Corporations and governments can legally destroy protected natural areas if they offset the loss of biodiversity elsewhere. That arrangement is not working, but it is becoming more prevalent.
Compensation for biodiversity loss is not new: in the 1980s, the United States, Germany, and India introduced this approach into their environmental regulations. According to proponents of this idea, it ensures that companies that harm biodiversity offset their impact by either maintaining or enhancing biodiversity elsewhere. However, the examples below demonstrate a different reality: compensation for loss of biodiversity undermines protection of the environment. It allows companies to ignore the rules of protection of nature in any particular place of interest, as long as they promise to compensate for the damage in other places. In this way they can claim to respect environmental protection laws while at the same time destroying biodiversity in places protected by law. In a way, compensatory pay allows government agencies and financial institutions to maintain an uninterrupted flow of environmental licenses and financing for corporate destruction, including in protected areas and World Heritage sites; This is despite the fact that the catalog of environmental regulations has increased in response to public pressure, since the 1970s, for better protection of the environment.
The following quote from a New Zealand-based law firm clearly summarizes why not only governments, but also - or perhaps particularly - companies are interested in offsetting biodiversity:
“Biodiversity loss offsets can help companies manage their risks more effectively and strengthen their license to operate by demonstrating to regulators that operations can be based on a biodiverse approach 'no net loss' or' profit net ', and by ensuring the support of local communities and civil society. Companies are increasingly looking to demonstrate good environmental practices in order to secure their license to operate and access capital, obtain consent in a timely manner, operate profitably and maintain a competitive advantage. "
It is not surprising, therefore, that compensation for biodiversity loss has become so popular. According to the International Union for Conservation of Nature (IUCN), since the beginning of the century the number of countries in which compensation for loss of biodiversity or other forms of compensatory retribution have been introduced has doubled. This instrument received a great boost at the international level during the Rio + 20 summit in 2012 in Brazil. The summit was dominated by proposals focused on how to achieve a green economy through an economic valuation of nature, and compensatory payments were presented as an integral part of the promise of the green economy. Many of the biodiversity loss compensation initiatives that exist today, both at the corporate and intergovernmental levels, can be traced back to the run-up to and immediate follow-up to the Rio + 20 summit. By 2017, 115 countries had adopted regulations allowing the use of offsets for biodiversity or similar rewards. As already noted, the reasons for this increase are diverse, including:
- Many countries have adopted the policy goal of “no net loss” of biodiversity, and compensation for biodiversity loss is the mechanism to achieve this goal.
- Corporate destruction increasingly targets formally protected areas or habitats particularly rich in biodiversity, where destructive activities are now licensed by law only in exceptional cases. As a result, corporate calls for "regulatory flexibility" are on the rise, with biodiversity compensation and compensation schemes proposed as instruments to provide such "regulatory flexibility" or "malleability."
- The World Bank and its private sector financing arm, and the International Finance Corporation (IFC), have largely promoted biodiversity loss compensation provisions in environmental regulation in the Global South, in order to facilitate the implementation of the provisions of IFC Performance Standard 6. These Performance Standards are a set of requirements and guarantees that must be met in order for the IFC to finance a corporate project. Biodiversity loss compensation provisions were added to the Performance Standard in 2012, the same year that the Rio + 20 summit gave a major boost to biodiversity compensation as a policy instrument. The revised 2012 Performance Standards allow IFC to finance destruction in what the World Bank has defined ascritical habitat. Prior to the 2012 review, approval of IFC funding for corporate destruction in such habitat would have been more difficult and controversial.
Regulated destruction ofcritical habitat
IFC Performance Standard 6 has proven to be a particularly powerful tool for offsetting biodiversity loss, at both corporate and government levels. Since many public and private sector banks have adopted the IFC Performance Standards or similar standards, submitting a biodiversity loss compensation plan has practically become a prerequisite for securing financing for corporate destruction in what the World Bank has defined ascritical habitat. Because many rivers have already been dammed and many biodiversity- and ore-rich habitats have been destroyed to extract the desired minerals, companies in the hydropower and extractive industries are increasingly targetingcritical habitat for corporate expansion. And since IFC funding is often crucial to securing increased private sector funding for such corporate projects, hydropower, mining, and oil and gas companies have pioneered compensation for biodiversity loss. By submitting compensation plans for loss of biodiversity, they hope to obtain a public license to operate and secure support from the conservation industry for such corporate projects, which would likely face public opposition for their location in areas of particular importance to them. the conservation of biodiversity.
Compensation for loss of biodiversity as a gateway to oil drilling in protected areas and World Heritage sites
In Kenya, biodiversity loss offsets enabled the KJV oil company to obtain licenses and financing for the exploration of oil areas within two World Heritage sites, Lake Turkana National Park and the Great Rift Valley Lakes. in Kenya. Drilling also affects protected areas. KJV is committed to conducting its activities in accordance with IFC's Performance Standards and developing biodiversity offset plans in the hope that this will facilitate the licensing process for destruction in areas that are of great importance. for the conservation of biodiversity.
French energy company Total also cites IFC's Performance Standard 6 as a reason for developing a biodiversity loss compensation plan for its Tilenga oil exploration project in Uganda and other operations involving drilling in national parks and other protected areas. : "Total agreed to comply with the Performance Standards of the International Finance Corporation (IFC, World Bank) for its Tilenga, Papua LNG and EACOP projects, in order to take into account the particularly sensitive biodiversity of certain sites." The Tilenga oil drilling and East Coast Pipeline (EACOP) affects one of the world's biodiversity hotspots, the Albertine Rift, as well as the spectacular Murchison Falls National Park, an area that undoubtedly qualifies howcritical habitat. The company even acknowledges that its operation will target "a particularly sensitive area for biodiversity." However, Total's biodiversity loss compensation plans for drilling for oil in one of the world's most important biodiversity sites blame local land use for biodiversity degradation (degradation that it claims is the company will stop and reverse); Meanwhile, any mention of the devastation that oil drilling will cause at this biodiversity hotspot is clearly absent from the list of factors that threaten biodiversity.
In Costa Rica, the energy companyCosta Rican Electricity Institute is experimenting with biodiversity loss compensation to compensate for ecological damage as a result of the construction of a large hydroelectric dam on the Reventazón River. The construction of the dam is financed, among others, by the IFC and the European Investment Bank. According to the company, "the Reventazón River qualifies as a Natural Habitat according to IFC Performance Standard 6," and the changes in hydrology that result from the dam will affect Tortuguero National Park. As a compensatory measure, the company promised to restore another river, the Parismina, and the Costa Rican government promised not to develop any hydroelectric dams in Parismina for the next few decades.
In Germany, compensation for biodiversity loss has become an increasingly common form of compensation for environmental damage, and a requirement that has been part of environmental regulation since the 1980s. At the largest open pit coal mine in Europe, stretching over 85 km2, compensation for biodiversity loss facilitates the destruction of a very old wooded area, the Hambach Forest. Mining has destroyed forests up to 12,000 years old. Currently only a small remnant of these ancient forests remains, characterized by very high biological and structural diversity. This type of forest is protected by Annex 1 of the EU Habitats Directive. As a result, the mining company is required by law not only to reforest the area after extraction, but also to implement additional compensatory measures (compensation for loss of biodiversity) on land located outside the mining concession. Among them is the restoration of old farmland located just north of the mine. As part of a highly criticized partnership between mining company RWE and IUCN, the conservation organization produced a report that suggests, among others, that RWE considers "possible compensatory measures." The same report indicates, recognizing the limits of compensation for loss of biodiversity, that compensation measures "will never reach the biodiversity status of a mature forest."
When perpetuity doesn't last
Compensation for biodiversity loss from Uganda's controversial Bujagali Dam demonstrates how unreliable compensation promises are. The dam project on the Nile River is co-financed by the IFC. The reservoir created by the dam flooded ecologically significant waterfalls and riverbanks of great cultural and spiritual importance to the indigenous Basoga peoples in the project area. In its public communication, the IFC assured its critics that the “comparatively important” riverbanks and falls would be reservedin perpetuity as compensation for loss of biodiversity in the Bujagali reservoir. However, the legal agreement that was ultimately signed with the Ugandan government did not mention a commitment to protection in perpetuity. As a result, perpetuity only lasted until a new hydropower developer obtained permission for another dam on the Nile River. This new hydroelectric reservoir will submerge waterfalls and river banks that were held in reserve a few years earlier to offset the destruction of the waterfalls and the surrounding riverbanks caused by the Bujagali dam. The IFC agreed to the destruction of the site with compensation measures for loss of biodiversity on the condition that a new offset location is identified and protected.
In Australia, Warkworth Sands Woodland, an area dedicated to be a clearing site for a Rio Tinto mine, was also destroyed when it became part of a corporate development project.
Such examples demonstrate one of the many risks that compensation represents for the protection of biodiversity: if today an area reserved as compensation for loss of biodiversity in the future becomes economically interesting for a company, its destruction can also be authorized and financed simply by promising to make up for a second time to replace the area the company now wishes to destroy. Compensation for biodiversity loss allows perpetual destruction rather than formal protection of biodiversity.
More and more countries allow biodiversity compensation
But as indicated by the number of countries with environmental regulations to compensate for compensation for biodiversity loss reported by the IUCN, which is 115, it is not only companies that are now incorporating biodiversity compensation into their business plans. Liberia and Mozambique are two countries where the World Bank has funded policy initiatives to offset biodiversity loss. In Liberia, World Bank consultants even developed a national roadmap to offset the loss of biodiversity. In this World Bank proposal, mining and other extraction projects in protected or high-biodiversity areas should be allowed, on the sole condition that developers pay a biodiversity offset fee which will then be used to maintain and manage (other ) national parks and protected areas.
In Mozambique, an organization involved in the biodiversity loss compensation roadmap developed thanks to the support of the World Bank explains why companies should not fear biodiversity compensation: “Far from being a burden on private companies, this new Regulation can speed up the approval process for new projects by clarifying procedures, pushing companies to comply with national and international standards, which they increasingly have to take care of ”.
Colombia is another country that in recent years has revised its environmental legislation, and has introduced the environmental framework for compensation that, in the region, is probably the most complete. As corporate activities that require compensation for biodiversity loss grow rapidly, an area of conflict also emerges resulting from such an environmental framework: biodiversity compensation inevitably entails double land grabbing, or at least leads to a context where companies control not only how land is used at their corporate project site, but also at the biodiversity loss compensation site. The land area in Colombia is considerable: between 2013 and 2015 alone, the potential demand for land declared as compensation for biodiversity loss amounted to more than 180,000 hectares. Thus, an important issue concerning the land looms, as noted by an observer in Colombia: “With more than 8 million hectares under mining titles, more than 130 oil and gas companies with operations in the country throughout at least 1.5 million hectares, including Shell, Oxy, Chevron, ExxonMobil and Petrobas, and thousands of kilometers of highways in pipelines that will affect the critical sites of biodiversity, one of the central questions is where the thousands and thousands of hectares are going to come from necessary for said compensations ”.
Compensation for loss of biodiversity increases conflicts over land
Conflict over land will therefore become a growing corollary of compensation for loss of biodiversity. Existing biodiversity offset projects already prove this reality to us. Take the example of a mining company seeking compensation for loss of biodiversity to compensate for the forest that will be destroyed by the corporate mine. In order for a forest to qualify for compensation, the company must demonstrate that if the forest is not converted into a biodiversity offset, it would be destroyed. By avoiding this hypothetical destruction, the company can demonstrate that it is compensating for the loss of biodiversity caused by its mine by preventing the loss of biodiversity elsewhere. This scenario of hypothetical destruction that the company claims to avoid through its biodiversity offset tends to include the following narrative: “Poor peasants have deteriorated the land because they use 'slash and burn' and extract too much fuel from the forest. Our compensation for the loss of biodiversity will prevent further 'cutting and burning' and gathering firewood, and will help the forest to recover ”. Although the details vary, this is the hypothetical scenario that underpins most of the biodiversity loss offset projects in the Global South. It brings several advantages for the company: blaming the deforestation and loss of biodiversity on peasant farming practices and the collection of firewood helps to make invisible the true risk, the corporate destruction caused by the mine, the dam, etc. Since the company will need to ensure that it avoids hypothetical destruction over the years, corporate biodiversity offset needs will control land use at the biodiversity offset site, as well as at the mining site or site. the hydraulic reservoir. This is why many warn that biodiversity equates to a double land grab, where corporate needs outweigh the needs of peasant agriculture in two locations: the corporate destruction site and the corporate compensation site.
New trends, same conflicts
In recent years, a trend in compensation for biodiversity loss has been for companies to make payments to conservation trust funds that subsequently implement conservation measures labeled as biodiversity offsets, rather than companies being directly involved in the implementation of compensation. As a result, it is increasingly difficult to establish a direct link between a particular biodiversity offset and the corporate destruction that is paid for it.
Another trend in the corporate and conservation industry literature is a change in terminology. Many conservation industry and corporate brochures no longer use the term “biodiversity offset”. Instead, industry publications, government policies, planning documents, licensing decisions, and funding commitments refer to the quantification of “gains and losses”, the achievement of “net biodiversity gains. ”Or“ net loss ”of biodiversity through the establishment of biodiversity banks and conservation trust funds. However, the distancing of the use of the term “compensation for biodiversity loss” does not mean that the instrument has lost its appeal in the extractive industries, in the conservation industry or in institutions such as the IFC and the World Bank.
World Rainforest Movement (2018): “Mainstreaming biodiversity” in extractive industries: Concealing devastation and land grabbing.
ReCommon (2017): Your Mine. Video about a biodiversity offset project in Madagascar.
ReCommon and World Rainforest Movement (2016): Rio Tinto’s biodiversity offset in Madagascar - Double landgrab in the name of biodiversity?
International Rivers website on the Bujagali dam.
A. Brock & A. Dunlap (2018): Normalising corporate counterinsurgency: Engineering consent, managing resistance and greening destruction around the Hambach coal mine and beyond. Political Geography 62: 33-47.
By Jutta Kill