Dorjee Sun, Ulu Masen and The Burning Season

At a presentation at the 2012 meeting of the Roundtable on Sustainable Palm Oil, Dorjee Sun talked briefly about his involvement in forest protection and carbon trading. “We made front page of Time magazine with our project in Indonesia”.

Sun didn’t mention the project name: Ulu Masen. And perhaps not surprisingly, he didn’t mention that no carbon credits have been sold from the project or that the project itself is stalled.

“We started off from an investment background. We’ve been investing into environmental projects for six-seven years now, ranging from clean technology, all the way through to carbon credits and forest protection. We made the front page of Time magazine with our project in Indonesia, “Banking on Trees” and we’ve also been finalists in a number of different awards. And we won the carbon financing deal of the year.”

At that point, Sun quickly changes the subject: “But what was really interesting was in 2008, I saw this and I had to take a photo. It was just amazing. Just the sheer amount of biomass outside of this palm mill.” Sun has now set up a company called Carbon Agro and is hoping to cash in on Clean Development Mechanism projects aimed at reducing emissions from waste associated with oil palm production.

Dorjee Sun first visited Indonesia in January 2007. Initially, he wanted to set up a reduced deforestation carbon trading project in Papua. While he was in Indonesia, he met LeRoy Hollenbeck, who from 2005 to 2008 was an advisor to the then-governor of Aceh, Irwandi Yusuf. Hollenbeck is a US citizen who has worked for three decades in Indonesia. During this time, he has worked for USAID, FAO, UNDP, spent six years as senior manager for Freeport McMoRan’s Sustainable Development Department, and after advising Irwandi, Hollenbeck spent a couple of years as the senior advisor to the Vice President of ExxonMobil’s Public Affairs Department.

In April 2007, the governors of Aceh, Papua and West Papua held a summit in Bali, backed by the World Bank, during which they offered to stop forest destruction and asked for international carbon financing in return.

Shortly after this declaration Sun bought a controlling share in an Australian company called Carbon Pool. In 2006, Carbon Pool had sold avoided deforestation carbon credits to mining giant Rio Tinto. Sun hoped to persuade Rio Tinto to invest in his REDD projects in Aceh and Papua.

In mid-2007, Sun flew to the US to hold meetings with investors, including hedge funds, companies and rich individuals. A documentary film written and directed by Cathy Henkel, “The Burning Season”, follows Sun as he tries to raise funding for the Ulu Masen project.

Although the film has its flaws, it is fascinating. It’s difficult not to be infected by Sun’s enthusiasm and energy, if not his conviction that raising money through carbon trading is the way to save the forests of Ulu Masen. The film has four themes:

• Dorjee Sun and the Ulu Masen project;
• A farmer in Jambi clearing land for a small oil palm plantation;
• Lone Droscher-Nielsen’s work in Kalimantan in an orangutan rescue station she set up and runs; and
• The UNFCCC negotiations and the meeting at the end of 2007 in Bali.

The four themes are shuffled and dealt almost at random in the film. A large part of the film consists of Dorjee Sun running around looking for funding for the Ulu Masen carbon trading project. Shots of Sun in meetings with bankers are contrasted with farmers in Jambi clearing forest to plant oil palm, or with tragic shots of starving orangutans in Central Kalimantan. But the film does not clearly explain that Dorjee Sun’s fund-raising is for a project in Aceh in north Sumatra and that this project has nothing whatsoever to do with stopping the clearance of forests in Jambi in Sumatra or in Central Kalimantan.

The film shows Dorjee Sun at a luxury resort in Bali for the Governors’ Roundtable on Climate Change. The voice-over explains that Sun has a “grand plan” to reverse the global trend of deforestation. He hired John-O Niles to work for Carbon Conservation. Niles had previously been an adviser to the Coalition of Rainforest Nations and now works with the Tropical Forest Group, an NGO that promotes carbon trading as a way of conserving forests, and addressing climate change.

At one point Sun says,

“How do we just get the three govs that we need in a room to sign a couple of documents that we want? Fingers crossed, if we get that signed we’ve got our project for 500,000 hectares which could potentially convert into like 200 million tons.”

Then he turns round and waves his arms round and eats an apple. It’s all very dramatic.

Meanwhile, Sun has meetings with the three governors attempting to persuade them to give Carbon Conservation exclusive options on the carbon stored in the forests. Irwandi says, “I want to save the forests. No matter how. And you are the experts.” The three governors sign Carbon Conservation’s document. “to prevent all logging in their provinces”. Frank Momberg of Fauna and Flora International is right in front of them, photographing the signing ceremony. Carbon Conservation’s Sun and Niles talk about the deal:

Niles: “It’s a historic document. Three governors have committed to reducing deforestation as long as they get the carbon credits. And Dorjee got it across the line, with the sign.”
 
Sun: “And then, the part that we love. ‘Carbon Conservation Proprietary Limited will be the preferred supplier of carbon trading and marketing services within the provinces of Aceh, Papua and West Papua.’ So that’s the cool thing.”
 
Niles: “We’re talking about somewhere between 300 and 500 million tons of carbon credits.”

Sun sets himself a deadline of the UNFCCC meeting in Bali at the end of 2007 to announce his first significant financing deal. Here’s Sun:

“The business model of this business is so cool. It’s the more forest that we manage and protect, the more money we make. I mean, bring it on, baby! Like if we could have millions and millions of hectares under our management protecting forest and farming carbon, this could be a hugely profitable and yet hugely well intentioned company that does good.”

The film leaps to Jambi and Achmadi, the oil palm farmer who wants to expand his area of plantations. Then to Central Kalimantan, Lone Droscher-Nielsen and the orangutans. Then we’re in Jakarta, where Patrick Anderson, who now works with the Forest Peoples Programme is asking, “What can we do in a situation that’s actually going to make a difference now this year or next year? Because forests don’t have that long.”

Then to Arnold Schwarzenegger, then-Governor of California, talking about climate science and Al Gore telling us that deforestation counts of 20% of global emissions. Dorjee Sun in an airport. Dorjee Sun talking. Dorjee Sun looking at maps in front of a helicopter. Dorjee Sun flying in a helicopter over “untouched rainforest”.

The film gives the impression that Dorjee Sun could stop deforestation and climate change single-handedly, if only he could get the funding.

In Aceh, Governor Irwandi drives out to a remote village to confront illegal loggers. “If new forests are opened up, I’ll thrash you,” he jokes with the villagers. This is the first time in the film that we’ve seen the villagers living in the Ulu Masen area. Unfortunately the film-makers did not interview them. Instead we get a commentary from Irwandi, followed by the voice-over telling us that,

“Irwandi will need a major shift here in Indonesia for Dorjee’s scheme to work. Forests will need to be seen as more valuable standing than chopped down. For this to happen, new revenue must be found for those who live near the forests. It will also need the central government to reverse its support for the big logging corporations.”

The film makes the same mistake as Sun. Instead of finding out from the villagers in Ulu Masen what they think and what they want, the solution is to make forests more valuable through carbon trading.

Sun has a meeting with lawyers Baker McKenzie in Australia. “The offset market at the moment has had such a bad press, especially in Europe,” Paul Curno a Partner at Baker McKenzie tells Sun. This and a comment from Patrick Anderson provide the only suggestion in the film that trading the carbon stored in forests is problematic:

“If this leads to a trading mechanism, so the carbon is buyable, so an industrial emitter, whether that’s Australia or a factory in Australia, could, instead of making the investment to clean up their factory, they can buy cheap carbon from Papua at $4 a ton, and then not have to clean up their business back home. Also the carbon then becomes theirs theoretically, and they could sell it on the market, and so it might well be that the profits of the efforts in Papua or Aceh are actually going to be made as the years go ahead, by the large industrial companies and governments.”

Less than one minute of the 90-minute-long film is spent discussing the problems associated with carbon trading. Then Sun is in an airport again: “Sydney to Jakarta to Jayapura to Jakarta to Hong Kong to London to New York to D.C. to Chicago to L.A. to San Fran and then to Santa Barbara and back to Sydney, all in that one bag.”

Sun has a meeting with the governor of Papua, Barnabas Suebu. Also present are FFI’s Frank Momberg and Irwandi’s advisor, LeRoy Hollenbeck. The film then shows Hollenbeck in Aceh talking about setting up a meeting between Governor Irwandi and Governor Schwarzenegger.

Then we’re watching Dorjee Sun in an airport. Again.

“So where to from here? It’s really easy actually, we need six things. Four things. Three things, actually. One: We’ve got the local support so we just need to legitimise that with legals. Two: We’ve got investors ready, we’ve just got to get them in. Three: We need the structure.”

Perhaps more than anything in the film, this reveals Sun’s failure to grasp the complexity of the problem he’s got himself involved in. An agreement with the Governor of Aceh is “local support” as far as he’s concerned.

At a meeting with investors in San Francisco, Governor Irwandi explains how he sees REDD:

“The developed countries produce a lot of carbon. And we need something that can absorb the carbon. And only the forest and the soil under the forest could absorb the carbon. Let me name it as carbon septic tank. At the moment we are providing a free septic tank. What I want is to start reforestation. Some financial assistance to start community forest. And I think within six years we will have a bigger septic tank.”

A little later in the film, Sun is in London, meeting Andrew Mitchell of the Global Canopy Programme. Mitchell arranged a meeting with Abyd Karmali of Merrill Lynch Bank. Dorjee was happy with the meeting:

“We knocked it out of the ball park. They didn’t let me out of the board room until like 8pm. And by the end of it they said that they were prepared to move literally hundreds of millions of dollars and sign an agreement by Friday so we can announce it to the whole world at the Green Governor’s dinner. And so I’m kind of delirious because I actually feel hopeful again.”

And then it’s December 2007 and the UNFCCC meeting in Bali. Sun and Hollenbeck sit down with Irwandi to get him to sign off on another document with Carbon Conservation before a meeting with Merrill Lynch. Hollenbeck explains to Irwandi that,

“You’ve got hundreds of thousands of people that are looking up to you now, having been popularly elected, to produce results and one way to produce results is to attract investment but do it simultaneously with making sure that the local people are part of the process. That it’s all done in partnership with the local population. And that’s what we’ll say in this document.”

In an interview, Sun says that, “The vast bulk of that money will go to local communities in order to prevent them from deforesting.” (It’s interesting to contrast this with what Sun said in 2008 once he’d signed an agreement with Merrill Lynch: “Ultimately we’ve been trying to think about ways where it’s not hand-outs. So the money will get to the people by the forest, but we feel that it’s actually damaging to give them money without recourse, without strings, because if it seems as though it’s money for free then people won’t appreciate it, they won’t invest it, they won’t learn the skills required to actually create a meaningful life.”)

Irwandi signed the deal with Carbon Conservation. Merrill Lynch however wanted to wait to see what comes out of the UNFCCC meeting regarding forests. Andrew Mitchell was also in Bali. “I hope that forests will be included in carbon markets after 2012 and that the process to do that will begin this week,” he said during a side-event.

The Bali footage includes the delaying tactics of the US negotiators and Kevin Conrad’s response: “We ask for your leadership. We seek your leadership. But if for some reason your not willing to lead, leave it to the rest of us. Please, get out of the way.” Eventually, the Bali Road Map was agreed and forests were included. “This is a paradigm shift,” Conrad said after the meeting.

Despite the excitement at the time, progress on REDD has been painfully slow and since then governments have taken practically no meaningful steps to address climate change through the UNFCCC.

Merrill Lynch subsequently signed an agreement with Carbon Conservation for a minimum commitment of US$9 million. The film ends with a meeting between Governor Irwandi and Governor Schwarzenegger. Sun, of course, is ecstatic.

But no carbon credits have been sold from Ulu Masen and the REDD project is currently at a standstill, if there is a project at all.
 

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This post is part of a series about Aceh and Ulu Masen. REDD-Monitor gratefully acknowledges funding from World Rainforest Movement and the Samdhana Institute to cover the costs of the trip to Aceh in December 2012.