SHC orders probe into private firm getting $26m carbon credit funds

The Sindh High Court has taken exception to an agreement between the Sindh forest department and a private company with regard to the distribution of an amount collected through carbon credit trading (CCT), observing that it is strange that the private company was receiving the lion’s share from fund generated through CCT for the only assignment of a mere supervisory nature.

Issuing an order on petitions against the lack of forestation in Sindh and the conversion of agricultural land into housing societies in urban areas of Karachi, a high court division bench headed by Justice Salahuddin Panhwar ordered the constitution of a committee to examine the legality of the agreement signed by the parties and also with regard to the existence or genuineness of the company and to verify the record of around $26 million received on account of the carbon credit trading fund during the last two years.

The court was informed that an agreement was made between a private company, namely Merlin’s Wood Pakistan (Pvt) Ltd., and the forest department, whereby it has been settled between the parties to the agreement that 60 percent of the amount generated through carbon credit trading, rewards by VERRA, will be given to the private company, while whereas 40 percent of the amount is to be credited in the account of the Sindh government’s forest department.

The court observed that so far about $ 40 million have been received through carbon credit trading, out of which $14.7 million are deposited by the Sindh government’s forest department, in its Sindh bank’s account, through a finance department’s letter, which was meant to be deposited in an endowment bank account; however, such an amount has been admittedly lying in a current bank account for about two years now.

The court observed that the special secretary, finance department, submitted that this amount was to be invested in any one of the AA ranked commercial banks and the proceeds to the same were required to be utilized by the forest department.

The court observed that forest department’s secretary and chief conservative officer were unable to give any satisfactory or justifiable response, when they were categorically asked as to how this grave illegality could be allowed to be perpetuated, and they could only come up with this lame and absurd reply that the bank manager, Sindh Bank, refused to open an endowment bank account.

The court observed that such an evasive and misfeasance response from the top officials of forest department speaks volumes about their efficiency and credibility. It directed the chief secretary to constitute a high-level committee comprising three top officials of Sindh government -- Dr. Shireen Narejo, Member Inspection Team, Mohammad Mureed Rahimoon, secretary Auqaf, and secretary of the finance department -- to ascertain the shortcomings. The court observed that in order to fix the responsibility upon the delinquent officials, the committee must submit its recommendations within 30 days.

The SHC further directed the forest department to immediately withdraw the amount from the present current account and invest the same in any profitable scheme with the concurrence of the finance department, within fifteen days positively, without fail, and said that non-compliance will expose the secretary forest and the chief conservative officer to contempt of court proceedings.

The project director of forestation D.B-I & D.B-II project undertook he will produce evidence of all logistic support provided by the Merlin’s Wood company, including the financing transactions carried out between the parties. He admitted that the private company was never practically available or seen at the project site, thus all the activities, including the plantations, are being carried out by the forest department under their supervision.

The court directed the authorities concerned to ensure removal of encroachments from forest land as per its orders. It directed the secretary law and the chief secretary to ensure that legislation is made with regard to the new scheme of forest laws and a separate forest force in order to bring the province of Sindh at par with two of the other provinces, who have legislated on the subject issue, and rightly treating the same as a pressing priority.

The court directed the chief conservation forest and the project director Mangroves Project to submit complete evidence with regard to the plantation of mangroves trees.