A report released yesterday by Oxfam International documents how more than 22,000 people in Uganda were evicted to make way for a carbon offset tree plantation established by a London-based firm called New Forests Company. While this is not a REDD project, it provides an early warning of how “standards” and “safeguards” can be willfully ignored.
New Forests Company (NFC) was formed in 2004. The company now has projects covering a total of 90,000 hectares in Uganda, Tanzania, Mozambique and Rwanda. Investors in the company include the Agri-Vie Agribusiness Fund, which in turn is backed by the World Bank’s private sector lending arm, the International Finance Corporation and the European Investment Bank. The Hongkong and Shanghai Banking Corporation (HSBC) owns about 20% of NFC and has a seat on its board. These investors have social and environmental standards to which NFC should comply.
Oxfam’s report, “The New Forests Company and its Uganda Plantations”, can be downloaded here (pdf file 208.7 KB). The story has been reported in The Guardian, The New York Times, The Wall Street Journal and on AlJazeera.
NFC has been certified under the Forest Stewardship Council since 2009 – despite the fact that less than two months after the certificate was awarded, more than 10,000 villagers petitioned Uganda’s Lands Minister to stop NFC from evicting them from their land.
This is a company that, at least superficially, appears to be doing all the right things. Oxfam describes FSC as “the global gold standard for forestry best practice”, yet Oxfam’s report found that about 22,500 people were evicted to make way for NFC’s plantations. None of them has received any compensation.
NFC denies that so many people were evicted and denies that company employees were involved in the evictions, instead blaming the Ugandan authorities for the evictions.
The problems are serious. Oxfam International’s report, written by Kate Geary and Matt Grainger states that,
Today, the people evicted from the land are desperate, having been driven into poverty and landlessness. In some instances they say they were subjected to violence and their property, crops, and livestock destroyed. They say they were not properly consulted, have been offered no adequate compensation, and have received no alternative land.
NFC claims that people vacated the land “voluntarily and peacefully”. But one of the evicted people told Oxfam that,
“My land was taken by the New Forests Company. People from New Forests came with other security forces and started destroying crops and demolishing houses and they ordered us to leave. They beat people up, especially those who could not run. We ran in a group, my children, my grandchildren, my wife and me. It was such a painful time because the eviction was so forceful and violent.”
NFC describes the people evicted as “encroachers” who were “illegally occupying land leased to an independent third party, NFC”. The government also describes them as “illegal encroachers”. The people evicted explained to Oxfam that they did have lawful entitlement to the land. Some of them had lived there for more than 40 years. Others were Second World War veterans and their descendants who were “allocated the land in recognition of service”.
SGS, the company that carried out the assessment for the FSC certification (pdf file, 452.8 KB), states that the people’s claims to the land are “highly dubious”, which is, of course, exactly what NFC wants to hear. There is a conflict of interest at the heart of the FSC system, in that SGS audits are paid for by the company being audited, in this case SGS’s assessment was paid for by NFC. When Oxfam spoke to lawyers representing the community members, they were told that the land dispute cases are still active.
Reading SGS’s public summary of the assessment gives little clue of any problems. “[I]t is clear that the company has been successful in gaining the support of local communities,” SGS writes, after interviewing 41 employees, contractors, health and education officials, local government officials and community members.
FSC has a process for making sure that its certifying bodies (such as SGS) are in fact checking that certified companies (such as NFC) comply to FSC’s standards. A company called Accreditation Services International (ASI) carries out audits of the certifying body, including visits to certified operation. In 2010, ASI visited NFC’s plantations as part of its audit of SGS Qualifor (pdf file, 133.2 KB). ASI found little to criticise: “The SGS Qualifor audit team conducted a professional and systematic surveillance audit.”
None of the financiers involved managed to find anything wrong with NFC’s operations:
- IFC reviewed NFC’s plantation operations as part of its due diligence for its US$7 million equity investment in Agri-Vie, the private equity fund whose portfolio includes NFC. IFC decided that NFC had complied to its standard on resettlement “to the extent allowed by the Government”.
- The European Investment Bank has invested US$12 million in Agri-Vie, US$5.65 million of which goes to NFC. EIB also has Environmental and Social Principles and Standards, which include a standard on involuntary resettlement. EIB found nothing wrong with NFC’s operations in Uganda.
- HSBC has invested about US$10 million in NFC, an investment that was “subject to the company obtaining FSC certification for its operations”, according to SGS’s assessment report. HSBC’s judgement of whether NFC complies to its sustainability policies relies heavily on whether the company keeps its FSC certification.
Somehow, these investors have managed, with the help of FSC, SGS and ASI, to make 22,500 evicted people disappear completely.
Of course the people evicted have not disappeared. One of the people evicted to make way for NFC’s carbon plantations told Oxfam, “I lost land. I’m landless. Land was my life. I have no rights. It’s like I’m not a human being.”
Full disclosure: I’m friends with the authors of the Oxfam report and have worked with both of them in the past.