The Colombian justice system ruled in favor of a group of indigenous persons who filed a legal action against a carbon credit project in their territory. After giving credit to their claims that the environmental initiative has kept the community in the dark, a judge ordered the project’s suspension and a report from its promoters explaining how it spent resources.

On August 23rd, a second instance judge ordered the suspension of a carbon credit project in southern Colombia that a group of indigenous persons says has left their community in the dark. With this decision, the judge upheld a similar ruling by a first instance judge last July and represents the toughest action so far by the Colombian justice system against these type of environmental initiatives.

Redd+ projects link local communities that care for strategic forests to mitigate the global climate crisis with companies that buy carbon credits to offset their own fossil fuel use. Each credit 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 that conservation effort. But, as this journalistic alliance has been documenting over the past two years, many such projects in indigenous territories have not always been transparent, leading members of these communities to resort to legal actions in order to solve the conflicts that these have either created or exacerbated.

In early June, twelve indigenous persons from the Great Cumbal Reservation filed a protection suit against the promoters of the Redd+ Pachamama Cumbal project in the high-altitude Andean forests and paramos (alpine tundras) of their territory near the border with Ecuador.

The plaintiffs claim that they found out about the project when it had already sold its first batch of credits. In their view, this happened because neither the reservation’s governor of nor the companies developing the project, the Mexican-based Global Consulting and Assessment Services S.A. de C.V. and its Colombian subsidiary SPV Business S.A.S., socialized it with their community in Cumbal. They also pointed out that they’ve been denied access to the documents that support the project and that they have not received any information on how the earnings generated by the sale of 849,000 carbon credits to US oil company Chevron have been invested, as an investigation led by the Latin American Centre for Investigative Journalism (CLIP), in alliance with Mongabay Latam, El País América and La Silla Vacía, revealed. For this reason, they argued that the project violates their fundamental rights to prior consultation, effective participation and collective property.

In both instances, the judges ruled in their favor. “Members of the indigenous community cannot be left out of decisions that involve them,” judge Lorena Pérez Rosero of the third criminal court of Ipiales wrote, confirming the previous ruling after it was appealed by several of the parties involved. “Although they delegate their representation to a governor, the governor cannot, under the pretext of having been elected as such, disregard the intervention of the other members of the reservation both in deciding their common destiny and in seeking accountability of the money arriving as payment for a contract”.

Cumbal seen by the judges

In their two decisions on the Cumbal case, the judges focused on several problematic aspects of the Pachamama Cumbal project, which is being implemented in four neighboring indigenous reservations.

In the first ruling, on 21 July, Judge Carlos Alexander Coral acknowledged that the initiative was beneficial for the community in general terms, but considered that “the shortcomings in the management of the Redd+ Pachamama Cumbal project affected the indigenous community, not at the physical level in the territory as one might think, but at the level of social cohesion, equity and good living”. In his view, the initiative has been carried out in a “somewhat surreptitious manner” and has had “minimal socialization”.

In doing so, the judge dismissed former governor Ponciano Yamá’s argument that his role as an authority empowered him to enter into such contracts. He also dismissed the argument of the Global Consulting – which revealed to the judge that SPV “ceded its contractual position” to it in August 2022, with the knowledge of the then governor of the reservation – that the communities have been aware since “the very beginning of the project” and that the then governor accepted it “in the exercise of his legal powers”.

The Cumbal municipal judge was particularly critical of the lack of accountability for the financial benefits that the project was supposed to bring to the community, a point on which the second instance judge agreed. “It is of great concern to this office that even within the judicial process of this constitutional protection the current destination of the economic resources generated by the sale of carbon credits is not clear – not even to this authority,” he wrote. “Doubts arise as to the current whereabouts of these resources and even more so as to the purpose that is being given to these funds, which in theory were intended to encourage the care of the ecosystems and the fauna and flora of the indigenous territory”.

Finally, Judge Coral considered that the social and environmental safeguards that are mandatory for carbon projects and which are designed to protect local communities, including the rules on consent, effective participation and accountability, have been “widely disregarded”.

For these reasons, the second instance judge decided to maintain the project and contract suspension decreed by the first judge, until its promoters formally request an Interior Ministry assessment on whether a free, prior and informed consultation with the community is required and, if so, to carry it out. She also maintained the first judge’s order to the project’s promoters to present “a clear and detailed report on financial management” to the community, including the funds received and their destination, within two months.

Finally, in a rebuke of the Colombian government, it urged the Institute of Hydrology, Meteorology and Environmental Studies (Ideam) to guarantee the functioning of the state platform for mitigation initiatives that – as another investigation showed – has been out of service since August 2022.

The legal rulings also confirmed several facts uncovered by this journalistic alliance. Our investigation showed a potential conflict of interest between the two development companies and the audit firm they hired to validate the project, given that Global Consulting’s manager and SPV Business’s legal representative was also a co-founder and shareholder of the auditor Deutsche Certification Body S.A.S. In addition, SPV Business’s alternate legal representative was the legal representative of the same audit firm until a month before signing the contract with the then governor of Cumbal. This dual role calls into question the independence of those who were supposed to objectively assess the Cumbal project. This connection between auditors and developers, in turn, was not spotted by the certifier ColCX, part of the Santo Domingo family’s business group, which admitted to this journalistic alliance that it did not make project documents public and did not have a conflict of interest management policy.

Deutsche Certification Body defended itself in the case by arguing that there was no conflict of interest, but confirmed that such a relationship did exist. Its legal representative Óscar Gaspar responded to the first instance judge that “the shareholder (…) sold her shares before validation and verification took place”.

The Cumbal case shows that – amid gaps in the Colombian government’s ability to regulate and supervise this incipient market – indigenous communities are increasingly resorting to the courts.

The rulings of the two Nariño judges will soon be joined by another one. The Constitutional Court – the highest court in the country – is currently examining a voluntary carbon market case for the first time, regarding a similar conflict in the Pirá Paraná in Vaupés that was also documented by this journalistic alliance. Its decision could set a precedent for other similar payment for environmental services initiatives, drawing legal lines on what can and cannot be done in similar projects in territories inhabited by indigenous peoples. Although a ruling was expected soon, on August 10th, the Court announced that it would take longer to assess the evidence in what it termed “a complex and novel process in constitutional jurisprudence”. 

That this promising climate solution does not end up with indigenous territories selling credits without their inhabitants knowing about it, as seen in Cumbal, will depend on this ruling and the corrective measures dictated by the judges.

Gray Carbon is a project led by the Latin American Center for Investigative Journalism (CLIP) on the carbon market in Latin America, carried out in partnership with Mongabay Latam, La Silla Vacía, Rutas del Conflicto and La Liga contra el Silencio, and with support from the Pulitzer Center’s Rainforest Investigations Network.