Monday, July 06, 2009

Knights in shining armour

Who will save Papua New Guinea's forests? A year ago, Prince Charles launched his project to help save the rainforests. In doing so he described an "an astonishing level of public consensus in the developed world that tropical rainforest destruction must be stopped if we are serious about reducing the levels of carbon dioxide in the atmosphere". Shame, then, that on July 1st, to dismay among environmentalists, mummy (the Queen), gave a knighthood to megawealthy Tiong Hiew King, founder of giant Asian logging conglomerate Rimbunan Hijau, for services to deforestation, I mean, commerce.

Rimbunan Hijau is the Malaysian conglomerate which is the biggest extractor of tropical timber from Papua New Guinea. It is also the parent company of the subsidiary Wawoi Guavi Timber, which is engaged in a legal battle over the logging rights to the forest of Kamula Doso in Papua. Kamula Doso is one of the largest blocks of unlogged rainforest in the country, containing hundreds of millions of dollars worth of timber and strategically placed for access to all the other remaining forests in Western province.

Rimbunan Hijau would very much like to cut the forest of Kamula Doso, and the rest of the region, down to stumps. So that it can be turned into something useful like Australian barbeque trolleys, while locals scratch around wondering where future went. Indeed, the only reason Kamula Doso is still standing today is because of a lengthy court battle being fought by local NGO Ecoforestry Forum over the way the concession was awarded and the teensy weensy issue of whether logging rights had actually been acquired from local landowners before the concession was granted.

But others now realise there is money to be made by avoiding deforestation. So while the loggers and the NGOs tussle over who has the legal right to cut it down, others are tussling over who has the legal right to not cut it down. In other words, who has the rights to any carbon credits for avoided deforestation, should they exist.

The Kamula Doso forest has been an ongoing issue in the country. These days it is linked with the creation of irregular carbon credits, which have appeared in the hands of Australian carbon brokerage, Carbon Planet. On the same day that the Chainsaw King got his gong from the Queen, Papua New Guinea finally suspended Theo Yasause, director of the Office of Climate Change in relation to the printing off symbolic carbon certificates (some of which relate to the carbon in Kamula Doso). His suspension was reported by Ilya Gridneff of Associated Press and came after weeks of feverish rumour and speculation. An internal investigation of the office appears to be underway (although this has been said before), and in the meantime, Dr Wari Iamo has become acting director.

Significantly Gridneff reports that AusAID has announced a corporate planning adviser will be placed in the OCC office for three months as part of the $3 million pledged under the Australia-PNG carbon initiative. Great move Australia. Now the question is whether other parts of the international aid community (World Bank Forest Carbon Partnership Fund, the Norwegians and UK's DFID) will apply safeguards to REDD projects here and in other parts of the world or lumber on regardless?

Last but not least, Kevin Conrad was passing through London today, and spoke at a meeting on the politics of climate change at Chatham House in London. Although much of what takes place at Chatham House is usually on a non-attributable basis, Dr Conrad was one of those who spoke publicly at the meeting--so I am able to report what was said here. He reflected on some of the governance issues in relation to avoided deforestation, particularly in relation to countries that have struggled to control both logging and illegal logging. And also on some of the governance issues as faced by Papua New Guinea. On the latter issue he said:

"We found that because Papua New Guinea was advocating a regime shift in forests, we had every carbon cowboy in the world descend upon Papua New Guinea and try to get a deal with some landowners to they could go back and say they were working in Papua New Guinea and that somehow gave them some credibility.

We then, at the same time, had a group of governors who understood our law very well and understood that if the government got all of the money in a consolidated budget that they under our law would then receive 100% of it because it was an export oriented activity.

We have what is called a derivation grant, so money comes in as consolidated revenues and if it is an export it goes to the state. So what they did was rattle the cages, try to destablise the regime as it were, try to bait the government into signing saying that all the REDD money goes to the government first. Surprisingly it then ends up in the governor’s pockets.

But it was a serious issue we had some irregularities, so cabinet had to suspend our executive director, we have to launch an independent review, and we want it to be transparent. But we want to learn from this.

Papua New Guinea is the first of many upcoming instances, whether it is in... Peru. Whether...whenever there is prospective of oncoming wealth there is a tendency for the small to become overrun by the strong. That is something we as a global society have to guard against and that is why we have to hold back market forces, until made the necessary infrastructural and capacity investments in each country."

On the broader issues, Dr Conrad said: "That is the question of transforming a development pathway in developing countries and the understanding that that means significant capital needs to be invested. What we are already seeing globally is that when stakeholders see a gravy train on its way, many of them try and restructure the local system using information and misinformation to try and position themselves at the front of the line. Now that is normal human behaviour. But it is important.

What we have to understand we need to first invest in absorptive capability. You can’t just drop money into a third world country and expect that to solve a problem, can’t build a road and provide a car and expect that will solve a villagers challenge of getting product to market. Because it rains and guess what the road disappears the car runs out of fuel, spare parts don’t make it and after half a year they are back at square one and the money has been lost.

The question is how do we invest first, before we introduce market forces? How do we first invest in the analysis, the institution building the capacity building, the strengthening of governance? All of these things in developing countries to varying levels, there are some like Costa Rica that have a head start on that. There are some countries in Africa that have a further way to go and there are many are in between, and Papua New Guinea is one of those."

It would be nice to think that the suspension, the investigation and the new acting director for the Office of Climate Change will draw a neat clean line under this episode and allow everyone to move on. But Dr Wari Iamo is very unlikely to be able to do this. For one thing he is a very curious choice for the Office of Climate Change as he was involved in the original allocation of the disputed Kamula Doso forestry concession to Rimbunan Hijau, in 1999. In 2002, Dr Iamo was criticised by a subsequent investigation by Papua's Ombudsman Commission, which said among many things that he did not “give proper consideration to environmental matters” and his “conduct was baffling and negligent”.

Is it really not possible to do better than this in the search for champions for the world's third largest rainforest?