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Carbon Colonialism: The Failure of Carbon Offset Projects in Uganda

December 19, 2017
Anuradha Mittal / The Oakland Institute

As the One Climate Summit began in Paris, the Oakland Institute's new report, Carbon Colonialism: Failure of Green Resources' Carbon Offset Project in Uganda, exposed the false solutions to climate change promoted by some Western corporations and institutions in Africa. In Uganda, one major carbon-offset project -- supported by a number of international financial institutions -- illustrates how climate change is increasingly misused as a pretext for imposing a new form of "carbon colonialism" in Africa.


Help End Carbon Colonialism
Anuradha Mittal / The Oakland Institute

Despite what Donald Trump may say, we are in the midst of a climate crisis -- one that demands immediate and serious action. But some solutions touted by powerful companies and institutions have nefarious consequences.

In 2014, we exposed the false climate solutions peddled by Green Resources -- a Norwegian plantation forestry and carbon credit company operating in Uganda. Green Resources boasted being the largest plantation forestry company in Africa with an investment of over $125 million in tree planting on the continent -- and one of the first international companies to sell carbon offset credits.

What they didn't reveal was that their 11,000 ha plantation forcibly evicted thousands of villagers from land they relied on for their food and livelihoods . . . . All in the name of climate change mitigation.

The good news is that our expose on Green Resources' carbon violence secured major wins. The company's only carbon credit buyer -- the Swedish Energy Agency -- had to withdraw funding and its major shareholder -- Phaunos Timber Fund -- divested from the company!

But these important wins are under threat as the Swedish Energy Agency reassesses resuming payments to Green Resources in early 2018. The Oakland Institute delivered a significant blow to Green Resources in 2014.

To end this carbon colonialism for good, we just released an in-depth investigation exposing the continued failure of Green Resources in Uganda and the complicity of carbon trading audit systems. Communities forced from their lands by the plantation continue to face an acute hunger crisis as they are denied access to water, firewood, and land for grazing animals. Stealing from the poorest and most marginalized is not a solution to climate change!

"The Oakland Institute's first report amplified the voices of those who carry the heaviest burden of carbon offset projects in Uganda, and brought global attention to Green Resources' mis-deeds. This gave local people hope their calls for justice may be respected.
"Our hope with this second report is that justice will be delivered to our communities. That would be a good Christmas present to the people of Caching."

-- David Ssemwogerere, Suubi Centre, Uganda.

Carbon Colonialism: The Failure of Green Resources' Carbon Offset Project in Uganda
The Oakland Institute

(December 12, 2017) -- As the One Climate Summit began in Paris, the Oakland Institute's new report, Carbon Colonialism: Failure of Green Resources' Carbon Offset Project in Uganda, lays bare the false solutions to climate change promoted by Western corporations and institutions in Africa.

This scathing expose reveals how Green Resources, a Norwegian industrial forestry and carbon-offset project, continues to undermine food security and livelihoods by excluding people from their own land in Kachung, Uganda. The project, supported by a number of international financial institutions, illustrates how climate change is increasingly misused as a pretext to impose a new form of colonialism in Africa.

Following the Institute’s expose in 2014, revealing the mistreatment and violence perpetrated by the company in Uganda, Green Resources' only carbon credit buyer, the Swedish Energy Agency, suspended funding in 2015 and outlined ten actions for the company to undertake to reinstate payments. The following year, Green Resources' major shareholder, global forestry investment firm Phaunos Timber Fund, divested from the company.

As the Swedish Energy Agency reassesses whether to resume payments to Green Resources in early 2018, Carbon Colonialism is an irrefutable indictment on the failure of Green Resources to address the harmful impacts on local communities as a result of its project.

"Our field research reveals that communities surrounding the plantation face an on-going hunger crisis resulting from restrictions placed by the project on access to land, water, firewood, along with perilous working conditions for Green Resources' workers," explained Kristen Lyons, lead author of the report and Senior Fellow at the Oakland Institute. "It is simply unacceptable that a Norwegian company seeks to extract a profit in the face of such dire conditions," she continued . . . .

In the 2014 report The Darker Side of Green: Plantation Forestry and Carbon Violence in Uganda, the Oakland Institute exposed the devastating impacts of Green Resources, a Norwegian plantation forestry, carbon offset, forest products, and renewable energy company.

Despite Green Resources' grand standing as good corporate citizen -- including claims to have planted more trees in Africa than any other private company in the last ten years, and investing over $125 million in tree planting -- the Oakland Institute exposed Green Resources' misconduct at its two project sites in Uganda -- Kachung and Bukaleba.

The social, cultural, and environmental damage caused by Green Resources was called out as carbon violence, given the suffering and destruction reported was directly tied to the company establishing industrial monoculture forestry plantations for entry into carbon markets. Following the exposure of Green Resources' poor conduct at its Kachung site, the state owned Swedish Energy Agency -- Green Resources only carbon credit buyer -- stopped payments to the company in November 2015.

The significance of this cannot be overstated. The arrangement between Green Resources and the Swedish Energy Agency was touted as the longest carbon deal -- running between 2012 and 2032 -- and Green Resources claimed to be one of the first international companies to earn revenue via the sale of carbon credits from its forestry plantation.

This landmark project had barely begun when the company's misconduct ground it to a halt. Shortly after this financial blow, Green Resources' major shareholder, Phaunos Timber Fund, also divested, placing additional financial pressure on the company. The deep flaws in Green Resources' conduct, characterized by mis-treatment towards local communities and a detrimental impact on the environment, cost the company access to its sole carbon market.

In explaining its decision to withdraw from the buying arrangement, the Swedish Energy Agency drew attention to human rights concerns: "Villagers were (being) deprived of vital resources and experienced threats and violence, and there is a lack of clarity regarding ownership in the reserve."

What has been the response of Green Resources to such criticisms? This report draws upon the only known independent assessment of Green Resources activities at Kachung and reviews the company's claims against those of villagers on the ground. From this new study, the report highlights the limits of governance of the carbon market, including the failings of relevant agencies to adequately monitor the social, environmental, and other impacts associated with carbon projects.

Executive Summary
In 2014, the Oakland Institute released The Darker Side of Green: Plantation Forestry and Carbon Violence in Uganda, a report documenting the mistreatment and violence directed at local communities by Norwegian plantation forestry and carbon offset company, Green Resources.

As a result of its abusive conduct, Green Resources (Uganda) is now excluded from participation in carbon markets. Its carbon credit buyer -- the state owned Swedish Energy Agency -- withdrew its funding in 2015, and outlined ten reforms and actions that Green Resources must undertake before payment is reinstated.

This was followed by Green Resources' major shareholder -- global forestry investment company, Phaunos Timber Fund -- divesting from the company in 2016. With the Swedish Energy Agency's decision expected in 2018 regarding whether it will resume its purchase of carbon credits from Green Resources, a re- assessment of the company’s activities is necessary.

This report provides an update on Green Resources' project in Kachung, Uganda, since the publication of our 2014 Report. Drawing from extensive research conducted between November 2016 and August 2017, it exposes the company’s continued failure to address the many issues faced by local communities in relation to its project.

This most up-to-date study of Green Resources in Uganda shows that the company has failed to respond to the Swedish Energy Agency's requirements for re-instatement of carbon credit payments. Demonstrating this, the reality on the ground for local communities is far removed from the good news Green Resources spread.

Green Resources commissioned an audit of company activities, which was released in March 2017. Importantly, this audit deems Green Resources "non compliant" and calls it out for failing to take effective steps to address the food security crisis in the district in which it operates. The company, however, is deemed "fully compliant" in addressing land issues.

This is puzzling given this compliance is largely based on the company's efforts to make people aware of the government laws that evicted them from lands that were essential for their livelihoods. The auditors allow Green Resources to shirk its responsibilities by placing the onus on the government to address land shortage and related land conflicts.

While Green Resources may be deemed legally compliant, their activities are conducted on land grabbed from the people and therefore violate their basic human rights, undermine their livelihoods, and threaten their very survival.

In other instances, Green Resources are deemed "partially compliant" or "compliant" to the Swedish Energy Agency's demands, yet our research ascertains differently. The company demonstrates a poor understanding of its social and economic impacts; for instance, it misrepresents and over-inflates the employment opportunities it provides.

The company's approach to the reduced availability of firewood resulting from its activities is also highly disconcerting. Green Resources' key intervention in this field has been to train a number of villagers in the construction of energy-saving cook stoves. However, not only has this intervention failed, with very limited uptake in villages, but it also misses the acute daily challenge villagers face to secure adequate firewood for cooking.

Overall, the industrial monoculture plantation forestry run by Green Resources at its Kachung site is simply incompatible with the presence and needs of local people who rely upon the same land for their livelihoods.

Our findings expose, more broadly, the limits of carbon market audit systems, including the so-called "due diligence" of carbon credit buyers, to ensure fair corporate conduct across carbon markets. The research exposes the bias of audit reporting in favor of the company; with corporate compliance commensurate with the violation of basic human rights and undermining of local livelihoods. Villagers that expect any more from Green Resources are described as unrealistic.

While local villagers carry the social, environmental and other costs of this project, Uganda is unable to claim any of these carbon offsets as part of its own emission reduction targets. This system is carbon colonialism at work, with the natural resources of an African country exploited by foreign interests under the guise of sustainable development and at a high cost for the people and the environment. Such circumstances should be a matter of serious concern to Green Resources' shareholders and financers, who share responsibility with the company in supporting a project that has such a detrimental impact on local populations.

The findings of this report call for the following actions:
1. Swedish Energy Agency suspend future payments to Green Resources and cancel the deal for purchase of carbon credits.

2. Development finance institutions -- Norfund, the Netherlands Development Finance Company FMO and Finn-fund -- suspend funding to Green Resources given the company's detrimental impact on people’s livelihoods and the environment.

3. The assessments and audit systems for carbon markets must by critically evaluated and revised so that they actually take into account the livelihood and environmental impacts of forestry plantations.

4. Given the role of many governments in facilitating land grabs in their own countries, international bodies and agencies involved in carbon markets must set up higher standards for the recognition of common and customary land rights than just the legality of contracts and land leases.

5. Global action to establish sustainable energy futures, including rapid expansion in renewable energy options, must be promoted and supported, thereby reducing global greenhouse gas emissions and the subsequent reliance on offset initiatives.

The Oakland Institute is an independent policy think tank, bringing fresh ideas and bold action to the most pressing social, economic, and environmental issues of our time.

Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.




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