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Tuesday, 12 February 2013

More corruption involving Norwegian REDD funding in Tanzania?


More corruption involving Norwegian REDD funding in Tanzania?

By Chris Lang, 6th February 2013

In 2006, an evaluation of Norwegian aid to Tanzania revealed that about US$30 million had been lost to corruption and mismanagement in the Ministry of Natural Resources and Tourism. The money was about half of the total that Norway spent on a Management of Natural Resources Programme. This week, Norwegian aid is in the headlines again over allegations of corruption in Tanzania.

Norway supported the MNRP from 1994 to 2006 to the tune of US$5 million a year. An independent evaluation in 2006 found that money was syphoned off through buying overpriced or non-existent goods and services. Procurement rules were not followed. More than half of Norway’s money went on workshops and “capacity building” exercises. Large amounts of money were lost to the “per diem culture” that surrounds aid-agency funded workshops in Africa.

Norway stopped aid to the Ministry of Natural Resources and Tourism. But after Tanzania returned a small part of the missing money, Norway turned the aid flow back on, committing US$100 million over five years for forest climate projects in Tanzania.

UPDATE – 8 February 2013: Inger Naess, Counsellor at the Norwegian Embassy in Dar es Salaam wrote to REDD-Monitor today. Her email can be downloaded here (pdf file, 61.1 kB) – see also my comments below. On the MNRP, she commented as follows:

It is not correct that almost half of the funds disbursed to the MNRP was lost to corruption and mismanagement. It is important to separate what is actually misuse of funds and what some people think is not appropriate use of development aid, such as paying allowances for participation in workshops. Payment of allowances is legal and budgeted for in national budgets in Tanzania and many other countries. Payment of allowances may not always be “value for money” – but it is not illegal. The practice of payment of allowances is on the decline in Tanzania as in many other countries. All misused funds and funds not properly accounted for (about NOK 11 million or US$2 million) were repaid by The Government of Tanzania to the Government of Norway.

This time around, Norway wanted Tanzania-based NGOs to implement the REDD projects. WWF were hired to work on a project titled “Strengthening Capacity of Environmental Civil Society Organizations”. Last year WWF was embroiled in a corruption scandal in Tanzania and recently returned just over US$120,000 to Norway.[*]

Norway chose to work with the Wildlife Conservation Society of Tanzania (WCST) to implement a US$3.9 million project titled, “Piloting REDD in the Pugu and Kazimzumbwi Forest Reserves”. The contract between Norway’s Ministry of Foreign Affairs and WCST can be downloaded here (pdf file, 313.3 kB) and the annexes to the contract here (pdf file, 2.7 MB).

The four-year REDD project started in February 2011 and was aimed at reducing deforestation and “improving carbon stocks” in the Pugu and Kazimzumbwi forest areas near Dar Es Salaam, the largest city in Tanzania. At the end of the first year, the Tanzania Forest Conservation Group reported that the forests continued to be destroyed, mainly for charcoal production. TFCG estimated that at the current rates of destruction, Kazimzumbwi will be completely deforested by the end of 2014 and Pugu by the end of 2017.

In 2012, consulting firm Deloite produced a mid-term review of the WCST project. While the tone of the report is positive, there are warning signs. “Significant work remains on the ground level,” Deloite writes.

The stated project goal, “to manage the forest properly including participation of communities, supports surrounding community livelihood and provides ecosystem services” has not been observed during site visits and document review. Overall, the project has made progress, yet as the project has only just completed the inception phase, quantifiable impacts towards the stated goal are not yet appreciable.

In May 2012, Ivar Jørgensen, a senior adviser with NORAD, visited the project. He told the Norwegian newspaper Aftenposten that, “WCST did not follow the agreement, did not cooperate with other actors as they were supposed to and did not have the correct contacts with the authorities.”

When Inger Naess, Counsellor at the Norwegian Embassy in Dar es Salaam, tried to visit the project site in June 2012, she was advised not to go because of the level of conflict over the use of the forest. Conflicts took place between local communities in the area, between Government departments and between communities and WCST staff. Communities were upset because WCST had not implemented an alternative livelihoods strategy that was part of the project design.

Naess visited the project area in August 2012, but found that the few project activities that had been set up were inoperative and parts of the forest had burned down.

UPDATE – 8 February 2013: In her email to REDD-Monitor Inger Naess adds,

It is not correct that the conflicts around the Pugu and Kazimzumbwi forest reserves were caused by WCST. The reason for the conflicts are many, among them the fact that the forest is within the border of Tanzania’s largest city (Dar es Salaam) with a growing population and urbanization.

Norway stopped disbursement to the project and has commissioned an external audit by Baker Tilly.

On Sunday, 3 February 2012, Norway’s largest newspaper, Aftenposten published an article about the misuse of Norwegian aid funds in Tanzania. The article (in Norwegian) can be downloaded by clicking on the image here:http://www.redd-monitor.org/2013/02/06/more-corruption-involving-norwegian-redd-funding-in-tanzania/

Here’s a rough translation of the Aftenposten article (based on google translate – any corrections from Norwegian speakers would be welcome!).

Conflict around money for forest protection

Misuse of Aid

By Siri Gedde-Dahl, Aftenposten, 3 February 2013

Cheating staff have repeatedly carted off Norwegian environmental assistance in Tanzania. Now, the Norwegian Embassy in Dar-es-Salaam halted payments to another organization.

This time we are talking about government’s prestigious project, the international forest campaign.

World Wildlife Fund (WWF) recently repaid Norad just over NOK 700,000 after malpractice cases related to environmental projects from the Norwegian aid budget in Tanzania, Congo and Kenya. Norway has now handed over the investigation of disloyalty to the local police, the organisation declared fit after a clean up and assistance opened up again to WWF. Meanwhile, the voluntary organisation Wildlife Conservation Society of Tanzania (WCST) has been put under scrutiny. The forest that Norwegian money was supposed preserve, is partially burnt down. And conflict over the use of resources has reached new heights.

Save the forests

WCST has been granted NOK 25 million to 2015, from the so-called REDD funds (see fact box). It was paid NOK 6.8 million in 2011. When WCST did not report on the project as agreed, all further payments were stopped in 2012. In December of the same year, the remaining amount of WCST’s project account was also frozen.

It’s almost been a year since the embassy took action. A new chief coordinator at WCST, took office in August and promised to clean up. But the Norwegian government has not yet received proper progress reports, financial statements and audit reports from WCST. Inger Naess, a Counsellor at the Norwegian Embassy in Dar es Salaam, said that the embassy has now requested audited accounts directly from WCST’s auditor, Deloitte. The embassy has ordered an external investigation from the firm Baker Tilly.

The WCST project takes place in peri-urban forest at Pugu-Kazimzumbwi Forest Reserves, near Dar-es-Salaam. The forest is protected, but the protection is not respected. Illegal construction and illegal logging for wood and charcoal production threaten the tropical forest. WCST is supposed to use the Norwegian money to help local people with alternative employment, control use of the forest, reduce conflicts, and assist people to take care of the forest.

A good start

The project aims to reduce CO2 emissions by preventing deforestation and forest degradation, according to the agreement with Norway.

“When I visited the area five to six months after the start, everything was good. They had established local tree nurseries, with trees for alternative charcoal production, and native trees for planting in the forest. They had also built a guardhouses at the entrance to the forest,” says Naess.

But when Ivar Jørgensen a senior advisor at Norad visited the project a few months later, in May 2012, things had become worse.

“WCST did not follow the agreement, did not cooperate with other actors as they were supposed to and did not have the correct contacts with the authorities,” says Jørgensen. So he sent a warning letter to the Norwegian Embassy in Dar es Saalam, which Aftenposten has seen.

Jørgensen says that later suspicion arose that project staff had been paid without having carrying out the work they should have.

When Naess wanted to visit the area again in June 2012 the level of conflict over the use of the forest had risen so much that she was advised not to travel into the area itself. She had to be content with talking to local authorities. In August 2012 she entered the forest. The guardhouses had been partially destroyed, the new tree nurseries were inoperative and parts of the forest had burned down. People without legal ownership had sold land inside the forest. Also, WCST had not done anything in particular to reduce the level of conflict.

The Embassy believes the contract has been breached because the activities have not been carried out. Naess says that today they have no basis to say whether there has been direct financial fraud.

The management of WCST were sent questions on Friday but by last night had not yet sent their comments.

Fact box: Aid Corruption in Tanzania

  • In 2008 comprehensive fraud was revealed in the Management of Natural Resources Programme Norwegian aid project. The case went deep into the Ministry of Wildlife and Tourism (MNRT). The first audit estimated that NOK 150 of the NOK 300 million had disappeared. Norway ended up having to claim back NOK 12 million. A number of critics believe Norway has not got to the bottom of the case and allowed cheats to escape.
  • In 2012 an audit report showed that NOK 2.4 million had disappeared in corruption and fraud relating to four aid projects run by WWF in Tanzania. The issue has boiled down to NOK 560 000, as Tanzania Norway has repaid the Foreign Ministry. WWF is out of the cold again to recieve funding for a variety of projects.
  • In 2012 Norway believes that the Wildlife Conservation Society of Tanzania (WCST) has breached the contract on Norwegian REDD money and has stopped further payments.

Fact box: Climate Aid

  • Norway will provide NOK 15 billion over five years as compensation for land / local people that contribute to cutting greenhouse gas emissions by reducing deforestation and planting new forests. Forests contribute to global emission reductions by binding CO2.
  • Tanzania will receive NOK 500 million of this money.
  • Much of the money channeled through the REDD programme, Reducing Emissions from Deforestation and Degradation.
  • In Tanzania, nine non-governmental organizations (NGOs), including the WWF and the WCST, have received money for REDD pilot projects.
  • In addition, Norway provided funds for research and a secretariat to develop a national REDD strategy.

Risks must be taken

“If we are to bring anything through aid, we must be willing to take risks. It is also the signal from our Minister: We must be willing to take the risk, but also follow up with zero tolerance,” says Counsellor Inger Naess in Tanzania, with reference to development minister Heikki Holmås (SV).

Are the malpractice cases now coming up, the tip of an iceberg?

“I think it comes up more than before because we have followed up much more in the past four years. It is not necessarily more corruption. But we know there is corruption and breach of contract, and simply in part the lack of skills to manage money properly.”

Are you alarmed by the things that you have seen in recent years?

“This type of abuse is sad, not only in the aid sector, but in the country in general. It is mentioned in the papers and people react strongly. The opposition is running on this towards elections in 2015. It is bad to know that the scope is huge, but good to see that it is being addressed.”

Photo caption: Peri-urban forest at Dar es Salaam in Tanzania, Pugu-Kazimzumbwi Forest Reserves, is prized as a recreational area. The protected forest area is threatened by illegal logging and development. Norwegian climate money was supposed to protect the area, but it has gone badly so far.

Photo: pugukwakiki.com

UPDATE – 7 February 2013: Wildlife Conservation Society of Tanzania (WCST) is a Tanzanian NGO. It has no links to the international NGO Wildlife Conservation Society (WCS), which also works in Tanzania. Thanks to Tim Davenport for pointing this out. WCST’s website seems to be down, but a snapshot from 11 November 2010 is available on archive.org.
CORRECTION – 8 February 2013: This post originally stated that the US$120,000 that WWF returned to the Norwegian Government “is less than 10% of the US$1.3 million that was reported missing in an audit carried out by Ernst & Young”. In fact, AlertNet reported that the Ernst & Young audit found that “a share” of US$1.3 million disappeared, not the entire amount. Thanks to Jason Rubens for pointing this out.

UPDATE – 8 February 2013: The figure of US$120,000 (NOK 770,000) comes from the Aftenposten article, translated and posted above. Inger Naess comments as follows:

Norway supported two projects (in Tanzania, not including DRC and Kenya) and only one of them was a REDD project. The Embassy has been repaid NOK 514 380 (approximately USD 94 000) from WWF Norway for the CSO project and TZS 9 970 000 (approximately NOK 34 000 or USD 6 200) from WWF Tanzania for the REDD project. This includes both the full amounts that were deemed fraudulent by Ernst and Young as well as all other funds that WWF could not guarantee had been spent in accordance with the contract.

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