Brazil sues to block unlicensed REDD deal between Irish company and indigenous group

December 17, 2012

Brazil's Attorney General Office has filed a lawsuit against an Irish company and an indigenous group for unlicensed sales of carbon credits generated from an reducing emissions from deforestation and degradation (REDD+) project, reports Reuters Point Carbon.

The lawsuit aims to cancel a contract signed between Celestial Green Ventures LLC and the Awo Xo Hwara indigenous community in the state of Rondonia. The deal would have paid the indigenous community $13 million over 30 years for the rights to develop a carbon conservation project across 260,000 hectares of rainforest.

The problem is Brazil does not yet have a legal framework for avoided deforestation projects. In indigenous territories, one major issue is the state owns the land, while tribes only have the right to permanent use of the land. Therefore the Brazilian government would need to be a part of any agreements, according to Reuters Point Carbon.

In March, Brazilian officials announced they would seek to annual 30 pending deals that would have given investors legal title to carbon credits.

It's not the first time Celestial Green Ventures has had problems with its REDD+ projects in Brazil. In March, the Brazilian government’s National Indian Foundation (FUNAI) said the company's contract with the the Munduruku Indians in the state of Para was "not valid". The deal — which would have allegedly provided the tribe with $120 million over 30 years — covered 20 million hectares of rainforest.

Celestial Green Ventures last week said it would hold off on signing new agreements with indigenous communities "until it had greater clarity on the concerns of the Brazilian authorities," according to Reuters Point Carbon.

There is no global framework on REDD+. Credits generated from REDD+ projects are currently limited to voluntarily markets, although Japan and California have indicated they may allow REDD+ credits to count toward compliance under their frameworks.

Supporters of REDD+ say a well-designed mechanism could generate multiple co-benefits, while forcing important reforms in the forestry sector. Critics fear REDD+ could spur land grabs, undermine global carbon prices, and fail to reduce overall greenhouse gas emissions. Negotiations on a UN framework for REDD+ broke down earlier this month at climate talks in Doha.

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Brazil sues to block unlicensed REDD deal between Irish company and indigenous group.