Jago Wadley
Senior Forest Campaigner
Environmental Investigation Agency (EIA)
www.eia-international.org
Norwegian Woods:Exploring Norway’s Contradictory Financial Incentives in
South East Asia’s Land Use Sector
19th Illegal Logging Stakeholder Update Meeting 10th February 2012Chatham House
But seriously…
Medco Energi International Kulim Malaysia Bhd
LG International Corp. Kuala Lumpur Kepong Bhd
Golden Agri Resources (GAR) IJM Plantations Bhd
Indah Kiat Pulp & Paper Corp Tbk Pt IJM Corporation Berhad
London Sumatra Indonesia Tbk Pt Kim Loong Resources Bhd
Astra Agro Lestari Tbk Pt TSH Resources
Astra International Tbk Pt Genting Plantations Berhad
Bakrie Sumatera Plantations Tbk Pt Genting Berhad
Wilmar International IoI Corporation Berhad
Ta Anne Holdings Indofood Agri Resources Ltd
Sime Darby Berhad Noble Group
United Plantations Bhd United Malacca Berhad
WTK Holdings Berhad International Nickel Indonesia Tbk Pt
First Resources Ltd Unilever Indonesia
While NICFI is a leading REDD+ Donor in Indonesia, the GPFG is heavily invested in a Who’s Who of deforesting companies that control about 9 million hectares of plantations land in Indonesia in particular & South East Asia more widely…
Lobbying for Reform of the Fund (1):
• May 2010: EIA research identifies circa $430 million of GPFG shareholdings in logging & plantations firms in Indonesia & SE Asia, including companies we were actively researching
• 19th July 2010: 1st EIA letter to Norwegian Finance Ministry, raising concerns and highlighting 30 major companies controlling 9.4 million hectares of plantations and forest concessions
• 25th August 2010: 1st Finance Ministry response to EIA: it’s not a problem, ethical council has it covered & we sold our Samling Global shares, so don’t worry
• August 2010: EIA Press Release: Samling is “tip of the iceberg”. Flag up 3 companies actively clearing forests in Papua & West Papua, Indonesia’s Last Frontier
• November 2010: Meeting with Council on Ethics in London: Explain the scale of the problem, not sure we are believed
• March 2011: 2nd EIA Letter to Environment Ministry: (no reply)
• June 2011: EIA Briefing release “Caught REDD Handed: How Indonesia’s Logging Ban was Breach on Day One and Norway will Profit”
• June 2011: EIA/RFN meeting with Secretary General of Finance Ministry in Oslo. Propose strategic study into GPFG impacts on forests and cross-departmental coordination so as to meet Cancun Agreements commitments. No commitment given
• October 2011: EIA/RFN letter & Policy Recommendations Briefing to Prime Minister Jens Stoltenberg: Calling for him to form a cross departmental working group, & commission a strategic study into the role of the GPFG in driving deforestation. Letter forwarded to Finance Ministry
• November 2011: Finance Ministry reply to RFN: The Fund is not a policy tool, and is designed to make money, so we wont engage in cross-ministerial deliberations on the Fund.
• 9th Jan 2012: Second EIA/RFN letter to Prime Minister Jens Stoltenberg: Report that Ministry of Finance will not work with Environment Ministry. Environment Ministry has responsibility for Norway’s UNFCCC commitments, not Finance Ministry. No reply to date.
Lobbying for Reform of the Fund (2):
Norway’s REDD+ Incentives Conditionalities in Indonesia
Indonesia / Norway LoI on REDD+ (US$ 1 billion)
US$ 200 million in conditional grants, for which Indonesia must:
•Develop National REDD+ Strategy with Civil society (& Indigenous peoples’) participation that “addresses all key drivers of forest and peatland emissions”
•Create REDD+ Coordination Agency reporting to President
•Develop & establish MRV strategy & framework & financial management mechanism (by Dec 2013)
•Designate a REDD+ Pilot Province & Institute a 2 year moratorium on new conversion permits
•National capacity building & policy implementation
•Establish a degraded lands database
•Stop illegal logging and address land tenure conflicts
US$ 800 million in compensation for verified emissions reductions from 2013
(NOTE: $800 MILION NOT GUARANTEED - ONLY IF INDONESIA PRODUCES MRV’d EMISSIONS REDUCTIONS OF EQUIVALENT VALUE)
Norway’s Pension Fund Incentives Conditionalities in Indonesia
Invest Norway’s oil money in Indonesia as we see fit
Conditions:
•Make billions of dollars
•?
No, really, that’s literally it - make billions of dollars.
(Disclaimer – We are not a policy tool, and we are responsible investors)
Cancun Agreements Decision 1/CP.16, paragraph 68: Encourages Parties to: “find
effective ways to reduce the human pressure on forests that results in greenhouse gas
emissions, including actions to address drivers of deforestation”.
Late 2011: EIA/RFN advised PM Stoltenberg to form a cross-departmental working group & commission a strategic study into the Fund’s role in driving deforestation.
PM’s Office forwarded our letter to the Finance Ministry, who replied, saying:
•The Fund is not a policy tool
•It is designed to make money
•We wont engage in cross-ministerial deliberations on Fund management
Norway’s UNFCCC compliance rests with Finance ministry, which is “beyond policy”.
It seems unlikely Norway will meet this UNFCCC commitment on Drivers of Deforestation – despite being the poster-child of REDD+…
Conclusions, Considerations, Questions
• Either Norway’s Left hand (GPFG) is ignorant of what it’s right hand (NICFI) is doing – or the Fund is exploiting Norway’s foreign & climate policy for profits at the expense of forests, the climate, and people.
• Norway could make 50% more from Asian plantations companies over 5 years than it might pay Indonesia for REDD over a similar period. (lets leave Norway’s Indonesian coal investments for another presentation…)
• The Norwegian Finance Ministry refuses to reform the fund to comply UNFCCC & Norwegian goals on drivers of deforestation, & the President & parliament deem this acceptable
• Despite its efforts to drive forward REDD+, Norway’s Environment Ministry & NICFI remain utterly powerless to rein in or influence the Fund
• REDD+ partner countries such as Indonesia can game these contradictions, at the expense of REDD+ (and who can blame them, looking at the figures)
• Norway is not REDD Ready and wont be until GPFG policy coheres with the NICFI
• If the world’s REDD+ Superhero is leading by this example, what hope for the wider global REDD+ & climate change response?
