April Salumei is a REDD project in Papua New Guinea. Various companies, including Qantas, Eneco Energy Trade, and Norwegian supermarket chain Rema 1000, have bought carbon credits from the April Salumei REDD project. Should you so wish, you can buy carbon credits from the project on the USAID-funded website Stand for Trees.
The project is certified by Verified Carbon Standard. And it was validated under the Climate, Community and Biodiversity Alliance Standards from 2011 to 2016. So far so good. Or bad, given that carbon offsets allow climate pollution to continue, thus dooming the planet to climate chaos.
But there’s another side to the April Salumei story. It’s one that REDD-Monitor has written about more than once. Here are the most recent two posts:
To cut a (very long) story short, here’s what happened. In 2011, a Swiss company called World Markets AG bought five million “carbon benefit units” from the April Salumei project. They were called “carbon benefit units” because at that time the project was not certified by VCS.
World Markets explained in a 2013 “Short Company Presentation”,
Each CBU representing 1 tonne CO2e will later be exchanged for 1 ex-ante Verified Carbon Unit, representing 1 tonne CO2e once the project is approved to Verified Carbon Standard (VCS).
As Natasha Loder, a journalist with The Economist, was at pains to point out in 2009, there’s nothing wrong with buying (or presumably selling) “carbon benefit units” from April Salumei:
If I as a customer, wanted to buy an option right now on the delivery of future certified credits from April Salome forest right now would that make me criminal or clever? It might be unwisely hasty but it would be legitimate. It might also be a good deal because the options I buy now could be worth a great deal more down the line.
Of course, there are other options in addition to the “criminal”, “clever”, and “unwisely hasty” that Loder could have mentioned. “Scammed”, for example. But I’m getting ahead of myself.
World Markets didn’t wait around to see whether April Salumei’s “carbon benefit units” would be worth a great deal more at some point in the future. By the end of 2013, they’d sold them.
From World Markets in Switzerland, the “carbon benefit units” went to London, bought up by scam companies like London Carbon Neutral Ltd, World Future Limited, and Industry RE. These boiler rooms cold called people and persuaded them to buy the “carbon benefit units” as investments.
At each step in the chain, the price increased. World Markets bought the carbon credits for US$0.61 each and sold them for US$1.67 each. The boiler rooms sold them for around £7.50 each.
No doubt the boiler rooms didn’t bother explaining that they were selling “carbon benefit units” and not carbon credits. But even if the “carbon benefit units” had been exchanged for carbon credits (VCUs) before they reached the boiler rooms, they would still be worthless as investments. The judge who ordered World Future into liquidation said,
“I have seen evidence that [World Future’s customers] were being told that the carbon credits were a suitable investment which would go up in price. The true position is that the credits were not a suitable investment at all as they were a wasting asset unlikely ever to be profitable.”
REDD-Monitor was recently contacted by a group of over 150 people who were scammed into buying April Salumei “carbon benefit units”. Unfortunately, they have found out the hard way that the “carbon benefit units” were not a suitable investment at all. Between them, they have lost about £4.2 million.
This group of people has some questions for the April Salumei project developer Stephen Hooper of Rainforest Project Management Limited:
- The approx. no. of tonnes of April Salumei carbon credits owned by Pacific Forest Alliance (PFA)?
- The approx. no.of tonnes of April Salumei carbon credits sold or under control of third parties?
- Whether PFA have set up a website / sales portal that our group can use to sell all or part of our April Salumei carbon credits (subject to price) in an orderly fashion?
- If not,what are your suggestions for how our Group can achive an orderly sale of the April Salumei carbon credits?
- Whether there is any broker you can suggest for our group to achieve this goal?
- Due to the circumstances of our investments will you agree to prioritise the sale of our April Salumei carbon credits?
Despite sending these questions repeatedly to Hooper, they have received no replies to their questions.
REDD-Monitor also has a few questions for Hooper. REDD-Monitor sent the following questions to Hooper today. I look forward to posting Hooper’s replies to both sets of questions in full and unedited.
- Do you feel any responsibility for the fact that people have invested their savings in worthless “carbon benefit units” from your April Salumei REDD project?
- In the CCBA project validation report, the address of your company, Rainforest Project Management Limited, is given as PO BOX 3321, Drake Chambers, Road Town, Tortola, BVI (British Virgin Islands). Where is Rainforest Project Management Limited registered? Could you please send copies of the company’s annual reports since the April Salumei project started on 22 May 2009.
- A draft Project Design Document dated 30 December 2008 for the April Salumei project states that, “Earthsky Ltd has initiated and managed the avoided deforestation project in Papua New Guinea”. Earth Sky’s address is given as Drake Chambers, Road Town, Tortola, British Virgin Islands – the same address as Rainforest Project Management Limited. What is the relationship between Earth Sky and Rainforest Project Management Limited? Is the PNG government REDD agreement with Earth Sky or with Rainforest Project Management?
- Please explain the difference (or relationship) between Rainforest Project Management Limited, which appears on CCBA and VCS documents, and Pacific Forest Alliance, which is the company named on the April Salumei project website.
- In 2011, the April Salumei REDD project issued “carbon benefit units”. Please describe exactly what a “carbon benefit unit” is. How many “carbon benefit units” did the project sell, and how much money did this raise? What happened to this money?
- A company in Switzerland called World Markets bought five million “carbon benefit units” from the April Salumei REDD project. Two years later World Markets sold the “carbon benefit units” at a profit of more than US$5 million. From December 2011 to March 2013 you were a director of World Markets. Were you involved in the sale of the “carbon benefit units”? How much did you personally profit from World Markets’ sale of “carbon benefit units”?
- In July 2011, Sean Lewis, who is listed as the representative of Earth Sky in the April Salumei draft Project Design Document, was appointed chairmanof World Markets. Why did two key people behind a REDD project in Papua New Guinea suddenly turn up on the board of a company in Switzerland – a company that happened to be buying (and subsequently selling) “carbon benefit units” from the project?
- Earthsky Limited appears in the International Consortium of Investigative Journalists’ Offshore Leaks Database (click on the image for a larger version):
Karl Preisig and Graham Taylor were directors of World Markets, and of Earthsky Limited. As mentioned above, Sean Lewis was listed as a “representative” of Earthsky in the April Salumei draft Project Design Document, and was chairman of World Markets. ICIJ lists him as a director and shareholder of Earthsky.
Earthsky Limited was registered in the UK on 26 July 2001. Earthsky was one of eight linked companies ordered into liquidation in November 2015 in the High Court in London, following an investigation by the Insolvency Service.
In a statement, the Insolvency Service explains why Earthsky was ordered into liquidation:
The company’s accounts filed at Companies House disclose that the company has achieved no turnover since its incorporation but nevertheless record that it has been involved in some form of significant business leading to it reportedly having cash at bank of some £17 million in 2004 increasing to some £535 million in 2006 and some £613.5 million in 2011. No explanation has been provided as to the activities giving rise to such cash balances nor a $1 billion trust agreement nor a $30 million bond.
The grounds for winding up the company are that its accounts filed at Companies House are false and misleading and it has failed to maintain, preserve and/or deliver up adequate accounting records and failed to fully co-operate with the investigation.
Do you have any comment on Earthsky’s business, where the money came from, and where it ended up? How did Earthsky come to be involved in the April Salumei REDD project?
- The “carbon benefit units” were registered on something called the IFIT Registry. The only other carbon project listed on this registry is the Lake Murray project in Papua New Guinea – a project also run by Pacific Forest Alliance. Apparently IFIT has more than 80 million “carbon benefit units” on its registry. Have all these “carbon benefit units” been sold? How many of those “carbon benefit units” were from April Salumei, and how many from Lake Murray?
- IFIT and World Markets seem to be closely related. The two companies share an address in Zurich. Rolf H Küng is on the board of both companies. Can you explain why you chose to register “carbon benefit units” from April Salumei on the IFIT Registry?
- IFIT’s Purchase Application Form states that,
Each “Carbon Benefit Unit” (CBU) representing 1 tonne CO2e will be exchanged for 1 ex-ante “Verified Carbon Unit” (VCU) representing 1 tonne CO2e once project is approved to Verified Carbon Standard (VCS)
The April Salumei REDD project was validated under the VCS system in October 2013. Since then, however, the “carbon benefit units” have not been exchanged for VCUs. Why not?
- The Lake Murray REDD project has not been certified by either VCS or CCBA. How many “carbon benefit units” have been sold from this project? What is the current status of the Lake Murray REDD project? Does the Lake Murray REDD project overlap the Kamula Doso REDD project area?
- In 2016, April Salumei sold more than 130,000 carbon credits (VCUs). So far this year, the project has sold more than 100,000 carbon credits. How much money did this raise? Is the REDD project financing itself from sales of carbon credits?
- April Salumei’s validation under the Climate, Community and Biodiversity Alliance Standards expired in June 2016. Why have you not renewed the validation?