Eight problems with Norway’s REDD support to Guyana: Open letter to Erik Solheim

Next week, Erik Solheim, Norway’s Minister of the Environment & International Development, will be visiting Guyana. A year ago, Solheim congratulated Guyana’s President Bharrat Jagdeo when he was awarded the United Nations’ 2010 Champion of the Earth. Solheim described Jagdeo’s promotion of low carbon development as “an example for others to follow.”

The letter, which is signed by members of civil society and two Members of Parliament, suggests that there are at least eight reasons why Solheim should perhaps revise his opinion of President Jagdeo and take a more critical look at Norway’s support for his Low Carbon Development Strategy. The letter recommends that Norway should not release any funds to Guyana on the grounds that Guyana has “substantially failed to implement the MoU, either in spirit or in practice.”

Open letter to Minister Erik Solheim, Minister of the Environment & International Development, Norway, 24 March 2011

Norway-Guyana Memorandum of Understanding, November 2009

Dear Minister Solheim,

In advance of your imminent visit to Guyana, we respectfully draw your attention to eight key problems with the operation of the Memorandum of Understanding between the governments of Guyana and Norway. The signatories of this letter include members of civil society with diverse backgrounds and two Members of Parliament who have followed developments in Guyana closely since signature of the agreement, and who are particularly familiar with some of the detailed local issues which are raised.

1. Delays in preparation of projects. Norway transferred US$30 million to the Guyana REDD-plus Investment Fund (GRIF) before Guyana had developed any ‘Low Carbon Development Strategy’-related proposals and before any attempt at independent verification of the claims from Guyana about progress in reducing forest carbon emissions. Months later, and in spite of criticism of donors by the President of Guyana, there is still only a single (draft) proposal on the table, a technically inadequate project for titling and demarcation of Amerindian lands forwarded by Partner Entity United Nations Development Programme, apparently without quality control and without significant participation by indigenous Amerindians themselves (see below, section 5). The Norwegian US$30 million now languishing in the GRIF and listed in the national budget of Guyana since mid-January 2011, together with an anticipated further US$ 40 million from Norway, comprises nine per cent of the Guyanese government’s budget for 2011. We believe that transferring the original US$30 million in advance of verified progress on the agreement with Norway sent quite the wrong signals to a country with daily allegations in the independent Press of corruption and malfeasance in government procurement and other expenditure.

2. Deforestation appears to have increased, not decreased. In an undated technical note on the Norwegian International Climate and Forest Initiative website – “Norway and Guyana – a partnership for reduced forest carbon emissions”¹ – it is stated that Guyana will be paid for its ‘performance’ in keeping deforestation below an agreed reference level, as well as avoiding any measurable increase in forest degradation. Guyana has made no explicit commitment to reducing or even stabilising its emissions of forest carbon. On the contrary, all construction schemes announced by the President involve extra emissions. Production and export of timber increased sharply in 2010, as proudly announced recently by the Minister of Agriculture.²

Because of technical deficiencies in the work of Poyry New Zealand and the Guyana Forestry Commission (GFC), it is not possible to make any definitive conclusions about the absolute rates of historical or current deforestation. However, even allowing for those technical deficiencies, the relative rate of deforestation in 2009-2010 appears to have increased three-fold, not decreased in comparison with the reference period.

3. Need for strong and consistent safeguards. The Memorandum of Understanding between Norway and Guyana originally stated that the Guyana REDD+ Investment Fund, through which pass Norwegian payments for Guyana’s progress, would be subject to the World Bank’s ‘fiduciary and operational policies’. This requirement was subsequently dropped. No reason was given for this potentially serious weakening of ‘safeguards’. President Jagdeo has objected to the delays from the due diligence procedures of the World Bank. The President prefers to work with the Inter-American Development Bank (IDB), as shown by the transfer of the Forest Carbon Partnership Facility ‘delivery partner’ to that agency from the World Bank. We suggest that Norway should be concerned by the switch to the IDB, which has provided much of the credit for a large recent increase in the country’s external debt, in spite of providing for a large HIPC-related cancellation of prior debt in 2007.

4. Weak participatory process. Unlike the process for the National Development Strategy (NDS) in 1995-6, the President’s Low Carbon Development Strategy has been an almost entirely in-house compilation, not linked to the NDS or even the President’s own National Competitiveness Strategy of 2006. The LCDS projects, apart from Amaila Falls, have no specific link to a low-carbon economy, nor have there been any conventional moves to reduce carbon emissions in the non-forested coastland where most of the economy is concentrated.

The MoU calls for the LCDS Multi-Stakeholder Steering Committee (MSSC) ‘to ensure systematic and transparent multi-stakeholder consultations… to enable the participation of all affected and interested stakeholders…’ The MSSC, however, is dominated by the President, and is in no sense a forum for strategic debate about developmental options and determination of priorities. Nor is the LCDS linked to the national Poverty Reduction Strategy, which is supposed to be the guiding economy strategy but is a programme hardly ever mentioned by the Government.

An example of the lack of effective consultation and coordination is the two LCDS projects to install solar panels for low-wattage household electricity and to distribute a netbook/laptop to each family (OLPF). The MSSC did not apparently consider that the IDB is already funding a solar panel project. And the Press is carrying many articles about the chaotic decision-making in the President’s Office about the OLPF. Although the Head of the Presidential Secretariat has claimed (11 March) that there is a proposal submitted to the GRIF for the solar panels, such a document has not been posted to the LCDS/GRIF website. Nor has the Amaila Falls proposal been posted.

5. Indigenous Land Demarcation. Many confused and confusing announcements have been made by the Government of Guyana about land allocation to the indigenous Amerindians.

The titling of indigenous lands in Guyana is to be aided through the first draft project to be presented to GRIF by UNDP Guyana and the Ministry of Amerindian Affairs. However, there are serious concerns about the proposal because it does not address the basic problems. The proposal is based on the Amerindian Act 2006, which is incompatible with both the National Constitution and international standards, including instruments to which Norway is party. Absence of progress towards a national integrated land use planning policy and procedures, field tested in 1997 and then abandoned, also complicates a sustainable solution to Amerindian land claims. You will have heard about the discussions in the Forest Carbon Partnership Facility concerning the equivalence of environmental and social safeguards between those of the World Bank and those of Multiple Delivery Partners such as UNDP. If UNDP’s procedures are not as good as or better than the World Bank’s OP 4.10 safeguards for indigenous peoples, then it must be asked why the UNDP country office in Guyana is thought to be a suitable Partner Entity for delivery of a project concerning indigenous land tenure.

6. Risks of the Amaila Falls Hydro Project. The President of Guyana proposes to invest US$40-60 million of the Norwegian US$250 million ‘REDD’ money in purchasing equity in the Amaila Falls dam, even though the entire justification for the dam remains just 1½ pages in the LCDS version of May 2010. The Guyana Energy Agency national policy, not updated since 1994, does not even mention Amaila Falls. We note that just yesterday, Erik Helland-Hansen, head of the Advisory Expert Panel appointed by the IDB to assess the project’s environmental and social assessment, has reportedly called into question the ‘whole strategic concept’ of the project.³

There is no practical possibility of the unqualified, inexperienced and under-capitalised contractor, who was awarded the contract under questionable circumstances, completing the access road to the dam in the specified time period or to the specified road bearing strength, in spite of being loaned US$ 1.5 million from a government ‘off-the-book fund’ to buy second-hand construction equipment. This delay is even admitted by the Government’s own technical adviser.⁴

The access road construction is now less than 25% complete, whereas some 65% should have been completed, according to the original schedule. It is currently unlikely that the two Chinese investment entities, which are reported by the President to have committed to funding the dam, would provide the US$500 million for the bulk of the dam construction while the road is incomplete. Thus there is a large question mark over when, or indeed if, the dam will be fully funded and constructed, and if any Norway-provided equity in the dam would be effectively applied. As we understand it, the Amaila Falls project cannot be presented to the GRIF until such time as the project proposal has been approved by the Board of the IDB, and this cannot happen until such time as the Advisory Expert Panel has completed its work, which we understand will not be for 6 months or so. The project’s developer, Sithe Global Power LLC, has today admitted that there may be delays in securing funding for the project.⁵

There appears to be no ‘Plan B’ for using Norwegian 2009-10 money already in the GRIF, but remaining unspent, let alone any plan for alternative use of any additional funds for 2010-11. We therefore submit that the risk of misuse of these funds is unacceptably high. Under these circumstances, there appears to be little justification for transferring any funding for 2010-11, when the government’s primary intention for use of those funds (the purchase of government equity in the Amaila Falls dam) seems highly unlikely to become a reality in the near future.

7. Inadequate Independent Verification Report. The concept of independent verification of government declarations about progress is an innovation in Guyana, introduced by the MoU. Historically, donors have not found that reports by the Government of Guyana are sufficiently accurate. The MoU contains an unprecedented (and welcome) list of enablers (progress indicators). It is not surprising that the Government of Guyana has focused much more on getting hold of the money with a minimum of conditions than on delivering progress on the conditions.

Unfortunately it appears that the Norway International Climate and Forests Initiative did not specify how or by what criteria the evidence supplied by the Government should be evaluated. The verifier Rainforest Alliance appears, in its long-delayed report, to have ticked even the creation of non-functioning and government-dominated committees as evidence of ‘progress’, and confused government’s one-way outreach with ‘consultation’. Rainforest Alliance noted that activities submitted as progress were not necessarily related to the MoU conditions, and that evidence was not in the public domain and so not available to civil society. Such evidence could not therefore match the MoU requirement for transparency. The majority of interviewees reported by Rainforest Alliance were government staff, government-employed consultants, or government-co-opted civil society. Other interviewees, labelled by government without evidence as political opponents, unsurprisingly sheltered under anonymity from Guyana’s notoriously vindictive and threatening government. Rainforest Alliance applied a descriptive framework and used a set of observations which failed to assess the scale to which the enablers have been attained. We believe that the report thus failed the key objective of the verification exercise, i.e., ‘to verify the content of Guyana’s reports stating its performance according to the enabling activities under the Guyana-Norway partnership on REDD+, hereunder an assessment of whether the enabling activities have been conducted as described in the Joint Concept Note (JCN)’ (our emphasis). We believe that the Rainforest Alliance report represents an inaccurate and overly optimistic reflection of the progress of the Government of Guyana in complying with the terms of the MoU.

8. Restricted access to government information. Likewise, reports such as those of Cedergren on carbon and biomass assessment and Trevin & Nasi on legislation and compliance, both in 2009, and Poyry in 2011, show that Guyana government agencies are still highly resistant to independent assessments and have not opened documents, databases, maps and imagery for check assessments. Although this secrecy is entirely in accordance with the Government of Guyana approach to information disclosure – it has stubbornly refused to pass Freedom of Information legislation – it is not compatible with the MoU. In a country with an Executive President, it is absolutely the responsibility of that President to give effect to the independent monitoring which is mentioned in the LCDS several times, and thus to allow independent access to all relevant information.

In summary, we believe there is no present justification for the release of the Norwegian funds already in the GRIF, nor for transfer of a second tranche for 2010-11. The Government of Guyana has substantially failed to implement the MoU, either in spirit or in practice. However, it has not completely failed. Norway needs to have a more realistic appreciation of the real progress which has been made, even though small, and build on that. In particular, Norway should –

• support civil society to reduce the disabling secrecy and corruption which this relatively huge amount of money inevitably attracts.

• insist on and support a transparent and participative revision of the enablers, including independent advisers and civil society, in a process not dominated by the President or government agencies.

• insist that all material which is not commercially confidential but which is relevant to the operation of this MoU should be in the public domain with minimal redaction and no tampering.

• open the GRIF steering committee to representatives of the supposedly beneficiary populations.

Sincerely (in alphabetical order)

Diana Abraham
Malcolm Alli
Seelochan Beharry
Janette Bulkan
Tanya Chung Tiam Fook
Anand Daljeet
Everall Franklin, MP
Malcolm Harripaul
Christina Jardim
Tarron Khemraj
Allison Lindner
Colette McDermott
Alissa Trotz
Karen Jardim
Edward Meertins-George
Sharon Ousman-Arjoon
Christopher Ram
Khemraj Ramjattan, MP
Oma Sewhdat
Charlene Wilkinson
Fitzgerald Yaw
David Yhann

1. http://www.regjeringen.no/

2. http://www.kaieteurnewsonline.com/ 06 January 2011

3. Development Today Update – March 23, 2011, Norwegian expert questions justification for Guyana hydro dam, www.development-today.com

4. http://www.guyanachronicleonline.com/

5. http://www.stabroeknews.com/