- An investigation by El País/Planeta Futuro has found evidence of irregularities in the allocation of “conservation concessions” and carbon-trading schemes in the Democratic Republic of Congo.
- The investigation uncovered allegations that concessions covering millions of hectares were illegally reassigned in 2020 and converted to carbon credit projects without public oversight. The Portuguese-owned titles overlap with a protected area and Indigenous lands.
- The boom in opaque “conservation” titles controlled by foreign investors raises concerns over the potential for future carbon offset abuses.
- Mongabay has partnered with El País/Planeta Futuro to publish this investigation in English. This story was produced with the support of the Rainforest Journalism Investigations Network (RIN) of the Pulitzer Center.
KISANGANI, Congo — A major European logging firm may have illegally converted more than a dozen of its timber concessions in the Democratic Republic of the Congo into so-called conservation concessions, a new investigation can reveal. After harvesting the most valuable timber from the 15 concessions — covering an area the size of Belgium — Portuguese-owned Norsudtimber is now eyeing European investment in carbon credit schemes it will operate from the former logging sites.
Since late 2020, the DRC has assigned 24 new conservation concessions, as investors seek to benefit from rising interest in carbon-trading initiatives in the world’s second-largest rainforest.
A seven-month investigation by El País/Planeta Futuro has obtained unpublished documents showing that, in December 2020, the outgoing environment minister, Claude Nyamugabo, signed contracts transferring millions of hectares of Norsudtimber concessions from its logging subsidiaries, Sodefor and Forabola, to Kongo Forest Based Solutions (KFBS), another Norsudtimber subsidiary set up to manage its carbon-trading operations.
The concessions were reassigned without public oversight or consultation with people who will be affected. Several of the concessions overlap with a protected area and the ancestral lands of the Bambuti, Bacwa and Batwa peoples, and nearly a third of the area covers climate-critical peatlands.
As tenants of conservation concessions, entities such as KFBS are entrusted with protecting precious ecosystems and the livelihoods of forest-dependent people. The DRC’s rainforests are home to threatened species such as pangolins, chimpanzees and okapis. They regulate the temperature and rain patterns of the entire region, and their trees store a third more carbon per hectare than the Amazon.
But the KFBS leases, with durations of 30 to 44 years, may violate DRC law, which requires concessionaires to present their financial and technical plans at a joint meeting with officials and local communities, so they can evaluate whether the project qualifies.
“The Minister arranged the deal,” says a senior officer from the environment ministry in Kinshasa, speaking on condition of anonymity for fear of reprisals. “Nyamugabo knew he would lose his position in a cabinet reshuffle, and wanted to ‘eat’ as much as possible before having to leave.”
The former minister is accused of having allocated an additional 4.4 million hectares (10.8 million acres) in the north and west of the country in violation of DRC law in 2020, including nine conservation concessions.
At the other end of the deal are the Portuguese Maia Trindade brothers, who lead both the timber and the carbon offset arms of Norsudtimber. Alberto Pedro represents logging companies Sodefor and Forabola, while José Albano represents KFBS, which oversees the new carbon offset titles.
In 2018, Global Witness alleged the group was operating illegally on 90% of its concessions. Norsudtimber denied any wrongdoing.
Fait accompli
DRC law requires that proponents of conservation concessions formally engage with everyone involved before contracts are signed. But provincial authorities were not consulted, only receiving a courtesy letter informing them of the conversion months after it had taken place.
This investigation obtained one of the letters, received by environmental authorities in the province of Tshopo in April 2021. It was sent on March 27 that year, when Nyamugabo was still in office.
“We have the honor of informing you that Sodefor recently transferred its forestry concession 59/14 … to KFBS. It is now a Conservation Concession,” the company wrote. A letter from KFBS then asks for the support of the province so the project can proceed “in a participative way.”
The DRC ranks as one of the most opaque countries in the world in terms of financial transparency, and the loopholes in its laws can be easily exploited. A 2011 decree on the attribution of conservation concessions, for instance, does not explicitly mention the conversion of existing logging titles.
Few people know the pitfalls of the DRC’s environmental regulations better than Augustin Mpoyi, a soft-spoken Congolese who juggles his roles as one of the leading environmental jurists in the DRC and one of its most implacable activists.
As a lawyer, he has worked on landmark legislation such as the 2002 Forest Code and a new land reform policy. As the founder of the NGO Codelt, he led the first prosecution of an environment minister for abuses of power, and has called on the government to suspend dozens of concessions that experts say are illegal. The government has already committed to canceling six so-called conservation concessions as a result.
Conservation concessions are a matter of public interest that require the free, prior and informed consent of communities; and the involvement of provincial administrations from the planning stages, Mpoyi says. “All is supposed to be done with the utmost transparency, and not even a minister can flaunt the procedures established by law,” he says. “So yes … the creation of those 15 [KFBS] concessions is really, really, really problematic.”
‘Straight to getting the signatures’
Forest-dependent communities are supposed to be at the heart of REDD+ projects, which is what conservation concessions in the DRC aspire to become. A key objective is reducing greenhouse gas emissions from deforestation and forest degradation by, for example, providing locals with alternatives to slash-and-burn agriculture.
But people in Isangi, a lush territory home to leopards (Panthera pardus) and giant ground pangolins (Smutsia gigantea) in northern DRC, first got the news five months after the contract was signed.
In December 2021, company representatives provided the final tranche of compensation for their logging activities — roofing and other materials — and had local chiefs sign an agreement for the concessions to issue carbon credits. Among the attendants at the meeting were the territory administrator and the environmental coordinator of the province.
In the document, KFBS agreed to pay $3,500 monthly to each of the communities and 8% of future carbon sales, as well as to keep them informed of carbon credit price fluctuations.
Perez Bolengelaka was at the meeting as representative of civil society in Isangi. He says KFBS did not discuss any financial and technical plans, or explain the activities of the project, beyond a general reference to nature conservation. There was no discussion of the alternatives they would provide to people surviving on itinerant agriculture and artisanal logging, he says.
“Examining all of this information and holding a proper consultation would have taken days, but the meeting went straight to getting the signatures,” Perez says. “It is a shame. That could have been a real partnership.”
Rainforests on the line
The Congo rainforest is unlike any other. It’s harder to penetrate, more pristine and a more powerful carbon sink than its counterparts in Southeast Asia and South America. Only recently, scientists confirmed the Congo Basin has the world’s largest tropical peatlands, a type of forested wetland that locks billions of tons of carbon in the soil, accumulated as semi-decayed organic matter over thousands of years.
Nearly a third of KFBS’s concession land is on peatlands, and several of the concessions overlap with a protected area in Oshwe, Maï-Ndombe province, in southwestern DRC.
Two of the titles in Oshwe used to belong to KFBS’s sister company Sodefor, until Nyamugabo awarded them to the Congolese company Groupe Services as logging concessions in June 2020. In October 2021, Congolese jurists formally requested that the Council of Ministers cancel those contracts for violating the moratorium on allocating new logging concessions.
What they did not know is that Nyamugabo had already reassigned the contested concessions nine months earlier. They were back in the hands of Norsudtimber, now operating as conservation titles.
One of those jurists was Augustin Mpoyi. Upon finding out, he shakes his head in disbelief. “It’s not possible … this is a scandal.”
Jeff Mapilanga of the Congolese Institute for Nature Conservation (ICCN) says protected areas should not overlap with private concessions, including conservation concessions. “We only started hearing about them before the U.N. climate summit in Glasgow,” he says.
Contentious allegations
The Norsudtimber deal is the latest in a series of contentious contracts signed by Nyamugabo, a protégé of former DRC president Joseph Kabila. The latter is currently facing allegations of embezzling $138 million.
In 2021, Congolese civil society took legal action against the former environment minister, a first in the history of the country. The NGOs, led by Codelt, accused Nyamugabo of illegally allocating an area of forest the size of Denmark. It is in this context that the government admitted “the illegality of many contracts,” just two weeks before the COP26 climate summit in October and November 2021. That included six conservation concessions awarded to Tradelink, a company founded by Belgian and Italian investors with a background in logging and mining.
At the climate summit, the European Union and the United Kingdom pledged $1.5 billion to protect the forests in the Congo Basin, while the Central African Forest Initiative (CAFI) announced a 10-year agreement, with $500 million earmarked for the first five years. CAFI is funded by Belgium, France, Germany, the Netherlands, Norway, the U.K., South Korea and the EU.
The CAFI initiative is now helping the DRC lift the moratorium on allocating new industrial logging concessions. The measure was put in place 20 years ago to prevent the plundering of equatorial forests following the Second Congo War, which officially ended in 2003. International environmental NGOs argue the country is not ready to end the ban.
“Truth is, keeping in check a logging concession is easier than controlling a forest that is open to all sorts of informal activities, including unregulated logging by local communities and even organized groups,” says François Busson, a natural resources expert with experience in the Central African Forests Commission. That is, he says, as long as new concessions operate legally.
‘Not in the public interest’
We presented the findings of this investigation to the concessionaires. In an emailed response, KFBS said: “Your descriptions of the facts, which are not expressly disputed, have to be understood as being irrelevant for us and do not deserve a [response] on our part.”
In a separate statement, KFBS said the environment ministry led by Nyamugabo did not consider the transfer of the concessions as new allocations under the law. The companies, they said, followed the guidelines established by the authorities at the time.
KFBS declined to share any evidence to support its position that the concession conversions were legal. “Our group does not intend to provide information which is not in the public interest or is not requested to be divulged by law or by a decision of justice.”
Nyamugabo did not respond to emailed requests for comment.
Unpublished audits
Ten days before the COP26 climate summit, where the DRC presented itself as a “solutions country,” President Félix Tshisekedi called for an audit of the DRC’s forest concessions and the suspension of all “questionable contracts.”
The first requirement of the $500 million deal with CAFI was the publication, before the end of 2021, of an audit conducted the previous year by the country’s General Inspectorate of Finance (IGF). The analysis targeted all concessions awarded or transferred since July 2014. The results are yet to be published.
In 2021, CAFI also commissioned an independent review of the legality of logging titles, led by a Spanish-Bulgarian consortium with funding from the European Union.
This investigation accessed an internal progress report, where experts noted their frustration at the “non-cooperation of public administrations at all levels.” Environmental officials and loggers argued that the EU team did not have official authorization from the environment ministry. And they were correct.
“This raises doubts about the actual will of the Forestry Administration to facilitate the review, even though it is officially engaged in [the agreement with CAFI] and is its main beneficiary,” said the June report.
The DRC government ended up issuing the document two months after the chief of the EU delegation in the DRC had requested it. And this is only one of several roadblocks that have actively delayed the review, pushing the deadline back by nine months to April 2022.
Despite the review being planned since 2017, due to the slow progress of reviewing concessions, with investigators unable to access even basic data on many of them, conclusions on the legality of the DRC’s forest concessions remain elusive.
Conflicts of interest
A four-year forest management initiative co-funded by the French international development agency (AFD) and CAFI has also been lagging behind over administrative hurdles in the DRC. In June 2021, French consultancy Forest Resources Management (FRM) was shortlisted along with several other firms that were considered as consultants to support the environment ministry in implementing the program. One of the firm’s duties was to enable independent Congolese observers to conduct their own audits of industrial concessions.
However, FRM was dropped from the shortlist after a researcher pointed out an overt conflict of interest in a chain of emails, seen by this reporter, that were sent to AFD and Congolese officials. “FRM has long standing commercial relationships with many of the DRC’s most notorious loggers; that includes two which, in 2018, represented 81 per cent of the total declared industrial timber production,” the researcher said. That includes the Norsudtimber group.
According to the researcher, the firm appears to have started its hiring process for the program more than four months before the ministry launched a tender for the contract. The description of the position was nearly identical to the objectives of the AFD-CAFI project, he said.
FRM did not respond to requests for comment. The AFD said the delays to the program were the result of “administrative prerequisites,” adding that the process of contracting new consultants would conclude in March.
Despite the obstacles in bringing illicit logging concessions to light, donors are also determined to review the surge in conservation concessions — many of them controlled by current or former industrial loggers seeking to diversify their portfolios — by 2024.
Trading in carbon credits
The fight against global heating offers opportunities for legitimate businesses to make money while doing good. Private initiatives operating REDD+ projects that address deforestation and forest degradation can profit by placing carbon credits in global, voluntary markets.
Each credit corresponds to 1 metric ton of avoided carbon dioxide emissions with respect to business-as-usual projections. Conservation concessions in the DRC could generate so-called verified carbon units by protecting Congo Basin rainforests, and get paid for it by, for example, an international airline willing to offset its emissions.
That is what the U.S. Blattner family has been doing in the DRC since converting its logging concession in Isangi to conservation titles in 2009. Records show the Isangi REDD+ project, in the northern Tshopo province, has sold more than 1 million carbon credits to dozens of entities from around the world.
Among the entities that bought Isangi credits are U.S. carrier Delta Airlines; the municipality of Davos, Switzerland; U.K. travel firm Exodus Travels; Swedish logistics company Scanlog; and universities such as Marymount California University and the University of Tasmania. A substantial amount of the credits were sold at $15 via the USAID-supported platform Stand for Trees.
Unlike stocks traded on an exchange, prices for verified carbon units can be privately negotiated, meaning it is not possible for observers to calculate how much an entity has earned by adding up the credits it has sold. In countries with weak governance, little technical capacity and widespread financial opacity, things get more complicated.
The big question
Upon being shown the figures from the Isangi REDD+ project, Felicien Malu, the Tshopo environmental coordinator at the time, stared at them blankly. “I had no idea they had been selling credits,” he said, although a monitoring report from the project claims it engages frequently with him and other authorities. Isangi territory administrator Joseph Mimbenga said the project has never held monthly consultations with him, as stated in the report. The project told him they have never sold any carbon credits, he said, and communities know this is the case.
Carbon credits belong to the Congolese state, and private operators must seek authorization to sell them before reporting transactions. The idea is that authorities and civil society organizations at all levels should be able to access the data to hold REDD+ projects accountable.
As it is now, no one person or institution in the DRC appears to have a full picture of who is selling what, and how much profit they are making, if any. Even inspectors from the DRC finance ministry say they are unable to effectively monitor the finances of forest carbon projects in the country.
So how are public administrations in the DRC, which lack even the most basic expertise and resources, supposed to know how much money they should be receiving, and when, from REDD+ projects? “That’s the big question,” says national REDD+ coordinator Hassan Assani, whose own service used to operate from a prefabricated structure under a mango tree in Kinshasa. “For the time being, it mostly depends on the good will of the projects.”
This reporter asked the owners of the Isangi REDD+ project how they report carbon credit transactions. In written answers, they said they had submitted carbon credit transactions to the National REDD+ Registry in March 2020. But according to the DRC’s National REDD+ Coordination, the body responsible for monitoring carbon credit finances in the country, it holds no data on the project. “Our dossier on the Isangi REDD+ project is empty,” the body said. “Maybe they have been engaging with other authorities.”
The Isangi REDD+ project said it communicates with “government stakeholders” and meets with them on a provincial level. It did not provide further details. The project has not yet reported annual net income and has not activated profit-sharing payments with the government, it said, but is honoring the agreements with communities.
Upon taking office in April 2021, the new environment minister, Eve Bazaïba, vowed to clamp down on corruption. She also pledged to create a national authority for carbon markets that enables transparency and tax-collection. The announcement from Bazaïba, known locally as ‘The Iron Lady,” came as President Tshisekedi called for a twentyfold increase in the price of carbon credits to keep the world’s second-largest rainforest standing.
A year later, regulatory loopholes, weak governance and lack of transparency continue to leave the door open to potential abuses by foreign investors and officials, including through tax evasion.
“Companies and opportunistic public officials can easily take advantage of people’s ignorance on carbon markets,” said a REDD+ expert from the finance ministry, who spoke on condition of anonymity for fear of reprisals. “Unlike timber, you can’t see them being felled and dragged out of the forest. And, in any case, some people are untouchable.”
Few investors have been in the DRC longer than members of the Blattner family. One of them is Elwyn Blattner, owner of Groupe Blattner Elwyn, who once said he had made his fortune in the DRC buying land at bargain-basement prices and acquiring companies from Belgian nationals that had gone bankrupt after the rise of Mobutu Sese Seko to power in 1965.
At 33, Elwyn Blattner already controlled more than 15 million hectares across DRC, an area bigger than Greece. “I call this the wild west,” he said at the time, unwittingly speaking for generations of foreign investors to come. “If you are willing to put yourself on the line, it’s wide open out there”.
The story was originally published in Spanish in El País/Planeta Futuro.
Banner image: A dugout canoe crossing a wetland in Basoko territory, northern DRC. The Congo Basin has the world’s largest tropical peatlands, a type of forested wetlands that lock billions of tons of carbon in the soil, accumulated as semi-decayed organic matter over thousands of years. Image by Gloria Pallares/El País.
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Revealed: Timber giant quietly converts Congo logging sites to carbon schemes
Source: Trends News
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