Fictitious commodities: the forest carbon market in PNG

A recent investigation reported in the Guardian newspaper suggested that more than 90% of the rainforest carbon credits issued by Verra, the not-for-profit organisation that administers the Verified Carbon Standard (VCS), do not represent real emission reductions. The Guardian investigation makes no specific mention of Papua New Guinea, but a recent ABC Four Corners program about “carbon colonialism” has begun to fill that gap. Here we provide more detail about the latest twists and turns in PNG’s forest carbon market.

The table below summarises the information contained in the PNG project proposals listed on the Verra registry.

The April Salumei project is the sole survivor of a raft of forest carbon schemes that were being proposed in 2009, when the PNG government first decided to clamp down on voluntary forest carbon projects and evict the so-called “carbon cowboys” from the country. By 2012, this was one of five pilot projects listed in the draft National Forest Plan produced by the PNG Forest Authority, and it was awarded a VCS certificate in 2013. Most of the documents currently contained on the Verra website date from that early period, although some of them seem to have been updated in 2017.

When PNG’s Climate Change Management Act was passed in 2015, the government’s ownership of the April Salumei project was transferred to the Climate Change and Development Authority (CCDA), whose minister was still promising to allocate more government funding to the project in 2019, but only if the local landowners would agree on a benefit distribution mechanism. An organisation called Tasman Environmental Markets responded to the Four Corners program by declaring that the project “has been delivering transformative, positive outcomes for climate, nature and people for almost 13 years”. However, there is no evidence of landowners receiving any benefits at all since 2015. Verra has recently suspended its registration of the project pending further submissions from the proponent.

New Ireland Hardwood Timber (NIHT) should have earned more than USD8 million from the sale of more than 1.3 million carbon credits since the Topaiyo project was registered by Verra. People interviewed by the Four Corners team said that no landowner in New Ireland had so far received more than PGK200 (about USD57) from NIHT, which seems to be the amount they received up front for signing pieces of paper.

Although the project supposedly covers an area of 110,000 hectares in two provinces, the carbon credits sold to date originate from a much smaller area – less than 11,000 hectares – on the west coast of New Ireland, which NIHT calls its “first project activity instance”. While NIHT claims that the larger project area contains 47,000 “beneficiaries”, the number of people with customary rights to the land within this smaller area could be more like 470.

The agreement that covers this “instance” was signed by representatives of a single clan based in two villages. However, villages in this part of PNG typically contain the members of several clans, while a single clan typically has members dispersed across several villages. Representatives of other clans and residents of other villages in the same area signed up to a large-scale forest conversion concession in 2015, at the same time that NIHT obtained the signatures of a few men who are probably not the only customary owners of the area that is meant to be protected.

Even these few men have had second thoughts about their agreement with NIHT, while other landowners in the area have since thrown in their lot with ForCert, a civil society organisation which already has one forest carbon project under development in East New Britain.

The NIHT people may only have been collecting the signatures of what are known in PNG as “paper landowners”, but they have at least made visits to local villages. The same cannot be said of Kanaka Management Services (KMS). The Four Corners team revealed the absurdity of the first KMS project in PNG, but the second one is even more preposterous, since it purports to cover an area that would make it the largest forest carbon project in the world.

We submitted a lengthy critique of both projects when Verra invited public comments in 2022, but expert local knowledge does not appear to count for much in the fabrications of the global forest carbon market, where KMS was voted “best project developer” in one set of voluntary carbon market awards for 2022.

In March last year, PNG’s environment minister announced a moratorium on voluntary forest carbon projects. This was simply a reiteration of what had been the national government’s policy for more than a decade. During that time, the CCDA played host to a range of donor-funded projects and teams of consultants who were supposedly helping to build the different elements of a national policy framework. Workshops continue to be organised, and local NGOs continue to engage in the policy process. But these activities have no impact on how project proposals make their way through Verra’s registration process.

The problem is that CCDA and Verra both currently lack the capacity to tell the difference between a project that has genuine community support and may actually benefit local landowners, and a project that is simply designed to benefit the companies that buy and sell carbon credits.

image_pdfDownload PDF

Andrea Babon

Andrea Babon has a PhD in international environmental governance from Charles Darwin University and is an independent researcher and consultant.

Colin Filer

Dr Colin Filer is an honorary professor at the Crawford School of Public Policy, Australian National University.

Bryant Allen

Bryant Allen is an honorary associate professor in the Department of Pacific Affairs at The Australian National University.

20 Comments

  • Thank you for sharing this piece on the complexities of carbon credit projects in PNG. It’s quite alarming to see how the supposed benefits of these projects rarely reach the local landowners. The investigation highlights critical oversights and the urgent need for more transparency and accountability in such environmental initiatives. It’s essential that local communities are genuinely involved and benefit from projects affecting their lands.

    • It is clear from various comments receive that some folks are still hoping to gain some benefit from voluntary forest carbon schemes while others are concerned about the risk of being ripped off. I have not yet seen any evidence to suggest that the risk has been reduced since we published our paper, but maybe the Climate Change and Development Authority will get its act together…

  • Papua New Guinea especially up in the Highlands have huge rainforests and it’s a better place for carbon deposits. I’m interested in facilitating the registration of rainforest in Highlands of Papua New Guinea.

  • I, Mr. Martin Itamai, from Bougainville, and I am interested to know more about the concept of carbon market in Papua New Guinea.

  • btw, as part of a current household, agric, nutrition survey we’re conducting we’ll be including some questions related to land use choices, including setting aside forest areas for carbon offsetting … it may be too hard, or theoretical (depending on prices and different periods of commitment), or individuals may feel they cannot respond over community owned resources … but, hopefully it will elicit something useful …

  • Hi all, Iam Kenn Mondiai, Iam a Forestry Officer been in the sector for 35+ years.

    In my honest opinion all Projects (REDD+, Green Carbon and Blue Carbon) are like a CARGO CULT ….. Carbon Promoters and Marketers are cheating our People in PNG, with their Sweet Talks of BIG MONEY….and in actual fact they are not delivering on their sweet talks.

    They and their people in the middle are the ones benefiting most due to the ignorance of our people.. and off course the Public Servants in Government and the Politicians.

    The next thing that we must all know, it that, the forest and trees were on the peoples land for generations and because of this so called Carbon Trade and Offsets ….we have Foreigners flooding our shores and going into rural remote areas trying to setup carbon Projects.

    Carbon Trading and Offsets does not do anything good for the Land and Resource Owners (People), the Promoters of Carbon Trade are actually not doing anything …..they are fooling our people in collusion with the Government Agencies and Politicians.

    The PNG Government MUST STOP CARBON TRADING and look at setting up more Community Conservation Area Projects where the people will be incharge and promoting sustainable agriculture, ecotourism and Government putting into the rural communities infrastructure. Our people must not be misled , fooled and exploited by Foreigners on some Cargo Cult idea that does no good for Planet Earth.

    Carbon Offset is a TOTAL LIE ….. The Big Polluters keep pumping GHG into the Atmosphere and Local Communities in PNG are promised BIG MONEY, but the Middle People Cheat them and give them Peanuts ….at the end of the day, POLLUTION KEEP GOING INTO THE ATMOSPHERE.

    • Hi my name is Patrick Topital TOLIAS from the Weitin Valley area of Namatanai District. I have witnessed the exploration of our indigenous peoples by carbon companies like NHIT and Chinese loggers. All of them are just crooks that prey on vulnerable people from remote under developed areas.

      Sir, are there any genuine opportunities for our people?

      • Hi Patrick. I gather that community leaders from Kait village on the west coast of the Konoagil LLG area have sought assistance from national NGO ForCert to develop a sustainable land use plan and forest conservation scheme as an alternative to the large-scale projects that you mention. If you do not know people from Kait village, perhaps you could contact ForCert to get more information.

  • Hi, I am from Papua New Guinea within the Salumei REDD project area. I have never seen any benefits for resources owners and God as a land owner.

    VERRA must come over to Papua New Guinea and verify April salumei REDD project.

    Why Steven Hooper and his Papua New Guinea college stole from the poor land owner when his county is well developed and they earn so much money from this poor people.

    • Thanks Lde. We are also puzzled by the fact that the April Salumei project remained on the Verra registry for such a long time, and we do not know why the registration has only been suspended this year.

  • I read with interest your blog as it mentions our project. Somewhat like tilting at windmills. The 4 Corners program had a pre-conceived agenda that did not really incorporate what is actually happening on the ground in PNG. We have 18 major discrepancies with their program (all sent to them before they aired their show).
    It is interesting that the show on carbon credits didn’t mention the Forcert REDD + Project verra.org project number 2483. They only interviewed people that Ivy from Forcert presented to them – not one person in favor of the project, not one positive comment.
    Now let’s debunk what you have stated.
    1. Wish we would have made $8m USD from the initial sales, we sold worldwide and our gross revenue was closer to $5m and net revenue closer to $3.5m.
    2.There were no upfront payments as it is against FREE PRIOR INFORMED CONSENT
    3.All of our contracts are with Incorporated Landowner Groups as required by PNG law.
    4.The process for a carbon credit project is that the initial area of 11,000 ha stands in for the entire area of 330,000 ha of which 110,000 ha are utilized to create the carbon credits. Based on the 11,000 ha if the entire area has the same carbon stock, then the credits are what we were issued. The 2020 vintage added the Sor ILG which has higher carbon stock which increased the number of credits, because of logging in the Nanio PAI instead of getting an additional 600,000 credits for 2020, we were issued 119,000 for the Nanio area.
    5. The PAI for Nanio has 972 people living their and the entire area was over 15,000. We also paid 20% of the funds to the project accounts of the ILGs. We also paid some clan members from ENBP.
    6.The 47,000 clan members comes from the original plan that was determined by the people who live in ENBP. Forcert determined to stop the project and assisted the people from Kait to sue in Namatanai district court to take control of the ILG. The management of the ILG lived in Kait, which is in Ward 14, however not within the boundary of the Nanio ILG. The Nanio people had lived on the land for over 65 years. The court ruled in June of 2021 that the ILG management if they didn’t live in the project area could not dictate to the customary landowners as to what to do with their land. That court case changed the entire process as most of the people (almost 30,000 of them lived in ENBP and didn’t live in New Ireland).
    7.The large scale concession that you refer to was Forcert (remember the stars of the 4 Corners program – Ivy who accused us of using false information which was untrue – is the manager of Forcert) and that was in Kait and is about 3,000 ha.
    8.None of our ILGs have thrown in with Forcert – again if they are a carbon credit project, why didn’t 4 Corners speak about their project?
    9. We have close to 80% support in New Ireland, have signed a contract with the New Ireland Provincial Government, the Climate Change Development Authority and the East New Britain provincial Government. Forcert isn’t even registered with the New Ireland Provincial Government.
    10.We have the signatures of the ILG Chairmen as listed with the lands department.
    11. The CCDA visited the Nanio PAI twice, once after a letter from Forcert that went to Verra, the Prime Minister and anyone else that they could think of. Verra hired Baker McKenzie out of Australia to do their investigation and it was determined that NIHT had done FPIC correctly and Peter Dam and Forcert were competitors and not credible in this case. Letter from the CCDA to Peter Dam and Forcert from the Managing Director. Had sent a copy of that letter to 4 Corners also.
    12. However at the Austrailian Institutes meeting in February titled Carbon Integrity – funny the name Integrity – in a panel discussion with the 4 Corners reporter sitting their – Forcert made the proven false accusation one more time that NIHT did not do FPIC correctly, which both Forcert and the 4 Corners Reporter knew was untrue.

    • Hi Stephen, I understand the government and community context makes the project very challenging. As I understand, the initial concept of the REDD+ was that communities could receive an income stream that improves their livelihoods for protecting the forest, paid for with carbon credits.

      Given you understand all of the complexities, particularly the number of people receiving payments and all the operational funds required for auditing, certification etc., do you think that REDD+ can achieve this initial goal of real livelihoods improvements?

      This is a genuine question, we have looked at the potential for working with communities in Indonesia to plant bamboo for carbon credits and income and your opinion and experience is important as a forerunner in the industry.

      • Hi Sarah-

        I really do, however, the needs are much greater than just the capital. The intent of ours and other REDD + projects is to help the ILGs utilize the capital they receive to create other livelihoods that will provide a monthly income also. Our plan is that 20% of the 56% of net revenue due to each ILG is used for projects that impact the entire clan positively. We had 4 clans purchase boats with the funds they received from the first distribution and others have built community centers. The remaining 80% goes to each individual.

        Our project is directed towards the individuals as it is their land, their trees. We looked at it as if we made a deal like this in the states, what would we expect. We adjusted it a little for the costs of doing business in PNG, however, even with the reduced price of our credits this year, we still think the distribution will be over k400 per person – twice the annual family income from the New Ireland Provincial Government numbers. It would have been closer to k800 before the 4 Corners Article. The strange thing is that the carbon stock and the credits are still the same, however, the market perception of what they are has been altered.
        The question on the bamboo is the carbon stock (total value of the planting) and how much that is. If you think about replanting a qwilla tree, it grows over 100 ft tall and can be over 100 cm dbh. If you have 20 to 25 of these per ha plus other trees, how many bamboo trees are needed to get to the same carbon stock?

    • Hi Stephen,

      Thanks for clarifying the income NIHT received from the sale of carbon credits. Given this information wasn’t publicly available we had to make an educated guess based on incomplete information.

      Can you confirm how much of the gross revenue has been passed on to the customary landowners, when and in what form (eg direct cash payments, investment in community infrastructure)?

      We have been trying to understand the NIHT Topaiyo project but there are a number of gaps and/or contradictory information in publicly available documents. I had some email discussions with George Gates in September 2022 and requested the following documents from NIHT:

      1. Documentation on the logging permit or concession type held by NIHT (to understand the legal basis of the avoided planned deforestation project type)

      2. Copy of the ‘Konoagil Logging Plan’  (to understand how the baseline ‘with logging’ scenario was established and therefore how emission reductions from not logging were calculated)

      3. Copy of the Benefit Distribution Mechanism and clarification of the percentage of revenue from the sale of carbon credits going to landowners and what payments have been made to date.

      We are planning on writing a longer Discussion Paper containing more detail on all the various carbon projects in PNG and would welcome copies of these three documents, as well as copies of documents you mention.

      Many thanks
      Andrea

    • We do not know why the Four Corners team made no mention of the ForCert forest carbon project in East New Britain. We did not discuss it in our blog post because of space constraints. We have concentrated on activities in the Konoagil local-level government (LLG) area in New Ireland Province because that is where NIHT has its first ‘project activity instance’.

      The only large-scale logging concession in that area that we are aware of is the Konoagil (or Lak-Kandas) Integrated Agro-Forestry Project, which is based on a Forest Clearing Authority that was granted to a company called Millionplus Corporation in 2015. We know from SGS records that this company has exported about 580,000 cubic metres of timber from this concession since 2016. Unfortunately, we do not know the geographical boundaries of this concession because the PNG Forest Authority has not seen fit to divulge this information. Therefore, we do not know how it might intersect with the area covered by NIHT’s first ‘project activity instance’ in the Kandas area. We only know that the FCA covers about 44,000 hectares of land, and that the developer has promised to plant about 25,000 hectares with oil palm once the forest has been cleared.

      I have discussed the formation of incorporated land groups (ILGs) in the Konoagil LLG area in a previous discussion paper (‘Two Steps Forward, Two Steps Back: The Mobilisation of Customary Land in Papua New Guinea’). According to the National Gazette, 17 land groups from that area applied for incorporation between 2015 and 2017, when the forest conversion concession and the forest carbon project were being canvassed to local landowners, and ten of them had actually been registered by the end of 2018. The gazettal notices do not tell us the reason for their incorporation or the nature of any agreements that they might have entered into. None of the notices relate to a group by the name of Nanio.

      We do not believe that it is possible to assert that 80 percent of the population of New Ireland support any specific form of development. Indeed, from my own experience of conducting fieldwork in that part of New Ireland, I doubt whether one could say that 80 percent of the residents of a single council ward would agree to a particular development option. If Mr Strauss would care to supply us with the names of all the ILGs in the Konoagil LLG area with which he has signed some agreement, then we can check the National Gazette to see whether they have been registered by the Lands Department. We are aware that NIHT has engaged a consultant to find out which land groups own which areas of land in the vicinity of its first ‘project activity instance’, but we understand that this work has yet to be completed. We should be delighted to receive copies of any court judgments relating to these matters. Our general approach to finding the truth about what is going on in PNG is to triangulate all available sources of information.

      • I should correct my earlier statement that the Konoagil Integrated Agriculture Project is the only large-scale logging project currently harvesting logs in the Konoagil LLG area. Two old concessions in the area have recently been ‘reactivated’ in apparent violation of the Forestry Act. Both are operated by a company called Joinland Management, which is closely related to Millennium Corporation. Between them, these two logging projects have exported about 265,000 cubic metres of logs since 2020, and the latest SGS report tells us that three quarters of this volume was exported in 2022. Which is even worse news for anyone attempting to claim carbon credits for avoided deforestation and forest degradation in that area.

    • My friend, FPIC is a lengthy process. It is not a one day process. It involves all landowners, not a few on behalf of everybody else.

      It is a right, a stand alone one.

      Your company’s work on a carbon project in the Bainings has a whole lot of rights transgressed on. A whole lot of processes are not being followed. Whether your operatives and the fake ILG personnel in involved know about these is a big question. The huge area of tribal lands illegally registered by the fake ILG is the biggest land fraud that easily, without contest, attracts the a formidable legal challenge that covers community entry by your company operatives and that of the fake ILG.

      Your points just do not hold water and they are out of context as to the content of the report.

      • I come from the Highlands. I have been researching and following carbon literature over a number of years. The discussions here are educational. Let me add this: our vast rain forests are virgin. Apart from perhaps hunting, people have not touched these forests. In the coast yes, logging is a concern to preservations but where I hail its virgin forest. Yet, seeing cheats by middle people, am inclined to drop my work for my people. I am targeting infrastructure as the first component. After which monetary payments can be considered. Government has a duty to be on guard with all these I guess.

Leave a Comment