Norway’s Auditor General rips into rainforest billions

May 20, 2018 News

Norway did little to prevent fraud with its climate funds, the country’s audit office said last week.

-risk of fraud not well managed, payment were delayed

Over the past ten years, Norway has handed out almost US$3 billion (NOK 23.5 billion) on stopping tropical deforestation.
In November 2009, the administration of Bharrat Jagdeo signed a historic forest deal with the European country that saw the Scandinavian country invest US$250m (£150m) to preserve the rainforests in this South American country.
It was hailed as one of the biggest forest conservation deals ever signed. Both sides signaled their intention to “provide the world with a working example of how partnerships between developed and developing countries can save the world’s tropical forests.”
Under the terms of the agreement with Norway, Guyana was to accelerate its efforts to limit forest-based greenhouse gas emissions and protect its rainforest as an asset for the world.
The accelerating destruction of the rainforests that form a cooling band around the earth’s equator is recognised as one the main causes of climate change.
Five years later, the deal was supposed to have expired.
However, Guyana was granted an extension to complete its obligations.
About US$80M is sitting in an account after it was earmarked for the Amaila Falls project.
Guyana has collected a significant portion but lost at least US$18M because of penalties.
On May 15, Norway’s Office of the Auditor General completed its investigation into Norway’s International Climate and Forest Initiative (NICFI). The report is critical of the arrangements with the countries that Norway signed the deal with.
According to the findings, “The Office of the Auditor General’s investigation shows that progress and results are delayed, that current measures have uncertain feasibility and effect, and that the risk of fraud is not well-managed.”
Per-Kristian Foss, National Auditor, was clear that “there is a need to ensure better control of the use and results of these funds.”
“International efforts to preserve tropical forest have not found solutions to address these global challenges. There is therefore uncertainty about further implementation and whether the measures give lasting effect.”
According to Norway’s Audit Office, there were cases where the Ministry of Foreign Affairs and the Ministry of Climate and Environment have not prevented and followed up the risk of financial fraud.
“This includes inadequate partner assessments prior to entering into an agreement and a lack of response when collaborative partners have been investigated for possible financial fraud. The administration has not complied with its own guidelines and has taken unnecessary risk of loss and abuse of Norwegian funds.”
According to the Audit Office, the report is an important report, not just for Norway, but internationally.
“Norway is by far the largest REDD donor, and the findings are relevant for the international attempt to implement REDD.”
REDD is the acronym for reducing emissions from deforestation and degradation of forests.
The results of REDD+, which is the fund that was created for the forest deal, so far are delayed and uncertain, the report of Norway’s Audit Office said.
The office found conflicts of interest and alternating political priorities in the partner countries prevented and delayed measures and results.
In five out of eight of the bilateral cooperation cases, payment for emission reductions has been delayed.
“The weak implementation of REDD+ at the national level and in central tropical forest countries means that stopping logging in one place can still be replaced by logging elsewhere.”
It was found, also, that Norway bore the strain with its contribution to REDD+, the fund that was established, which has not triggered enough funding from other donors.
“Norway is the largest donor of funds for REDD +. Compared with other major donors, Britain and Germany, Norway accounted for 51 percent of the contributions in the period 2008-2016.”
The report was highly critical of the findings that the control of the implementation and results of REDD + did not work well enough.
“There is not good enough follow-up of social and environmental safeguard mechanisms, such as indigenous peoples’ rights, poverty alleviation and conservation of natural forests. The recipient countries have little reporting. The Ministry of Climate and Environment does not compensate sufficiently for this.”
The report said that measurement, reporting and verification of reductions in emissions due to REDD+ are only partially in place.
“Progress on this work has been low in Brazil, and elsewhere. The Ministry of Climate and Environment is not systematic enough in the collection and use of information about the results of Norway’s International Climate and Forest Initiative.”
The Ministry of Climate and Environment has developed a framework for measuring progress towards milestones and targets, the Audit Office noted.
However, a small system of data retrieval and analysis weakens the ministry’s foundation for management and learning from REDD+ testing.
The survey shows cases where the Ministry of Foreign Affairs and the Ministry of Climate and Environment have not prevented, followed up and handled the risk of fraud against Norwegian recipients of Norwegian funds.
The report recommended that the Ministry of the Environment further develop measures to address the need for lasting results in REDD+ through work towards the UN Climate Change Convention and in bilateral cooperation.
“It also called for a strengthening of the Ministry’s information base on the safeguarding of social and environmental security mechanisms in payments for results.”
The findings and recommendations would worry Guyana and the Coalition Government which has signaled an intention for another deal.
Factions of Norwegian politicians have been objecting to the climate deals that were entered by that country.