Amazonian tribes are facing new challenges as carbon credit dealers move into their forests, write Patrick Bodenham and Ben Cubby.
Peru’s jungle city of Iquitos – first established on the myth of a land of lost gold and once a mecca for 19th century rubber barons – has long been frequented by profiteers.
The Spanish built the city as an outpost to look for El Dorado, a fabled land of gold. At the turn of the last century, the development of the car tyre sent thousands of businessmen on ornate steamships up the Amazon to Iquitos to extract rubber.
A new kind of businessman has now arrived in the jungle. The Australian property developer David Nilsson is not seeking rubber or gold, but the carbon dioxide locked up in millions of hectares of lush Amazon rainforest east of Iquitos.
Critics in Peru claim he is not seeking to harvest the nation’s natural resources, but exploit some of its most vulnerable people. Local newspapers have dubbed him Peru’s first ”carbon cowboy” – the nickname used for what are viewed locally as unscrupulous carbon credit dealers, several of whom are Australian, who have been operating in Indonesia, the Philippines and Papua New Guinea.
Nilsson sees himself as the lone pioneer of future industry in South America that will supply heavy-polluting businesses in Australia and other developed countries with the overseas carbon offsets they will need to meet their greenhouse gas cuts back home.
Under the federal government’s carbon price plan, half of the offsets used to reduce emissions from Australia’s biggest 500 emitters of greenhouse gas can be sourced from overseas, if the offsets can be verified by a reputable body.
Nilsson hopes to tie the jungle’s traditional indigenous owners into contracts that will see forests preserved as carbon sinks in exchange for overseas money, and to take a slice of the cash for his own enterprise – Carbon Sustainable Resources Limited.
“This could be some kind of anthropology project – tribal people in the modern world,” he told the Herald. ”I’ll get a good model set up and really pump the training into them. Not just pump it into them, but put them under contract and loan them the money to go to university.”
The targets of Nilsson’s carbon offsets’ promises are the Matses, a collection of indigenous tribespeople who still hunt with bows and arrows in the roadless forests, six days east of Iquitos by boat. They are nicknamed ”the cat people” because of the tribal custom of threading a spray of plant fibres through their noses, giving the appearance of whiskers. More importantly, from a carbon trader’s point of view, they are the traditional owners of more than 400,000 square kilometres of pristine jungle.
The Matses communities are almost impossible to reach alone, and they rarely even meet among themselves. “That’s why they’re such an easy target,” explains Israel Aquise Lizarbe, a local representative from Peru’s main indigenous organisation, AIDESEP.
“They have no telephones, no electricity, and they certainly have no lawyer that can translate documents for them.”
Nilsson first travelled upriver from Iquitos in April last year to a rendezvous with tribal leaders, guided by a US conservationist who lives in Iquitos, Dr James Pantone, to whom he was paying a $200-a-day retainer.
At first, the Matses were intrigued by the arrival of this unknown, wealthy Australian. He promised that he would make them rich, and share half of any profits from using their land as a carbon sink with local people. He impressed them with a PowerPoint presentation.
But the draft ”joint venture agreements” he presented to tribal leaders had a clause saying that the contracts must be kept secret and that showing them to anyone else would constitute a ”material breach”.
According to a local press report, Nilsson told them the agreements – obtained by the Herald – were written in English and not Spanish because “the World Bank and the [United Nations] only recognise the English language and the law of England and Wales for carbon projects”.
Pantone soon began to suspect that Nilsson was not all he claimed to be, and relations between the pair soured. It also emerged that Nilsson’s Carbon Sustainable Resources Limited was not the international carbon trading entity it appeared to be, and had no actual office or staff. The company, registered in Hong Kong, has a website that, a year later, is still ”under development”.
Nilsson’s own former business activities also came under question. In 1990 he visited Nauru to seek investment in a company called Darling Downs Development. Several Nauruans, flush with royalties from that island’s phosphate industry, said they were enticed to invest in a property development near Mackay, Queensland. Nilsson was named in the Queensland Parliament by a Labor MP, Jim Pearce, in 1997, after an investigation into the deal started by the aggrieved Nauruan investors. The MP said that several investors from Singapore had also been sold land in Queensland by Nilsson’s company at inflated prices.
Nilsson claimed the affair was overplayed by the Queensland Labor Party, because of Nilsson’s association with the head of the state’s Premier’s Department, Peter Ellis. ”Jim Pearce is taking a pot shot at the government by aligning me with the co-ordinator general,” he said.
Some time after the Nauru scandal, Nilsson became interested in carbon offsets. He visited the Philippines and Malaysia to try and secure deals with tribal groups to use their forests as carbon sinks. But a project in the Philippines went astray when he fell out with Dr Carly Green, an Australian expert on carbon offsetting. Her agreement with Nilsson’s company was dissolved.
Nilsson said the national commissioner of indigenous people in the Philippines sent out an email telling indigenous people not to deal with him or Green, so no carbon offsetting took place.
Nilsson’s Carbon Sustainable Resources Limited apparently still has interests in Papua New Guinea, as the controlling entity of a company called Carbon Credit Corporation Ltd. The group’s documents say it plans to convince tribal groups in PNG to participate in deals to generate carbon offsets from rainforests. In PNG, the promised cash for carbon payments are referred to locally as ”sky money”.
All the deals were to have been conducted under a United Nations program called REDD – Reducing Emissions from Deforestation and Forest Degradation. It is a process designed to cut greenhouse gas emissions by preserving forests that would otherwise have been damaged or cut down.
Other operators in the REDD sphere groan at the mention of Nilsson’s activities.
Dorjee Sun, the chief executive of carbon offsetting firm Carbon Conservation, said cowboy activities damaged the industry as a whole. ”What’s most important about this market is it is reputation-based – a big company does not want to sustain brand damage by associating with cowboy operators,” Sun said.
”In some ways it is very much on a par with the mining industry – you can invest your money with a guy who has just come back with one nugget and says there is gold in them thar hills, and you probably won’t see your money again. Or you can wait until the area has been surveyed, the ground-proofing is done, and then make a calculation about a return.”
Sun is working on a project in Kampar, which is in Aceh province in Indonesia. It will become the largest REDD site of its type. He is discussing the financing of the project with Australian banks and companies that are on the government’s list of top 500 emitters – before the proposed move to an emissions trading scheme in 2015.
”They are either going to pay $23 per tonne in Australia or buy for $10 or $15 a tonne in Indonesia or somewhere else,” Sun said. ”I see the next phase of this industry as REDD 2.0. We have already had REDD 1.0, the voluntary market with cowboy operators running around. I think REDD 2.0 will be asking, ‘how can you integrate forest protection practices into your normal processes?”’
Chris Lang, who runs the carbon offset monitoring website http://www.redd-monitor.org, said he had grown accustomed to hearing about questionable offsets programs.
”I think the appearance of ‘carbon cowboys’ is an inherent part of any REDD model that includes carbon offsets,” Lang said. ”There is always the danger of carbon traders setting up shop and approaching remote villagers and promising them huge amounts of money for the carbon stored in their forests. ”The problem is particularly bad at the moment, given the absence of an international agreement on REDD which means that there is currently no regulation of this sort of deal.
”Nilsson has no experience of establishing carbon projects or forest conservation projects … His company’s website is still ‘under development’. That’s not illegal, of course, but it rings alarm bells when Nilsson is promising to set up multimillion-dollar projects.”
Back in Peru, Nilsson still has grand plans for generating carbon offsets from the land of the Matses, but the indigenous community has become deeply divided over his plans.
The two leaders who worked with Pantone to investigate Nilsson have been denounced by the tribe’s main leader, Angel Uaqui. Suspicion has arisen within other communities about the motives of Uaqui himself, who was flown by Nilsson and, in his own words, “put up in the best hotel in Lima”.
“When someone comes in from the outside and starts putting ideas in people’s heads, people aren’t going to be OK with it,” says Johnny Java, a member of the Buen Peru community.
“When someone’s not following the law of the tribe, there’s a lot that can happen. They’ll gather together and kill dissenters with machetes and spears.”
Daniel Manquid Jimenez, the leader of the Estiron community of about 130 people, never wore clothes until he was 12 years old.
His face lights up when he talks about his childhood in the forest and how missionaries forced him to wear shoes because of his clumsiness with an axe.
Jimenez said of Nilsson: “I have never had this kind of friend … He has come from so far away looking to benefit from us. He wants our forest; our only riches.”