SAFI: Forest Department and Merlins Wood process in Pakistan neither consultative nor transparent

In February 2012, REDD-Monitor wrote about a London-based company called Merlins Wood and its REDD-type projects in Pakistan. Sarhad Awami Forestry Ittehad (SAFI), a local NGO, rejected the agreements the company had made in Pakistan. SAFI has now produced a resolution about Merlins Wood.

Surriekha Khan, the owner of Merlins Wood responded at length to the post on REDD-Monitor. Her response raised as many questions as it answered. On 21 February 2012, REDD-Monitor sent a series of further questions, which Khan has, so far, declined to reply. Merlins Wood has, however, now updated its website – which previously included images from wedding websites and several pages offering Himalayan hardwood and softwood timber sales.

On 6 March 2012, Pakistan Today reported that Merlins Wood had signed a Memorandum of Understanding with the Government of Khyber Pakhtunkhwa to develop a REDD+ project in the province. (In May 2011, Merlins Wood signed an MoU with the Khyber Pakhtunkhwa Secretary for Forests, Zahoor Ahmad Khalil.) The article in Pakistan Today reported that Terra Global Capital, a US-based carbon trading company, is also involved in Merlins Wood’s projects in Pakistan:

Terra Global Capital has partnered with Merlins Wood to carry out the carbon development work and market the pioneering projects. REDD Managing Director Sareeba, Leslie Durschinger, founder and managing director of Terra Global Capital, officials from UN REDD+ projects and Khyber Pakhtunkhwa and environment experts attended the MoU signing ceremony.

In a company brochure, Terra Global Capital claims to have “More than 200 projects in the pipeline, 23 active projects and consulting assignments with NGOs, governments, community groups and, private entities.” Terra Global Capital’s logo is on Merlins Wood’s new website, as are those of UN-REDD, Verified Carbon Standard (VCS) and Climate, Community and Biodiversity Alliance (CCBA).

Leslie Durschinger, the CEO of Terra Global Capital, visited Pakistan recently. An article in Dawn reports her as saying that,

“unless all stakeholders come together to ensure that investors’ money has the intended impact, others might be discouraged from coming to Pakistan with environmentally friendly initiatives and this will become another blow for the country.”

Which provides an interesting insight into Terra Global Capital’s perspective on the role of communities in REDD projects: “Stakeholders” should ensure that investments succeed, in order not to discourage future investments.

In the same article, Syed Mobusher Latif, Chief Financial Officer of Merlins Wood, explains carbon trading:

“These certificates can be sold to commercial firms like airlines, oil and gas companies and others who can use the certificates to show their investment in corporate social responsibility (CSR). Besides, the communities themselves can also trade these certificates as bonds in stock exchanges.”

SAFI’s Resolution is posted here in full. It raises serious questions about Merlins Wood’s projects in Pakistan and about the legal framework for any REDD-type projects in the country.

Sarhad Awami Forestry Ittehad (SAFI)

RESOLUTION

March 2012

SAFI’s Resolution regarding the MoU between the KPK Forest Department and Merlyn Woods Company Pvt. (London, UK) for leasing out in excess of 300,000 hectares for 40 years with Grant in Aid of UK Pound Sterling 12,000,000/- at a Ratio of 20:80 of Pakistan’s most important tract of forests – namely the Hindu Kush Himalayan forests – located in districts of Battagram, Mansehra and Swat for Carbon Credit Sales/Purchases under the Reducing Emmissions from Deforestation and Forest Degradation (REDD+) Program

Sarhad Awami Forestry Ittehad (SAFI) is a membership based people’s forest organization working in Khyber-Pakhtunkhwa (KPK). SAFI represents and protects interests and rights of its members which include forest owners, royalty recipients, forest dwellers and all those that are associated directly or indirectly with the forests of the KPK. SAFI constantly struggles and strives to promote forest governance that is transparent, accountable and rights based as well as pro-people. Currently there are more than 5000 forest owners, right holders, users and grazers as members in the organization. SAFI took birth during the Forest Sector Reforms Process in 1997 and the organization has been registered in 2008 under Social Welfare Act 1961.

SAFI hereby unanimously rejects and strongly condemns the MoU signed between KPK Forest Department and Merlyn Woods Company on the following grounds:

1. Currently KPK’s Forests are being managed in the province under the NWFP Forest Ordinance 2002. The KPK Forest Department is not the sole owner of Forests in the Province. Those forests which the KPK Forest Department claims to own and attempts to assert direct control over is highly disputed with a history of many decades. Even in Reserve Forests (Forest Department owned forests), which are a meager 7% of the total forested area in the province, forest dependent peoples living in the vicinity of these forests have legitimate and extensive rights.
   
   Guzara Forest or privately owned forests (38% of KPK’s forests), comprise of most of the forests in the Districts of Haripur, Mansehra, Abbottabad, Kohistan and Batagram. There is no provision in the NWFP Forest Ordinance 2002 that allows the Forest Department to lease out Guzara Forests. In the Guzara Forest, the Forest Department retains 20% managerial charges and 80% is distributed among the owners.
   
   Protected Forests in Malakand Division are 35% of KPK’s forests and the Forest Department shares profit incurring from these forests on a ratio of 60:40 in most areas and 80:20 in other areas. This means that the Forest Department is not the real owner of most of the forests’ of KPK as by law it is simply a Custodian/Manager of the people’s forests. As a Custodian / Manager, the Forest Department takes 20-40% of the profit, which is to be deposited in the Forest Development Fund as per law.
   
   The primary question that thus arises is how the KPK Forest Department was able to sign a MOU with Merlyn Woods to lease out for 40 years 300,000 hectares of rich and diverse forests in the province which are mostly the direct ownership of the people without taking the free, prior and informed consent of all the owners, right holders and forest dependent peoples.

2. As per Forest Ordinance 2002, this agreement is illegal because there is no provision in the Ordinance 2002 which allows forest department to lease out forests for the Sale/Purchase of Carbon Credits, which is the main objective of the Merlyn Woods agreement with KPK Forest Department. According to Section 105 of the Ordinance, the Forest Department can lease out the Reserve Forests and Protected Forests only for 1) planting trees 2) implementing agro forestry and social forestry, and 3) operating farms for breeding wildlife and biodiversity conservation provided for the achievement of said purposes. No activities shall be allowed which are inconsistent with the principles of Sustainable Forest Management or prejudicial to the rights and concessions of the local communities.

3. This Agreement does not protect the rights of forest owners, forest dependent people or royalty holders – small or large holders. Irrespective of the fact that the Forest Ordinance 2002 is not a solution to the tenure issues, but it has laid certain laws down. According to Section 39 of the Ordinance 2002, the net profit, if any, arising from the management of Guzara Forests shall be paid to Guzara Owners after deducting at source the harvesting or any other charges incurred in connection with the management of such land, timber surcharges, other charges/ surcharges as well as managerial charges on the profit.
   
   Contrarily all the profit generated from the carbon credits is divided between the KP Forest Department and Merlyn-Wood with 20:80 ratio. Under the constitution, the protection of the legal rights of the citizens is the prime responsibility of the State. However, the agreement between KP Government and Merlyn-wood has been signed in a way that the meager rights given by Forest Ordinance 2002 to the already marginalized owners, residents and right-holders have been ignored.

4. The entire process undergone by the Forest Department and Merlyn wood so far has neither been consultative nor transparent. The MoU has been signed clearly without due consultation of all concerned forest owners and right holders, Joint Forest Management Committees and other stakeholders. It was not discussed in the Forestry roundtable which is the legal body of the stakeholders. Though the Forest Ordinance 2002 lays down a policy framework for participatory decision making and management between the Forest Department and the forest owners and right holders, an overwhelming majority of these people had no idea and still do not have any knowledge of its existence. Additionally, it is highly doubtful that there was any competitive bidding process undertaken which is a requirement per law.

5. The agreement, if implemented as such, shall have severe social, political and economic impact on the already marginalized forest dependent people in the project area. These people have been living in the forest areas for centuries and forest has been the prime source of their livelihood. The project under REDD + program shall limit their access to their legitimate rights and access to their forests. This may lead to gross displacement, conflicts and social unrest that ultimately will further push this already marginalized segment of the population into poverty and depravation.

6. It is clear that the Government of Pakistan is a signatory to the Cancun Agreement in which REDD+ was introduced. However, no legislation has been passed by the Parliament for laying down a system of laws that will allow REDD+ to operate in Pakistan. In addition, it is vital to note that the KP Government also lacks defined laws of dealing with REDD+ in the province. Therefore, the question arises as to how will the KPK Forest Department deal with Merlyn Woods when there are no laws or Rules of Business or any legislation in place.
   
   It is also not clear how the sale / purchase of carbon credits will take place and how the profit incurring from this agreement will be distributed without breaking the existing Forest Department and Government of Pakistan’s statutes. Thereby, how will the business of carbon credits will be undertaken and how the benefits be shared among different stakeholders belonging to different land tenure categories. Thus such agreement whose legal validity is uncertain cannot be supported.

7. SAFI understands that the REDD + mechanisms address many issues that are relevant to today’s forests. SAFI is also aware of the fact that REDD+ is primarily a business of sale / purchase of Carbon Credits. Therefore, the future of REDD+ in KPK will be highly dependent on how certain factors relevant to the province will be addressed. Importantly, the division of profit among state, companies like Merlyn Woods and owners, right holders and other stakeholders, the settlement of social and legal issues surrounding REDD+ and the resolution of forest related existing conflicts and outstanding issues in the province of KPK.

Way Forward

SAFI vehemently demands:

• That the KP Government should immediately cancel the agreement with Merlyn Woods. In the case that this agreement continues, SAFI reserves the right for legal recourse,

• That with immediate effect, Carbon Credit laws, Rules and Regulations should be promulgated to implement the REDD+ mechanisms through a comprehensive, consultative and transparent process involving all stakeholders and the public at large,

• The immediate settlement of existing forest based issues, conflicts and legal tenure problems,

• That an independent forest commission under the 1999 Forest Law should be constituted that may monitor all the agreements under REDD+ program,

• That the Forestry Round-table should be restored, so that all the issues related to forests become transparent and accountable,

• That no further agreement should be signed in the future unless Carbon Credit law/regulations have been promulgated.

SAFI’s Key achievements

SAFI successfully brought the policy debate in public domain, creating meaningful awareness about the policy issues and environmental value of the forests. It successfully strived to resolve the Dir- Kohistan Forest Royalty issues recovering about Rs.200 million from the forest contractors which was the share of about 10,000 people. SAFI successfully persuaded the royalty case which was between people and Forest Development Cooperation- last year the case was settled by the Supreme Court of Pakistan in favor of the people. Moreover, as a result of SAFI’s efforts the provincial assembly of KPK has unanimously passed resolutions in 2006 and 2007 requesting the provincial Government to enhance forest royalty of Dir and Swat- Kohistan from 60 per cent to 80 per cent like other parts of the province. SAFI has been striving to bring amendments in Forest Ordinance aiming at balancing the powers of Forest Department and Joint Forest Management Committees.