In 2011, a Swiss company called World Markets AG bought five million “carbon benefit units”. They came from the April Salumei REDD project in Papua New Guinea. World Markets sold the “carbon benefit units” at a profit of over US$5 million.
One of the developers of the April Salumei REDD project, Sean Lewis, was appointed chairman of World Markets in 2011. And Stephen Hooper, who runs the project was a director of World Markets AG from December 2011 to March 2013.
From World Markets, the “carbon benefit units” went to London, to a series of boiler room operations, that sold the “carbon benefit units” at hugely inflated prices to retail investors.
In July 2017, a group of over 150 people who had been scammed into buying “carbon benefit units” got in touch with REDD-Monitor. Between them, they have lost about £4.2 million.
In June 2015, the April Salumei REDD project developer, Rainforest Project Management Limited, sent a “Project Update” to the unfortunate people who had bought “carbon benefit units” as investments. The project update included the following information about converting “carbon benefit units to verified carbon units:
As described in the purchase application forms, each Carbon Benefit Unit (CBU) will be exchanged for a Verified Carbon Unit (VCU) once the April Salumei Project is approved under VCS. The first stage of the April Salumei Project has been approved, validated and verified.
The process to convert the CBU into a VER is straight forward. We have an electronic registry account that we administer. We simply list the VER’s required and retire it or transfer it upon your request and confirmation of your holdings.
In October 2017, REDD-Monitor sent a series of questions to Stephen Hooper, of Rainforest Project Management Limited. In December 2017, I re-sent the questions, along with a few more. Hooper did not reply.
Earlier this week, REDD-Monitor sent some questions to VCS about the April Salumei REDD project. Kate Heller, Communications Manager at VCS replied yesterday. Her responses are posted here in full and unedited:
REDD-Monitor: Could you please confirm the current status of the April Salumei REDD project?
Kate Heller: The current VCS Program status is “registered” and the CCB Program status is “validation expired.”
REDD-Monitor: Does the project still exist?
Kate Heller: Yes.
REDD-Monitor: Does the current status of the project have any impact on the carbon credits that have already been issued under the April Salumei REDD project?
Kate Heller: We cannot speak for the other ‘credits’ issued by the project. However, the permanence of any Verified Carbon Units (VCUs) that have already been issued by the VCS Program is assured through the use of the VCS buffer account. A portion of emissions reductions achieved by any VCS forestry project must be deposited into the pooled buffer based on the risk profile of the project. The buffer account is a single account that holds millions of non-tradable credits to cover potential losses from individual AFOLU projects.
REDD-Monitor: Are you aware that in 2011, a Swiss company called World Markets bought five million “carbon benefit units” from the April Salumei project? And that these “carbon benefit units” were bought up by a series of boiler room operations in London that sold them to retail investors? (Further details here and here.) Now that you are aware of this, does this information have any impact on the carbon credits that have already been issued under the April Salumei REDD project?
Kate Heller: We are aware of these events from seven years ago. Those credits have nothing to do with our program. The VCS program exists to counter questionable accounting claims and transactions, ensuring that carbon credits are backed by robust accounting, third-party auditing, a system of ongoing monitoring and verification, and a transparent registry platform.
REDD-Monitor: The “carbon benefit units” are registered on the IFIT registry. IFIT’s purchase application form states that each “carbon benefit unit” will be exchanged for a verified carbon unit (VCU), once the project is approved to verified carbon standard (VCS). Is there any mechanism for converting “carbon benefit units” to VCUs?
Kate Heller: There is no mechanism to convert “carbon benefit units” to VCUs. The VCS would not allow this as those units do not necessarily meet the rules of the VCS Program, so there cannot be any automatic conversion of those units into VCUs.
REDD-Monitor: Has anyone from either IFIT or the April Salumei project developers Rainforest Project Management Limited (or anyone else) been in touch with VCS about exchanging “carbon benefit units” for VCUs?
Kate Heller: No.
REDD-Monitor: When was the last time that the project validator, Environmental Services, visited the April Salumei project area? When is the next visit planned to take place? And what will be the purpose of this visit?
Kate Heller: Information on site visits by a validation/verification body can be found in the validation and verification reports (both available publically in the project record on the VCS Project Database). The next site visit by a validation/verification body will occur during the project’s next validation and/or verification audit.
REDD-Monitor: April Salumei’s validation under the Climate, Community and Biodiversity Alliance standards expired on 13 June 2016. Has there been any communication from the April Salumei project developers about renewing the project’s validation under CCBA? (I understand that since November 2014, VCS has managed the day-to-day operations of CCBA.)
Kate Heller: The project developers have not notified VCS of an upcoming audit or plans to re-validate the project to the CCB Standards at this time.
REDD-Monitor: When was the last communication that the April Salumei project developers had with VCS/CCBA? Has VCS made any attempt to contact the April Salumei project developers?
Kate Heller: We have been in contact with the project proponent in January 2018.