In its first ruling on a carbon credit case, Colombia’s Constitutional Court ruled in favor of the indigenous authorities of Pirá Paraná, who argued that such project violated their fundamental rights. The ruling sets a precedent for the voluntary carbon market and contains harsh rebukes to the four companies that structured and validated the initiative, as well as to the Colombian government.
On July 8, the Constitutional Court ruled in favor of the Pirá Paraná indigenous authorities who filed a legal action against a carbon credit project operating in their territory in the Colombian Amazon, concluding that the project violated their fundamental rights to self-determination, autonomy, self-government, territory, identity, physical and cultural integrity, and free, prior and informed consent.
That ruling marked the first time that the country’s top court on constitutional matters has addressed the voluntary carbon market, a fledgling climate solution that the Court defends for its potential to address global warming and promote sustainable forest management, as well as for being “economically viable options for communities in situations of vulnerability, isolation and with little institutional presence” that care for them.
However, the three Court justice pointed out that the Redd+ Baka Rokarire project, “although laudable, has had significant and intense effects on the social, cultural and territorial structures of the indigenous communities of the Pirá Paraná”. Among the most serious negative impacts, the Court considers that the conflict generated by the project “compromises in a current, serious and certain way a broad spectrum of fundamental rights and even endangers the survival and integrity of the affected communities”, in a ruling that could set a precedent for other similar initiatives of payment for environmental services in territories inhabited by indigenous or Afro-Colombian communities.
The judicial ruling strongly questions the companies that structured, audited and certified the project in the Vaupés jungle, which it accused of “not acting with due diligence to identify, prevent, mitigate and respond to the negative impacts that the Redd+ project generates on the indigenous population”. It also scolded the Colombian State, arguing that beyond the particular case there is a general problem, and holding it responsible for not having “adopted an ethnic approach that comprehensively addresses the respect, protection and guarantee of the rights of indigenous peoples in Redd+ projects”.
The shadows of the Baka Rokarire project
As this journalistic alliance has been investigating for the past three years in its Gray Carbon and Opaque Carbon projects, many carbon credit projects implemented in indigenous territories have not always been legitimate and transparent.
These projects – called Redd+ – link local communities that care for forests critical to mitigating the global climate crisis with companies that buy their carbon credits to offset their own use of fossil fuels. Each of these credits is equivalent to one ton of carbon dioxide – one of the greenhouse gases driving climate change – that would no longer be released into the atmosphere as a result of these conservation efforts.
As a result of one such initiative, in July 2022 the Indigenous Council of Pirá Paraná filed a lawsuit known as a protection action, requesting the safeguarding of fundamental rights that, in their view, were violated by the non-governmental organization Corporación Masbosques and three companies that promoted or validated the Redd+ Baka Rokarire project, as well as by one of the national authorities that should ensure the proper functioning of this type of climate solutions that seek to bring funds to forest-conserving communities.
The Constitutional Court selected the case because it considered that there was a “need to rule on a certain line of jurisprudence” (that is, to examine whether judges have observed the jurisprudence that the court has established in its rulings) and because it was “a novel matter” in the constitutional field.
As the Latin American Center for Investigative Journalism (CLIP), Mongabay Latam and La Silla Vacía reported in an investigation published in October 2022, the Baka Rokarire project has several problems.
The plaintiffs denounced that the person who signed the legal contract on behalf of the indigenous people with Masbosques in March 2021 was the previous legal representative of the Association of Traditional Indigenous Authorities of the Pirá Paraná River (Acaipi), who had been removed from his position two weeks before signing it. They also argued that Masbosques negotiated with captains of the territory individually, in addition to the one who was no longer the legal representative of Acaipi, without ever going through the Indigenous Council that has been the highest authority in the Pirá Paraná since May 2019.
This governing body was created with the aim of fulfilling the old dream of becoming a territorial entity with political-administrative functions, a promise of Colombias’ 1991 Constitution that has been implemented by parts and that was reactivated with a 2018 decree signed by the Juan Manuel Santos administration, which laid out the route for indigenous territories in the non-municipalized areas of Amazonas, Guainía and Vaupés to be incorporated into the national order with a category similar to that of municipalities. From that moment on, indigenous territories there began to create and formalize their councils, the figure of local government -like a mayor for municipalities- assigned to them by the Constitution. The Pirá Paraná created its own Indigenous Council.
The Constitutional Court agreed with the indigenous plaintiffs that the manner in which the project was promoted violated their fundamental rights.
Masbosques’ lack of due diligence
The high court was especially harsh on the two entities that developed the project: Masbosques, a non-governmental organization from Antioquia that counts several public entities among its partners, and the consulting firm Soluciones Proambiente S.A.S., which appears in documents as supporting the formulation of the project but – as this journalistic alliance revealed – actually financed the initiative and receives up to 40% of its earnings.
“From the beginning of the initiative’s feasibility process, the maximum authority of self-government was not respected, but rather they signed a mandate contract with a legal representative of one of their organizations who didn’t have the power to do so,” said the Court’s ruling led by justice Juan Carlos Cortés, addressing the two central facts denounced by the indigenous people.
In its ruling, the Court dismissed Masbosques’ defense that it acted correctly according to the legal reality at the time, signing the contract with whom it considered the legitimate maximum authority, as well as its argument that the Indigenous Council had not yet become operational.
According to the Court, there was a “lack of diligence in identifying and recognizing the structures of self-government of the indigenous territory to be intervened” and “the contract was not processed in respect its decision-making structures”. Not only did Masbosques fail to consult the Indigenous Council and ignore the process of transformation of self-government in that territory, but the Court found no evidence that the assembly of authorities of Acaipi had given clear authorization to sign the contract. In fact, it emphasizes that “on the contrary, it’s clear was the assembly’s will was to develop its own initiative to mitigate greenhouse gases, without the intervention of persons from outside the territory”. This led the Court to conclude that “regardless of which is the highest form of government of the Pirá Paraná territory, there are two relevant structures (Acaipi and the Indigenous Council) that were ignored”.
In addition, the Court found that the developers “didn’t obtain free, prior and informed consent through a genuine and good faith dialogue. They conducted characterization interviews and social mapping workshops, but this “doesn’t meet the requirements set forth by the Court to achieve agreement or consensus with ethnic groups and their free, prior and informed consent.”
The Court also questioned the fact that thirteen conservation agreements with communities, provided by Masbosques, were signed after the sale of credits to Delta Airlines, rather than before. In its opinion, these agreements were “a strategy to validate or ratify a project already designed, validated and in the stage of certification of payments for results” and “don’t remedy or change defects regarding the breach of consent that should have been obtained prior to its execution”.
The Court was also highly critical of the actions of Masbosques and Soluciones Proambiente during implementation of the initiative, when differences in the Pirá Paraná over it were already evident. “Instead of facilitating dialogue with the ethnic population and seeking a solution that would strengthen the exercises of self-governance and forest governance in the territory,” the Court wrote, “the conduct of the companies allowed internal disputes to fester among members of the indigenous communities and, with it, risks to the physical and cultural preservation of ethnic groups whose knowledge [the Yuruparí Jaguars traditional knowledge system] has been declared intangible cultural heritage of mankind since 2011.”
Finally, the Court questioned the choice of the mandate contract as the legal tool to support the Pirá Paraná carbon project. “It was not designed as a legal instrument that is culturally appropriate to the needs or circumstances of indigenous communities of the Pira Paraná,” it noted, adding that it was a generic legal document and identical to that of other projects of that environmental NGO and that it “grants special and additional guarantees in favor of Masbosques that are not necessarily aligned with an intercultural, differential or culturally consistent approach.” Although the ruling underscores that this observation refers to Baka Rokarire, it concludes that “legal instruments of private law cannot be automatically transferred to ethnic communities”, in a paragraph that could set a precedent for a market where this legal figure is widespread and that raises questions for the other Redd+ projects in the Amazon that have used it. However, the Court did not clarify what the alternative legal figure could be, nor did it pronounce itself in the operative part on the mandate contracts.
For all these reasons, in one of its harshest sections, the ruling emphasizes that “an organization with a permanent presence in the Amazon would have or would be inferred to have some knowledge of the communities’ aspirations regarding the operation of indigenous territories”.
Auditor Ruby Canyon and certifier Cercarbono’s failures
The indigenous plaintiffs argued in their legal action that Baka Rokarire’s validation process was flawed throughout the entire carbon credit value chain, in which theoretically different actors act as checks and balances to ensure that projects comply with social and environmental standards promoted by the UN and the Colombian government.
For considering that they were negligent in not identifying these flaws at the origin of the project, they also directed their legal action against the Colombian certification standard Cercarbono, which certifies carbon projects in Latin America, Asia and Africa, and the U.S. auditor Ruby Canyon Environmental. The Constitutional Court agreed with them in both cases, considering that they were not diligent in their behavior.
Regarding auditing firm Ruby Canyon Environmental, which has assessed at least five Redd+ projects in indigenous territories in Colombia, the Court said that it “didn’t demonstrate independent and objective supervision” that it was responsible for. In its report, says the ruling, “there is no specific standard or criterion alluding to compliance, verification or analysis of the safeguards of the indigenous population, especially with regard to their full and effective participation, prior consultation, respect for the traditional knowledge of these indigenous communities or their self-government”.
As this journalistic alliance’s investigation revealed, Ruby Canyon may not have been aware of the project’s problems because, as its audit report shows, during its assessment work it merely flew over the territory instead of visiting it.
As for Cercarbono, which has certified at least 14 projects in ethnic communities in Colombia and six in Brazil, the Court notes that it “didn’t demonstrate sufficient parameters for operation in indigenous territories”. The ruling states that the company’s protocols for certifying Redd+ projects “are not sufficient to ensure the standards of respect intended by the Cancun safeguards, nor the constitutional mandates associated with the effective enjoyment of the rights of indigenous peoples”.
This journalistic alliance also revealed another peculiarity related to the certification standard: in what could constitute a conflict of interest, the company that bought and possibly resold the first crop of credits in March 2022 -called Latin Checkout- had at that time the same shareholders as Cercarbono, which registered the Pirá Paraná project and issued its credits.
The Colombian government’s “regulatory gaps”
The Constitutional Court considered that the Pirá Paraná case isn’t an isolated one, but rather part of a generalized problem that affects other indigenous communities participating in similar carbon projects. For this reason, an important part of its ruling focuses on adjustments to be made by the national government.
On the one hand, the three justices of the high court pointed out that, although there is a regulatory framework for the carbon market in Colombia, it lacks “an ethnic approach or perspective”. For example, the Court says, there are “regulatory gaps” in terms of who can prove ownership of the projects and the credits they issue, and how indigenous people can be holders when it is the developers who register them in the certification platforms. There are also gaps in the still pending National System of Safeguards that seeks to ensure that mitigation initiatives comply with the highest social and environmental standards. Ultimately, the Court stated, “if these communities are key players in the carbon market, it is imperative to guarantee their autonomy through the application of qualified standards, access to accurate information, effective participation in decisions and free and prior consent”.
The Court also questions the passive role of the Colombian State in the voluntary carbon market, omitting – as this journalistic alliance has reported – to supervise the projects and relegating the monitoring of these social and environmental safeguards to third parties that do not necessarily have the same obligation to protect rights.
In this line, the high court deemed the response of the Environment Ministry of Gustavo Petro’s administration unsatisfactory in its claims that it’s auditors who verify compliance with these mandatory safeguards for projects, as well as the fact that the National Accreditation Body of Colombia (ONAC), which monitors the auditors, doesn’t have a protocol on safeguards either. It is also concerned that “each certification program defines, according to its own criteria and without state supervision, the meaning of the content of the fundamental rights established by this court since 1992”. It also questions the “lack of coordination” between companies involved in projects and the national government agencies that have competence in these matters, such as the Environment Ministry and the Interior Ministry, which is in charge of ethnic issues.
These observations by the Court hit one of the main pillars of the voluntary carbon market: its self-regulatory nature. This position reached extremes such as that of the government of Iván Duque which, as this journalistic alliance reported, argued that it was not its responsibility to monitor the relations between companies and communities in a Redd+ initiative given that it is “of a private nature and, therefore, is governed by the jurisprudence that assists it as an entity that exercises a commercial activity under private law”.
On the other hand, for the Constitutional Court, “the Colombian State has an active role in the regulation of the forest carbon market and, therefore, in the supervision of its implementation and compliance with Redd+ schemes”. This includes, it explains, “the obligation to supervise and regulate forest carbon markets to ensure compliance with environmental regulations and the rights of indigenous communities”.
Neither the Ministry of Environment nor other national government entities had commented on the ruling at the time of publication.
Constitutional Court orders
In the end, the Court decided that the indigenous people of Pira Paraná should meet in their self-governing spaces, without interference from the defendant companies, to decide whether they would like to continue with the Baka Rokarire project, as well as the conditions for doing so. Should they not decide within six months, it will be interpreted as their withdrawal from the project. Until that happens, it isn’t clear whether the current contract – and therefore the project and credits derived from it – remain active. The Court didn’t rule on that matter.
On the companies’ side, the ruling orders them to establish “minimum standards of due diligence for the operation of Redd+ projects in indigenous territories”, including clear guidelines on access to information, procedures to identify, prevent and mitigate negative impacts of their operations, and mechanisms for monitoring these risks. The Court didn’t establish the type of mechanism to obtain the approval of the indigenous communities, but emphasized that it would apply prior consultation in cases of possible direct impacts or the highest standard of all, free, prior and informed consent (FPIC), should there be an intense social, cultural or environmental impact, especially one that puts their existence at risk.
Finally, the ruling ordered the Colombian government to prepare a technical report on the specific conditions for Redd+ initiatives in indigenous territories after consulting with civil society organizations, academia and indigenous peoples, and “a protocol with an ethnic perspective” to be registered as part of the country’s National System of Safeguards before the United Nations Framework Convention on Climate Change. It also ordered it to design strategies to accompany the communities that wish to participate in them and to monitor the resulting projects.
The carbon market’s response
Only one of the defendant entities has publicly commented on the Constitutional Court’s ruling. In a statement, Masbosques celebrated the case as “the opportunity to join in an ethnic, social and legal understanding for the development and implementation of Redd+ financial schemes in the country”. Its director Jaime García Urrea said that “we’re working hard to establish an open and transparent dialogue with indigenous communities to ensure that their rights and needs are respected and considered in all our projects and corporate processes”. Masbosques – which leads five other active Redd+ projects in indigenous territories – stressed that “as an organization we act in accordance with the law,” but didn’t refer to the Constitutional Court’s assertions about its actions.
Neither Soluciones Proambiente, Cercarbono or Ruby Canyon Environmental had commented on the ruling at the time of publication. Consulted by this journalistic alliance, Alex Saer, the president of Cercarbono and former director of climate change during the Duque administration, said that “we see it as very positive, because it raises the requirements to all actors in the value chain, including the need for a stronger regulatory framework. We will work to comply with the integrity of the ruling”.
Asocarbono, the guild of companies in the carbon sector to which three of the defendants are affiliated, also celebrated the Constitutional Court’s decision as “a significant advance towards the consolidation of a fairer and more sustainable carbon market” and “a unique opportunity to strengthen our initiatives and ensure that the benefits of the carbon market reach all corners of the country”. Its director Francisco Ocampo told this journalistic alliance that the guild’s ethics committee decided to wait for the Court’s decision before making any ethics decision and that “the ruling must be complied with in all its considerations”. He did not answer if the court’s questioning of its three affiliates Masbosques, Ruby Canyon and Cercarbono means that the committee will open a case against them.
In the end, whether the opportunity described by both the defendant Masbosques and Asocarbono will be strengthened will depend on whether the companies in the sector and the Colombian government solve the problems that the Constitutional Court identified in the voluntary carbon market and comply with its recommendation to “adopt an ethnic approach that recognizes and respects the rights of indigenous peoples”.
Gray Carbon is a project led by the Latin American Center for Investigative Journalism (CLIP) on the carbon market in Latin America, in partnership with Mongabay Latam, La Silla Vacía, Rutas del Conflicto and La Liga contra el Silencio, with support from the Pulitzer Center’s Rainforest Investigations Network.
