Swedish Energy Agency delays US$1 million carbon credit payment to Green Resources

Two weeks ago, REDD-Monitor wrote about a new report by the Oakland Institute. The report is the third by the Oakland Institute about a Norwegian company called Green Resources, and the destructive impacts of its monoculture tree plantations on local communities in Uganda.

The Oakland Institute’s report, “Evicted for Carbon Credits”, uncovers evidence – including letters from Green Resources – that farmers have been evicted to make way for Green Resources’ plantations in Uganda. The impacts of the plantations on local communities’ livelihoods are ongoing.

In 2011, the Swedish Energy Agency signed an agreement with Green Resources to buy 365,000 certified emission reductions at a price of SEK 35 million. The payments would be made over a 20 year period.

Last week, Ann Danaiya Usher reported in Development Today that the Swedish Energy Agency had postponed a carbon payment of SEK 10 million (about US$1.03 million) to Green Resources. The delay was because of “on-going concerns about the project,” Usher writes.

“Nothing new”

The day after the Oakland Institute published its latest report, the Swedish Energy Agency put out a statement on its website dismissing the findings of the report:

As far as we can see, the report contains nothing new and the conclusions drawn by the Oakland Institute are not consistent with those presented in the independent reviews that we have conducted. The project has also been reviewed by other players, Norfund, Finfund, FSC and the CDM Executive Board, nor do these actors draw the same conclusion as the Oakland Institute.

Development Today contacted Finnfund and Norfund, the development finance institutions that rescued Green Resources from bankruptcy in 2018.

Rasi Rajala, Communications Director at Finnfund, told Development Today that,

“We encourage [Oakland Institute] to visit the Green Resources plantation and discuss more closely with the local team there. As for their latest report, it does not appear to contain any substantial new information.”

And Inger Nygaard, Communications Manager at Norfund, said,

“We have no reason to doubt that the audits conducted by FSC and other auditors have been of a high standard.”

Which suggests that Nygaard didn’t bother to read the Oakland Institute’s report. Had she done so, she would have found a critique of the audits carried out under the Forest Stewardship Council, the UN Clean Development Mechanism, and the Climate, Community, and Biodiversity Alliance.

The FSC audit, carried out SGS Qualifor, is of a particularly low standard. The Oakland Institute points out that SGS Qualifor’s audit “blatantly contradicts” EOH’s March 2017 audit. EOH’s audit urged Green Resources to find a solution “as soon as possible” to several ongoing court cases related to land ownership disputes.

The Oakland Institute writes that,

SGS Qualifor appears to have missed that since 2008, a group of 300 villagers has been in protracted court cases against Green Resources demanding compensation for the loss of land. And despite the EOH performance audit recommendation to expedite outcomes of this and other legal cases, it remains outstanding over two years after the reports release. [SGS Qualifor] also states that “no person had been displaced or evicted” and that the company did not acquire “Kachung land forcefully.” The eviction notices and letters released with this report make it clear that these claims are false. Such blatant contradictions between SGS Qualifor’s reports, the audit commissioned by the SEA [Swedish Energy Agency], and reports by independent organizations and media demonstrate the failure of FSC towards its responsibility in allowing and renewing the certification of the project.

Not the first payments freeze

Development Today spoke to Ola Westburg at the Swedish Energy Agency who said that the delay is related to the Swedish Energy Agency’s own assessment of the project.

“The plan was to go through with the transfer last week,” Westburg said. The planned transfer was of 192,000 Clean Development Mechanism certified emission reductions. According to Westburg, the Swedish Energy Agency is “still reviewing the progress report from Green Resources. [The transfer] could happen any day, but probably not this week … There will be no transfer of certified emissions credits until the agency is satisfied.”

In 2015, the Swedish Energy Agency froze payments to Green Resources following a documentary by Sweden’s TV4 Kalla Fakta about the impacts the industrial tree plantations were having on local communities.

In October 2015, employees from the Swedish Energy Agency visited Green Resources’ plantations in Uganda. They found that the project on the ground “did not live up to the agreement between the Swedish Energy Agency and Green Resources or the pledges made in the project documentation”.

A report of the visit on the Swedish Energy Agency’s website states that,

Among the locals, there were several people who told me that they find it difficult to support themselves and that they need access to more fertile agricultural land for their livelihood. Conditions had become worse for the local population since their access to the forest plantation was limited.

Both locals’ stories and Green Resources’ own documents also showed that there were conflicts in the contact between the forest company’s field staff and locals.

An “action plan” and two audits

In 2016, Green Resources created a “road map” including a ten-point “action plan” covering issues like food security, water availability, cattle grazing, and roads.

The Swedish Energy Agency has commissioned two audits to check whether Green Resources was following its “road map”. The South African consulting firm, EOH Coastal and Environmental Services, carried out both audits.

The first audit was published in March 2017. The Oakland Institute’s second report about Green Resources was critical of the audit.

Following the launch of the report, Frédéric Mousseau, policy director at the Oakland Institute, commented in a press release that,

“The industrial monoculture plantation forestry run by Green Resources at its Kachung site is incompatible with the needs of local people who rely upon the same land for their livelihoods and existence. In the wake of our latest findings, it is imperative that the Swedish Energy Agency suspend all future payments to Green Resources and cancel the deal for purchase of carbon credits. This is the only viable response in the face of the worsening impact of Green Resources on the livelihoods of local villagers in Uganda.”

Development Today obtained a copy of the November 2018 EOH audit:

It points to numerous shortcomings: “Food security, ineffective communication . . . complaints from communities associated with corruption, land-rights issues, as well as community access to forest resources” are areas of significant concern. Green Resources is deemed by the consultants to be “partially compliant or non-compliant” on a range of key interventions. “Most . . . lack specific measurable key performance indicators,” making it difficult to assess compliance. In spite of a commitment to undertake road maintenance after the rainy season, “no firm plans for this are in evidence as yet.” The consultants found “no water quality monitoring data for the current year [or] . . . a planning schedule for natural water point rehabilitation interventions.” Moreover, the EOH report states, “the provision of health centre support and provision of drug supplies to these facilities has seemingly not been undertaken for the 2018 period.”

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