Renoster’s Stance on Recent Brazilian Carbon Project Concerns

Renoster was deeply saddened to read the Washington Post’s latest article about carbon project manipulation in Brazil.

We’d like to try to summarize and contextualize some of the key take-aways from the report. Firstly, it centers around a ‘carbon cowboy’ named Micheal Greene who has prolifically enrolled Brazilian land in avoided deforestation projects for the past few years – with little regard for law, diligence, or local community consent.

Problems in Portel

The first part of the article talks about a series of Verra REDD+ projects in Portel Brazil that took place partially on public land. At the time, they were permitted because land tenure claims were murky in the region, and there were competing land claims. Arguably such projects should not have been allowed to proceed, but sadly the same can be said for most of the Amazon. Advocates might argue that these areas are at risk of land grabbing, and the government not managing this land means it is essentially open country (or that the project’s other land tenure claimants had a right to the land). Over time, the government cracked down and essentially made it clear that they are the one and only owner in these areas. The news about these projects broke last year, and at that time Verra placed these projects on hold.

One of the most disappointing revelations from this article is that when indigenous people were interviewed in Portel Brazil, they claimed that they did not give Free Prior Informed Consent (FPIC) for the project to take place on their land. This is new information, and to Renoster, much more damning than murky overlapping government land tenure claims. These people legitimately appear to have been defrauded, at least, they’ve given testimony to Washington Post reporters to that effect. Other project claims appear to have been fabricated, such as their claim that they were obtaining legal land tenure for indigenous people.

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Projects on Indigenous Land

The second half of the article dives into a new set of projects with a separate problem, created by another of Micheal Greene’s companies (Indigenous Carbon) on the Colombian-based Cercarbono/Ecoregistry carbon registry. These projects are taking place on Indigenous Land in Brazil – a special designation of land-type. In one of these projects (Juina, ER139), local leaders claim they were taken advantage of by Greene and called upon the Brazilian government to step in. Certainly this is quite damning for this project, where FPIC was not obtained and revenue sharing seems lacking. Though it is worth noting that some of these leaders seem to have a checkered past (themselves being involved with illegal mining), and that the project did get a sign off from the association that represents the tribe in commercial matters. Nevertheless, we doubt the project can reasonably move forward with so many local leaders speaking out against it now.

What happened next is where things get even more murky. In the Washington Post article, a statement was made from a government attorney managing this case saying the following:

“the residents themselves have no legal right to sell them [sic. carbon credits] or give them away”

We think the legal situation is more complex than is portrayed here. FUNAI, the Brazilian government agency responsible for managing indigenous affairs has made the following more formal statement:

“Funai advises indigenous organizations and leaders not to engage in negotiations and dealings involving the commercialization of carbon credits on indigenous lands, suggesting that contracts should not be entered into until criteria and guidelines for the inclusion of indigenous lands in the voluntary carbon market are defined.”

Here we can see that their official position is one of advice. However, the agency does require that external commercialization contracts be vetted by them first, so as to prevent exploitation, something that was clearly not done in the case of these projects. Indeed, even to visit the land with a commercial proposal require’s FUNAI to be notified under current regulations. FUNAI’s rationale for this is that they want to prevent indigenous territories from coming under excessive control by third parties (like project developers), they want to ensure that traditional values are maintained, that FPIC was followed, to prevent abusive contracts between asymmetric parties (such as wealthy project developers and underserved people), and that revenue is fairly shared with the communities.

In some sense though, it seems unlikely to Renoster that FUNAI (or a government prosecutor) has the sole legal capacity to prevent carbon projects on indigenous land. Enshrined in Brazil’s constitution are strong legal rights for indigenous people. For example, Paragraph 2 of Chapter 8 of the Brazilian constitution says this:

“The lands traditionally occupied by Indians are intended for their permanent possession and they shall have the exclusive usufruct of the riches of the soil, the rivers and the lakes existing therein.”

So the notion that all projects taking place on Brazilian indigenous land are illegitimate seems to fly in the face of the constitution. Numerous indigenous groups have spoken up against this prosecutor’s position, claiming that their rights are being violated. Renoster is currently consulting with both FUNAI and Brazilian indigenous rights groups to see if this has merit, or if it’s prosecutorial overreach. Not allowing indigenous communities to enroll for carbon crediting programs to help preserve their land could be bad for the environment and communities. Between 2019 and 2021 illegal deforestation on indigenous land increased by 138% compared to the previous three years. Of course, the solution is not to let Michael Greene run amuck – but a moratorium would also result in suffering.

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Renoster’s Reviews & Mitigation Efforts

Renoster has reviewed a number of these projects and is working hard to get to the bottom of these issues. Firstly, there’s another complication: some of these areas were very clearly at risk of deforestation, and satellite imagery shows that those risks have been mitigated possibly thanks to the projects. From a numeric perspective, we find some (but not all) of these projects to be justified and reasonable in their carbon claims. However, without doubt, we missed some of the risks associated with these projects. We were not aware of the most severe FPIC issues (such things are nearly impossible to ascertain without an impartial ground survey – something that is incredibly expensive and often impossible to do impartially). We were also unable to forecast FUNAI’s recent declaration on carbon credits in indigenous areas.

The projects described in the first half of the Washington Post article are old news and largely written off by the market (not that this makes them acceptable, crimes were seemingly committed against indigenous people). Projects described in the latter half of the article pose a bigger question for us. For one thing, Micheal Greene and Indigenous Carbon have quite a few other projects, and some of them seem impactful to us. 

For example, Rio Jacarecanga (ER130) is designed to prevent gold mining that has been demonstrated to have poisoned more than 120 community members with mercury. The project has been successful at preventing deforestation to date, and its credits appear to be entirely valid from a carbon perspective.

However, there seems to be contention even within the Munduruku community that inhabits the project about the project’s value. Some statements made by community members (including the Purusu Indigenous Association and the Munduruku Indigenous Council of Alto Tapajós) are strongly supportive of the project, stressing that they have the right to manage their land for carbon, and stressing the value of the project in preventing deforestation and further poisonings. Statements made by a different community group, The Wakoborun Association of Munduruku Women, claim that the project is exploitative and that FPIC was not obtained. One of the tasks that we will be undertaking over the coming days is reaching out to these groups and others to determine if either viewpoint represents a large majority.

The task is made more difficult because of the history of mismanagement and potentially exploitation at Micheal Greene’s companies. Even if the Munduruku leadership consider their project worthwhile, having Indigenous Carbon continue to manage and profit from it is less than ideal. More ideally, the carbon markets would be more comfortable with removing and replacing problematic project developers from otherwise good projects.

Renoster has evaluated a number of projects that are well justified, but mismanaged. We envision a world where some of the market’s biggest flubs would be allowed to reset with new management – less predatory groups who use modern financial mechanisms such as trusts to manage their budgets and ensure equitable benefits sharing. Currently there is no mechanism to remove and replace project developers, we hope that situations such as the Munduruku’s can be a call to action. Supporting the tribe’s fight against illegal mining continues to be incredibly important.

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