Brazil weighs new corruption probes in carbon markets: source
Quantum Commodity Intelligence – Brazil's Federal Police is mulling whether to launch fresh inquiries into the takeover of public land by several REDD+ projects in the Amazon, according to a well-placed source.
Future inquiries would follow the launch of the so-called "Greenwashing" investigation into actions taken by São Paulo-based carbon project developer Ituxi, whose senior management team are on remand in jail.
"There could be similar operations to Greenwashing in the future due to the huge interest for lands in the Amazon," said the source.
"(They) have detected illegal issues with land ownership for many years now.. so [new investigations] are likely to come, although it is not possible yet to say how big they will be," added the source.
Quantum understands that federal investigators are reviewing claims of evidence of illegal invasion of public land across different Amazonian states.
Future inquiries come after the highly-publicised Operação Greenwashing, which was the culmination of a two-year long inquiry that resulted in public raids on June 5 and the seizure of properties and goods valued at BRL 1.6 billion ($230 million).
During that inquiry, which alleges the illegal seizure of 538,000 hectares of public land, investigators kept the Ministry of Environment and other authorities in Brasilia in the dark until the probe became public, fearing news of the inquiry could leak and that they may come under political pressure to end it.
The scope and the name given to the investigation launched this month are an echo of 'Operação Lava Jato' (Operation Carwash), a landmark anti-corruption probe in the mid-2010s which had many phases and expanded throughout several years.
Carbon credits
Ituxi has sold a total of BRL 180m in credits issued from its Unitor (VCS2508), Fortaleza Ituxi (VCS1654), and Evergreen (VCS2539) REDD+ projects, which are registered under US-based standard Verra, according to information from the Federal Police.
"Verra is not being investigated… but their auditing system has a lot of breaches," Federal Police investigator Thiago Scarpellini told Quantum, claiming that the US-based registry did not conduct enough checks to prevent stolen public land from being used for carbon projects.
In Brazil, all land is considered public until proven otherwise, as it was conquered by the Portuguese Crown during colonial times and transformed into national property following the country's independence.
Any person claiming to be the owner of a property must have documents proving that such land has been removed from public inventory in a process legally named 'cadeia dominial' (domain chain).
Verra suspended the carbon projects earlier this month.
