McKinsey’s REDD plans in Papua New Guinea: Nice work if you can get it

A June 2009 confidential memorandum from the consulting firm McKinsey to the PNG government has been posted on the PNGExposed Blog. In the memo, McKinsey was asking the PNG government for US$2.2 million for four months work to produce a draft “National REDD and Climate Change Plan” before the Copenhagen meeting.

The confidential memorandum from McKinsey provides a fascinating insight into the world of REDD consulting. The Draft Project Proposal, which is dated 5 June 2009 and titled, “Supporting the Development of PNG’s National REDD and Climate Change Plans,” can be downloaded here (pdf file, 2.8 MB).

McKinsey has also been hired by Brazil, Guyana, Indonesia, DR Congo and Mexico to produce “REDD and Climate Compatible Development Plans”.

In case anyone thinks US$2.2 million is a lot of money for a report, McKinsey is offering its services cheap:

“We would bill you at our Social Sector rates, which are 50% below our usual fees. At these rates, our professional fees and expenses for phase one as outlined above would amount to USD 2,200,000.”

McKinsey’s consultants helpfully suggest where the money might come from:

“The budget for this project should be covered out of third-party funds available to PNG from external sources. In particular, UN-REDD could provide the financing for the REDD plan.”

On 7 March 2010, Freddy Austli of UNDP in Papua New Guinea told REDD-Monitor that “As UNREDD is not operational, none of this [UN-REDD] money has yet been disbursed.”

McKinsey’s report on REDD in PNG is not, at least as far as I’m aware, available to the public. Unlike McKinsey’s report on REDD in Brazil, it does not seem to be available on McKinsey’s website. PNGExposed notes that the country’s REDD strategy “has never been debated by PNG’s Parliament or disclosed to the PNG people.”

As Economist journalist Natasha Loder pointed out on her blog last year, McKinsey is the climate consulting firm du jour. Loder was enthusiastic about McKinsey:

“If Papua [New Guinea] can find a mere $2m, McKinsey will load up its crack team of climate consultants into the Batplane, fill it up with biofuel, and send it swooping down on Port Moresby to help the country prepare itself for Copenhagen by developing the national REDD and climate change plan, deploying cost-abatement curves from their utility belts. . . and all just in time for Papua’s cabinet meeting in November.”

I’m not suggesting that McKinsey’s experts don’t know what they are talking about. They do. But there are no guarantees that any international consulting firm working on a tight deadline will include indigenous peoples’ rights in its considerations on REDD. Particularly one with a strong focus on economics. McKinsey’s report on Brazil mentions neither the word “indigenous”, nor the word “rights”.

Others are less enthusiastic than Loder about McKinsey, particularly now that the company is working in PNG. In a letter to Wari Iamo, the Acting Executive Director of the Office of Climate Change and Development (OCCD), the Papua New Guinea NGO Eco Forestry Forum (EFF) expresses its dissatisfaction with “stakeholder consultation on climate change and REDD issues”. EFF was invited at short notice to the Office of Climate Change and Development on 21 September 2010 to discuss the UN-REDD National Joint Programme and REDD+ project guidelines. EFF was asked to provide comments on documents distributed at the meeting by 1 October 2010. EFF asks, “How could we do that within a short period of time?”

Regarding McKinsey’s involvement in PNG, EFF commented:

“While we have been verbally told of McKinsey’s role in the country as Technical Advisors, they were seen to be acting like OCCD or DEC [Department of Environment and Conservation] staff, answering questions relating to the processes of REDD implementation. We would have loved to see OCCD staff or DEC staff taking a lead in the discussions. This leaves us with the conclusion that OCCD and DEC does have a capacity issue that has not been admitted. It would be interesting to know when the McKinsey contract expires.”

It would also be interesting to see a copy of McKinsey’s terms of reference, just so that we know what they are supposed to be doing in PNG. It would be interesting to know where the money to pay McKinsey’s came from. And it would be interesting to see the reports that McKinsey has produced for the PNG government on REDD and climate change.

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