It is the first such decision the Green Climate Fund (GCF) has taken since its creation in 2010.

The GCF said on Thursday it had terminated its agreement with project developers after their failure to comply with its rules on environmental and social safeguards resulted in “legal breaches”.

In 2020, the fund committed $64 million to the programme run by the Nicaraguan government and the Central American Bank for Economic Integration (CABEI), which aimed to reduce deforestation in the UNESCO-designated Bosawás and Rio San Juan biosphere reserves.

The GCF said it had not paid out any funds before terminating its support for the project and no activities had yet taken place.

Community groups warned that the project was going to be carried out in reserves being deforested by a massive invasion of settlers that use violence against Indigenous people with impunity due to weak law enforcement action. They worried that the programme – which was to be overseen by state authorities – would worsen those conflicts and fail to protect the rights of Indigenous communities.

Amaru Ruiz, director of the Nicaraguan organisation Fundación del Río, which supported the affected communities, welcomed the decision by the GCF.

“This sets a precedent globally for the functioning of the fund,” he said. “It is also a recognition of the struggle and resistance of the Indigenous people and Afro-descendant communities of Nicaragua, and it shows that there is a window of opportunity to insist on the fact that climate projects must not violate human rights.”

Fuelling conflicts

The decision concludes a grievance process that has lasted nearly three years since a coalition of local and international NGOs filed a complaint with the GCF. They accused the project of fuelling a violent conflict between Indigenous communities and settlers who were grabbing land to farm cattle and exploit resources, as well as failing to consult local people.

The Bosawas Reserve in Nicaragua has been hit by illegal mining and logging despite protected status. Photo: Rebecca Ore

Independent legal observers have documented repeated attacks against Indigenous people in the area with dozens murdered, kidnapped or raped over the last few years.

An investigation by the GCF’s independent complaint mechanism deemed their concerns justified. It found a series of failures with the project that could “cause or exacerbate” violent conflict. The probe also highlighted a lack of due diligence on conflict risks and human rights violations and the absence of free and informed consultations with Indigenous communities before the project’s approval.

The GCF said it was unaware that the project was not in compliance with its policies at the time of its approval and that new evidence had subsequently been brought to light.

Late-stage consultation

Following the internal investigation, the GCF board agreed last July to suspend the project until it addressed local concerns and fully respected the fund’s policies and procedures. It effectively gave the project developers one last chance to fix the problems.

In an attempt to remedy the issues, CABEI carried out a consultation and engagement process with local communities between August and September. The project developer said a total of 5,550 people participated in 69 events across the region.

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But NGOs criticised it as a “sham”, saying participants were only provided with a brochure in Spanish – a foreign language for many Indigenous people – and were given limited freedom to debate the proposal.

“There’s been an increase in militarisation in the territory,” said Ruiz. “At least eight Indigenous community forest guards were detained after they had denounced the situation of encroachment on their territory”.

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Since 2007, Nicaragua has been ruled by an authoritarian regime led by President Daniel Ortega. His administration has been responsible for “widespread and systematic human rights violations that amount to crimes against humanity”, according to the United Nations Group of Human Rights Experts on Nicaragua.

CABEI detailed in a report sent to the GCF in October the steps that had been taken to make the project compliant with its rules. But the fund’s secretariat, its administrative arm, found the issues were not addressed to its satisfaction and decided to terminate its participation in the programme.

It communicated the decision to its board members at a meeting in Kigali, Rwanda, this week.

Lesson for the future

The GCF secretariat says it is now committed to working collaboratively with CABEI and the Nicaraguan government to “develop a clear strategy to conclude the project in an orderly and responsible manner”. That will include informing people on the ground and “managing the expectations” of the potential beneficiaries.

CABEI did not immediately respond to a request for comment.

Florencia Ortúzar, a lawyer at the Interamerican Association for Environmental Defense (AIDA), said she hoped the GCF would learn a lesson from this case.

“It is a reminder of the importance of including local communities from the very beginning of project design,” she told Climate Home. “The GCF policies and safeguards exist to prevent those regrettable situations and must be implemented rigorously and consistently.”

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An investigation by the fund’s independent complaint mechanism found a series of failures that could “cause or exacerbate” violent conflict between indigenous people and settlers.

The Green Climate Fund (GCF) will not provide any money to the project managed by Nicaragua’s authoritarian regime until it fully complies with the fund’s rules, its board ruled at an annual meeting in July.

This marks the first time the GCF board puts on hold an approved project over human rights concerns. The decision comes at the end of a process that took more than two years since a coalition of local and international NGOs filed a complaint.

But the fund stopped short of entirely scrapping the project, as local activists requested. The Nicaraguan government now has the chance to make it compliant with the GCF rules.

A GCF spokesperson told Climate Home that the matter “has received, and continues to receive, its highest attention”. They added that the fund reserves the right to exercise its legal rights in case the issues are not addressed to its satisfaction.

Human rights abuses

The project, which was approved in 2020, aims to reduce deforestation in the Unesco-designated Bosawás and Rio San Juan biosphere reserves in the Caribbean Region of Nicaragua.

The region is gripped by an increasingly violent conflict between indigenous communities and settlers, who are grabbing land to exploit the forest’s resources and farm cattle.

Independent legal observers have documented repeated attacks against indigenous people in the area with dozens of people murdered, kidnapped or raped over the last few years.

A report by the internal redress body said the complainants’ concerns that the project may fuel further violence were justified.

It also found the project had been approved even though it did not comply with a series of GCF’s policies and procedures. Investigators highlighted the failure to carry out due diligence on conflict risks and human rights violations and to conduct free and informed consultations with indigenous communities before the project’s approval.

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These failures “may adversely impact the complainant(s) and other indigenous communities in the project areas”, the report said.

A GCF spokesperson said the fund was not aware that the development of the funding proposal was not in compliance with its policies at the time of the project’s approval. New evidence brought to light subsequently through the independent investigation showed that some of the information presented by the project proponent, as part of its due diligence, was not accurate or correct, the GCF added.

Bittersweet ruling

Nearly a year after the investigation was concluded, the board has now requested the GCF Secretariat, its administrative arm, to put the project on hold until it respects the fund’s policies and procedures.

The ruling’s summary does not specify if all of the issues raised through the complaint mechanism will need to be addressed.

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The result is bittersweet for the groups behind the complaint.

Florencia Ortuzar, a lawyer at the Interamerican Association for Environmental Defense (AIDA), says that, even if the outcome may ultimately be positive, the decision gives no clarity as to what process the Secretariat will follow. “We do not know which specific issues of non-compliance will be looked into nor how they will aim to fix them”, she added.

Calls for cancellation

Amaru Ruiz, director of the Nicaraguan organisation Fundación del Río, says the ruling validates indigenous populations’ concerns, but he believes the programme should be axed rather than simply improved.

“A project that violates human rights, consultation processes and a series of procedures should be cancelled”, he told Climate Home News. “The problems are substantive, not just formalities”.

The GCF Secretariat will now need to work with the Nicaraguan state apparatus and the Central American Bank for Economic Integration, its funding partner on the project, to resolve the issues.

The government of Nicaraguan president Daniel Ortega has been accused of widespread human rights abuses. Photo: Presidencia El Salvador

The government led since 2007 by president Daniel Ortega has been responsible for “widespread and systematic human rights violations that amount to crimes against humanity”, according to the United Nations Group of Human Rights Experts on Nicaragua.

Ruiz claims the Nicaraguan regime does not have the political goodwill to play within the rules. “It is only after the financial resources, so I believe it will try to show on paper that the project is now compliant even if that is not the case”, he added. “We will see if the Secretariat acknowledges its previous mistake and will make sure regulations are properly applied now”.

Lack of transparency

The complainants’ worries are compounded by what they described as a lack of transparency during the lengthy redress mechanism.

Investigators concluded the reviews in August 2022 but their findings have only been made public now following the completion of the complaint process. The GCF’s board members discussed the report during three separate meetings before making a final decision nearly two weeks ago.

The discussions happened behind closed doors and public updates on the case were limited. This prompted some complainants to criticise the process as “unfair, non-transparent and deficient”.

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Aida’s Ortuzar told Climate Home News “this is especially concerning as it is the first time a complaint reached the board and it sets a worrisome precedent”.

The report by the redress mechanism also raised concerns over the way the GCF relies heavily on information submitted by project proponents to make decisions on whether to fund them.

“This leaves the GCF extremely vulnerable to policy and safeguards non-compliance that can result in huge reputational risks to the fund”, the investigators wrote.

The article was updated on 27/07 to include comments from the Green Climate Fund received after publication

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The president’s office said that Oquist died on Monday night. Local media reported the cause of death was pulmonary embolism, a common complication of severe Covid-19 infection – although no positive diagnosis of the virus was made.

“Paul Oquist Kelley served the people, the families, all Nicaraguans with love, faithfulness, commitment and untiring bravery,” president Daniel Ortega said in a statement on Tuesday. 

“[He was] a brother, a colleague and I believe one of the most important and prominent people in this country, a true Nicaraguan, more Nicaraguan than many who were born in this country,” said Gustavo Porras, speaker of Nicaragua’s national assembly.

Climate watchers have described him as a “fighter for justice” and a  “complex figure in global climate negotiations”, with a sharp, analytical mind.

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Born in 1943 in California, Oquist attended university in the US before moving to Nicaragua where he held several positions in Ortega’s government in the 1980s and when he returned to power in 2007.

In the climate space, Oquist made waves by refusing to back the adoption of the Paris Agreement, arguing the deal did not go far enough to cut global emissions and protect developing countries from climate impacts.

“We’re not going to submit because voluntary responsibility is a path to failure,” Oquist told Climate Home at the time in a video interview on the sidelines of the UN climate talks in Paris in 2015. 

“We don’t want to be an accomplice to taking the world to 3 to 4C and the death and destruction that represents,” Oquist said. “It’s not a matter of being troublemakers, it’s a matter of the developing countries surviving.” 

Nicaragua, a country in central America described by the World Bank as a “renewable energy paradise”, is a tiny emitter, generating just 0.02% of global emissions. 

Nicaragua eventually joined the Paris Agreement in 2017 in a move president Ortega said was a show of solidarity to countries affected by climate disasters. 

Following this change of heart, Oquist was appointed co-chair of the multi-billion-dollar Green Climate Fund (GCF) board in 2018. In this role his main responsibility was steering the board meetings, where decisions are reached by consensus.

On the GCF board, Oquist called for stricter vetting of potential private sector partners. For example in 2019, he backed civil society concerns about a Chilean private equity firm specialised in wealth management and an Indian bank mired in financial instability. Both entities were accredited.

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Oquist was a close political advisor of president Ortega and his defence of the government’s crackdown on political opponents resulted in financial sanctions from the Trump administration. 

Following news of his death, political leaders and climate experts paid tribute to Oquist on social media. 

Venezuelan president Nicolas Maduro said in a statement that Oquist was known for his “inexhaustible energy, cheerful nature and dedication to reveal and defend, internationally and in any setting, the truth.”

South African GCF board member Zaheer Fakir described Oquist as a “fighter for justice and a steadfast and dedicated climate warrior”.

Sad to hear of the passing of a colleague, a comrade and a friend Dr Paul Ouquist. A fighter for justice and a steadfast and dedicated climate warrior. May his kind soul rest in eternal peace. HASTA LA VICTORIA SEMPRE! @theGCF @UNFCCC pic.twitter.com/9bUMe3LqV0

— Zaheer Fakir (@zaheer_fakir) April 13, 2021

Henning Wuester, director of the Initiative for Climate Action Transparency, wrote on Twitter: “With Paul Oquist the global climate process loses a very bright and engaged personality. He was difficult but very sharp and analytical – an important voice to carefully listen to. I will always remember some of his statements of the early days of the GCF.”

Rest in power, Paul Oquist. A complex figure in global climate negotiations, but I will always appreciate the clarity he brought in calling out dodgy private sector deals, backing up CSOs when other governments stayed silent. Classic example in the GCF:pic.twitter.com/WQlLwnrdGH

— Joe Thwaites (@joethw8s) April 13, 2021

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Nicaragua’s Paul Oquist was rubber-stamped for a top international climate finance role this week, despite a token protest.

The central American country was the only one to refuse to adopt the Paris Agreement in 2015. Oquist told Climate Home News at the time basing the deal on voluntary national commitments was “a path to failure”.

Yet his government had a change of heart and joined the pact in 2017, clearing the way for Oquist to become co-chair of the Green Climate Fund (GCF) – a key mechanism to deliver the finance goals of the Paris Agreement.

At a board meeting of the UN-backed fund in Songdo, South Korea, a representative from Georgia objected to Oquist’s appointment before absenting himself while the rest of the board waved him through.

“This country [Nicaragua] quite often stands against the international community,” said Teimuraz Murgulia. “You may tell that Nicaragua has since rejoined the Paris Agreement, but nothing significant has changed since Paris.

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“In Georgia, we also consider that achieving results in combating climate change requires much more ambitious result. But instead of abstaining, we are joining up with one of the most ambitious groups of climate diplomacy.”

Georgia has joined the environmental integrity group in UN talks, Murgulia said, a small bloc of developed and middle-income countries including Mexico, South Korea and Switzerland.

Oquist declined an interview request to explain the evolution of Nicaragua’s position. In an emailed statement, he said he was “honored to have been elected” and the boardroom atmosphere was “very positive and supportive”.

After confirming Oquist and Sweden’s Lennart Båge as co-chairs, the board approved its biggest tranche of projects to date.

In a record board meeting, the fund committed more than $1 billion to 23 projects. These included $27 million for early warning systems and climate information services in Georgia.

Namibia became the first country to get through the fund’s new simplified approval process, getting $9.3 million to help smallholder farmers within three months of applying. The streamlined approach was a response to criticisms that hefty paperwork was blocking money from reaching the poorest and most vulnerable to climate change.

The board also adopted policies to protect indigenous people’s rights and manage the environmental and social impacts of projects. Members agreed to start talks on raising more money, a sensitive subject since the US – its single biggest donor – has signalled under Donald Trump an intention to halt contributions.

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The central American country’s chief climate negotiator, Paul Oquist, is set to be the next co-chair at the multi-billion-dollar Green Climate Fund (GCF).

According to three diplomatic sources, Nicaragua lobbied for the position, but the fact that it had not signed up to the UN pact that underpinned the fund made the appointment awkward.

At the same time, left-leaning Nicaraguan president Daniel Ortega did not want to be seen as taking Donald Trump’s side. With Syria promising this week it too will join the Paris pact, the US is now the only country in the world to reject the 2015 landmark initiative.

Oquist’s appointment at the GCF is due to be confirmed in February. The 24-member board appoints two co-chairs, representing developed and developing countries, for 12-month terms. Oquist is currently an alternate board member.

He has ministerial status in Nicaragua and is close to the first lady and vice-president Rosario Murillo. Both are in charge of the country’s climate change policies.

In 2015, Nicaragua refused to join the Paris Agreement on the ground it was too timid. “We’re not going to submit, because voluntary responsibility is a path to failure,” Oquist told Climate Home News at the time.

Under a rotation scheme, the next co-chair from the developing world will be nominated by the Latin American and Caribbean nations. The current co-chair is Saudi Ayman Shasly. The co-chair is mainly responsible for steering the meetings, with decisions reached by consensus.

GCF is based in South Korea and meets three times a year. It started with $10 billion of funding pledged by developed countries to support poorer countries with low carbon growth and resilience to climate change impacts. At the last meeting in October, it approved 11 funding proposals valued at $393 million.

Oquist did not respond to a request for comment.

Climate Home News’ reporting at Cop23 is supported in part by the European Climate Foundation.

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Nicaragua refused to join the accord at the Paris climate conference in 2015, its lead envoy calling the voluntary commitments that countries make “a path to failure”.

Now, with the US shaping to withdraw from the deal, record-breaking hurricanes pummelling Nicaragua’s Caribbean neighbours and a devastating monsoon season killing thousands in south Asia, president Daniel Ortega announced he had decided to step towards the community of nations.

“We have to show solidarity with this large number of countries that are the first victims, that are already victims and who will continue to suffer the impact of these disasters: countries of Africa, Asia, Latin America, the Caribbean, those in highly vulnerable areas,” El Nuevo Diario reported Ortega saying.

The Central American nation, which emits 0.03% of global CO2, will now have to submit a pledge to the UN for curbing its emissions and adapting to climate change impacts. Diario said the government had begun its internal processes for joining the deal.

It is widely accepted that the voluntary measures nations have submitted to the Paris deal do not make deep enough carbon reductions to keep the world from warming to dangerous levels. Ortega said this remained a problem with the accord, especially because the deal does not bind nations to their promises.

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“Scientists have said to political leaders, to governments, that [the agreement] isn’t enough, and have said that it’s not true that we’re going to be able to reduce global warming with these actions to which we’ve committed, because there’s no obligation to do so. So it’s a declaration, a proclamation,” he said.

The announcement leaves war-torn Syria as the only nation remaining outside the agreement, which was joined by 195 countries in 2015. US president Donald Trump announced in June that he intended to pull the US from the deal at the first opportunity. Under the terms of the accord that cannot take effect until 2020.

In recent days Ecuador, Bhutan and Lichtenstein all ratified the deal, bringing the number who have formalised their participation to 162.

David Waskow, international climate director at the World Resources Institute, said: “When the only country left in the world that hasn’t signed the Paris Agreement is Syria, President Trump’s decision to withdraw from the accord stands out like a sore thumb. The Trump Administration’s reputation as a climate loner deepens even farther.”

This week at the UN general assembly, secretary general António Guterres linked climate change with the severity of the storms that have caused devastation across several Caribbean nations and said cutting emissions must be part of the response.

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Although Brazil, the world’s biggest coffee producer and exporter, is expecting a record harvest  this year, its coffee crop − like that of 70 other producer countries − is now being threatened by climate change.

A report by the independent Climate Institute concludes that, by 2050, the world’s present growing area will have been halved by global warming.

It warns: “Climate change is already putting production and cost pressures on the supply of coffee in significant parts of the world’s ‘bean belt’ of coffee-producing countries.

“Increasing temperatures and extreme weather events will cut the area suitable for production by up to 50%, erode coffee quality, and increase coffee prices for consumers.”

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John Connor, CEO of the Sydney-based Climate Institute, says: “Over 2.25 billion cups of coffee are consumed around the world every day. World coffee production has more than trebled since the 1960s to supply the $US19 billion trade that continues to deliver a 5% increase in consumption annually.

“Yet between 80% and 90% of the world’s 25 million coffee farmers are smallholders, who are among those most exposed to climate change.

“They generally live and work in the ‘bean belt’, which comprises around 70 mostly developing countries, including Guatemala, Brazil, Vietnam, Colombia, Ethiopia and Indonesia. Climate change threatens their world.”

The best temperature for coffee bushes is 18-22°C. Above this, the plant grows more quickly and bears fruit too early, damaging the quality of the bean.

In the Central American countries of Mexico, Guatemala and Honduras, average temperatures have already increased by 1°C since the 1960s, while the average volume of rainfall has dropped by 15%.

Six ways @GCF_News is investing in #adaptation https://t.co/NU07DPgqTy #GCFund #climate pic.twitter.com/mJZKe2MwML

— Climate Home News (@ClimateHome) December 14, 2016

In Ethiopia, home of the Arabica bean, where coffee exports are a major part of the economy, the average temperature increased by 1.3°C between 1960 and 2006.

This has raised temperatures in the highland area where coffee is grown to as high as 23°C − leading to the proliferation of pests such as the coffee berry borer beetle.

In Brazil, the number and intensity of heatwaves in the coffee-growing areas of Minas Gerais has risen significantly, while extreme cold spells have decreased.

Higher temperatures and rainfall have increased the incidence of disease and pests, affecting yields and quality.

In already-hot countries, more warming will also increase the physical and mental health burdens on producers, labourers and communities – with consequences for productivity, says the report, which was commissioned by Fairtrade Australia & New Zealand.

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The Fairtrade Foundation, which works with small farmers round the world, is already providing technical and financial support for climate change adaptation and mitigation.

About half of the 1.6 million farmers and workers involved in Fairtrade are small-scale coffee farmers in 30 countries, with 80% of Fairtrade coffee coming from the Latin American countries Colombia, Brazil, Peru, Nicaragua and Costa Rica.

Other farmers live in African countries such as Uganda and Tanzania, or Asian countries such as Indonesia.

Fairtrade farmers cultivate both the more expensive Arabica, which is more sensitive to temperature fluctuations, and the stronger and less expensive Robusta coffee beans.

In Brazil, experts say the country is ready for the challenges of climate change. Antonio Fernando Guerra, a research director at the Brazilian government research agency Embrapa Café, says the continental size of the country, with so many different micro-climates, means that losses in one area are compensated for by increased production in others.

Plants that are more resistant to pests and drought are also being developed. So, for the time being at least, it looks like there will continue to be a lot of coffee in Brazil.

This article was produced by the Climate News Network

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By Alex Pashley in Paris

Nicaragua has become the first country to explicitly withhold a climate plan from a UN-backed global warming pact as it says pledges let big polluters off the hook.

Lead envoy Paul Oquist said it refuses to join 183 out of 195 countries in delivering an “intended nationally determined contribution” (INDC) as they collectively fail to stop catastrophic levels of global warming.

“We’re not going to submit because voluntary responsibility is a path to failure,” Oquist told Climate Home on the sidelines of UN climate talks in Paris.

“We don’t want to be an accomplice to taking the world to 3 to 4 degrees and the death and destruction that represents.”

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The Central American state is a tiny emitter, with a 0.03% share of global emissions, but its refusal is a rebuke to the UN process. Venezuela, a fellow member of the ALBA negotiating bloc, is likely to follow suit and refuse outright a pledge, Oquist claimed.

The Bonn-based UN climate body has requested all countries in a position to do so to submit “intended nationally determined contributions” (INDCs) to international efforts to hold warming to 2C.

Conflict-riven states like DR Congo and Iraq presented plans for how to cut carbon and adapt to a warming planet up to 2030. More than 95% of emissions are now covered, with 12 continuing to hold out.

But the sum total of pledges overshoot the “safe” threshold according to the UN, curbing warming to only 2.7C if enacted.

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“It’s a not a matter of being trouble makers, it’s a matter of the developing countries surviving,” Oquist said.

“4C is not a survival track in the Sahel with the Sahara advancing. It’s not a survival track for India or Pakistan with the glaciers melting in the Himalayas.”

Nicaragua president Daniel Ortega wasn’t among 150 world leaders to appear on Monday, making Oquist the country’s most senior representative in Paris. He said wealthy countries should bear their historical responsibility for causing climate change and provide adequate climate finance.

The ten largest carbon polluters account for 72% of historical emissions and the 100 smallest just 3%, he said.

“There’s no willingness to make any sacrifices on policy sphere and that’s why we have this very poor level of ambition.”

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