never go down onto the ground to talk to people, to interview people,” Andrea Babon notes. “They just really make sure that the documents are all correct and rubber stamp them.”
Four Corners couldn’t find any mention of the logging in public documents about the NIHT Inc project.
Long spoke to some of the companies that bought carbon offsets from NIHT Inc. Sam Nickless, Chief Operating Office at the law firm Gilbert & Tobin told Long that,
“We bought these carbon credits in good faith based on the accreditation and the verification that we saw. Anything that raises concerns about whether they’re having the impact that they were going to have that’s a worry. It’s really made us think about the credits that we’re going to buy into the future.
When NIHT found out that Long had been talking to companies that bought its carbon offsets, it made the extraordinary accusation that Four Corners had leaked non-public information, by telling the companies about the logging.
NIHT Inc’s forest inventory was fudged
Long spoke to Ivy Kiele, a trained forester. She works for FORCERT, an NGO that is in the process of setting up a REDD project in Papua New Guinea.
Kiele previously worked for NIHT Inc. She was part of a team that surveyed the forest to estimate how much carbon was stored in the forest.
Kiele told Four Corners that,
“The person that was leading us doing the forest inventory was a builder and not a forester. So, he doesn’t really know the scientific names of the trees.
There were some inaccessible areas that we were not able to survey. So when we came back, we were short of data for the credit. So the person that led timber crews had to make up some of the data, and he put in his own figures and the names of the trees.
NIHT Inc told Four Corners that the man who led the inventory was hired for his mapping skills. And, of course, NIHT Inc denies that the numbers were deliberately fudged. Long says that NIHT Inc, “concedes errors were made initially, but says they would have been picked up in a detailed audit and verification process”.
An interview with NIHT’s Esrom Toligur
Long interviews Esrom Toligur of NI Holdings, which is NIHT Inc’s subsidiary in PNG. Toligur claims that the project has brought some benefits, such as labour kits “for the mothers to contribute or help in reducing mortality rates”. He added that “we also working on the learning materials for the schools”.
Toligur told him that the total sales from carbon offsets was 10 million Kina and that “56% of that is equivalent to 6.3 million”.
Long doesn’t point out that 56% of 10 million is 5.6 million, and picks up on the 10 million figure instead. “It looks like a lot more than that,” he says.
Toligur’s response is bizarre:
“Okay. It’s whatever numbers, just write it off to 10 million, 6.3 million, 56% of the people that has gone now.”
Whatever that means.
NIHT Inc’s marketing material claims that 47,000 people have received benefits. The company now admits that it’s significantly less than half that number.
Stephen Strauss’ “chequered corporate history”
Long moves on to Stephen Strauss, the founder of NIHT Inc. Strauss initially agreed to an interview with Four Corners, but later declined because of ill-health.
Strauss has been involved in several failed business ventures in PNG, involving logging, scrap metal, and mining.
In 2011, the Securities Exchange Commission found that Strauss had issued a series of press releases aimed at inflating the stock of Chilmark Entertainment Group, Inc. Strauss was CEO and Chairman of the Board of Directors of Chilmark. The court ruled that,
Strauss was CEO and Chairman of the Board of Directors of Chilmark and played a central role in the violation. Indeed, during his deposition Strauss admitted that he authored all six of the press releases at issue. Most importantly, however, Strauss repeatedly and knowingly and/or recklessly defrauded investors by disseminating false and misleading information.
About ten years ago, Strauss was deported from PNG and banned for two years. He told Four Corners that he doesn’t know why.
“Steve Strauss is a very honest man,” NIHT’s Toligur told Four Corners. “We have also done our own diligence background search on Steve. We’ve asked him, he’s already explained it to us.”
So, er, that’s alright then.
The Four Corners documentary ends with the following announcement:
In the wake of our investigation, Verra suspended NIHT Inc.’s right to trade carbon credits, pending a review of Stephen Strauss’s past securities law violations.
