The Colombian state took on the task of adapting international social and environmental safeguards to its local reality to ensure that carbon projects respect the rights of communities who protect forests. However, today, five years later, these norms have remained on paper and authorities do not require investors developing carbon credits to respect these safeguards, nor do they properly accompany ethnic communities in negotiations with private companies, nor have fulfilled their promise to launch a public reporting system and a complaints channel.
When, a decade ago, the idea of creating payment schemes for the environmental services provided to the world by the forests of tropical countries, such as those in Latin America, the concern also arose as to how to ensure that this money actually reaches the Indigenous and peasant communities that care for these ecosystems. And that their rights are not violated but, on the contrary, strengthen them and their governance of forests that are strategic to mitigate the global climate crisis.
The solutions to that fear were the social and environmental safeguards: seven ground rules agreed at the 2010 UN climate summit in Cancun. They seek to ensure that initiatives to reduce carbon dioxide emissions linked to deforestation work well and effectively protect these communities and biodiversity. This, because often the inhabitants of these forests are vulnerable ethnic minorities.
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Colombia was a diligent student. It did a judicious and ambitious job in adapting these safeguards to its national reality. But then it left the task half done. It failed to make those ground rules mandatory for the private carbon market projects that have proliferated in the last five years and it has not fulfilled promises to create a safeguards reporting system and a complaints mechanism. If it acted on these pledges, it might have avoided some of the problems detected in various Redd+ projects, the name given to initiatives in which private investors may sell credits on the global market for the carbon that these forests prevent from going to the atmosphere and thus opening up funds for the communities caring for them and tax breaks for their buyers. These are several of the findings by the Latin American Center for Investigative Reporting (CLIP), Mongabay Latam and La Silla Vacía, with support from the Pulitzer Center’s Rainforest Investigations Network.
“There is a regulation vacuum of which the government is aware,” Maritza Florián, a climate change specialist at the environmental NGO WWF, told this alliance of journalists. Eight other persons who have worked on drafting the safeguards or regulating the carbon market, both in government and environmental organisations and multilateral bodies, agree with her assessment.
They all agree that the past two Colombian governments have failed to regulate how private Redd+ projects — which are selling credits to companies as an alternative to them having to pay a carbon tax — should incorporate these safeguards. They have also not overseen whether they are in fact doing so. The carbon market has been one of the climate finance mechanisms at the center of discussions on implementation of the Paris climate agreement, whose COP 27 kicks off this Sunday in Egypt.
This reality is further aggravated by the fact that, as reported by CLIP and its allies, the government has also failed to accompany Indigenous and Afro-descendant communities as they negotiate with private actors who want to structure such projects in their collectively-owned territories.
Rules for a fair green game
Tropical countries that wanted to bet on the Redd+ carbon scheme, whereby developed nations could reward those that are halting deforestation, came away from the 2010 UN climate conference in Cancun with four clear tasks.
If they wanted to implement any Redd+ activities, they would have to develop a national strategy, a monitoring system for their forests, a rate that quantifies and projects the deforestation trends in those forests (known as forest reference emission levels or 'FREL') and a reporting system on how the initiatives address and respect safeguards to protect those local communities and biodiversity.
Colombia, as a tropical country with almost 600,000 square kilometers of forests and a dedicated student, started ticking off each of the boxes. It designed a public policy, called 'Forests territories of life', which it officially submitted to the UN Framework Convention on Climate Change in 2018. It strengthened its forest monitoring system, headed by the Institute of Hydrology, Meteorology and Environmental Studies (Ideam).
It established its deforestation reference level for the Amazon biome in late 2014, calculating the historical average of the previous five years and adding an additional 10% — which it termed 'national circumstances' — in anticipation that an eventual peace agreement with the FARC would increase logging in the territories from which the guerrillas would leave. Five years later, in January 2020, it supplemented it with the deforestation rate for the whole country, applicable for the period between 2018 and 2022.
In the last task, the reporting system, Colombia began with a foot on the accelerator.
For five years, a coalition of civil and government actors worked on a 'national interpretation' that brought the seven global safeguards down to a Colombian context. Officials from these organizations — which included WWF, the Natural Heritage Foundation and the UN-Redd program of the United Nations — traveled thousands of kilometers of rivers and jungles since 2011, talking with local communities and gathering their input. Resources for this participatory process came from the World Bank through the Forest Carbon Partnership Facility (FCPF) fund, UN-REDD (a consortium of three UN agencies) and the German development agency GIZ.
The result of this effort was a document with 15 rules detailing the ideal functioning of climate change mitigation initiatives in Colombia's forests, from preserving the environmental services provided by the ecosystems — such as running water or climate regulation — to monitoring that deforestation is not transferred to other areas.
The bulk of the national safeguards focus on what the relationship between projects and the local communities that host and implement them should look like: they should provide them with clear information about their implementation and be accountable to them; never modify their land rights; guarantee both their full and effective participation and their free, prior and informed consent; acknowledge and strengthen their governance structures and traditional knowledge systems; and, of course, distribute their profits in an equitable manner.
In the way they were intended, they were a bucket list of good practices that every Redd+ program and project should comply with. Although many of these already appear in national legislation or in Constitutional Court rulings, with exceptions such as benefit sharing which is not covered by any of these, it was an effort to think about how they should apply specifically for climate change mitigation initiatives. To bring them closer to communities, the Environment Ministry and international aid agencies have published several primers and infographics explaining them since 2017.
When the time came to regulate how projects would incorporate them and who would oversee this, Colombia took its foot on the breaks.
Two programs overlap
In 2017, the government of then-President Juan Manuel Santos created a carbon tax that companies must pay to offset the environmental footprint of the fossil fuels they use. At the same time, it created an alternative route for those who wanted to avoid paying it: buying carbon credits, each of which is equivalent to one ton of carbon dioxide, one of the greenhouse gases that drives climate change.
This tax incentive sparked interest in these credits — which are usually purchased at a lower price than the tax — and triggered the development of the fledgling market for private carbon projects. Dozens of companies and organizations flocked to the country's jungles and forests, in the Amazon but also on the Pacific coast, the Orinoquia grasslands and even the Andean moors, in search of communities that protected forest cover and were interested in partnering with them to put credits on sale.
Just before that, the Colombian government had created its own state-run Redd+ program, called Vision Amazonia, which began operating in 2016. Instead of selling individual carbon credits, under this scheme the country calculates the net results of its fight against deforestation in the entire biome each year and three donor countries — Norway, the UK and Germany — pay for them. The government then spends that money on halting deforestation with Indigenous and peasant communities, as well as with environmental authorities. In 2019, Colombia and its three donors extended the concept nationwide to pay for its overall results. The new deal could bring the country up to 260 million dollars.
This simultaneous wager has been positive, mobilizing millions of dollars for conservation of Colombian forests. However, failures in their implementation have brought problem. First, both models — the state-led and the private one — have overlapped. An example of this is the project in the Selva de Matavén reservation in the Amazon’s northeastern corner, between Vichada and Guainía, whose economic results — as reported in an investigation by CLIP and allies in 2021 — had to be deducted from the funds Colombia receives from international aid to avoid double counting, despite concerns in the environmental sector and in the international community that they could be inflated. Specialized organization Carbon Market Watch reached a similar conclusion.
And, second, although initially the social and environmental safeguards were intended for state-run programs (although the Cancun COP decisions speak of all "Redd+ activities"), Colombia ended up deciding that part of its implementation of this financial mechanism would be through private projects.
Despite having designed the national interpretation of the safeguards and applying them in Vision Amazonia and other state initiatives like BioCarbon and Heart of the Amazon, which together have delivered five periodic reports on their compliance to them, the government has not regulated the safeguards for private carbon projects nor has it drawn a line on how they should be applied in each project.
The national policy defines the safeguards as "the ground rules for REDD+ to function adequately in the territory", but only says that one of its goals is to "follow up on the application of social and environmental safeguards", without detailing how this would occur or what specific responsibilities would correspond to whom. The white paper on curbing deforestation approved in mid-2020, which should be the guide for all public policy, only pledges to implement a "strategy for accountability of forest management" that incorporates the safeguards, without giving any details.
Ultimately, Santos’s second government and Duque’s failed to make the safeguards obligatory.
To be or not to be, Renare's existentialist dilemma
There is only one place where Colombia did timidly incorporate safeguards: the government's platform of mitigation initiatives, called Renare.
The Environment Ministry, in its 2018 resolution regulating the carbon sector, established that all Redd+ projects must report how they comply with safeguards in Renare, including information on local communities’ consent. It announced that it planned to launch Renare in September 2018 and that projects would have three months from that time to upload that information.
Two years later, in September 2020, the Ministry published a Renare technical guide further detailing that requirement. It did so with an obligation and a suggestion: It instructed all initiatives to upload a report that "describes how the project addresses and complies with international safeguards", but made the task easier by stating that it merely "recommends following the structure of the national interpretation of safeguards as good practice". Once again, the government failed to make the Colombian version of the safeguards it had promoted mandatory.
Neither Renare nor the technical guide are publicly available today, as the platform has been down since the beginning of Gustavo Petro's government for maintenance. Its quick return has been made even more difficult by a September ruling of the State Council that ordered Renare’s temporary suspension, while it resolves a lawsuit against the resolution that regulates the entire private carbon market. With that suspension, the lack of transparency worsened further as there is no other site where citizens can download carbon initiative documents or know for sure which projects are operating countrywide. The Petro government has not publicly commented on the issue.
Beyond these setbacks, there is an issue of substance: The Colombian state seems to be undecided on what it wants to do with Renare or how binding it wants to make it.
Its announcements on the tool that gathers all the public information on the market have been contradictory. In October 2019, two years late, the Environment Ministry and Ideam announced its "beginning of operations". A year later, in September 2020, they launched it again and underscored that it is "active as of this date", kicking off the three-month clock for projects to register all their information. Three weeks later, the same ministry issued a resolution reversing its position and promised that it would indicate "through an official communication yet to be issued that the platform is enabled for registration".
With that, the clock stopped again. Until August 2022, when Iván Duque's government ended, there was no further public announcement on the validity of Renare.
This has meant that not only is it unclear whether or not Renare is officially operational, but as a consequence, most projects are not reporting their compliance with safeguards, and it is more difficult for the Ministry to monitor them and identify any irregularities. In turn, citizens have no way of following up on them.
Another serious omission, given that precisely one of the safeguards speaks of being able to count on "transparent, accessible and timely information related to Redd+ actions".
This journalistic alliance asked Petro’s Environment Ministry, via its press chief, what is its position on the effective entry date of Renare and how many private carbon projects have complied with the obligation to report on the safeguards. At the time of going to press, no response had been received.
No safeguards, no paradise
In the same turmoil are two tools designed to monitor mitigation initiatives, which the Colombian government pledged to create and which could help it detect, almost in real time, any problems.
The safeguards compliance reporting system, which is among the commitments under the Cancun Convention and which promised to publish updates on the socio-environmental performance of each project, is fully designed on paper but its technological implementation has not yet been contracted.
A team led by Fondo Acción — an environmental NGO that has been implementing Redd+ projects in partnership with a dozen Afro-descendant community councils in the Pacific — delivered to the Environment Ministry the plan for the execution of this tool. This work — again with resources from the global FCPF fund executed through the World Bank in a project that ended this June — included everything from what information the tool would contain to how it would interact with other digital tools in the sector, such as Renare or the environmental licensing platform. Even the terms of reference for contracts were ready, but the government has not yet taken the step to create it.
Something similar happened with the grievance mechanism, which seeks to allow persons and communities to request information on projects or report problems. This tool, which was not required by the convention but by the World Bank, was not created in the end. The government decided that the Environment Ministry’s general channels of public attention, like its toll-free telephone line, its citizen attention email and its online complaints form, would apply to private carbon projects. Meanwhile, Vision Amazonia does have its own complaint mechanism and in its last report on safeguards to the Climate Change Convention reported 76 petitions and requests for information.
Although neither the reporting system nor the complaints channel exist, the Colombian government publicly stated without any shame that they do in its application for global funds from the Green Climate Fund two years ago. It argued that its commitment to the Cancun safeguards is evidenced by the fact that it had already created a National Safeguards System that includes the national interpretation of these ground rules, as well as the information platform to monitor compliance and the complaints channel.
In other words, the rules adapted to the national context that it has not adopted and the tools that, as of 2022, are not operational.
Projects with problems
The inexistence of these tools may help explain why the Colombian government has not been aware of or has not taken action in the wake of reports on possible irregularities in several private carbon projects.
For example, two projects of the Waldrettung company — one of which is active and the other did not materialize — sowed division within Indigenous communities in Vaupés and Guaviare, as reported in an investigation this year by CLIP in partnership with Rutas del Conflicto, Mongabay Latam and La Liga Contra el Silencio.
In the Vaupés Great Reservation, the second largest in Colombia, several leaders of Indigenous associations claim not having been informed of the project proposal before its implementation, which could indicate failures in its compliance with the safeguards on effective participation and free, prior and informed consent. The company — which claims to be a subsidiary of a German multinational that does not appear in the commercial registry of that country — defends that it entered into the contract with the reservation’s legal representative as the figure that legally groups them, that it obtained the consent of its assembly and that it has consent forms signed by 3,237 of the 4,156 families that live there.
In addition, the Matavén project — the largest in Colombia — might be in breach of the safeguard that stipulates that all Redd+ initiatives must be complementary or compatible with the objectives of national forest programs. This is because the initiative promoted by the company Mediamos F&M has used a projected deforestation rate that is five times higher than the rate Colombia established for the Amazon and approved by the UN, thus indicating an even higher logging risk than in reality and allowing it to sell a higher number of credits, as investigations last year by CLIP and Carbon Market Watch revealed.
Another project in Vaupés led by Corporación Masbosques, an Antioquia-based NGO that counts several public entities among its partners, has been the subject of a protection action by the current authorities of the territory where it is being carried out. Several Indigenous leaders of the Pirá Paraná claim that the proposal was never taken to the highest internal governing body of the territory and that the person who signed the contract was no longer their legal representative at the time, according to an investigation by CLIP and allies published last week. For this reason, they argue that Masbosques and three companies involved in the Baka Rokarire project violated their fundamental rights as Indigenous peoples, in a case that could end up going all the way to the Constitutional Court.
Beyond what happens with this lawsuit in court, the Pirá Paraná case shows possible failures not only in compliance with the safeguards on participation and consent. The way it has been implemented also sows doubts about it falls awry of the safeguard on acknowledging and strengthening existing governance structures. Masbosques argues that it agreed on the project with the legitimate authorities of the territory recognized by the national government at the time and that it always acted "in accordance with the legal reality of the moment". Several of the Pirá Paraná communities support their initiative, highlighting the strong social fracture.
This reality underscores the need not only to apply those rules drafted when the voluntary carbon market had not yet boomed, but also to incorporate the lessons learned from many of these Redd+ projects.
In fact, in their protection action, the current authorities of the Pirá Paraná ask the judges that "the regulations on the operation of Redd+ in Colombia incorporate human rights standards, since it is not constitutionally viable that the measures called to protect them in environmental matters end up achieving the opposite".
The private market and the critical minister
Given the government's lack of definition or inaction regarding safeguards, Redd+ projects are now governed by the private standards chosen by project developers for their projects and established by certifying companies such as the U.S.-based Verra or the Colombians Cercarbono, BioCarbon Registry (known until this year as Proclima) and ColCX. It is they who must ultimately verify compliance, together with the auditing firms that the projects have to hire every few years to evaluate their performance.
In other words, the government delegated verification of safeguards compliance to private actors who receive money from the projects they certify or audit.
The new government of Gustavo Petro brought a more friendly stance to the regulation of the carbon market. New environment minister Susana Muhamad described the market in an interview upon taking office as "the wild west" and, although she has not yet announced speficic measures, promised more regulation to prevent abuses.
At least three initiatives could give them ideas on what to regulate and monitor in detail, according to environmental sources consulted by this journalistic alliance.
The Climate Action Law approved last December gave more teeth to the Ministry so that, in cases where it detects possible irregularities or receives credible complaints, it can "request complementary information, visit the place of implementation of the initiative and transfer it to the competent authorities so that may take the necessary actions". How it uses these new powers remains to be seen.
In addition, the international environmental organization WWF, which has worked for years on safeguards, is set to launch next week at the UN climate conference in Egypt a guide detailing fair deals that it drafted after conducting a financial analysis of projects, talking to communities and actors in the chain. With this booklet, it seeks to prevent — in its words — that "certified carbon becomes another of the ephemeral bonanza in the Amazon (...) that have not meant an improvement in the welfare conditions of its inhabitants".
Its recommendations to reduce the risk of unfair treatments include that contracts should have flexible term clauses (and in no case should last longer than 30 years without periodic review mechanisms), that they should be available in local Indigenous languages, and that they do not forbid any traditional community activities. It also proposes that the economic benefits be invested according to a collective and not an individual logic, that the implementation and transaction costs of the credits are made transparent, and that there be a strategy for local inhabitants to gradually take on a greater role in the administration of projects.
Finally, they propose a significant change in the way their profits are distributed, moving away from the now common model of pre-established percentages over time (such as 50-50 or 60-40) to one where profits are calculated based on the private party's initial investment, deducting the real costs of technical intermediation of the projects and acknowledging that these costs fall after the first credit issue. This, they argue, would maximize the benefit to the communities that preserve forests.
Finally, the previous government convened a commission of experts on the carbon market, which has been meeting since June and brings together six people who are familiar with it, including several who worked on its regulation. This commission — which the Petro government has not yet decided whether it will continue, although it has already added new experts such as the congresswoman and former National Parks director Julia Miranda — has also addressed safeguards in its internal discussions, according to two people with first-hand knowledge.
"With the state saying 'Kids, behave yourselves' nothing is going to happen in the market," says one source who worked on the design of the safeguards and was granted anonymity given their work at a multilateral body. "This will only improve if all the actors in the carbon chain improve their standards."
The new climate bill, the WWF booklet and the expert commission could give impetus to the government to finally make these safeguards obligatory for private projects and, above all, that it identifies and corrects those where, as shown by journalistic investigations, they have already caused conflicts or sown doubts.