Carbon Fund Risks Undermining REDD Readiness

Last month, 29 NGOs and indigenous peoples organisations from 14 countries wrote to the World Bank’s Forest Carbon Partnership Facility expressing their concern that the World Bank is rushing through its REDD readiness process.

The danger is that the Bank is moving ahead with its Carbon Fund when only a few countries have started activities supported by the Readiness Fund. The NGOs write that,

It is critical that countries receive endorsement of their R-Package according to a comprehensive and strong set of criteria and a rigorous review process prior to consideration of emissions reductions programs. This will ensure that the necessary improvements in forest governance and adherence to social and environmental safeguards, including respect for the rights of indigenous peoples and local communities, are achieved.

The letter also criticises the World Bank’s focus on carbon markets for forests, noting that Reuters recently described carbon as the world’s worst performing commodity. The letter points out the risk of preparing countries for a market in forest carbon credits that may not exist.

The letter ends with a series of recommendations, including a reference to the Global Dialogue of Indigenous Peoples on the Forest Carbon Partnership Facility (FCPF) held in Panama, September 2011. The Action Plan from this meeting is posted below the letter.

Amis de la Nature et des Jardins · Asia Indigenous Peoples Pact · Arbeitsgemeinschaft Regenwald und Artenschutz · Bank Information Center · Brainforest · Civic Response · ClientEarth · COECOCEIBA · Environmental Investigation Agency · ERND Institute · Euronatura – Centro para o Direito Ambiental e Desenvolvimento Sustentado · Forest Management Trust · Forest Peoples Programme · Forum pour la gouvernance et les droits de l’homme · Friends of the Earth US · Global Witness · Greenpeace International · Groupe de Travail Climat REDD · Indigenous Environment Network · Ona Keto Peoples Foundation · Managalas Development Foundation · Partners With Melanesians · PNG Ecoforestry Forum · Rainforest Foundation Norway · Rainforest Foundation UK · Reseau des Communicateurs de l’Environnement · Urgewald · Women Organizing for Change in Agriculture and Natural Resource Management

October 17, 2011

Re: Carbon Fund Risks Undermining REDD Readiness

Dear Participants Committee Members and Carbon Fund Participants:

We, the undersigned organizations, are writing to express our concern that the Forest Carbon Partnership Facility (FCPF) is not properly sequencing the Readiness and Carbon Funds. Pushing ahead with the Carbon Fund while criteria and guidelines for the evaluation of the Readiness-Package (R-Package) have yet to be developed and only a few countries have even begun implementing activities supported by the Readiness Fund will undermine the effectiveness of both Funds in contributing to reductions in deforestation and forest degradation. The current rush to fully operationalize the Carbon Fund may exclude many REDD countries that are participating in the FCFP but are still in the early stages of implementing readiness activities.

Appropriate sequencing of actions is necessary to ensure that improvements in forest governance form the building blocks for forest sector reforms necessary to ensure lasting reductions in deforestation and forest degradation. Whilst the need for a phased approach to REDD was widely acknowledged early in the REDD debate and in the Cancun Agreement[1], subsequent pressure for results has seen a compressing of the three phases so that all phases can now happen simultaneously. It is critical that countries receive endorsement of their R-Package according to a comprehensive and strong set of criteria and a rigorous review process prior to consideration of emissions reductions programs. This will ensure that the necessary improvements in forest governance and adherence to social and environmental safeguards, including respect for the rights of indigenous peoples and local communities, are achieved.

Before moving forward with proposals for programs in the Carbon Fund, REDD countries need to be aware of what is expected of them at mid-term review and for approval of their R-Package. Participants and observers have previously noted the difficulty in proceeding efficiently and predictably through the stages of the Readiness Fund when requirements either are not made clear from the outset or are changed repeatedly. Clearly articulating transparent decision gates through which REDD countries proceed if they meet agreed standards is an important lesson learned from the Readiness Fund. Establishing clear standards and criteria for assessing progress towards readiness will contribute to a more transparent and efficient approval process, and help to ensure that emissions reductions programs are effective and sustainable.

The need for REDD+ countries to make sufficient progress towards achieving readiness before accessing the Carbon Fund has been recognized in the FCPF Charter, which states that REDD countries must submit an R-Package for endorsement by the Participants Committee before a country can submit an Emission Reductions Program to the Carbon Fund.[2] However, the FCPF management is not giving adequate attention to ensuring that the process of elaborating R-Package moves forward according to the timeframe outlined at PC 9 in June 2011. The focus of the FCPF management should remain on clarifying the criteria for R-package evaluation before soliciting submissions that, according to the charter, should only come from countries with an endorsed R-Package. Access to the Carbon Fund can serve as an incentive for countries to make progress in achieving national-level readiness, but only if sequenced correctly and linked to the outcomes of the readiness phase.

Lastly, an exclusive focus on generating compliance-grade carbon credits would limit the opportunities for generating learning and maximizing country participation. The growth in carbon markets has stalled in the past 12 months,[3] with carbon recently declared the world’s worst performing commodity.[4] As forests are excluded from the EUETS, which represents 98% of the global compliance market[5], there is currently no large-scale market for forest carbon credits. The Carbon Fund should be wary of preparing countries for a market in forest carbon credits which may not materialize. Alternate performance metrics would increase the number of eligible REDD countries and enable the Carbon Fund to support a broader range of policies and measures with the potential of contributing to emissions reductions.

Recommendations:

• The content and process for evaluating R-Package must be approved by the Participants Committee before the Carbon Fund solicits emission reduction program submissions.

• The FCPF must ensure that effective consultations are held with civil society organizations and rights-holders in determining the content and process for evaluating the R-Package.

• The Carbon Fund must maintain the flexibility to finance the broad suite of possible policies and measures identified during the readiness phase as having mitigation potential.

• The Carbon Fund should ensure that its operations do not pre-empt or undermine guidance and decisions coming out of the UNFCCC.

• As requested in the “Indigenous Peoples Action Plan regarding the FCPF” at the Global Dialogue of Indigenous Peoples on the Forest Carbon Partnership Facility (FCPF) held in Gaigirgurdub, Guna Yala, Panama, September, 2011, the FCPF must carry out a thorough information dissemination to and consultations with indigenous peoples on the Carbon Fund set up under the FCPF to ensure that their concerns and issues as rights holders are fully accounted for.

• Any additional pledges to the Carbon Fund should be conditioned on fulfilling the above recommendations.

Endorsed by:

Les Amis de la Nature et des Jardins (ANJ), DRC
Asia Indigenous Peoples Pact (AIPP)
Arbeitsgemeinschaft Regenwald und Artenschutz (ARA), Germany
Bank Information Center, US
Brainforest, Gabon
CAPPA-Ecological Justice, Indonesia
Civic Response, Ghana
ClientEarth, UK
COECOCEIBA, Costa RICA
Environmental Investigation Agency, US
ERND Institute, Democratic Republic of Congo
Euronatura – Centro para o Direito Ambiental e Desenvolvimento Sustentado, Portugal
Forest Management Trust, US
Forest Peoples Programme, UK
Forum pour la gouvernance et les droits de l’homme (FGDH), DRC
Friends of the Earth US
Global Witness, UK
Greenpeace International
Groupe de Travail Climat REDD (GTCR), DRC
Indigenous Environment Network, US
Ona Keto Peoples Foundation, Papua New Guinea
Managalas Development Foundation, Papua New Guinea
Partners With Melanesians, Papua New Guinea
PNG Ecoforestry Forum, Papua New Guinea
Rainforest Foundation Norway
Rainforest Foundation UK
Reseau des Communicateurs de l’Environnement (RCEN), DRC
Urgewald, Germany
Women Organizing for Change in Agriculture and Natural Resource Management (WOCAN)

Global Dialogue of Indigenous Peoples on the Forest Carbon Partnership Facility (FCPF) Gaigirgurdub, Guna Yala, Panama, 27th to 29th September, 2011

Indigenous Peoples Action Plan regarding the FCPF

Recognizing and appreciating the Guna Peoples for hosting this event in Gaigirgurdub, Guna Yala, Panama from 27th to 29th September, 2011.

And appreciating the support of the FCPF Participants Committee (PC) and the Facility Management Team (FMT) for enabling the global dialogue,

We, the global Indigenous Peoples participants, hereby agree to put forward the following action plan relating to FCPF:

Preamble:

Acknowledging that this dialogue of indigenous peoples on the FCPF is the beginning of a global process of engagement between Indigenous Peoples and the FCPF;

Recognizing that the dialogue must be based on the framework of the recognition and respect of Indigenous Peoples rights as enshrined in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), the ILO Convention 169 and other international instruments relating to indigenous peoples as a minimum standard;

Emphasizing the critical need for strengthening the capacities of indigenous peoples as essential for their full and effective participation in processes and mechanisms – at the local, national, regional and global levels – relating to FCPF and REDD+;

Requiring that the future global dialogue on FCPF shall be coordinated by the Indigenous Peoples International Steering Committee composed of duly-designated indigenous peoples by geographical region

Objective:

The objective of this action plan is to ensure that the FCPF implements the Cancun agreement on REDD+, particularly in relation to ensuring the full and effective participation of indigenous peoples, respecting their rights and traditional knowledge as well as the provision on information system on safeguards for the Monitoring, Reporting and Verification (MRV).

Action Plan:

The following three Action Plans (A, B and C) shall be implemented immediately and in full:

A. Capacity building and participation

1. Strengthening the capacity of indigenous peoples through awareness-raising and information-sharing at the international, regional, national and sub-national levels.

2. Increased focus for strengthening the capacity of women and youth for their effective participation – taking into account their specific issues and concerns – in the FCPF process and mechanism.

3. Facilitating sustained communication channels between indigenous peoples organizations and FCPF through the duly designated regional focal points, including the provision for translation of documents and interpretation in Spanish, French and English

4. Ensuring full and effective, participation of indigenous peoples – with financial support to indigenous peoples representatives – at the national, regional and international FCPF processes.

5. Inviting duly selected indigenous peoples lawyers – with logistic support from FCPF – to dialogues and meeting of indigenous peoples relating to FCPF.

6. Requiring participation of all FCPF delivery partners in the mechanisms for
engagement with indigenous peoples at the regional level.
7. Supporting initiatives by indigenous peoples for strengthening their ownership and management of forests, as well as their traditional governance systems.

8. Ensuring the participation of indigenous peoples experts at the UNPFII and other relevant UN bodies and procedures to the FCPF process and mechanism including their participation in the FCPF-PC.

9. Including indigenous peoples experts endorsed by indigenous organizations in the conduct of FCPF activities or projects contracted to consultants.

ACTION NEEDED FROM FCPF: Allocation of adequate financial resources to support this action plan on capacity building and participation.

B. Securing rights of indigenous peoples through effective implementation of the safeguards and monitoring of performance indicators.

1. The FCPF supports a global study on the situation of indigenous peoples’ forest land tenure with a view to recommend measures to strengthen land tenure reforms and forest governance in FCPF countries. The Indigenous Peoples Global Steering Committee shall define the Terms of Reference (ToR) of this study with technical support from FMT. The FCPF shall provide the necessary financial resources for the conduct of this study.

2. The FCPF develops and implements a robust and comprehensive framework to assess performance and to monitor impacts of safeguards – including effective participatory monitoring indicators – throughout the REDD+ cycle. In this context, the FCPF shall fully and effectively engage with indigenous peoples in good faith to review and develop the guidelines and indicators for monitoring, assessment and evaluation of safeguards in REDD+, particularly – but not limited to – in the Common Guidelines for Stakeholders engagement, Strategic Environmental and Social Assessment (SESA), Environmental and Social Management Framework (ESMF), EFMA, R-Package, the carbon fund, etc. This review shall look into key areas relating to respect for the rights and traditional knowledge of indigenous peoples in the following critical issues

• Forest land tenure

• Sustainable livelihoods, including traditional livelihoods

• Equitable Benefit sharing

• Full and effective participation of indigenous peoples including the implementation of Free Prior and informed Consent (FPIC)

• Governance

• MRV

3. FAO shall engage indigenous peoples in the review of its proposal submission to become a delivery partner, particularly its policy of environmental impact assessment and proposal for an accountability mechanism.

4. FCPF will ensure information and awareness of indigenous peoples on the safeguards, accountability mechanisms and related guidelines of the delivery partners and the sustained engagement of indigenous peoples with delivery partners at all levels (national-regional and international).

5. FCPF will require review of the guidelines for the stakeholders involvement to include the commitment to implement the UNDRIP in FCPF and UNREDD countries, the ILO Convention 169 in countries that have ratified the Convention and the other applicable international human rights instruments where they have been ratified or adopted.

6. FCPF will establish regional recourse mechanisms with the full and effective participation of indigenous peoples in designing the regional recourse mechanisms and in defining the ToR.

7. FCPF will carry out a thorough information dissemination to and consultations with indigenous peoples on the carbon fund set up under the FCPF to ensure that their concerns and issues as rights holders are fully accounted.

ACTION NEEDED FROM FCPF: Allocation of adequate financial resources to support this action plan on securing rights of indigenous peoples through effective implementation of the safeguards and monitoring of performance indicators

In particular, the PC and FMT shall enable the conduct of regional workshops and subsequently a global meeting within 2012 with indigenous peoples to address the following;

1. Review FCPF guidelines and instruments particularly the Common Guidelines on Stakeholders Engagement, the Strategic Environment and Social Safeguards (SESA), the Environmental and Social Management Framework (ESMF), the Readiness (R)- Package relating to safeguard implementation, performance indicators, monitoring, assessment tools and related concerns.

2. Establishment of regional process of engagement of indigenous peoples on FCPF with the participation of FCPF delivery partners including presentation of their specific safeguard policies, guidelines and related documents; and the establishment of recourse mechanisms at the regional level

3. Presentation and discussions on the carbon fund with a view of ensuring that concerns of indigenous peoples are effectively addressed

C. Allocation of Adequate and Dedicated Resources for indigenous peoples

1. The FCPF increases its indigenous peoples’ capacity building fund from US$ 1 million (200,000 per year) to US$ 4 million for the readiness phase (2011-14) to enable the implementation of the indigenous peoples action plan. A Global Advisory body with a decision-making power shall be created and to be composed of the following: Two (2) indigenous peoples representatives from each of these regions – Africa, Latin America, Asia and one (1) IP representative from the Pacific region: two (2) representatives of the PC and two (2) representatives from the FMT. The indigenous representatives shall be chosen through a self-selection process.

ACTION NEEDED FROM FCPF: Approving additional US $ 3 million for the readiness phase.

2. FCPF shall ensure full and effective, participation of indigenous peoples with financial support to indigenous peoples representatives at the regional and international processes, relating to FCPF.