Envirotrade’s carbon trading project in Mozambique: “The N’hambita experiment has failed”

By Chris Lang

Envirotrade’s carbon trading project near the Gorongosa National Park in Mozambique should be a success story. Its carbon credits are certified by the Plan Vivo Foundation. It is certified under the Climate, Community and Biodiversity Alliance Standard. Yet the project is winding down and will close in four years, according to a report in the Mozambique Bulletin.

Envirotrade was set up in 2002 by Robin Birley and Philip Powell. Birley is a UK businessman. He inherited Annabel’s, London’s poshest nightclub from his father. The club is named after his mother, Lady Annabel Vane-Tempest-Stewart, who subsequently married Sir James Goldsmith.

Birley was president of the Mozambique Institute in the early 1990s, which supported RENAMO, the South African-backed force that systematically committed war crimes and crimes against humanity during the civil war in Mozambique. When Chilean dictator Augusto Pinochet was arrested in the UK in 1998, Birley described Pinochet as “the underdog” and backed a fund for Pinochet’s luxurious bail residence in Wentworth, Surrey. Pinochet “has done an immense amount for Chile,” said Birley.

Powell is no longer involved in Envirotrade. He was a senator in South Africa and spokesperson for the Inkatha Freedom Party. According to the Truth and Reconciliation Commission report, Powell trained and armed a paramilitary unit that was involved in destabilising South Africa’s first democratic elections in 1994. He left South Africa in 1999. According to a 2003 report, the police had a warrant out for Powell’s arrest, relating to a stockpile of weapons obtained from Eugene de Kock, a colonel in the apartheid-era South African Police.

Despite the questionable background and politics of the founders of Envirotrade, the company’s project in Mozambique has received much praise. In 2006, it was cited in the Stern Review as “an example of the potential for a beneficial relationship between emissions reductions and poverty reduction.” But it’s revealing to look at Stern’s sources: a 2005 article by Richard Girling, a Sunday Times journalist, and the company itself.

A PR company called Only Connect Communication boasts Envirotrade among its clients. On its website Only Connect tells us that among the outcomes of its work for Envirotrade were,

Two Sunday Times Magazine investigative features by Richard Girling, the UK’s foremost, award-winning environmental journalist, charting the progress of Nhmabita, a small Mozambiquan community, from launch of the Envirotrade carbon forestry initiative, to today, four years on.

Robin Morgan, ex-editor of the Sunday Times is a “strategic partner” of Only Connect. When he left the Sunday Times in 2009, Morgan said,

“Newspapers have largely become the marketing arm of celebrity brands instead of doing journalism. We know that PRs are sending them photos they want used, that they are getting copy approval. It’s disgusting.”

After leaving the Sunday Times, Morgan set up a, er, PR company called Robin Morgan Media.

Predictably enough, Girling’s reporting about Envirotrade was overwhelmingly positive. Here’s a sample:

Birley has set up a private company, Envirotrade, to deal in carbon credits . . . It’s why the villagers of N’hambita are so energetically surrounding their mashambas with new saplings. It’s why researchers from the Institute of Atmospheric and Environmental Science at the University of Edinburgh are such regular visitors, measuring the height and girth of the trees, calculating biomass, growth rates and the absorption of carbon. Their conclusion is unequivocal. New planting at N’hambita will lock away 90 tonnes of carbon dioxide per hectare.

Another of the outcomes listed on Only Connect’s website is a 20-minute BBC World News Documentary. Award-winning environmental journalist Richard Girling also appears in this programme. Broadcast in September 2009, it is a thinly disguised PR film. Titled, “Taking the Credit”, the film was funded by the Africa Carbon Livelihood Trust. The managing director of the Trust was Charles Hall, who is also a chief executive of Envirotrade. In April 2010, the BBC ruled that the programme should not have been broadcast because of the links between Envirotrade and the Africa Carbon Livelihood Trust.

Between 2003 and 2008, Envirotrade’s project at N’hambita, near Gorongosa National Park, was part financed by a €1.59 million grant from the European Commission. In 2007, the Commission suspended the final payment of €450,000. A May 2008 report by ODI and Winrock International for the European Commission found “poor reporting”, and commented that “the area of greatest concern is the whole carbon aspect of the project”. A second report by Agreco Consortium found that forest inventory and biomass estimates were “insufficient”. The suspension was still in place when Taking the Credit was filmed, but no mention was made of any of this during the film.

Despite working so hard on its PR communications, Envirotrade has failed to sell enough carbon credits to make the project viable. In addition to the money from the European Commission and sales of carbon credits, Birley has sunk US$2 million of his own money into the project. The money has seen some benefits for local communities in N’hambita, but it seems unlikely that these benefits will continue.

A recent article by Via Campesina highlights the problems for farmers involved with Envirotrade’s project. Villagers in N’hambita are in effect paid for seven years to plant and conserve trees, but sign a contract to do so for 99 years. “It is the farmer’s obligation to continue to care for the plants which they own, even after the seven year period covered by this contract”, states a clause in the contract. Perhaps even more controversially Envirotrade sells the 99 years of carbon credits up front, in some case even before the trees are planted, according to Mozambique Bulletin. António Serra, National Director for Envirotrade in Mozambique, told Via Campesina that,

“If a farmer passes away during the contract period, the contract, all the rights contained therein but also all the obligations, are transferred to their legitimate/legal heirs (children).”

Even with this arrangement, the money is not reaching the project. Plan Vivo’s 2011 annual report (pdf file, 2.1 MB) of the project states that “As in previous years, lack of funds was the greatest challenge of 2011.” The sales of carbon credits raised only 42% of the operational expenses of the project, leading to problems transporting and paying for seedlings, monitoring and liaising with the communities. In 2011, the project laid off 11 staff members out of a total of 48. Envirotrade has not issued any new contracts to farmers for the past three years.

Envirotrade’s António Serra is clear about the problems with relying on carbon credits for local farmers. He told Via Campesina that,

“Carbon trading is not there to make anyone rich. The market itself shows that there are many costs involved. This is not going to make communities wealthy. Individuals need to have other sources of income.”

Some farmers have stopped planting trees. In some cases Envirotrade stopped payments to farmers, without explaining why. Via Campesina found that communication between the company and farmers was problematic, to say the least. Envirotrade’s National Carbon Manager, forest engineer Aristides Muhate, explained why farmers did not understand the concept of carbon trading and REDD: “Information exists on different levels. There’s no reason why we should waste time explaining complicated concepts to the farmers.”

The Mozambique Bulletin reports that on 6 June 2012 a group of angry peasants met in Pungue village. They had not received their annual payment from Envirotrade. In the first three years payments were made at the beginning of the year, but for the last three years payments have been delayed. One of the villagers comments, “They are taking our money. We work hard, but in vain. They are buying expensive cars while we are suffering here in the bush.” In 2011, Envirotrade handed out a total of US$90,000 to 1,415 families. That’s an average of just US$63 per family.

In 2010, Charles Hall, Envirotrade’s chief executive, told the Observer:

“The business model for Envirotrade frankly remains to be proven. The fact that this can be made into a sustainable business on the basis of selling carbon offsets remains to be seen.”

Two years later, the Mozambique Bulletin comments that “The N’hambita experiment has failed and the Gorongosa project is winding down, and will close in four years.” Most farmers that the Bulletin spoke to said they would cut down the trees and sell the wood in the future. Some said they would do so as soon as the project finishes.

 

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UPDATE – 14 July 2012: See also Charles Hall’s response to this post: