The return of the Kamula Doso REDD project in Papua New Guinea: This time run by Mayur Resources, a mining company, and Santos, an oil and gas company

By Chris Lang

Mayur Resources Limited is an Australian company, registered in the tax haven of Singapore. The company only operates in Papua New Guinea, where it extracts iron sands, lime and cement, battery minerals and builds renewable power generation. Last week, Mayur Resources announced an Expression of Interest with Santos Ventures Pty Ltd to “jointly develop a portfolio of nature-based carbon offset projects in Papua New Guinea”.

Mayur Resources also plans to construct the first coal-fired power plant in Papua New Guinea. The 52 MW power plant could at a later date be expanded to 200 MW. The Center for Environmental Law and Community Rights (CELCOR) recently put out a report about the pollution and health risks to local communities about the proposed coal-fired power plant.

CELCOR’s Samantha Kuman comments that, “The potential impacts of the Lae coal-fired power plant are not widely known in PNG because the public consultative process was hugely by-passed by Mayur Resources and the relevant state, provincial and district authorities.”

Santos Ventures is a subsidiary of Santos Limited, an Australian oil and gas exploration and production company. In December 2021, Santos Limited bought a 92-year-old oil and gas company called Oil Search. After the deal Santos became the largest shareholder in PNG’s biggest resource project, the PNG Liquefied Natural Gas project, run by Exxon Mobil.

So two of the most polluting, destructive Australian companies operating in Papua New Guinea are investing in “nature-based carbon offset projects”.

In January 2022, Mayur Resources held a webinar about their REDD projects in PNG. Back then, according to the presentation, they were working with Wildlife Works Carbon, Tribeca Investment Partners, Everland, and VT Carbon (a joint venture between carbon consulting firm Viridios Capital and Tribeca). None of these companies is still working with Mayur Resources on these REDD projects.

Mayur Resources’ Strategic Partnership Conference Call

On 21 June 2022, Mayur Resources held a “Strategic Partnership Conference Call”. The powerpoint slides are available here. Paul Mulder, Managing Director of Mayur Resources, and Tim Crossley, Executive Director of Mayur Resources gave the presentation.

The presentation overestimates the amount that deforestation contributes to global greenhouse gas emissions. Mayur Resources claims that “Deforestation accounts for up to 20% of all Greenhouse Gas emissions”.

But data from the Intergovernmental Panel on Climate Change states that the total greenhouse gas emissions from land use, land use change, and forestry accounted for 11% in 2019, down from 13% in 1990.

Mayur Resources’ and Santos Ventures’ REDD projects are planned to cover a total of 1.4 million hectares of “pristine rainforest in Papua New Guinea”. According to Mayur Resources’ statement about the deal, “Phase 1 development is already being progressed which includes up to 800,000 hectares in the Western Province.”

The company estimates that the three projects, covering a total of 800,000 hectares, can generate US$100 million per year. Mayur Resources estimates that the projects will cost US$10 million to set up and a maximum of US$10 million per year to run the projects. Costs, taxes, and levies are expected to be 30% of the revenue from the projects. Landowners are to receive 54% of the revenue, with Mayur Renewables, the Project Developer, receiving 16%.

Under the deal, Santos has given Mayur US$3 million “to fund ongoing detailed feasibility and landholder consent work on the Carbon Projects”.

Questions and (sort of) answers

Following the presentation, Mulder and Crossley took questions. I’m quoting at length from their responses, because they reveal two things very clearly. First, the REDD projects are going ahead without a proper process of free, prior and informed consent of local communities. So far, the consulting firm carrying out the free, prior and informed consent process has made only one visit to the communities – in a project area of 800,000 hectares. Second, Mulder and Crossley speak at length without necessarily answering the question.

Mulder responds as follows to a question about which local organisations Mayur Resources was working with:

“Yeah, look, you know obviously, I mean we’re well on the way particularly with those first three project areas, we’re using a local group in PNG called SERACS to do our free and prior informed consent [sic] process, we’ve already done one trip out to the area, we’re about to do another trip to that group in about a week’s time.”

“SERACS” refers to a company called Social Environmental Research And Consultancy Services Limited. As far as I’m aware, the company doesn’t have a website, but it does post regularly on Facebook and LinkedIn. On 21 March, the company made the following post on Facebook:

Facilitating Free Prior Consent and Awareness on the Kamula Doso Carbon Credit Project with community of Ali village along Aramia River, Middle Fly District, Western Province. The team consists of Mayur Renewables, Tumu Timber Development Corporation, UPNG and SERACS Ltd.

So Mayur Resources’ three REDD project areas covering a total of 800,000 hectares are a revival of the failed Kamula Doso Improved Forest Management Carbon Project. The project started in 2009, set up by a company called Nupan. The man behind the company was “PNG’s kingpin carbon cowboy”, an Australian called Kirk Roberts.

No wonder that neither Mulder nor Crossley mention the name of Mayur Resources’ REDD project during their presentation.

Mulder continues:

“We’ve also engaged a group called EP Carbon out of the US who’ve started on the actual feasibility and the documentation for the projects there, an extremely well credentialed group, were involved in the other main project in PNG that’s released carbon units now, that’s the NIHT project.”

The fact Mayur Resources has hired EP Carbon, the consulting firm that worked on the NIHT REDD project, is hardly reassuring. In June 2021, the Kamlapar Incorporated Land Group wrote to PNG’s Climate Change and Development Authority and Verra, complaining about “Illegal operations by NIHT Inc”.

In response to a question about when carbon offsets might be generated from the project, who is Mayur Resources competing with, and what is Mayur Resources’ competitive edge, Crossley replies that,

“We’ve now, from a Mayur Perspective, got a lot of experience on development, taking projects through their development pathway. To a certain extent that pathway and that process isn’t a lot different whether it’s a mineral development project to a carbon project.”

Which is quite an extraordinary statement. Crossley’s background is in the mining industry and not forest conservation. He does not elaborate on what he sees as the similarities between destructive extraction projects and forest conservation projects.

Mulder adds that,

“The edge here is that you have globally a recognised one of the most pristine biodiverse areas in just one area, 800,000 hectares in Western Province as ecologically one of the most pristine areas on the planet, erm, when you say what is the edge, erm, when you look at a) what ecological environment you’ll be protecting that is currently under threat, big tick. Then the second edge is how are we going about, we’ve got deep in-country experience we just haven’t started we’ll keep this country, we’ve been there over a decade, Oil Search / Santos have been there for decades, they’ve successfully worked with communities.

“The next edge will be how demonstration the international community when they invest with and buy a carbon credit from this venture, they’ll be buying a carbon credit where the actual money going into that credit that they buy they can put up and show to their own customers to say, ‘Hey, not only did we protect some of the most pristine area on the planet, we’ve also had one of the biggest improvements of social living and social conditions whether it’s women’s empowerment, electrification, education, sanitisation, general health.’

“They have nothing out there, literally nothing. So this is going to be something that we will be able to demonstrate and it’ll be demonstrating by referring to work that already has been done. There’s been a huge amount of work done by environmental groups on this area already, who have not wanted logging to occur. So I think that there’s a massive opportunity here that will not and should not be missed.”

It is extremely worrying that Mulder describes the Indigenous communities, with their traditional culture, rituals, knowledge, and close ties to their forest and territories, simply as having “nothing out there”.

“PNG needs this more than most countries do”

Mark Tilly from Carbon Pulse asks a question about the moratorium in PNG that Minister for Environment Wera Mori issued in March 2022. The moratorium is on new and proposed REDD projects aimed at generating voluntary carbon credits.

In Mayur Resources’ Quarterly Report, dated 29 April 2022, the company states that “Minister for Environment confirmed Mayur Renewables projects are exempt from PNG’s REDD+ carbon offset project moratorium,” and that the company has “Received letter agreement from the Climate Change and Development Authority (CCDA) to establish carbon trading in PNG”.

Tilly notes in his question that the PNG government is “still in the process of developing safeguard frameworks to oversee these projects, obviously timing around the national election, there is some uncertainty about the timing of when those safeguards will be finalised. So I’m just wondering if you can speak on your confidence that you’ll have the regulatory framework in place to kind of proceed and have that confidence in the project’s liability going forward.”

NGOs in PNG are extremely concerned about the process for developing the safeguards.

Here’s Mulder’s answer:

“You rightly pointed out there our waiver and exemption for the moratorium, there’s a specific reason given for that, for us to have that provided, because they want the project to proceed, noting that the work that you’ve highlighted correctly. Let me be clear, this isn’t something, we’re not going to rush out in the next three months while the election is on and go and trade carbon.

“We have got deep in-country relationships and work with various government departmental agencies and in doing so we want to be a part of that fabric, to make sure that safeguards are put in place, and to ensure that we can demonstrate real benefit and the real benefit we’ve articulated in those pie charts make it to the village floor, make it to the internal revenue commission, and those things. So, erm, you know, we’re not looking at this from the [inaudible] in the next three months, you know we’re uncertain, we know what’s happening with the election, we know that there’s going to be that level of continued strengthening and development of that regulatory framework.

“We will continue with the waiver to work with the government, but we remain highly confident that we will be seen as a pioneer, with alongside Santos, because the reality is PNG knows it needs to expand its offering into the international market with regard to its products it can offer, it knows it needs to displace imports coming in constraining foreign currency it knows that its products have to be carbon neutral if they’re going to compete in a decarbonising world, so from that perspective you know, I’ve articulated the reasons for the waiver, and your, what you’ve outlined is very pertinent, but I think we do have the confidence, we’ve got the insights, we have the ongoing dialogue, and you know it’s not to say, you know, to say that things will be perfect standing all the time is just not accurate in these sorts of things, it doesn’t matter if you’re in Brazil, or in Australia, or in PNG, there’ll be an industry, there’ll be a government, there’ll be work to do, but at the end of the day, PNG needs this more than most countries do.”

This comment reveals Mayur Resources’ neocolonial attitude to its operations in PNG. Mayur Resources is one of the polluting companies that will use offsets from the REDD projects, supposedly offsetting its continuing contributions to the climate crisis. The government of PNG has implemented a moratorium on voluntary REDD projects, while it develops safeguards and figures out how voluntary carbon offsets relate to the country’s Nationally Determined Contribution. But Mayur Resources asked for (and received) a waiver to go ahead anyway.

There’s a slight pause after Mulder says that “PNG needs this more than most countries do.” Tilly clears his throat and asks for more details about the work Mayur Resources has been doing with SERACS.

Mulder replies as follows – once again he speaks for a while, but says very little:

“Look, the work that we do is at the village level up. It is to ensure that from a free and prior informed consent [sic] the group has a long, long history, with PhD, Professor qualified personnel, that work in that organisation, local Papua New Guineans that have helped many organisations to ensure that the appropriate engagement of locals, and the land-owners, and the property genealogy, the rightful land-owners, the explanations, people don’t just sign away, don’t understand what they’re consenting to, there’s very, very detailed passages in the local language, visits, explanations, verification, and it’s an ongoing thing, and the work with SERACS is something where you’re partnering with the community, where they’re getting the majority of the benefit, explaining just the bare principles to some that haven’t heard of carbon trading before, to others that are very, very apt and understand it, so it’s working with a diverse range of people at the village level that have those different understandings and look, there’s been very successful across the board in PNG for many, many years, and we’ll continue that association with them and anyone else that we feel will tick the box to meet the criteria of demonstrating and I mentioned the words NFTs and blockchains and that sorts of things that will meet the requirements from an international transparency point of view, erm, that are, those achievements and those engagements have been appropriate have been and have met the required standards.”

Indo-Pacific Carbon Offsets Scheme

Tilly once again clears his throat. “Thank you,” he says. He asks about the Indo-Pacific Carbon Offsets Scheme – a A$104 million Australian government scheme to develop a carbon market between 2021 and 2031 – and whether Mayur Resources has made any enquiries with the Australian or PNG government related to this scheme.

Here’s how many words it took Mulder to answer “No” to that question:

“Er look, there has been. I guess one of our advisory board members, Professor Chalapan (Kaluwin, from the University of Papua New Guinea) who advises the, he’s Mayur Renewables advisory board member, he also advises the Australian governments, government on ETS, and also the various areas whether it be forestry, PM’s office, and environment’s office in PNG. So we’ve been using also that conduit, to assist us in ensuring that we understand what the progress is in that space, what the opportunities are, how one would get that recognition and confidence, so much so that the Australian, you know, [inaudible] market so to speak, would recognise something like this. You know there’s a way to go on that, and that’s why we’re not factoring that in, but is there an opportunity in [inaudible] we feel there may be, but we’re not factoring it in.”

Polly Hemming, from The Australia Institute, asks a follow up question about the Indo-Pacific Carbon Offsets Scheme. It turns out that Mayur Resources has interacted with the Australian government and the Department of Foreign Affairs and Trade (DFAT). “Yes we do,” Mulder says, in reply to Hemming’s question. Hemming replies that she wasn’t aware that the Indo-pacific Carbon Offsets Scheme was setting up pilot projects. “Yes we have, we’ve had discussions with DFAT around this,” Mulder says.

Will the logging permits be made public?

Hemming mentions the “low confidence in REDD+ after the Oro Project”, a project proposed by Kanaka Management Services that Gary Juffa, the governor of Oro Province, described as “farcical, it’s a scam”.

Hemming asks whether Mayur Resources “will be making the documents on the project verification, like potential logging permits, to prove your case on the counterfactual, will you be making those available publicly?”

This is a crucial question. When Nupan attempted to set up the Kamula Doso REDD project 13 years one of the key debates was whether Rimbunan Hijau’s logging concessions were legal. In July 2010, Rimbunan Hijau’s subsidiary the Wawoi Guavi Timber Company and the PNG Forest Authority agreed to a consent order that the Kamula Doso Forest Management Agreement was not valid.

But Mulder doesn’t answer Hemming’s question about whether the logging permits will be made public, instead waffling about being “committed to transparency”:

“Yeah, look. We’re committed to transparency, as I mentioned, we’re committed to ensuring that what we do is at the highest level, which we understand is our own standard and expectation, but you know without saying it’s Santos’s as well.

“So, we acknowledge the Oro Project, I’m not going to talk about what other projects have or have not done, all I can say is that we know our commitment to what we’re going to be doing for the people and the consultation whether it be with the governor, whether it be with the landowners, whether it be with CCDA, etc.

“So, you know, we’re very committed in that space, and, you know, we acknowledge there’s, you know, there’s issues all around the world, whether it be, if you look at Brazil, Australia, Indonesia, there’s been projects that we could mention here today that have had issues, but there’s other fantastic success projects with very reputable companies, that have come in and put their brand to it. You know, whether it be the Googles of the world, or whoever it is, you know, there’s some great examples.”

Mulder doesn’t give any concrete examples of the “fantastic success projects” he refers to.

Additionality?

Stephen Long, a journalist from the Australian Broadcasting Corporation, asks, “If the PNG government goes ahead with its intention to formally ban all logging, then how do carbon projects continue to satisfy the requirement of additionality?”

Here’s Mulder’s less than convincing response:

“That’s, that’s a really, that’s a really good question. Erm, I think from the point of view, when you are, when you are, er, coming up with a REDD project today, and you’re looking at, erm, you’re looking at the current, the previous and current, erm, logging that’s occurred, and will it continue to occur?

“There’s a, there’s a, there’s a commitment to look at banning logging, but, as I mentioned in my, erm, presentation, there needs to be, there needs to be some other form of revenue and that’s caveated and if you check the press, you’ll see that that ban on logging is only caveated, or is caveated on the basis of having a replacement industry in the forestry space that would compel them to stop cutting the trees down. And that’s what this is.

“In relation to your question around additionality obviously, there’s this, I mentioned the nested jurisdictional, erm, focus where you look at a, a, er, country’s NDC and you’re able to see, erm, from that their overall carbon inventory, what the nested opportunity is.

“Erm, in going into the details, everyone obviously realises that downstream processing is also a focus for the PNG government, erm, in relation to even its own timber products. Erm, its first focus is to try and ban the export of round logs into, erm, the likes of China and other countries. Erm, again, that is caveated on the ability for PNG forest, erm, to derive revenue from alternative industries. And it’s either, I think the media article without being quoted on, but the general theme was if the, er, the international community, they don’t want us to cut our trees down, they can pay us the difference, erm, of a billion dollar industry, or they can, or we can come up with another industry, erm, that is positive for the environment that replaces those forestry revenues, sorry logging revenues. So, erm, that’s the arching focus and how we go about navigating between that and the jurisdictional nested approach is something that we will continue to work on.”