In Brazil's Amazon, carbon credit project halted over land dispute
Macaws sit on a tree at the Amazon rainforest in Manaus, Amazonas State, Brazil October 26, 2022. REUTERS/Bruno Kelly
What’s the context?
A forest conservation project that sold carbon credits is under review after Context revealed its offsets came from publicly-owned land
- Forest conservation project probed over canceled land titles
- Context finds private carbon credits sold from state land
- Case fuels concerns about exploitation of disputed areas
- Certifying body launches review, halts credit issuance
RIO DE JANEIRO - A corporate conservation project in Brazil's Amazon rainforest has sold carbon credits from publicly owned land without state authorization, a Context investigation has found, highlighting concerns about the credibility of offsets from areas with disputed land ownership.
Analysis of land titles and court proceedings, and interviews with officials in Pará state, reveal how a carbon offset program continues to operate several years after the state registered most of the project area as public land - a landmark move that has triggered a complex legal battle.
The Jari Pará REDD+ Project in northern Brazil gained approval to issue carbon credits in 2020 from Verra, a leading organization that certifies offsets, and became Verra's biggest registered project in Brazil by area. It covers about 497,000 hectares (1.23 million acres), an area more than four times larger than Hong Kong.
In response to Context's investigation, Verra said it had launched a review of the Jari Pará REDD+ Project and suspended the issuance of new carbon credits from the project.
Jari Pará is part of a wider REDD+ program in the Jari Valley, managed by two private companies - Jari Celulose, which produces water-soluble cellulose used in fabric production, and Biofílica Ambipar Environment, which specializes in carbon offsets - together with the Jari Foundation.
The program aims to reduce planet-heating emissions from deforestation and forest degradation and protect biodiversity by supporting local ways to earn a living, like Brazil nut processing, which keep trees and their stored carbon intact.
Buyers of the Jari Pará project's credits include international firms Janssen, 3M, CNN and BMW, and Brazilian media company Globo and bank Bradesco, which make such purchases to offset climate-heating emissions from their own businesses while also protecting forests.
However, a Brazilian prosecutor, a Pará state attorney and researchers told Context that the Jari Pará REDD+ project contravenes Brazilian law because it has sold carbon credits based on an invalid claim to a 386,000-hectare land parcel, known as Fazenda Saracura, which was registered as public property in 2018.
Ibraim Rocha, a Pará state attorney who has been involved in the case for more than a decade, said there is "no doubt" the area is now "state property".
He added that Jari Celulose has no legal right to the land and cannot execute a carbon project there, as Brazil's forest code, and its legislation on sustainable production in public forests, stipulate that private business can only be conducted in those areas with state permission.
Registration documents for the Jari Pará REDD+ project submitted to Verra in 2019 described Jari Celulose as "the legitimate owner" of the Gleba Jari-I estate where the project is located. That includes the Fazenda Saracura parcel that had been registered as public land the previous year.
In response to Context's findings, Jari Celulose said that a 2021 provisional ruling by a Pará state lower court determined the company has "possession" of Fazenda Saracura, which, in property law, denotes a considerable degree of control over an asset but does not equal ownership.
Jari Celulose asserted that the 2021 ruling called into question the state's decision in 2018 to register Fazenda Saracura as public land, adding that this would make it possible for the company to seek ownership of the property.
Both Jari Celulose and Biofílica said that, according to Verra's rules, possession of the area was enough for them to sell carbon credits connected to forest protection on the land.
However, Rocha said the retaking of Fazenda Saracura by the state made possession by Jari Celulose impossible, citing rulings from Brazil's Superior Court of Justice on the topic.
In 2022, the Pará state land authority ITERPA appealed to a higher court to revoke the 2021 ruling on Jari Celulose's possession of the land. A final decision has yet to be reached.
This month, after learning about the 2021 ruling from Context, Rocha also petitioned Pará state courts to revoke it.
Two academics - José Heder Benatti, a researcher at the Federal University of Pará and former president of ITERPA and Gustavo Kloh, a law teacher at Brazilian university FGV - analysed the 2021 ruling at Context's request and said it did not reverse the registration of the land as public property.
Financial assets from contested land
The Jari Pará case adds to rising concern among Brazilian academics and officials that financial assets - from carbon credits to non-fungible tokens (NFTs) - are being created and sold internationally, based on Amazon land ownership that is contested or has been ruled invalid by government authorities.
Development of the Jari Pará REDD+ project began in 2014 on land Jari Celulose says it has controlled since 1948.
But analysis by Context of documentation and juridical processes concerning Fazenda Saracura found that a state court concluded in 2012 the company did not own the area. Following this ruling, the land title was cancelled in 2016.
In 2018, the state registered Fazenda Saracura as public property, changing its name to Gleba Arraiolos.
Despite this, the 2019 Jari Pará REDD+ Project description and validation documents listed on Verra's website include a link to the parcel of land in Brazil's Land Management System (SIGEF) registered in the name of Jari Celulose.
SIGEF's website states, nonetheless, that the land title was cancelled in 2016 and is invalid.
Land ownership is a persistent source of dispute in Brazil's Amazon region, plagued by a frail registration system and the common practice of claiming ownership over public land often using documents produced or altered without legal authority, entailing long court battles.
State attorney Rocha said the Jari Pará case shows "we have still not faced up to the problem of land-grabbing in the Amazon".
"Carbon credits are making it more complicated," he added in a phone interview, describing the practice of sourcing credits from public land "as carbon land-grabbing".
Private land titles canceled
The legal process that led to Fazenda Saracura being registered as public built on efforts by the Pará State Court of Justice and the National Council of Justice over the past two decades that canceled or blocked thousands of private land titles issued by registry offices across Pará, including all the parcels used for the Jari Pará REDD+ project.
When a land certificate is blocked, it cannot be sold without a court authorization.
Historically, land-grabbing in Brazil has been facilitated by irregular ownership deeds issued by local notary offices that were never checked by government authorities.
According to research published this January by environmental groups including Imazon and Climate Policy Initiative, Fazenda Saracura is the only publicly known case among the thousands of titles canceled by the state to have since been registered by the government as public property.
State officials and researchers said this registration calls into question the credibility of the Jari Pará REDD+ project, which was designed to generate carbon credits and revenues from their sale for three decades from 2014 to 2044.
In a previous statement to a Pará state judge, Jari Celulose said it expected to make at least R$45 million ($8.54 million) by selling carbon credits over an unspecified period.
Girolamo Treccani, a researcher at the Federal University of Pará who has helped authorities investigate Jari Celulose's land claims, questioned how a planned 30-year project could be "based on something so precarious", referring to the land title battle.
Verra checking 'project ownership'
Jari Celulose told Context it has the right to operate a carbon project on the Fazenda Saracura land, despite it having been declared public, because a Pará state lower court in 2021 ruled that the state's land authority ITERPA should not take action against the firm's possession of the area.
The court said the asset was central to the financial restructuring of Jari Celulose's highly indebted parent company Jari Group, which has operations in forestry, paper and packaging.
In a related case, ownership certificates for another Jari Pará REDD+ project parcel of 120,000 hectares, called Santo Antônio da Cachoeira, were blocked by a court order in November 2022. The Pará State Court of Justice decision cited evidence presented by the state's Agrarian Justice Prosecution, showing inconsistencies in the land registration documents.
As with Fazenda Saracura, the prosecution requested that this smaller area also be registered as public. There has yet to be a final court ruling in this second case.
According to Herena Melo, the agrarian prosecutor who led this investigation, the cancellations and blockages now in force against Jari Celulose's land claims guarantee that the "land cannot be used - the carbon credits cannot be traded".
Jari Celulose said it is following proceedings to regularize the 120,000-hectare area, as well as others included in the carbon credit project that are currently canceled or blocked.
Verra told Context it is reviewing whether Jari Celulose has "project ownership" of Jari Pará - which, according to Verra's rules, means the "legal right to control and operate project activities", which it said "differs from land ownership".
Biofílica said it had been notified of the Verra review, while Jari Celulose said it had not.
During the registration process with Verra, the Jari Pará REDD+ project verifier, Italian auditing company RINA, noted in a 2019 report that the state cancellations affecting the project's rural properties did not "imply automatic loss of ownership".
RINA told Context its role was "not to ascertain the ownership of the land" but to "certify the compliance of the project to the Verra standard", adding that the documentation presented by the project's developers "was satisfactory".
This month, Context obtained from a registry office in Pará the 17 main project land titles analysed by RINA and verified that four were still blocked and the remaining ones canceled.
According to Melo, this means that the titles are still invalid, although those other than the Fazenda Saracura parcel - which has been declared public land - could be reinstated.
Timber out, carbon in
Since Portugal started to colonize what comprises modern-day Brazil in 1500, all of the country's land has legally been considered state property unless transferred into private hands.
But there are still more than 50 million hectares of public land - concentrated in the Amazon rainforest - that have never been legally designated as private property or publicly protected areas, which makes them vulnerable to land-grabbing.
In May 2022, Brazilian news outlet Agência Pública reported that the Ecomapuá Amazon REDD Project, which is also certified by Verra, was selling carbon credits connected to two public conservation reserves in Pará state.
When questioned by Context about this project, Verra said it had recently learned the project manager was "undergoing a legal process to clarify ... its rights regarding use of the land".
Verra said it was reviewing information about this legal process to determine its next step, which might include a review of the carbon project and the suspension of credit issuance.
In a separate development, Britain's Guardian newspaper reported in mid-March that Verra plans to phase out and replace its rainforest carbon offsets program by July 2025.
In response, Verra told Context it is "consolidating and updating" the methodologies it uses for the program, in a process that began several years ago, not phasing out or replacing them.
Researcher Treccani, who co-authored the 2023 research on state cancellation of land titles in the Brazilian Amazon, described the private sale of carbon credits derived from invalid ownership documents as land-grabbing "painted green".
Treccani noted that, in the past, land-grabbers were more interested in logging for timber - but the prize has changed.
"Now there is interest in (offering) an alleged solution to climate change, but making money from public property," he said.
(Reporting by Andre Cabette Fabio; Editing by Megan Rowling and Kieran Guilbert.)
Part of:The Amazon rainforest and climate change
Updated: August 11, 2023
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