New report on Norwegian "carbon plantations" in Tanzania: Carbon Upsets

By Jørn Stave
Norwatch

Earlier this year, NorWatch published a report on Tree Farms' plantation project in Uganda, a project that may lead to the loss of livelihood for about 8,000 farmers and fishermen (see NW 5/2000). The report also pointed out that the land-lease agreement with the Government smacked of a kind of neo-colonialism. In the aftermath, the Ugandan project has been excepted from the options contract that Tree Farms has signed with Industrikraft Midt-Norge for the sale of so-called carbon credits (see NW 6/2000).

However, the company has other forestry projects in the neighbouring country of Tanzania, and these will now benefit Norwegian gas power developers. Therefore, NorWatch visited Tanzania in May this year, and the results can be found in the report "Carbon Upsets - Norwegian 'Carbon Plantations' in Tanzania".

Credits for sale
One of the motives behind Tree Farms' grand investments in the East African countries of Uganda and Tanzania is the desire to sell emissions credits to Norwegian polluting industries. According to the Kyoto Protocol, which requires industrialised countries to limit their emissions of greenhouse gases, private companies can start climate change-related projects in developing countries. The emission reductions can then be credited to the rich countries through the purchase of carbon credits, with profits accruing to the company implementing and funding the project. This is the mechanism that Tree Farms is now exploiting by planting trees that will sequester the greenhouse gas CO2, and thus compensate for emissions in Norway and other rich countries.

Tree Farms is in the process of acquiring more than 80,000 hectares of land in southern Tanzania, not far from the formerly NORAD-supported sawmill Sao Hill. These areas are planted with pine and eucalyptus, and will, according to the company's calculations, store some 500 tons of CO2 per hectare. This means earnings in the amount of tens of million USD if international climate change negotiations lead to the approval of carbon credits based on tree plantations in developing countries.

In comparison, Tanzanian authorities earn 1,500 Tanzanian shillings (USD 1.9) per hectare per annum in rent for Tree Farms' lands, which are leased for a 99-year period. This is a mere fraction of the profits that the Norwegian company can expect from trading emissions credits. The report therefore questions whether the projects will contribute to sustainable development in Tanzania, as required under the Kyoto Protocol, or if this kind of trade in lands and carbon credits will only benefit industry and investors in Norway and other rich countries.

Unpaid wages
Tree Farms has at times employed up to 500 workers from the villages around the plantation areas. The workers plant trees, build roads, and guard the company's lands. When NorWatch visited the three villages concerned, Idete, Uchindile, and Mapanda, it emerged that many workers had not been paid for a long time.

"I estimate that about 60 of the villagers here have pay outstanding from the company," says Mussa Lihava, Chairman of the Village Council in the small village of Idete. In the period from 1998, when the company started afforestation outside the village, and until today, the company has only paid wages for July and August 1999, says a resigned Lihava.

The Uchindile village council says they have just sent a complaint to Tree Farms' subsidiary Escarpment Forestry Company Ltd. (EFC), demanding that wages be paid soon, but EFC had not yet answered when NorWatch visited Idete. The management in Tanzania has previously explained it all by saying the money comes from a faraway place (i.e., Norway), and hence that nothing can be done about the problem.

After NorWatch discussed the missing payments with the Norwegian management, Tree Farms' Managing Director Odd Ivar Løvhaugen now claims that wages were paid just after NorWatch's visit to the villages. Løvhaugen also says that the workers have got a pay rise, and that today, they are paid 1,000 Tanzanian shillings (USD 1.25) per day. This is just above the Government's recommended minimum wage. In the period before this pay rise, Tree Farms has paid its workers below Government rates.

Poor climate measure
Unlike Tree Farms' concession area in Uganda, which is ridden with land conflicts between the locals and the authorities, the villages concerned in Tanzania have voluntarily ceded their lands. After large parts of the population were gathered in villages under president Nyerere's ujamaa policy in the 1970s, wide-spread grassland savannas are today at the Norwegian company's disposal. The deal with the villagers, however, has a clause requiring Tree Farms to contribute education materials and health services in the poor villages. Nearly five years after the company set itself up in Tanzania, nobody has seen the promised benefits.

"We don't intend to sneak out of our commitments," Løvhaugen assures us. "This is a long-term investment, and it will take a while before this can be realised. But when operations get underway, and the market in carbon credits possibly is established, we will be able to contribute to a huge social and economic upswing in the villages", Løvhaugen emphasises.

However, the final outcome of the Norwegian afforestation projects in Tanzania is not just local and social in nature. Tree Farms is operating in the context of global climate change, and will allow Norwegian companies to increase their greenhouse gas emissions. The idea is for carbon to be stored in trees and wood products instead of in oil, coal, and gas. The NorWatch report discusses a number of objections to approving sequestration of the rich countries' CO2 emissions in tree plantations in developing countries:

- Changes in the carbon content of soils may lead to a negative carbon sequestration budget.

- There are no guarantees that the trees will not be felled or burned as a result of future land conflicts or wildfires. Tree plantations are a highly uncertain and provisional carbon store.

- Leakage effects in the form of e.g. emissions from sawmills or a paper factory, as well as socio-economic changes, may lead to major errors in the total carbon budget.

- The Kyoto Protocol requires all climate projects to be addtitional to the measures that would have been implemented in the absence of this agreement. This criterion is fraught with problems. According to Tree Farms, the afforestation would have been carried out without regard to the market in emission credits, since the company is also highly involved in conventional forestry.

The report "Carbon Upsets - Norwegian 'carbon plantations' in Tanzania" can be ordered from norwatch@fivh.no or Tel. +47 22 20 10 45. It is also available at NorWatch's home page http://www.fivh.no/norwatch.

"When we asked about the salaries, the company told that the money came from a place far away and that it was nothing that could be done about it."
Villagers of Uchindile, May 8, 2000

Norwatch Newsletter 8/00