Norway agency warns of Chinese risk in Amaila project

-says Low Carbon strategy ad hoc

-cites exclusion of stakeholders
-points to logging without value added

The Norwegian government agency through which funds are channelled to Guyana for protecting its forests has warned of the risk to Norway’s reputation if the controversial Amaila Falls Hydropower Project (AFHP) is funded by the Chinese and has urged Oslo to send a high-level team here to discuss these and other issues.

Even as it described Guyana’s Low Carbon Development Strategy (LCDS) as being a “stand-alone more-or-less ad hoc collection of projects,” the Norwegian Agency for Development Cooperation (NORAD) raised issues such as Chinese logging companies in Guyana not engaging in value-added activities.

This has been in the spotlight recently with the Stabroek News and Kaieteur News reporting on the failure of several logging companies including China’s Bai Shan Lin and India’s Vaitarna Holdings Private Inc to fulfill commitments to undertake value-added activities here. Although the Guyana Forestry Commission has defended these companies, it has also noted that several other companies have also not moved to undertake value-added activities.

NORAD has also pointed out that despite the LCDS, the Government of Guyana is still maintaining a high carbon development path.

The agency urged Oslo to impress on the Government of Guyana that Norway, whilst fully respecting national sovereignty, is keen to see that all uses of Norwegian funds are unlikely to damage Norway’s international reputation.

NORAD is a directorate under the Norwegian Ministry of Foreign Affairs (MFA) and since 2010, it has been monitoring Norway’s International Climate and Forest Initiative (NICFI) via which Guyana is paid to protect its forest. Under the Guyana-Norway partnership inked in 2009, Guyana could earn up to US$250 million from Oslo in performance-based payments for the period up until 2015, based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities. REDD+ is a global initiative that aims to reduce greenhouse gas emissions from deforestation and forest degradation.

In its latest report released on Monday, NORAD said that in addition to perceived politicisation of the LCDS, there are other concerns about which Norway should be aware, some with the potential for reputational risk to Norway or NICFI. Most of the concerns relate to the LCDS, “it being a stand-alone more-or-less ad hoc collection of projects which are operating in a parallel policy environment, in which the Government of Guyana is still maintaining a high carbon development path/trajectory,” NORAD said while citing new “non-green” construction projects, transport/motor vehicle import practices and incentives.

It noted that there appears to be growing opposition to the way specific activities of the LCDS project portfolio, such as the Amaila Falls project, are being implemented.

 Wisdom

“The wisdom of constructing a single large hydroelectric power dam, as opposed to several smaller hydroelectric power schemes closer to centres of population, is challenged by many Guyanese stakeholders, and also the World Bank,” NORAD noted.

“As well as being challenged technically – water flow is not guaranteed for all 12 months – and ecologically, there is also apprehension about the need to acquire a lot of additional investment, most likely to be sourced from China. This chimed with other questions raised regarding the growing involvement and influence of China with regard to (‘rare earths’) mining, as well as (no-local-added-value/processing) logging operations,” NORAD said.

It urged that a high level “at minimum ministerial- level” visit be undertaken by the Norwegian government to explore and discuss these and other issues. This would be helpful in preparing Norway/NICFI for negotiating a second Memorandum of Understanding, and also to impress on the Government of Guyana that Norway, whilst fully respecting national sovereignty, is keen to see that all uses of Norwegian funds are unlikely to damage Norway’s and NICFI’s international reputations, NORAD declared.

Norwegian funds are to be used as Guyana’s equity contribution to the Amaila project.

The government has vowed to resuscitate the Amaila hydropower project and officials have spoken of Chinese funding for it. In this year’s budget, US$80 million was listed as equity for the project which is due to come from the Guyana REDD+ Investment Fund (GRIF). Before US-based Sithe Global pulled out of here last August as the developer of the US$858.2 million, 165-megawatt hydro venture, the AFHP was shrouded in controversy as costs escalated. In March, President Donald Ramotar told reporters that the controversial AFHP is once again being examined by the IDB board and they would hopefully be wrapping up soon.

Meantime, NORAD said that the indicators in the Guyana-Norway partnership’s Joint Concept Note are reasonably specific, with specified time-periods for implementation, but they are still open to overly wide interpretation and also allow some divergence from the underlying intentions and spirit in which they were created.

Overly vocal

“The most notable example is the case of the Multi-Stakeholder Steering Committee: although it includes a large number of relevant stakeholders, it also excludes representatives from opposition political parties, and, according to a range of government and non- government informants and Rainforest Alliance…two members of the committee who were considered overly vocal in their criticisms of some of the projects (and hence, it was perceived, of the government) have been de-selected, one formally/transparently, the other informally with no paper-trail,” NORAD reported.

“Questions have also been raised about the genuine representativeness of some members of the committee; in particular those who claim to represent Amerindian communities,” the agency said. NORAD said that the problem of interpretation can be partially mitigated by increasing the specificity of the indicators in future iterations of the Joint Concept Note, but ensuring adherence to the spirit of the partnership should also be addressed at a higher political level.

It also pointed out that concerns have been raised about the inclusiveness of some of the projects including that the Amerindian Development Fund focuses exclusively on Amerindian communities and does not provide support to other sections of the rural poor. However, it also noted the Micro and Small Enterprise Development project is open to all sections of society, and particularly encourages the participation of vulnerable groups.

“Concerns have also been raised about the way in which the Amerindian Development Fund has been used to create an obligation on Amerindian communities, in order to encourage future political support, and also the way Community Support Officers (CSOs), who report to the Ministry of Amerindian Affairs, are being posted/imposed upon participating Amerindian communities,” NORAD said while noting that the funds for the CSOs may have a Norwegian source.

In relation to the Amerindian Land Titling Project, administered by the United Nations Development Programme, NORAD said that it is progressing, but at a slow pace and reportedly at a noticeably very high cost. “A number of stakeholders were highly positive about the land titling project, as establishing ownership is essential for further activities such as accessing finance for community development, and applying for extensions to the titled area. One Amerindian group has raised a number of concerns with the project, such as the loss of lands through the demarcation process, overlapping titles, and the precedence given to logging and mining concessions despite land titling – but many other stakeholders emphasized that land titling is an important and progressive first step,” the report said.

It said that NICFI funding is supporting sustainable livelihoods and land tenure reform, but progress has been slower than expected due to a variety of factors, not least the slow disbursement of funding from the GRIF.

 

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