Forestry and Poverty Project Newsletter – Issue 33, March 2012

WWF Tanzania (I): Corruption allegations surface

The World Wide Fund for Nature (WWF) has recently found itself at the centre of controversy in Tanzania, with allegations of corruption and the forced eviction of local communities.

WWF Tanzania was hit with allegations of corruption  involving alleged misappropriation of Norwegian aid funds.  The funds were part of a four-year, USD4.4 million WWF-administered programme, Strengthening Capacity of Environmental Civil Society Organizations.

The project was launched in 2008 and aimed to ‘empower civil society organisations’ to help improve the contribution of fisheries, forestry and wildlife to national economic growth, poverty reduction and people’s livelihoods.

Similar ‘capacity building’ projects in Indonesia have been used to establish what can be best described as ‘front groups’ for international NGOs operating at the local level.  One such project in Indonesia funded by the Critical Ecosystem Partnership Fund delivered few tangible results other than the establishment of local advocacy groups attempting to achieve international NGO objectives.

Norway’s aid agency Norad immediately suspended disbursements under the programme once the allegations surfaced. It also suspended funding to another WWF project in Tanzania, the US$2.5 million REDD+ Readiness project. According to WWF’s latest press release, four projects have been linked to the corruption allegations thus far. Total budget for the four projects are estimated at USD 15.4 million.

WWF’s Tanzania country director has since resigned and eight employees have been terminated in connection with the embezzlement.

Auditing firm Ernst & Young has been asked to investigate the irregularities. Media reports indicate that the largest expenses have been for external lecturers, hotel expenses and various allowances for seminar participants, as well as grants for organisation activities and youth groups. Reportedly, up to 70 per cent of the budgets in the program were allocated for per diem payments.

The British Department for International Development (DfID) is also awaiting the completion of the Ernst & Young audit report to decide on its future course of engagement with the local WWF organisation in Tanzania.  DfID is a major sponsor of WWF Tanzania.

WWF in Tanzania (II): WWF and forced evictions

The corruption allegations against WWF emerged soon after the organisation was accused with being responsible for mass evictions in the Rufiji Delta Mangrove Forest.

During 2009-2010, WWF conducted a pilot project in the Rufiji Delta with the Tanzanian Forestry & Beekeeping Division (FBD), with funding from Norad. In October last year, the FBD carried out a mass eviction of local inhabitants in the Rufiji delta citing illegal rice cultivation as the reason.

WWF claims it never endorsed the evictions and that there is no link between the WWF project and the eviction. However, WWF has struggled to contain the backlash from local communities. In addition, Norad’s funding of organisations that evict people from traditional lands has been questioned in Oslo. In November, a highly critical op-ed appeared in Norway’s leading newspaper, Aftenposten, blasting WWF for its activities on the Rufiji delta.

The eviction allegations emerged at the same time an article appeared in the refereed academic journal Global Environmental Change. The article, ‘The REDD Menace: Resurgent protectionism in Tanzania’s mangrove forests’ caused further controversy in Tanzania and Norway. The authors, US academics Betsy A. Beymer-Farris and Thomas J. Bassett, argue that forest-reliant communities and community-based resource management in Tanzania are being displaced by “fortress conservation” under WWF REDD projects.

A letter of response from WWF Senior Advisor Neil Burgess and WWF Tanzania Country Director Stephen Mariki followed the release of the article. Stephen Mariki has now resigned in connection with the recent corruption scandal and the Head of WWF Norway also stepped down in March this year for undisclosed reasons.


World Bank Repeats its illegal logging mistakes

The World Bank’s new report on illegal logging indicates that it remains misinformed over global levels of illegal logging.

The report, Justice for Forests: Improving Criminal Justice Efforts to Combat Illegal Logging, claims high levels of illegal logging and rampant illicit earnings from illegal logging activities. The report argues that countries should address illegal logging through the criminal justice system and better use of financial intelligence.

The paper opens with allegations that there is compelling data and evidence to show that illegal logging is a worldwide epidemic, stating that in some countries up to 90 percent of all the logging taking place is illegal. The report further claims that these activities help generate illicit earnings amounting to about US$10–15 billion annually worldwide. These numbers are cited from reports by Chatham House, Seneca Creek and Greenpeace.

Yet the contention that illegal logging is rampant is propagated by the use of unreliable data sources, including the use of biased data from environmental groups. The extent of illegal logging is highly uncertain. Few studies have attempted to measure the global extent of illegal logging, and even then their methodologies have major drawbacks and the data used is questionable.

The Seneca Creek report suffers from serious flaws, including the use of regional estimates, and is almost ten years old. The Chatham House study states that the incidence of illegal logging has decreased by between 50 per cent to 75 per cent, with estimates of illegal logging in Indonesia as low as 40 per cent as compared with the 70 per cent to 80 per cent estimated by Seneca Creek and stated in the Bank report.

Yet these values are also likely to be significantly overestimated, as the methodology relies on unscientific methods such as perception surveys, and wood-balance modelling which can result in large variations in estimates of illegal logging. Chatham House itself acknowledges the limitations of measures of illegal logging activity.

The contention that 90 per cent of logging in some countries is illegal is based on a report by Greenpeace in Papua New Guinea (PNG), which fails to present hard evidence as to the apparent illegality of operations. Moreover, the report does not cite a single case under which a forestry company in PNG has been prosecuted for supposed violations.

The World Bank report itself fails to define clearly what the drivers of illegal logging are. A closer look at illegal logging on the ground indicates it is much more complex than the Bank assumes.

Forest clearing in Indonesia for example is often performed by local communities that wish to grow crops or generate income. The proceeds of the timber sales (often locally sold) raise capital for crop establishment. The ‘illegality’ is often in disputed land tenure claims.

Tenure problems in Indonesia are compounded by a lack of a centralised titling system and non-harmonised spatial planning at four government levels. This is further complicated by overlapping or incomplete legislation and regulation. None of this is mentioned in the Bank report.

The report also attempts to attribute around 80 to 90 per cent of global deforestation to ‘illegal logging’. It states that the key factor is consumer demand for ‘expensive’ timber. Yet in 2007 the UNFCCC reported that around 14 per cent of global deforestation was caused by commercial timber extraction – whether legal or illegal. The UNFCCC’s conclusion was – and still is – that agriculture is responsible for more than 80 per cent of deforestation.

The World Bank recently released a document outlining the methodology it will adopt to evaluate the effectiveness of its forest policy. The last time the Bank evaluated its forest policy in 2002, it noted the negative economic impacts its policies had on the forest sector in developing countries, mainly due to a heavy-handed focus on conservation.

In a recent op-ed, a former World Bank Vice President stressed that the Bank needs to change its culture, from one that exaggerates successes and hides failures to one that promotes debate and learns from past failures. Getting basic facts right would also help.

Greenpeace refuses to cooperate in APP police investigation

Greenpeace has refused to take part in a police investigation against Asia Pulp and Paper (APP), raising questions about the veracity of the group’s allegations of illegal logging.

Earlier this month Greenpeace accused Asia Pulp and Paper (APP) of having ramin timber in its supply chain. Similar accusations were made by WWF in 2006. Then, as now, the trade of ramin is controlled by a quota system under CITES (Convention on the International Trade of Endangered Species).  Its harvest and export is permitted under certain conditions.

Greenpeace claims it has evidence that supports its claims, and asked Indonesian authorities to investigate. However, Greenpeace refused a request by Indonesian law enforcement to participate in the investigation.  A Greenpeace spokesperson said it believed the evidence of the report stood on its own merits, and that the police investigation would be limited in scope. Greenpeace simultaneously accused the Indonesian police, customs officials and forestry ministry of being too slow in their investigation.

The refusal by Greenpeace has been criticised by Indonesia Police Watch (IPW), a local NGO that campaigns against police brutality and institutional corruption. Neta Pane, a spokesperson for IPW, said that Greenpeace should participate in the investigation and questioned why they publicly released the report to media, but refuses to participate in legal proceedings.

The criticism has emerged at the same time WWF front group Eyes on the Forest has accused APP of reneging on a deal it made with creditors in 2004. A debt restructuring agreement was brokered between APP and export credit agencies (ECAs) and private banks. The agreement included an Annex on sustainable sourcing. However, the agreement has never been made public; there is no way of determining how the sustainability annex materially affected the broader commitments. Given APP’s debt levels at that time, most creditors would have been happy to see a return on their dollars.

The question remains as to why WWF would re-hash these accusations now. WWF has invested heavily into destroying APP’s reputation and attacking Indonesia’s forestry industry, but the fact remains that APP is a successful company that is globally competitive and Indonesia holds a significant comparative advantage over other timber exporting nations. APP and Indonesia should only expect these attacks to continue.


WRI: Indonesia’s moratorium will not significantly reduce emissions

A new report from the US- based World Resources Institute (WRI) indicates that Indonesia’s forest moratorium will have little impact on reducing Indonesia’s emissions.

Last year Indonesian President Yudhoyono placed a two-year moratorium on the award of new licenses in primary forests and peatlands (see here).

The moratorium was part of the broader US$1 billion Indonesia-Norway partnership to support Indonesia in reducing its greenhouse gas emissions from deforestation and forest degradation. It was also part of an even broader pledge by Indonesia to reduce its greenhouse gas emissions by 26 percent by 2020.

The WRI report analyses the potential impact(s) of Indonesia’s moratorium.  The report uses the national Indicative Moratorium Map (IMM) to estimate the above and below ground carbon stocks of different forest types both within and outside the IMM boundaries.

According to the report, the moratorium covers 43.3 million hectares (ha) made up of primary forest (28.4 million ha) and peat land (14.8 million ha). This is more than 40 per cent of all forests, and a little under a quarter of Indonesia’s total area. The authors estimate that the area contains 25.3 gigatons of carbon (92.8 Gt CO2e ). By way of comparison, Indonesia’s estimated GHG emissions in 2005 were 2051 GtCO2e, according to some sources.

Subsequently, WRI concludes the moratorium will not support Indonesia’s 26 percent goal. Three main reasons underpin their conclusion. First, the exemption of existing concessions means that around 3.5 million ha of primary and peat forests inside the IMM are not protected. Second, the status of about 15.6 million ha of secondary forests included inside the IMM is unclear, i.e. whether they are to be protected or not under the moratorium. Third, enforcement of moratorium boundaries is weak; many areas are still subject to encroachment, with 100 illegal clearings taking place within moratorium areas in its first three months.

WRI’s findings beg the question: Where is the 26 per cent going to come from?

“No point continuing” Australia’s REDD project in Indonesia

The Australian Government has drastically wound back its REDD (reduced emissions from deforestation and forest degradation) program in Kalimantan.

According to Stephen Howes, former chief economist at AusAID, Australia’s development assistance body, Australia’s key AUD47 million REDD project in Indonesia has produced few results and is unlikely to any time soon.

Howes’ comments were published in a paper on the Australian National University website. According to Howes, Australia’s flagship program in Kalimantan – the Kalimantan Forest Carbon Project – has had its project area reduced by around 90 per cent; has been suffering long delays (including failure to define baseline emissions); and had no local impact whatsoever on conversion of forest land for crops.

The paper also points out a serious flaw in the assumptions underlying the entire project, and the REDD concept more broadly: the prospect of REDD funding arriving any time soon is not realistic, meaning that there are few incentives to stop converting forest to generate income.

Howes conclusion is that there is “no point continuing along current lines.” He also recommends that a similar project in Sumatra be dropped completely. Howes does, however, think that the original scale of the project be restored and that AusAID should continue to foot the bill until global REDD funds arrive.


Australian illegal logging bill draws ire from trading partners

The Australian illegal logging bill is facing broad opposition from Australia’s trading partners, particularly Indonesia.

In a submission to the Australian government, Indonesia has indicated it will take the bill to the World Trade Organization if its exports come under significant threat. The Indonesian opposition to the proposed law follows objections from Canada, New Zealand, Malaysia and Papua New Guinea.

Indonesia’s stance on the bill has emerged at a fractious time for the two trading partners. Australia suspended beef exports to Indonesia after pressure from the animal welfare lobby; Indonesian subsequently cut Australia’s import quota by almost half following the resumption of trade.

According to Australian Trade Minister Craig Emerson, Australia will ensure that the bill is WTO consistent.


Danzer withdraws from FSC-certified operations in the Congo

Swiss-based timber group Danzer has announced it is selling its FSC-certified operations in the Democratic Republic of Congo.

Danzer’s withdrawal follows a complaint by Greenpeace to the FSC Executive Board under its ‘rules of association’ regulation, which allows the FSC Executive to arbitrarily withdraw FSC certification from any certificate holders, even if it is complying with its management standards. FSC’s ‘rules of association’ has been used previously to prevent APP using FSC’s ‘Mixed Sources’ standard.

Danzer’s operations in the DRC have been plagued by more than five years of allegations of corruption, bribery and human rights abuses, primarily by Greenpeace. The ongoing campaign by Greenpeace prompted Danzer to adopt FSC certification standards. However, FSC certification seemed to increase allegations of wrongdoing by Greenpeace rather than reduce them.

The new operator of the concessions in the DRC, Groupe Blattner Elwyn, requested that the existing FSC certificates be cancelled immediately; it has also been reported that it will not pursue FSC certification in the future.

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