Scams and frauds were the top stories on REDD-Monitor in 2014. The previous year, all ten of the most popular stories were about companies selling carbon credits as investments. This year the top seven stories were about scams.
Not all the scams were carbon credit related. The first is an investment in a teak plantation in Brazil, sold to retail investors. The second involves a group of companies that in addition to selling carbon credits as investments also sold plots of land in Africa as investments. And the third involves investments in a jatropha plantation in Cambodia.
During 2014, there were 199 new posts on REDD-Monitor. Most visitors were from the UK, followed by the USA, Indonesia, Germany, Australia and Canada.
The total number of views of REDD-Monitor passed the 2 million mark during 2014. The busiest day was in January with 2,435 views.
To make sure you don’t miss anything on REDD-Monitor in 2015, you can subscribe to receive an email each time a new post appears (just fill in your email address in the right hand side bar). Or you can follow REDD-Monitor on Twitter, Google+, or Facebook.
1. Global Forestry Investments, teak plantations in Brazil and the unravelling of an unregulated investment scheme
Global Forestry Investments claims to be an ethical investment company. But hundreds of investors are now asking where their money went. Andrew Skeene and Omari Bowers registered the company, GFI Consultants Ltd., on 13 April 2010. A company called Emerald Knight sold plots of land in the plantation in Brazil to retail investors. A representative of the company contacted REDD-Monitor and requested that the thumbnail photograph of Skeene and Bowers used to illustrate the post be removed.
In February 2014, the UK’s Financial Conduct Authority won a case in the High Court against two investment schemes promoted by Capital Alternatives and other firms. The FCA accused the firms of “promoting and/or operating collective investment schemes (CISs) in the UK illegally and without our authorisation”. Judge Nicolas Strauss QC ruled that the schemes were collective investment schemes.
This is a story involving a company called Sustainable AgroEnergy, a jatropha plantation in Cambodia, boiler room companies, retail investors asking where their money went, banks in Switzerland, Tanzania and the British Virgin Islands, a member of the House of Lords, and the Serious Fraud Office. It also involves a company called Citadel Trustees, a company that holds the carbon credits that several boiler room companies scammed people into buying.
4. UK High Court shuts down “web” of carbon credit boiler rooms – £19 million scam with Eco-Synergies at the centre
Following an investigation by the Insolvency Service, 13 companies that sold carbon credits as investments have been wound up in the UK’s High Court on the grounds of public interest. The companies had scammed people out of more than £19 million. The Insolvency Service describes the companies as a “web”, with Eco-Synergies Ltd at the centre.
Last week City of London Police led the biggest ever international operation against boiler room fraud, resulting in the arrests of 110 people, mainly in Spain and the UK. The arrests were the result of a two-year investigation, code named “Operation Rico”. A total of 17 boiler rooms have been closed down: 14 in Spain; two in the UK; and one in Serbia.
A company called Sterling and Bond is cold calling people to persuade them to convert their near-worthless carbon credits into a Voice over Internet Protocol (VoIP) scheme. There’s an advanced fee involved. And it’s a ridiculously obvious scam. Sterling and Bond shares its address in Sydney with a company called Velvet Assets. The founder and director of Velvet Assets is Geoff Woodcock, who was previously the sales director for Capital Alternatives (see number 2, above).
A company called London Prestige Capital is cold calling people who have been scammed into buying carbon credits and offering them an exit strategy. For an advance fee. If they contact you, I would suggest contacting Action Fraud.
Last week, the World Resources Institute, Google and more than 40 partners launched an online forest monitoring system. It’s called Global Forest Watch. It’s free and available to anyone with an internet connection. The amount of information contained in the maps is extraordinary. The data shows deforestation, protected areas, biodiversity hotspots, mining, logging, palm oil and wood-fibre plantations. You can download the data by country.
In 2011, carbon markets traded a total of €96 billion worth of pollution allowances and carbon credits. In 2012, the figure was €62 billion. In 2013, it fell to €38.4 billion. The price of EUAs (EU Allowances) has fallen from €18 in 2011 to €5. Those are the findings of Thomson Reuters Point Carbon’s review of the carbon markets in 2013, under the headline “Global carbon market contracts by 38% in 2013 as prices and volumes drop.”
An opinion piece for the magazine Development Today that I wrote about Norway’s REDD deals in Brazil and Indonesia. In an Editorial, Development Today argues that the problem with Norway’s approach to REDD is that it is “hands off”, or results-based. This might work in Brazil, which has by itself dramatically reduced deforestation in recent years. It might eventually work in Indonesia, although deforestation is currently increasing there. The danger is that a hands off approach means sitting back and watching Indonesia’s forests going up in smoke.
See also the response from Anja Lillegraven (Rainforest Foundation Norway) and Rukka Sombolinggi (AMAN).