“Good money after bad? Risks and opportunities for the Green Climate Fund in the Congo Basin Rainforests”, is the title of a new report by the Rainforest Foundation UK. The report focusses on the GCF and REDD, followed by a critical overview of the GCF’s planned projects in the forests of the Congo Basin.
This post looks at the part of the report that investigates the role of the GCF funding for REDD related projects worldwide and in the Congo Basin. A future post will look at the GCF’s planned involvement in scaling up the International Finance Corporation’s Forest Bonds programme.
The authors of the report, Norah Berk and Joe Eisen, note that GCF is shaping up to become the next major source of funding for REDD in the Congo Basin. GCF-funded activities are planned in the Democratic Republic of Congo, the Republic of Congo, Cameroon, Gabon, Central African Republic, and Equatorial Guinea.
RFUK’s report looks at the early experiences of the GCF in other parts of the world, assesses its institutional structure and social safeguards policies, and looks into the challenges in the Congo Basin. It includes specific recommendations for the GCF, Accredited Entities, National Designated Authorities, and National Civil Society.
The Green Climate Fund
Formed in 2010 under the UNFCCC, the GCF is one of the financial mechanisms for implementing the Paris Agreement (along with the Global Environmental Facility and the Adaptation Fund). GCF started to approve projects in 2015.
In 2009, at the Copenhagen UNFCCC meeting, rich countries promised to fund US$100 billion per year by 2020. But so far, rich countries have committed only US$10.3 billion to the GCF.
Berk and Eisen acknowledge that compared to other international finance mechanisms, the GCF aims to provide “significant space for civil society”, and has “comprehensive safeguard policies on gender and indigenous peoples’ rights”. In addition, the GCF emphasises national ownership over investments.
But Berk and Eisen argue that,
[I]n order to ensure investments are implemented in a way that genuinely empowers local communitiees and strengthens their rights, the fund will have to address a number of challenges, including weaknesses of its safeguard policies, non-adherence to international standards, flaws in its institutional design, political and geostrategic pressures to hastily approve projects and programmes as well as an overemphasis on attracting private sector finance.
RFUK is concerned that loopholes in GCF safeguards “could be detrimental to the rights of forest peoples”. Remedies for non-compliance with the Environmental and Social Safeguards (ESS) often focus on procedural fixes rather than enforcement.
For example, the ESS allows “limited involuntary resettlement” provided a policy framework is in place that claims to have been informed by local communities. This contradicts the GCF’s Indigenous Peoples’ Policy (IPP) that only allows a project to evict people from their homes once they have given their free, prior and informed consent.
In a 2017 report, the Rights and Resources Initiative looked at eleven GCF-funded projects and found that safeguards were not routinely enforced.
RRI found that free, prior and informed consent was not adequately applied in GCF projecs. FPIC was not even mentioned in several of the projects that RRI looked at. In the remaining projects, FPIC application was “partial at best, either because the ‘affected people’ are not considered indigenous, or because processes for implementing FPIC are not well defined.”
Transparency in the GCF jungle?
Berk and Eisen note that the GCF has taken some steps towards transparency – with board meetings streamed online, for example. The GCF also claims to disclose all project documents. But documents could end up being published online only after projects have been approved.
GCF Watch, a website set up by civil society organisations monitoring the GCF, states that civil society organisations are “struggling with finding their way through the GCF jungle, keeping track with developments”.
GCF Watch has raised concerns about the inclusion, consultation and respect for land rights of local communities in many GCF projects funded between 2015 and 2017.
The GCF emphasises attracting private sector finance. For example, the GCF’s Private Sector Advisory Group recommends investing in deforestation-free value chains in global commodities, creating a robust carbon market, and implementing financing strutures such as forest bonds.
Berk and Eisen comment that, “each of these investment areas risks exacerbating deforestation and/or the marginalisation of local communities if implemented prematurely or inappropriately”.
A look at the GCF’s involvement in REDD related projects so far is not reassuring.
No free, prior informed consent for GCF in Peru
In 2015, the GCF approved the Datem del Marañón project in Peru. REDD-Monitor reported on this project in 2018, under the headline, “How the Green Climate Fund approved a wetlands project in Peru without a process of free, prior and informed consent of Indigenous Peoples”.
The president of the Achuar People, who are affected by the project, wrote to the project managers, explicitly stating that the Achuar had not given their free, prior and informed consent to the project.
When the GCF’s Independent Redress Mechanism reviewed the project, it concluded that the FPIC process was not “conducted earnestly”, that GCF staff should have asked for more evidence of a meaningful FPIC process, and that the project’s risk factor had been downgraded to avoid triggering more stringent safeguards.
Berk and Eisen write that,
The Datemm del Marañón project thus serves as an alarming debut to GCF investments in forest-dependent communities and the problems documented in its IRM [Independent Redress Mechanism] should hopefully serve as lessons learnt for future GCF projects that implicate forest communities.
GCF and REDD in Brazil
In February 2019, the GCF approved its first REDD results-based pilot project, in the Brazilian Amazon.
Brazil received US$96 million for “emissions reductions” generated from 2014 to 2015 in the Brazilian Amazon. The project is in effect rewarding the Bolsonaro regime for emissions that were reduced up to five years ago.
Bolsonaro has threatened to leave the Paris Agreement. He has cut the Environment Ministry’s budget, removed its secretariat for the National REDD+ Committee, and transferred powers to the Ministry of Agriculture. This ministry is closely allied to Brazil’s agribusiness industry.
The GCF’s “results-based payment” is based reduced deforestation compared to an inflated baseline. Based on this reference level, deforestation in Brazil could more than double and the country could still receive GCF funds. Clearly this is not funding a “paradigm shift”.
GCF does not require that carbon remains stored in forests past the lifetime of the GCF investments. Berk and Eisen note that droughts and forest fires are becoming increasingly frequent and damaging as the climate crisis escalates, and as forests are degraded and fragmented.
Changes in commodity prices for beef, oil palm, or soy can rapidly lead to new waves of deforestation. And stopping deforestation in one area often leads to increased deforestation somewhere else, as soy companies or cattle ranchers look for new land to expand their operations.
GCF in the Congo Basin
RFUK’s report provides a list of 12 projects proposed for the Congo Basin that could include funding from the GCF. Berk and Eisen note that these projects, “mostly lack any reference to how forest communities have been engaged or how their rights will be strengthened.”
They write that,
There is a real risk that lessons from the failures of existing REDD+ interventions – such as the exclusion of local communities from decision-making processes, insufficient effort to improve communal land tenure rights, lack of independent oversight, and the capture of funding by intermediary organisations – are not being learnt. Rather than continuing to channel valuable climate finance solely into REDD+ programmes as the solution to deforestation, the GCF should target alternative initiatives to support forest communities and their environment.
For many years, the World Bank has funded REDD readiness activities in the Democratic Republic of Congo. Included among these activities is the institutional strengthening of the Ministry for Environment and Sustainable Development (MEDD).
Yet a 2015 GCF readiness proposal to strengthen the capacity of the Ministry reports that the Ministry, “lacks both human and financial capacity. Its staff lacks relevant technical and operational skills as they are new to the job, making it difficult to effectively engage with the Fund.”
The second phase of this GCF readiness proposal is now underway. Berk and Eisen report that “there is little indication that progress has been made on improving MEDD’s transparency, accountability and institutional capacity to oversee GCF investments”.
The Environment Minister has featured in a series of scandals, including attempting to lift the 2002 logging moratorium, allocating several illegal logging concessions, revising DRC’s national forest code, and enabling the sale of endangered species to China.
As a result, most REDD activities in DRC, including the Central African Forest Initiative, currently avoid working with the Environment Ministry, and its associated REDD structure, CNREDD.
RFUK’s report looks at a GCF concept note titled, “Forest Landscape Improvement, Emmission Reduction, Resilience to Climate Change and Green Growth Progame in Central Kongo Province”.
Since 2014, the World Bank’s Forest Investment Programme has been running a US$36 million Improved Forest Landscape Management Project (IFLMP) in Mai Ndombe, Bas-Congo, and Kinshasa provinces. GCF’s planned US$70 million project is intended to scale up the IFLMP.
Research carried out by RFUK and other NGOs reveals that communities in Mai Ndombe were not adequately consulted on the development of the REDD project. The communities have received minimal benefits from the project. Agro-forestry activities they have carried out under the project have also resulted in few if any benefits. And most of the communities have seen little improvement in land tenure security.
The Congolese organisation LICOCO found similar results when it investigated the Forest Investment Programme’s activities in communities in Mai Ndombe. WWF is the project implementer in these communities.
LICOCO found that WWF had failed to obtain the free, prior and informed consent of these communities. Local administration was not knowledgeable about REDD, and was not involved in REDD implementation. Customary power structures were replaced mostly by non-representative local development committees.
LICOCO reported that more resources went on office rent, hotels, and travel of WWF staff than on delivering the infrastructure improvements and other benefits promised to communities.
A 2018 report published by the Rights and Resources Initiative found similar problems in REDD projects in Mai Ndombe:
- an incomplete governance structure for REDD+,
- approaches adopted without a prior study on the drivers of deforestation,
- negligible effort to improve the land rights of communitiies, and
- the capture of benefits by private actors while the poorest people are left with little to no benefits.
The GCF’s concept note shows little evidence that lessons have been learnt from the exposure of these problems with REDD in Mai Ndombe.
Consultation with local communities is not mentioned in the concept note. Neither is free, prior and informed consent. Berk and Eisen point out that this puts the concept note in breach of the GCF’s Indigenous Peoples Policy safeguards.
The concept note is similarly weak on land tenure issues. Five years after the Forest Investment Programme’s project started, there is no land tenure assessment for the province. Yet, as Berk and Eisen write, a land tenure assessment is a “preliminary step to analyse how communities will be affected by project activities”.
The issues raised about the Forest Investment Programme’s REDD activities in Mai Ndombe province were all raised by NGO investigations. The most recent project mandated independent assessment of REDD in Mai Ndombe was in 2015. RFUK recommends that any investment from the GCF should make independent local monitoring a requirement of whether funds are being properly managed to carry out promised project activities.
RFUK’s report concludes that the GCF can only succeed in its goal of creating a “paradigm shift to low-emission and climate-resilient development” if the fund:
- addresses certain institutional weaknesses;
- integrates lessons learnt from previous REDD+ interventions; and
- emphasises investments rooted within local communities over complex and unproven carbon market based instruments.