OPINION: Systems failure in the voluntary carbon market

16 May 2024

Quantum Commodity Intelligence – Luciana Tellez-Chavez is a senior environment researcher at Human Rights Watch and lead author of the 'Carbon Offsetting's Casualties: Violations of Chong Indigenous Peoples' Rights in Cambodia's Southern Cardamom REDD+ Project' report.

The Southern Cardamom REDD+ project upended the life of a young Indigenous Chong farmer, the father of two children. "I've been farming turmeric and bananas on the same land for 14 years," he told me. But in March 2022, the banana trees were cut down. "There was no warning or discussion prior to the destruction. … I may end up not growing anything this year. … I'm completely dependent on farming so I don't really know what I'm going to do."

He is one of the 91 people Human Rights Watch interviewed for our recent report – 'Carbon Offsetting's Casualties: Violations of Chong Indigenous Peoples' Rights in Cambodia's Southern Cardamom REDD+ Project' – on Cambodia's largest REDD+ project, run jointly by Cambodia's Environment Ministry and conservation organisation Wildlife Alliance.

Rainforest protection

The Southern Cardamom REDD+ project aims to protect the rainforest and wildlife of Cambodia's Cardamom mountains by deploying rangers to patrol half a million hectares, running eco-tourism initiatives, offering agricultural training to local residents, and supporting construction of basic infrastructure.

In our extensive dialogue with Wildlife Alliance – a year of letters and meetings prior to publication – the group repeatedly asserted that forest is "under siege" from illegal loggers, poachers, and land grabbers.

Undeniably, encroachment on protected areas is a pressing issue in southwest Cambodia. Yet, it is also true that the Cardamom mountains have been home to Chong Indigenous people for centuries. They should not be treated as outsiders or interlopers to be pushed out.

What would best practice look like instead? In Cambodia and elsewhere, government authorities should survey Indigenous territories in partnership with Indigenous communities to identify physical markers of customary use, and issue land titles.

Both the government and private entities should ensure participation, including of Indigenous women and youth, in decisions that may affect their rights and livelihoods.

When they consent to a project in their territory, it should be clear how Indigenous people stand to gain through binding and transparent benefit-sharing agreements.

Our investigation found that there wasn't adequate consultation with  Indigenous communities prior to undertaking the Southern Cardamom REDD+ project. Seven years into the project, several community members in Indigenous Chong villages told us they faced harassment, arrest, and jail time for foraging or farming in "protected" areas.

Their villages, their foraging areas, and the farmland they've customarily relied on had been included in a national park without consulting or compensating them, and the park is now the heart of the REDD+ project. To date, no binding benefit-sharing agreement has been signed with communities.

Verra certification

The project was certified by US-based registry Verra, one of the main accreditation organisations in the voluntary carbon market, under three of its standards. Verra issued more than 27 million credits to the project's account between 2018 and 2023.

Verra's rules, and the audits required to demonstrate compliance with those rules, were supposed to prevent abuses from happening. In fact, several issues we documented were raised in audits submitted to Verra.

For example, the first audit, prepared by SCS Global Services in 2018, noted that project activities began on January 1, 2015, but that meetings to inform communities about the project and seek their consent only began 31 months later, in August 2017. SCS denied any wrongdoing.

Another audit, prepared by Aster Global in 2021, noted that "several communities reported high numbers of persons with no knowledge of the REDD+ project." It said that, "High numbers of these persons report they do not know about the definition of REDD+, its implementation, how REDD+ benefits and funds will be shared to the community, [and] boundary demarcation between REDD+ and their farmlands." Aster Global declined to comment on our findings.

We asked Verra why it did not act on these red flags when we first shared our preliminary findings in May 2023. Verra opened an investigation and put the project's registration "on hold", but almost a year later, the outcome was still pending and the project is still listed as "on hold".

Equally important, several issues we documented were not reflected in audits. The project's description submitted to Verra in 2018 acknowledges that the Cardamom mountains have been home to Indigenous Chong people for centuries. But subsequent audits did not ascertain whether Indigenous territories had been surveyed and titled, or whether the project could undermine Indigenous peoples' livelihoods.

However, the auditing firms and Verra are not even the major industry players most intimately involved in the project. Wildlife Works Carbon (WWC) helped design and fund the project.

WWC also trained Wildlife Alliance staff to consult with communities, and wrote the project description and every monitoring report submitted to Verra. The Cambodian government appointed Everland, a marketing firm founded by WWC executives, to be the exclusive broker of the sales of carbon credits.

In response to the allegations, WWC denied any wrongdoing, and said it had recently hired a staff member in Cambodia to mediate "conflicts and grievances" between communities and government rangers. Everland said they remain "committed" to the Southern Cardamom REDD+ Project. Neither response contributes to a genuine remedy for rights abuses.

While maintaining that it disagreed with our findings, Wildlife Alliance committed to: "provide technical and financial support" for "indigenous community land titling"; "provide formal human rights training to all Cambodian government rangers and Wildlife Alliance staff"; and develop a "formal Human Rights Policy." These commitments, if implemented, can have a positive impact.

But they skirt the central issue: the need for Wildlife Alliance – and all others involved – to acknowledge and remedy the human rights harm already caused by the project.

To ensure accountability, Verra should make reinstatement of the suspended project conditional on comprehensive remediation for this harm, including monetary compensation for victims, the recognition of Chong peoples' land rights, and a new consultation process to enable the Chong to freely decide whether this carbon offsetting project is one they actually want – and if so, on what terms. As for Verra itself, the ordeal creates a responsibility to examine why its monitoring mechanisms were not able to prevent the harm.

Any market actor that treats human rights as an afterthought, rather than a responsibility that must be collectively met, will reap a bitter harvest.

Editor's note: Quantum asked for comment on the points raised in this article. However, the companies either declined to comment while Verra's investigation is ongoing, wanted to wait until they had seen the full article before commenting or did not respond.