Brazil prosecutors to review Pará REDD deal, suspend April ruling
Quantum Commodity Intelligence - Brazil's National Council of the Public Prosecutor's Office, a body tasked with controlling activities of public prosecutors, will further review an April ruling calling for the immediate cancellation of a $180 million contract between the Pará government and the Leaf coalition of buyers.
The announcement was made by Pará authorities themselves, rather than the National Council of the Public Prosecutor's Office (CNMP), which sits above the Federal Public Prosecutor's Office (MPF) and the State Prosecutor's Office of Pará (MPPA) that in April called for the transaction to be cancelled.
The decision comes just days after the northern state of Pará, the second largest in the Amazon rainforest, began formal free, prior and informed consultations with indigenous and traditional communities to advance its jurisdictional REDD+ programme.
The state is developing what is thought to be one of the largest jurisdictional REDD+ schemes in the world, larger than many countries' programmes.
"CAAP (the Pará public company in charge of developing the programme) clarified that the signed contract is a pre-agreement that defines future commercial conditions, without carrying out an effective transaction or generating a purchase obligation before emissions verification, and is within the law," said Pará.
"Clauses in the contract expressly and strictly establish that the sale is subject to verification of emission reductions. Until this occurs, there is no financial obligation between the parties, which rules out the configuration of an advance sale, which is prohibited by law," it added.
Pará authorities further stated that a "conciliation hearing" with all parties involved will be held soon.
In April, MPF and MPPA said the $180 million deal should be cancelled.
The MPF, considered a powerful institution in Brazil, was involved in the impeachment of former president Dilma Rousseff.
The prosecutors claimed the deal with Leaf addresses the credits as regular commodities but argued that offsets are "intangible" and "non-fungible rights", meaning they cannot be traded via a regular trading contract.
The prosecutors additionally reiterate concerns raised last December about a lack of transparency of prior consultation with indigenous and traditional communities, as well as the potential for financial speculation through the resale of credits and pressure on territories.
Pará signed the deal with Leaf's administrative coordinator, non-profit Emergent, in September last year for the sale of up to 12 million yet-to-be-issued credits from the 2023 to 2026 period.
Leaf is a corporate and government buyer coalition backed by the US, UK, Norway, South Korea, and major companies, including Amazon, Bayer and Walmart Foundation.
MPF and MPPA have not yet responded to the latest decision by CNMP.
