Growing frustration among indigenous leaders with forest carbon scheme LEAF

For over a year, Levi Sucre Romero, coordinator of the Meso-American Alliance for People and Forests (AMPB), has been trying to get to the bottom of LEAF; to understand how this new forest financing scheme will work and whether it might benefit or harm indigenous communities.

Launched on Earth Day one and a half years ago, LEAF aims to leverage big private money to save tropical rainforests in the name of combating climate change. It is designed as a platform where companies can buy emission reductions credits to meet their net-zero commitments, while at the same time channelling billions of dollars into tropical countries to help them fight deforestation. The two governments – Norway and the United Kingdom, which have together put up USD 500 million in aid financing to guarantee the scheme - have made indigenous peoples’ role in protecting these forests a key selling point.

Read more about the donors’ price guarantee for LEAF.

But for indigenous leaders like Romero, the mechanism has so far been a huge disappointment. Rather than being central players in the design and implementation of the scheme, the Meso-American alliance has struggled for months to engage. This new forest carbon trading mechanism turns out to be tortuously complicated and dominated by mainly US-based NGOs, consultancies, and donors. Key technical and legal documents on the LEAF web site are in English. Several indigenous representatives Development Today has spoken to share these concerns.

“It has been very difficult for indigenous organisations to get information about LEAF,” Romero says.

According to a policy brief by Rights and Resources Institute and McGill University, most forest land targeted for offsets overlaps with areas customarily held by indigenous peoples, local communities, and Afro-descendant peoples. Only a fraction of community lands and territories are legally recognised by governments, and ownership of carbon rights, a totally new commodity, is not yet explicitly defined. Some observers worry that LEAF will provide further incentive for governments to assert ownership over rights to carbon in forests held by indigenous peoples and capture the benefit of this new trade.

“How will LEAF ensure that territorial rights, the right to participation, and carbon rights are respected in our countries?” Romero asks. “If there is no mechanism to secure these, we will be the victims of our own governments and they will decide about our forests without us being involved.”

LEAF - Lowering Emissions by Accelerating Forest Financing - is managed by the New York-based entity Emergent, which acts as a broker between governments looking to sell credits and potential corporate buyers. It adheres to a standard, known as ART-TREES, that is based on the Cancun safeguards, a set of UN-sanctioned guidelines for ensuring full participation of indigenous peoples and local communities in activities that affect the forest lands they inhabit. LEAF represents a strategy to expand the concept of reducing emissions from deforestation and forest degradation (REDD+). 

To have their credits certified by ART-TREES, governments must show they have complied with the Cancun safeguards. Once verified, credits can be sold via Emergent to a LEAF buyer. In principle, the messy business of clarifying land tenure and carbon rights is sorted out before the credits enter the LEAF market. Among the companies that have signed up to LEAF as potential buyers are Amazon, Unilever, and Nestlé.

Read Development Today’s analysis of Emergent.

Engagement

Romero objects fundamentally to LEAF’s “hands-off” approach to resolving the brutal political battles between governments and communities that characterise forest politics in many tropical countries. “They say they have the Cancun safeguards, but how will they implement them?” he asks. From his point of view, there is no proper monitoring and verification mechanism in place. He says the set up could leave communities as vulnerable to governments as they have ever been and could facilitate a wholesale capture of the forest lands that indigenous peoples manage and protect. He warns that it could lead to an increase in disputes and evictions of indigenous peoples from their lands.

AMPB is an alliance of 11 organisations in Central America. According to AMPB, indigenous and forest communities have historical influence over 50 million hectares of forest in the region. The alliance first reached out to LEAF a year ago at the climate summit in Glasgow, the COP26. Along with indigenous organisations from the state of Acre in Brazil, they held discussions with Emergent. Over several hours, they communicated their concerns and questions about LEAF and conveyed their principles of engagement: respect of tenure rights, direct access to climate finance, respect for cultural practices, no criminalisation of indigenous communities.

The indigenous leaders expected a response from Emergent following this meeting, but the months passed, and none came. “One year later, our concerns remain the same,” Romero says.

 It is not the responsibility of Emergent and LEAF to consult with an indigenous group on their involvement in a particular host jurisdiction. Our engagement … is purely to build their understanding, gain information, guide information, maintain the dialogue.

                  - Philip Brady
                   Managing Director, Marketing & Communication at Emergent

Commenting on Emergent’s engagement with indigenous peoples, Philip Brady at Emergent says to Development Today: “We have to be really clear that Emergent and the LEAF coalition’s role in terms of engaging with indigenous peoples and local communities is to make them aware and assist their understanding of the process and, yes, to gain their support, because that is crucial. But it is not the responsibility of Emergent and LEAF to consult with an [indigenous] group on their involvement in a particular host jurisdiction. Our engagement … is purely to build their understanding, gain information, guide information, maintain the dialogue.”

Several observers point out that adherence to the Cancun guidelines requires that indigenous communities be actively engaged in the design of climate initiatives, not simply add-ons after mechanisms are established. Moreover, resources – for things like travel and networking, translation, legal advice and keeping track of a fast-evolving market - also need to be made available to make it possible for indigenous communities, among the most marginalised on the planet, to have a chance of engaging meaningfully with initiatives like LEAF.

LEAF bears signs of being hastily put together without a meaningful consultation process with indigenous peoples before the initial launch, says Andrea Johnson at the Climate and Land Use Alliance. Now that it exists though, she says, it might give indigenous peoples some new leverage.

“When push comes to shove, it comes down to who is on the ground evaluating whether a particular jurisdiction has actually implemented the Cancun safeguards. So, let’s support communities to leverage this process so that they can get something out of it,” Johnson says.

CLUA has provided a USD 150,000 grant to ART-TREES for the development of training materials on safeguards for indigenous groups and civil society organisations.

Another US-based NGO Forest Trends has produced a series of booklets and seminars on LEAF in Spanish and Portuguese aimed at indigenous groups, mainly in Latin America. These provide information tailored to indigenous peoples and local communities.

Meanwhile, one year on, the Meso-American indigenous alliance is pushing for a fundamental change in the architecture of LEAF.

A meeting in New York

On the side lines of New York Climate Week this fall, the alliance convened a meeting with LEAF’s broker Emergent and the standard bearer ART-TREES and proposed the creation of a mechanism for dialogue between governments and indigenous and local communities on forest ownership, carbon rights, and the sharing of benefits earned from the sale of forest carbon credits. The model is based on experiences from Costa Rica, Romero says, where a “road map” mechanism has been important in strengthening indigenous people’s rights.

According to the alliance’s proposal, four parties would participate in the road map for LEAF: the government, indigenous communities, Emergent as the entity that will arrange for the sale of the credits, and ART as the entity that must guarantee the standard is met.

Romero recounts: “After an intense dialogue, we managed to convince them that before buying credits from a country, it is necessary to agree on a road map. Emergent indicated that they would be involved in managing the construction of the road map with the governments.” ART-TREES, on the other hand, needed to evaluate the proposal, he said.

Romero believed important progress had been made. After the meeting, he told Development Today that the parties had come to agreement about the need for a road map to be in place prior to the sale of carbon credits, to define issues and timelines related to indigenous peoples’ involvement.

But when Development Today asked Emergent about this, Brady said no such agreement had been reached. “Emergent did not agree to manage the construction [of the road map] … Emergent called for an open and ongoing dialogue with [the Meso-American alliance], which [they] agreed to … Emergent explained the LEAF process and made clear that consultations are the responsibility of governments,” he said.

We regret if they are not going to honour this agreement. We will continue at the dialogue table.

                   - Levi Sucre Romero
                   Coordinator of the Meso-American Allicane for People and Forests

Romero insists on his version. “There seems to be a lack of coordination within Emergent,” he says to Development Today. “That was the agreement we reached. We regret if they are not going to honour this agreement. We will continue at the dialogue table … to insist that things must be done correctly, respecting the rights of indigenous peoples and local communities.”

Development Today also asked ART-TREES for comment about the indigenous alliance’s proposal. The Secretariat of ART-TREES is housed at Winrock International in Little Rock, Arkansas. Christina Magerkurth, Managing Director of the secretariat, underlines that ART-TREES is not part of the LEAF Coalition. “We are completely separate organisations,” she says.

Regarding the meeting at New York Climate Week, Magerkurth says ART is involved neither in the jurisdictions’ processes to sell their credits nor in discussions between governments and indigenous peoples’ groups. “It is our understanding … that [the Meso-American alliance] is interested in finding mechanisms so that jurisdictions can develop the REDD+ initiatives in full respect of safeguards, and building enabling conditions in the jurisdictions is key to achieving that,” she says. Magerkurth notes that “all these processes happen before the validation and verification stage.”

Part of the frustration stems from an architecture that indigenous leaders describe as opaque and non-inclusive. Romero says the division of labour in LEAF remains unclear to him. “We still don’t understand the relationship between ART-TREES and Emergent,” he says. “Emergent says that ART-TREES is totally independent and has nothing to do with them. But Emergent only buys credits [approved by] ART-TREES. So, this proves that there is a relationship.”

According to the LEAF Coalition’s Engagement Strategy on indigenous peoples and local communities, a Stakeholder Engagement Group, managed by Emergent, was established in May 2021 and has been meeting regularly since then. It is composed of “LEAF coalition members and leading international NGOs and other stakeholders.” The purpose of the group is to “conduct outreach activities on the ground and share the key issues involving indigenous peoples and local communities.”

But no indigenous peoples’ organisations are part of the group. “I cannot understand how it can be that indigenous peoples are not included in that group,” Romero says.

Documents seen by Development Today show that the members of the group include WWF, Environmental Defense Fund, Rainforest Foundation Norway, Forest Trends, UN REDD, and the Climate and Land Use Alliance (CLUA), as well as representatives of the three governments - Norway, the UK and the US - and the global company, Amazon. The NGO members were asked to sign a non-disclosure agreement by Emergent to be able to participate. Brady says the purpose of the non-disclosure agreement is to protect commercially sensitive information about companies in LEAF. There are no public minutes of the meetings.

The LEAF architecture

Notwithstanding this lack of transparency and representation, the main LEAF donors have repeatedly emphasised that recognising indigenous peoples’ rights is key for the survival of the world’s rainforests and for tackling climate change.

Science shows that indigenous peoples are the best guardians of tropical forests

                   - Norwegian Climate Ministry
                   Press release, September 22, 2022

“All the evidence tells us that indigenous peoples and local communities are more effective at reducing deforestation and preserving and restoring biodiversity than governments and agencies can accomplish through mere protected areas,” said Lord Zac Goldsmith, former UK Minister of the Foreign, Commonwealth & Development Office at a recent seminar on donor funding for indigenous peoples organised by the Rights and Resources Institute. “After sounding the alarm for decades it must generate mixed feelings to see the rest of the world finally begin to wake up.” Echoing this conviction, a September press release from the Norwegian Climate Ministry states: “Science shows that indigenous peoples are the best guardians of tropical forests.”

Read more about the donors’ funding pledge for indigenous groups

While LEAF is mainly run through US-based organisations and consultancies, the American government has provided only symbolic support to the initiative. Norway has single-handedly underwritten the LEAF architecture, investing NOK 100 million in aid financing in creating Emergent and another NOK 42 million in setting up ART-TREES. The grant for ART-TREES runs out next month. They are hoping for an extension of Norwegian support for 2023-2025, Magerkurth says.

Twenty corporations have expressed interest in spending another USD 500 million on buying forest carbon credits. In total, LEAF has so far mobilised USD 1 billion and hopes that the first emission reduction purchase agreement will be signed next year. Emergent indicates that these numbers will be updated at the upcoming COP27 climate summit.

Though ART-TREES is not formally part of the LEAF architecture, the whole system rides on credits being verified by ART-TREES before they can be sold. Governments must show they have both reduced deforestation and followed the Cancun safeguards. If they cannot demonstrate this, “credits will not be issued until evidence is provided,” Magerkurth says.

It is important to note, however, that the ART-TREES Secretariat does not do the verifying itself. This is carried out by consultants approved by ART-TREES. Their job is to “ensure the government’s application is in conformance with all requirements listed in TREES, including for carbon accounting and [Cancun] safeguards, and that the claims made … are complete and accurate.” ART-TREES currently lists two American consultancy firms as approved verification bodies: Aster Global Environmental Services, Inc. based in Ohio and S & A Carbon, LLC based in Oregon.

“The whole idea of LEAF is to demonstrate to these countries that there is a strong demand signal from corporations,” explains Brady. “If they can generate high integrity forest credits to the standard required by ART TREES - both environmental integrity and [indigenous] safeguards - there is a potential to unlock significant levels of finance. It is designed as a carrot. It is designed to catalyse this market because it doesn’t exist at the moment. We are looking to create something really new here, which could hopefully have a major impact.”

Levi Sucre Romero says Emergent seems to be more focused on markets than on rights. “They seem confused about the realities of indigenous peoples. Having consultations with indigenous peoples is not just about hiring a consultancy. If LEAF only offers ‘carrots’ … we could be facing an imminent ‘blood carbon’ buy-out since there is no guarantee that governments will respect the rights of indigenous peoples in commercial transactions of carbon.”

Please send comments/tips to Ann Danaiya Usher: adu@devtoday.no

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