Norwegian aid to Climate Advisers ends in "multimillion-dollar dispute"
A recent report in Norway’s Panorama Nyheter investigates a dispute between Norway’s aid agency, Norad, and the Washington DC-based consulting firm Climate Advisers Inc., run by Nigel Purvis, a Harvard-educated lawyer.
Journalists Tor Aksel Bolle and Targei Leer-Salvesen write that Purvis received as much as US$3,000 a day from Norway’s aid budget. His company Climate Advisers Inc. and Climate Advisers Trust, the foundation Purvis set up in 2017, received at least US$17 million from Norway.
From 2019 to 2020, Norad paid about US$7 million to Climate Advisers Trust. About 85% of the money was spent on salaries and consultancy services in the USA. Climate Advisers Trust hired companies that Purvis owned. Norad was not told that Purvis owned these companies.
Bolle and Leer-Salvesen note that Norad believes it is difficult to see results from this “aid” either for the rainforests in poor countries or for Indigenous Peoples and local communities who live in them.
Between 2018 and 2020, Purvis received a salary of US$1.2 million as CEO of the Climate Advisers Trust. In 2019, for example, Purvis received US$452,153. Most of the non-profit foundation’s funding comes from Norad. Purvis told Panorama Nyheter that his salary is not particularly high considering “his experience and competence”.
Bård Vegar Solhjell, Norad’s director, told Panorama Nyheter that,
“This has been a serious matter with clear breaches of the agreement from the Climate Advisers Trust. We have learned a lot and will think very carefully before we enter into that form of agreement again - where a commercial company has created a non-profit which is our agreement partner.”
Norad stopped all payments to the Climate Advisers Trust in 2021. Norad also demanded that Climate Advisers Trust repay NOK 1.6 million because of “substantial breaches of the agreement”.
Climate Advisers Inc. continued to receive funding from the Norwegian aid budget, for example acting as a consultant to Emergent on a Norway-funded project.
Norway’s rainforest billions
In December 2007, Norway’s then-Prime Minister Jens Stoltenberg launched Norway’s plan to spend three billion kroner a year to save the rainforests.
The idea came from Lars Løvold, then-director of Rainforest Foundation Norway; and Lars Haltbrekken, then-chairman of Friends of the Earth Norway. In September 2007, Lars and Lars wrote to Stoltenberg asking for six billion kroner a year to be spent on rainforest protection. They claimed that the money, “can reduce greenhouse gas emissions by over 700 million tons per year. Norway will become more than 10 times climate-neutral”.
It is telling that Norway’s Minister of Petroleum and Energy was one of the three people who presented Norway’s strategy to save the rainforests at the launch in Oslo.
Despite the utter failure to address deforestation in the 15 years since, and in the context of the scandalous waste of Norwegain aid money on Climate Advisers, Løvold remains surprisingly upbeat. He told Panoroma Nyheter that,
“Climate came very high on the agenda in 2007. We saw an opportunity, went straight to the politicians and got success. Our proposal was six billion annually. We got three. It is still a significant sum.”
Bolle and Leer-Salvesen comment that “good intentions and three billion Norwegian kroner were not enough to stop deforestation”. Norway’s International Climate and Forest Initiative (NICFI) therefore aimed to create support for its rainforest strategy in other countries, particularly in the USA.
Enter Nigel Purvis and Climate Advisers Inc. In 2012, Climate Advisers was hired to provide strategic advice to NICFI.
Purvis apparently had friends in high places in the Norwegian aid bureaucracy. Panorama Nyheter quotes from a 2012 internal memo to the Minister of Climate and Environment, Bård Vegar Solhjell:
“Purvis is one of the brightest minds in American climate policy, and will have very useful perspectives for the minister both in terms of American policy and Norway's opportunities for influence in the future. Purvis is also central to the group that has helped the Climate and Forest Initiative to prepare the strategy for increased international support for the climate and forest issue, which the minister has agreed to.”
Panorama Nyheter states that it “has obtained access to documents which show that Purvis in 2012, and also later, raised hourly fees of US$639”. REDD-Monitor reported on these hourly rates back in 2014:
Panorama Nyheter comments that these hourly rates are “unusually expensive in the context of aid”.
Between 2013 and 2018, Climate Advisers Inc. had received about NOK 50 million. This money came from NICFI and was supposed to go to civil society organisations working to prevent deforestation. Commercial companies and consulting firms cannot apply, according to Norad’s regulations.
Climate Advisers Inc. got round these regulations by applying together with non-profit organisations, with those organisations being Norad’s formal contractual partners.
Panorama Nyheter reports that,
“Case documents we have seen show that CAI played a central role in the design of several of the applications, and that significant parts of the grant went to pay high fees to Nigel Purvis and his staff.”
Norad’s legal department argued for rejecting all applications in which Climate Advisers was involved, on the grounds that it was a commercial company.
In 2016, Development Today reported on the disagreements between Norad and the Ministry of Climate and Environment about Climate Advisers Inc.
“Operation Sunlight”
In spring 2018, Norad received an application from Climate Advisers Trust for a project called “Operation Sunlight”. The project application states that the project would contribute to transparency around investments that result in deforestation.
Under the project, Climate Advisers Trust was supposed to develop an online tool giving up-to-date information about the companies driving deforestation in Indonesia, Peru, and Colombia.
Climate Advisers Trust was also supposed to cooperate with organisations in rainforest countries to present cases to the authorities in the USA to prosecute companies and actors that contribute to deforestation.
Panorama Nyheter reports on documents that clearly show Norad’s concerns about Climate Advisers Trust’s application:
The ties between Climate Advisers Inc. and Climate Advisers Trust were too close. Nigel Purvis was head of both companies. Climate Advisers Trust would buy services from Climate Advisers Inc. They shared the same office address and several of the same staff.
Norad and the Ministry of Climate and Environment noted the expensive salaries, particularly for Purvis.
A grant of NOK 70 million from Norad would result in a large increase in income for Climate Advisers Trust, which had only been created a few months previously.
Norad’s legal department warned of the risk of “hidden profit” linked to high salaries, internal invoicing, use of consultants, and purchases from related parties.
At the time of Climate Advisers Trust’s application, Andreas Dahl-Jørgensen was a manager at NICFI. He had previously worked at Climate Advisers Inc., where his hourly rate was US$262.80.
Dahl-Jørgensen declined to give an interview to Panorama Nyheter about his particular case of revolving door syndrome.
Ultimately NICFI convinced Norad to go ahead and in May 2019 Norad and Climate Advisers Trust signed the agreement.
4,800 hours unaccounted for
Just three months later, a former employee told Climate Advisers Trust’s board about irregularities in documenting the hours worked on the Norwegian-funded project. The board hired an external auditor who concluded that the whistle-blower’s claims were baseless.
But when Norad carried out its own investigation it found that someone had entered 4,800 hours into the time registration system in one day. The hours were distributed among employees without them being informed. It is not clear who gave the order to introduce the extra hours. Norad believes that Climate Advisers Trust cannot account for these 4,800 hours, worth more than NOK 2.3 million.
Purvis told Panorama Nyheter that Climate Advisers Trust had staff changes in 2019 and as a result the time keeping had not been done properly. He argued that it was a short term problem. “No damage occurred to the project,” he wrote, “and no Norad money was used in the wrong way.”
Norad could not prove that the mistakes were deliberate and asked Climate Advisers Trust to return NOK 260,000.
Purvis and Concordian LLC
In March 2020, a case manager at Norad noticed that Nigel Purvis was the founder and director of a company called Concordian LLC. Climate Advisers Trust entered into an almost NOK 20 million consultancy agreement with Concordian.
Concordian was registered in the tax haven of Delaware in early 2018, around the same time that Climate Advisers Trust applied for funding from Norad for “Operation Sunlight”.
In December 2020, Norad hired auditing firm BDO to investigate how Climate Advisers Trust had used Norway’s aid.
Norad’s internal audit is very critical:1
“As there were no employees in the company, that the company is relatively newly established and that Concordian was also not the most reasonable alternative, the notification team questions the realities behind and the validity of the award to Concordian. There are many indications that the award was carried out with the aim of extracting a profit from the services provided. In any case, Norad has not been informed that Nigel Purvis is the owner of the company, which is a breach of the terms....”
Purvis denies any wrong doing. “Concordian was founded by a handful of people, including me,” he told Panorama Nyheter. “I was never employed by Concordian, and I did not supervise the work. I was an investor.”
BDO’s auditors also found that Climate Advisers Trust had overpaid for services from Climate Advisers Inc. Purvis argued that Climate Advisers Inc. “was the most experienced, competent provider” and added that “Norad has misunderstood both the process and the costs.”
Norad’s internal audit concluded that,
“Investigation has revealed that the board of CAT [Climate Advisers Trust] has on two occasions awarded larger contracts to related consulting companies. In addition to ownership in CAI [Climate Advisers Inc.], the CEO [Nigel Purvis] had also established a further consulting company without Norad being informed about this. As the agreement involves collaboration with related for-profit companies, this enables profit to be made on the hours and service delivery.”
Norad’s internal audit found several “significant breaches” of the agreement but did not conclude that fraud was involved.
“It is difficult to say what proportion of the Norwegian aid millions Purvis may have taken as profit and salary through the companies CAI and Concordian,” Panorama Nyheter reports.
“Lack of transparency”
Norad requested the accounts of the two companies several times, but did not receive them. Norad says this is in breach of the agreement.
Climate Advisers Trust disagrees. Purvis told Panorama Nyheter that,
“Climate Advisers is a privately owned company and we have never shared financial information with donors. If we had given Norad the information they requested, it would have set a precedent that we would then have to follow with other donors as well. We had nothing to hide, it was a matter of principle.”
Norad’s director Solhjell told Panorama Nyheter that,
“It is clearly unfortunate. We expect our partners to provide us with this type of information when we request it. There are specific conditions for receiving Norwegian aid funds, and Norad is a state actor with particularly strict requirements for how we spend money. We expect our partners to accept this. The challenges of following the money flows in this case have been significant due to a lack of transparency. It is very problematic.”
In June 2021, Norad demanded repayment of around NOK 3.4 million. In spring 2022, Norad reduced this amount to NOK 1.4 million.
When Climate Advisers Trust said it did not have the money to pay back, Norad increased its claim to NOK 2.7 million and threatened legal action.
Following this, Climate Advisers Inc. quickly agreed with Norad that it would pay NOK 1.4 million. And in March 2022, Climate Advisers Inc. handed over the money.
Purvis told Panorama Nyheter that he agreed to this payment because,
“We have collaborated with Norad for many years and had a good relationship. It was important to find a solution and it was an investment in a better long-term relationship.”
Operation Sunlight did not deliver
Norad’s assessment of the project concludes that the project did not deliver what was expected, and there were questions about whether the project activities actually contributed to reduced deforestation in the three countries covered: Indonesia, Peru, and Colombia.
An online tool, called Lucida, was supposed to provide information about the companies and actors responsible for destroying rainforests. Norway paid NOK 20 million, but Lucida was never completed.
Purvis told Panorama Nyheter that Lucida didn’t become operational because Norad stopped support for the project. Climate Advisers Trust had no choice other than to shut down Lucida.
Hilde Dahl, deputy director at the forestry section in Norad, told Panorama Nyheter that Norad has a responsibility to ensure that its money is used in line with the agreement. “When we suspect this is not the case,” she says, “it is our duty to follow this up as we have zero tolerance for financial misconduct.”
Norad gave Climate Advisers Trust NOK 14 million to present cases to the US authorities so that they could prosecute companies causing deforestation. But this did not result in a single case in the US legal system.
Climate Advisers Trust applied for NOK 60 million for the period 2021 to 2025. Norad rejected the application citing Climate Advisers Trust’s “lack of transparency and willingness to share information”.
Norad’s computer system now features a red warning triangle next to the name Climate Advisers Trust. “Contact the central control unit in the Ministry of Foreign Affairs”, it states.
CLARIFICATION - 6 March 2023: I had previously mixed up BDO’s audit and Norad’s internal audit. The quotations are actually from Norad’s internal audit.
Please keep a close look at USAID funding for forests too. They are actually funding consultancy companies and private consultants.