“The Carbon Market Regulation was not validated, still lacks clarity and substance, and cannot be completed without further public stakeholder consultation,” Papua New Guinea NGOs tell the government

A new letter from PNG Environmental Alliance to Simo Kilepa, Minister for Environment, Conservation and Climate Change.

Papua New Guinea’s Environmental Alliance has once again written an open letter to the government highlighting its concerns about the country’s Climate Change Regulation and Climate Change Management Act.

This is third letter from the PNG Environmental Alliance demanding proper consultation over the government’s Carbon Market Regulation.

On 22 September 2023, the PNG Environmental Alliance wrote to Simo Kilepa, Minister for Environment, Conservation and Climate Change, and Ivan Pomaleu, the Chairperson of the Central Agency Coordination Committee:

On 4 December 2023, at COP28 in Dubai, a representative of the PNG Environmental Alliance handed a COP28 position statement to Simo Kilepa. The following day, Kilepa signed an updated Memorandum of Understanding with Blue Carbon LLC, a United Arab Emirates-based carbon offsetting company:

The PNG Environmental Alliance has not received any official response to either the letter or to the COP28 position statement.

Here is the PNG Environmental Alliance’s most recent letter regarding the country’s Carbon Market Regulation, which was delivered to Kilepa’s office on 17 May 2024. It was also published on the same day as a full-page advertisement in the Post Courier.

Attn: Hon. Simo Kilepa
Minister for Environment, Conservation and Climate Change
9th Floor, Dynasty Tower
Savannah Heights, Waigani Drive
Port Moresby, NCD

Date: 15 May 2024

Dear Honourable Minister Kilepa,

RE: OPEN LETTER ON CLIMATE CHANGE REGULATION AND CLIMATE CHANGE MANAGEMENT ACT REVISION

In summary, explained and motivated in more detail below, we, the membership of the PNG Environmental Alliance, are bringing the following to your urgent attention and request you to demonstrate your good leadership in taking the appropriate action:

• The Carbon Market Regulation was not validated, still lacks clarity and substance, and cannot be completed without further public stakeholder consultation

• The PNG Government breached its own REDD+ FPIC Guidelines, by not conducting public stakeholder consultation on the CCMA revision process, while changes were made on the issue of carbon rights

• The PNGEA is willing to continue to work with the PNG Government to develop a robust and transparent overall regulatory framework for carbon projects and the carbon market in PNG, that protects the rights and interests of our rural communities

The PNG Environmental Alliance (PNGEA) is a network association established to be the national voice for civil society organisations on all issues related to the environment in PNG. The civil society organizations that are members of the PNGEA are actively engaged and working directly with a large number of our customary landowning communities. One of our responsibilities is to voice the landowning and land user communities’ and wider civil society concerns and seek clarity from the leaders of this country, to help communities defend their rights and interests, and to also ensure our leaders are accountable to their people.

As part of this responsibility, we again write an urgent open letter to you to voice our grave concerns on the development process of the Climate Change (Management) (Carbon Market) Regulation 2023 and the amendment of the Climate Change (Management) Act 2023.

On two separate occasions we have addressed the same concerns. Firstly, through our initial letter of 22 September 2023, addressed to yourself and the CACC Chairman, Chief Secretary Ivan Pomaleu, and secondly, through a prepared COP28 Position Statement which was hand delivered by one of our members to you on 4 December 2023 at the COP28 gathering in Dubai, United Arab Emirates. To date, we have not received any official response on either of our letter or our COP 28 position statement.

The Carbon Market Regulation was not validated and cannot be completed without further public stakeholder consultation

In our letter of 22-09-2023 and in our COP28 position statement, the PNGEA expressed our concerns that during the Carbon Market Regulation validation workshop of 18-08-2023, it became clear that the majority of the stakeholders, including representatives from other key government departments, did not agree with the content of the final draft version of the Regulation as presented at the workshop and did not validate it, with one of the key issues being the definition of Carbon Rights. Stakeholders agreed that there was a need for a definition to be clearly spelt out, thoroughly discussed and accepted by all stakeholders, in particular our landowning communities, including the practical implications for each of the many possible types of carbon projects that could be undertaken in this country. This is a basic building block for the rest of the legislation and associated regulations.

Overall, the Regulation lacks clarity, has no adequate references and links to other elements of the legislative framework (such as safeguards documents for all types of carbon projects), the carbon market and international guidelines. There are still significant gaps that need to be resolved, with the most pressing concerns outlined in our letter and statement referred to above.

In our view, the only manner in which the Regulation can be developed and finalised into a robust and accountable key component of the country’s overall regulatory framework for carbon markets, is if the CCDA is willing to seriously consider stakeholder input. Overall, the willingness to take on board stakeholder comments and suggestions by the CCDA on the Regulation has been patchy. During the Regulation validation workshop at the Hilton Hotel in August last year, it became clear that the CCDA had not sent their responses to the comments submitted by all stakeholders before the start of the workshop, and stakeholders realised during the workshop that many of their comments had been left unanswered, while others were not dealt with in a comprehensive manner. Stakeholders were told at the validation workshop that they could still submit further comments in writing, which the PNGEA did.

This was almost ten (10) months ago, and to date we have not received any feedback from CCDA if and how our comments, or the many outstanding inputs from other stakeholders, including other Government Departments, have been considered. Consequently, we are still awaiting circulation of the updated final draft version of the Regulation to allow stakeholders to understand and verify the contents for themselves.

Given this turn of events, we strongly suggest that the CCDA:

1. Distribute an updated stakeholder comments matrix on the Regulation, which has incorporated feedback to the outstanding stakeholder comments submitted; and

2. Conduct a further public stakeholder consultation.

This is all critical to providing the credibility and confidence for carbon-related transactions and agreement amongst both the PNG landowners and international and domestic partners.

PNG Government breaches its own REDD+ FPIC Guidelines; no public stakeholder consultation on the CCMA revision process

On 21 March, 2023, another PNGEA open letter was delivered to your good Office regarding the Climate Change (Management) (Amendment) Act 2023 (CCMA), passed in Parliament in October 2023. We were requesting a revision of the CCMA through a transparent process, including thorough stakeholder consultation, with key points for the revision being the definition of carbon rights (and any reference to primary and secondary carbon rights) to be included at the level of the Act and not the Regulation. We also urged that references to safeguards and regulations for all types of carbon credit projects, alignment of existing forestry, environmental and energy legislation, and a clear outline of how carbon projects should be nested within a national approach, and how this would be governed, including framing the delineation of responsibilities, and complementary responsibilities, in the architecture of Government institutions.

However, the CCMA revision was completed without proper public stakeholder consultation, and it appears that none of the essential issues identified by the PNGEA have been given due consideration, with the definition of carbon rights removed from the Act and left to be defined at the Regulation level.

The CCMA amendment includes a key change in Part VIA Establishment and operations of an emissions trading scheme, through repealing Paragraph (a) of Section 78B REDD+ transactions by the Government of the Principal Act. This paragraph reads:

(1) Where the Government participates in any transaction under international REDD+ programmes, including but not limited to the Green Climate Fund results-based payments programme, the Minister is to be taken to have the authority of the landholder to sell and transfer all carbon sequestered by the forest including in the form of emissions reductions, Papua New Guinea Mitigation Outcome Units or carbon sequestration resulting from that programme provided that––
(a) the Minister has the free, prior and informed consent of the customary landholders and will be guided by Section 89, where relevant; [REPEALED]

Our concerns on the lack of public consultation were raised with the now, a/Managing Director for CCDA, Ms. Debra Sungi. She then informed the Alliance that the amendments to the Act would be mere administrative changes therefore, there being no utility to have a public stakeholder consultation. From our reading of the amendments, the removal of the requirement for Government to obtain Free, Prior and Informed Consent (FPIC) from customary landholders for national level REDD+ carbon trading, has very harsh implications, and may well also entail an unconstitutional deprivation of landowner rights and authority. It appears to undermine the fundamental rights of our customary landholding communities that are the custodians of the very forests producing the carbon credits that the Government intends to sell.

Clause 1.4, 1.6 and 7.2 of the National REDD+ FPIC Guidelines clearly stipulate the need for wider stakeholder consultation, for any changes in policies, laws or regulations that may impact the lives of many customary landholders; in this case the change even impacts the lives of all customary landholders in PNG. If this amendment was deemed necessary to remove prerequisites for the Government to be able to access landowner payments, including REDD+ Results Based Payments (RBPs) at the national level, then this should certainly have been explained and discussed in public stakeholder consultations, as part of the overall discussion on carbon rights, and the CCDA should have sought the consent of the affected stakeholders.

The complete lack of public stakeholder consultation on this change in the CCMA, infers that the PNG Government has not complied with its own REDD+ FPIC Guidelines, and raises uncertainty as to why this required consultation was not conducted. An important question emerges on how the Government is planning to ensure that the requirement from our National REDD+ Benefit Sharing and Distribution Guidelines, that 60 percent benefit share from RBPs shall go to customary landholders will be met. Furthermore, there is the question of how the Government will ensure that all REDD+ RBPs and other national carbon market related income is managed through dedicated funds under the independently governed PNG Biodiversity and Climate Fund, if not through Government controlled Trust Funds.

Working with the PNG Government to move forward

In all its letters to the Government and in its media statements, the PNGEA has always emphasised its willingness and necessity to continue to work with Government, and use its members vast experience from their work at the grass-roots level, to develop a robust and transparent overall regulatory framework for carbon projects and the carbon market in PNG, that protects the rights and interests of all our citizens, but in particular our rural communities.

In order to achieve this, the definition of carbon rights must be agreed upon through an open discussion with all stakeholders, with particular attention to its implications for customary landowning communities for the various types of carbon projects that we can expect to be implemented in PNG. It is unclear what the consequences of the current definition in the Regulation will be for our communities under all the different types of carbon projects that may happen on their land or in relation to their natural resources. Safeguard Guidelines need to be developed to cover all types of carbon projects, through a transparent and timely stakeholder consultation process, before the Regulation is finalised. There is an extensive range of potential carbon projects that could be undertaken in this country, therefore, it is crucial for an assessment to be made specifically on the safeguard requirements for each type of carbon project. We suggest that the REDD+ Safeguard Guidelines could form the basis of these necessary additional Safeguard Guidelines, but cannot be considered as default safeguards for all different types of carbon projects.

The PNGEA also sees the urgent need for a stakeholder consultation process, informed by a range of experienced international experts, on the most suitable and beneficial REDD+ and other carbon project implementation system for the country. There are very interesting experiences and initiatives in other tropical forest countries, based on both market and non-market approaches, with the latter in a locally adjusted form possibly proving to be more suited for the PNG situation. The current in country arrangement of voluntary carbon market project development by overseas developers with little or no local knowledge, requires CCDA to have in place stringent monitoring and enforcement capacity, including the capacity to undertake adequate due diligence assessments on these project developers.

The PNGEA suggests that until this consultation is completed, and the full carbon market regulatory framework, including the needed monitoring and enforcement capacity with the CCDA is in place, a moratorium is applied for all carbon market projects, additional to the current Moratorium on new REDD+ Voluntary Carbon Market projects.

The PNGEA therefore requests you to demonstrate your leadership to protect the reputation of the country in considering and navigating the emerging multiple long-term financing options for REDD+ and other emission reduction activities in PNG, through a well-informed consultation and decision process, with the main consideration at all times being the interest and long-term well-being of our customary landholding communities.

We thank you for your consideration and look forward to receiving a formal response to this letter.

Your sincerely,

Pamela Avusi
Coordinator
PNG Environmental Alliance

Endorsed by the following PNGEA members:
Bismarck Ramu Group (BRG)
Centre for Environmental Law & Community Rights Inc. (CELCOR)
Consultative Implementation & Monitoring Council (CIMC)
FORCERT – Forests for Certain: Forests for Life!
Institute of National Affairs (INA)
Partners with Melanesians (PwM)
PNG Council of Churches (PNGCC)
Research & Conservation Foundation (RCF)
Tenkile Conservation Alliance (TCA)
Tree Kangaroo Conservation Project (TKCP)
Wide Bay Conservation Association (WBCA)
Wildlife Conservation Society (WCS-PNG)

Cc: Hon. James Marape, Prime Minister
Cc: Hon. Salio Waipo, Minister for Forest
Cc: Ms. Debra Sungi, Acting Managing Director, CCDA

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