Grain’s agrofuel report

Grain, an NGO that supports poor farmers in poor countries, has published a large report that is getting a lot of publicity.

The press release is here, the report, a special issue of the magazine Seedling, is here, further reading here.

We begin with an introductory article that, among other things, looks at the mind-boggling numbers that are being bandied around: the Indian government is talking of planting 14 million hectares of land with jatropha; the Inter-American Development Bank says that Brazil has 120 million hectares that could be cultivated with agrofuel crops; and an agrofuel lobby is speaking of 379 million hectares being available in 15 African countries. We are talking about expropriation on an unprecedented scale…

The UN World Food Program in Somalia

The World Food Program dumps food on the market in Somalia, with predictable results. From The Independent,

“Food aid sent to Somalia to combat one of the world’s largest malnutrition crises has been criticised by Somali elders for causing violence - and for being delivered at the start of the harvest season.

More than 33,500 tonnes of food aid has been delivered to Somalia by the UN’s World Food Programme (WFP) since the start of the year. But in Marere district in the lower Juba valley, farmers and elders said the food distribution had brought chaos and driven down the price of maize by 60 per cent.

“WFP shouldn’t have brought it now,” said Mohammed Abdullahi Gure, chairman of the elders committee in Marere, who said distribution of the food had caused serious security problems.[...]

It is not the first time that Marere’s elders have criticised the WFP. After a chaotic food distribution last year, which also took place during the harvest season, the elders wrote to WFP asking the UN organisation not to deliver food again.[...]

Musa Yusuf Ahmed, 44, was a policeman before the Somali government collapsed in 1991. Now, he tries to make a living from farming, growing maize, beans and watermelons. He normally sells a 50kg bag of maize for 100,000 Somali shillings (about £3.10), but Mr Ahmed said it had dropped to 40,000 (£1.25). “For we farmers it is a big problem,” he said. “The food will benefit the people with no money but it will hurt the farmers.”

Some recipients of the food aid have also claimed that the quality is so bad they have had to feed it to their animals…”

Dark Green Ideas

Here are some dark green ideas.

Human communities should be maintained in small population enclaves within linked wilderness ecosystems. No human community should be larger than 20,000 people and separated from other communities by wilderness areas. Communication systems can link the communities.[...]

We need to radically and intelligently reduce human populations to fewer than one billion. [...]

All consumption should be local. No food products need to be transported over hundreds of miles to market. All commercial fishing should be abolished. If local communities need to fish the fish should be caught individually by hand.[...]

Who should have children? Those who are responsible and completely dedicated to the responsibility which is actually a very small percentage of humans. Being a parent should be a career. Whereas some people are engineers, musicians, or lawyers, others with the desire and the skills can be fathers and mothers. Schools can be eliminated if the professional parent is also the educator of the child.

This approach to parenting is radical but it is preferable to a system where everyone is expected to have children in order to keep the population of consumers up to keep the wheels of production moving. An economic and political system dependent on continuous growth cannot survive the ecological law of finite resources.

There is, of course, a complexity of problems in adjusting to a new design that will simply allow us to survive the consequences of our past ecological folly.

Curing a body of cancer requires radical and invasive therapy, and therefore, curing the biosphere of the human virus will also require a radical and invasive approach.

This vision belongs to Paul Watson of the Sea Shepherd Conservation Society (HT Tim Worstall).

Other quotes from Paul Watson,

“If you don’t know an answer, a fact, a statistic, then … make it up on the spot” (in Earthforce: An Earth Warrior’s Guide to Strategy).

“The fact is that we live in an extremely violent culture, and we all justify violence if it’s for what we believe in” (at the Animal Rights 2002 convention).

“There’s nothing wrong with being a terrorist, as long as you win. Then you write the history” (at the Animal Rights 2002 convention).

“We’re not a protest organization, we’re a policing organization” (on the Sea Shepherd Conservation Society).

Source of quotes here.

Fighting over carbon offsets

Many carbon offset schemes are bad, and there is a growing backlash against them (see this post on In Balance). Companies and NGOs with green goals are also competing for money and power. From BBC,

Carbon offsets ‘harm environment’

The current trend for “offsetting” carbon emissions by planting trees is doing more harm to the environment than good, MPs have been told.

The public is being “seriously misled” by companies peddling carbon offset schemes, campaigner Jutta Kill told the environmental audit committee.

The schemes did not reduce emissions and simply gave industry a “licence to pollute” elsewhere, she argued.

People should give money directly to climate charities instead, she said…

Jutta Kill is Climate Change Campaign Co-ordinator for the Forests and the European Union Resource Network (FERN), a charity.

NGO destroys African wildlife

- and subverts democracy in Kenya. A pretty good rant from Michael Norton-Griffiths (who has put some new articles on his website),

“Since 1977, Kenya has lost 60%-70% of all its large wildlife…

World Parks at Risk

The October issue of National Geographic has a series of articles on The Future of Parks, including an interesting article by David Quammen. He writes,

“Serengeti National Park tells the world that the people of Tanzania, accepting some burden of inconvenience, find themselves privileged to embrace within their boundaries a vast grassland filled with lions - come and see.”

The truth of the matter is that many Tanzanians, especially the Masai who previously inhabited Serengeti, see parks as places where wild animals are favored over local people for the benefit of foreign tourists.

It is also true that parks and other protected areas work. We need them if we want to conserve biodiversity.

But there are huge opportunity costs associated with protected areas. The long term sustainability of protected areas in poor countries is threatened by inadequate compensations for these costs.

If more poor countries become more democratic, the problem will get worse. Parks are an elite concern. By appealing directly to governing elites, the international conservation community has been able to get the support it needs to maintain the parks. This system may not be viable in the long run in countries that are poor, democratic and where landlessness is a serious problem.

A hint of things to come can be seen in Kenya, where the government, worried about an upcoming election, a year ago downgraded the Amboseli National Park to a national reserve, and handed control over it back to the Masai through the local county council. 29 NGOs wrote an open letter to the president of Kenya complaining about this decision, and arguing that income from Amboseli should continue to be used to subsidize unprofitable parks, and not all be paid to the county council.

Since Amboseli generates substantial revenue from wildlife, it may survive as a protected area rich in wildlife. In the absence of additional payments for conservation or as compensation, other parks are more economically viable if turned into farms or ranches.

For some reason, there doesn’t seem to be any international organizations or NGOs that want to come up with the money so that people in poor countries can receive fair compensation for setting aside their land for the benefit of all of us.

Tsunami Response

Financial Times writes (subscription necessary) about a report by the Tsunami Evaluation Coalition, a grouping of 40 charities and development agencies established to monitor the tsunami response.

The report’s authors wrote pointedly that the “generous funding” available for tsunami response meant the “humanitarian industry” was “deprived of its customary excuse for built-in systemic shortcomings”. Moreover, many of the systemic shortcomings listed had been identified as much as a decade ago, in the aftermath of the international response to the slaughter in Rwanda…

The issue in Ache is at least partly that the funds generated by the huge public response to the disaster prompted many agencies to embark on projects they had little expertise in…”No one had ever heard of the Red Cross construction company before, or of the Concern construction company…Those are aid agencies!”…

After spending more than $2 million on 571 homes, Save the Children discovered problems that meant 371 had to be torn down…

In a September report, the World Bank warned that local governments were spending too much new-found wealth on flashy new offices and not enough on infrastructure.

The aid industry is an industry with serious problems with incentives and accountability. Remember Easterly’s CIAO? Customer feedback, Incentives, Accountability, and, therefore, good Outcomes.

Greenpeace and Toxic Waste

Richard North on EU Referendum writes about unintended consequences and the latest toxic waste disposal scandal in Africa (previous scandals have included the dumping of Italian hospital waste in Somalia).

Richard argues that by encouraging restrictive and expensive regulations, Greenpeace has helped create incentives for the disposal of toxic waste in less regulated countries. Waste from the ship Probo Koala killed at least eight Africans, including children, and poisoned thousands of Ivory Coast residents,

“If one had to point to one organisation that had done more than any to demonise waste disposal and legitimise the flood of restrictive legislation on waste, Greenpeace would be a pretty good candidate.

Thus it is inevitable that, when a disaster arises in part as a result of the very legislation of which Greenpeace so much approves, they will be the last people to recognise the consequences of their own actions.

In essence, the Probo Koala disaster was one waiting to happen, one which was regulatory-driven, arising from well-intentioned idiots who have little idea of human psychology and the effects of commercial pressures and who suffer from the delusion that all you have to do to solve problems is make laws.”

“Demonise waste disposal”? Does this refer to the Brent Spar affair that did so much damage to Greenpeace’s reputation?

The Otis Redding Problem in Conservation

Look like nothing’s gonna change
Everything still remains the same
I can’t do what ten people tell me to do
So I guess I’ll remain the same, yes

-Otis Redding, (SITTIN’ ON) THE DOCK OF THE BAY

Why do Integrated Development and Conservation Projects (IDCPs) usually fail to deliver? The problem is what Bob Sutton calls the Otis Redding Problem. Too many objectives.

If a project in a poor country is designed to save endangered species, build local NGO capacity, fight infectious diseases, develop sustainable use of forest products, promote gender equality, and develop ecotourism, it has been designed for failure.

Why the proliferation of badly designed projects where nobody is individually responsible for doing anything for any one result?

Overly complex projects work well for intermediaries and middlemen, including the people who design and manage them. They get to spend the money. And on one hand, IDCPs are attractive to donors, who can say that they are promoting a lot of good things. On the other hand, it is virtually impossible to pin failure on any one person, so nobody will ever be held accountable.

The Political Economy of NGOs

In a previous post we showed how the competition for funds led NGOs to adopt policies known to be harmful.

In a paper by Alexander Cooley and James Ron, The NGO Scramble: Organizational Insecurity and the Political Economy of Transnational Action (pdf file), they describe the situation in Goma, Zaire (now DR Congo) after the genocide in Rwanda. Goma was filled with Hutu refugees, including many participants in the genocide. Two hundred NGOs had made their way to Goma and competed for more than $1 billion in relief-related contracts.

As one journalist noted after a 1995 visit, Goma had become a “three-ring circus of Žfinancial self-interest, political abuse and incompetence” where aid had become “big, big money,” and any NGO “worth its salt . . . recognized that it had to be in Rwanda.” As a result, he said, aid INGOs “parachuted” by the hundreds into Goma, creating “chaos and madness.” Another Western reporter described Goma as an “aid agency supermarket” in which aid groups “blare[d] out their names and logos like soft drink manufacturers,” plastering everything from water pumps to T-shirts with advertisements. Competition was Žfierce, he wrote, and aid groups were desperate to be involved in the Goma relief effort so that they could bolster their fund-raising capacities back home.

Cooley and Ron conclude,

Once established, transnationals are organizations like any other. To survive in a competitive world, they must justify their existence to donors, secure new contracts, and fend off competitors. Under specifiŽc institutional conditions,these imperatives will produce dysfunctional results. In the 1990s scholars established the importance of transnational networks and organizations for global politics; now we should turn our attention to the material incentives shaping their actions.

Amen.

Bandwagon Effects in Conservation

Fascinating case study on how the logic of fund-raising can drive NGOs to push for policies that are known to be harmful. Kaempfer & Lowenberg, The Ivory Bandwagon: International Transmission of Interest-Group Politics (pdf file, via Mit dem Kopf voran).

It is the case of the ban of the ivory trade. Scientists were against a ban on elephant hunting, “it would have been hard to find a conservationist with any zoological background and experience in Africa or with elephants who believed that a ban on the ivory trade was the way to save the African elephant”.

NGOs successfully raised money by dramatizing elephant “genocide” and the “African Chainsaw Massacre”.

Bonner (1993) describes how conservationists with impeccable scientific credentials, who were opposed to an ivory-trade ban, were “overcome by the public pressure and emotion and concerns about money” (34). They discovered that calling for a ban brought in more funding than any other cause and that any organization that failed to climb on the ivory-trade ban bandwagon risked losing members to more extremist competitors…

The bandwagon was gaining momentum, and conservation groups that did not jump aboard risked being left behind in the competition for members and contributions. In frustration, the chief fund-raiser for WWF–U.S. faxed the International in Switzerland, “We are in danger of losing our position with elephants” (Bonner 1993, 121). Bonner’s account makes clear that the fear of WWF officials was not that the elephant was threatened, but that the WWF was!

Fascinating reading.

Reputable and Disreputable Animal Rights Organizations

We have previously discussed market campaigns for animal rights (in this post), and the damage done by respectable animal rights organizations to conservation in Africa (here).

Meanwhile, the media is preoccupied with ‘animal rights terrorists’. Brendan O’Neill has written a sensible and balanced article about this phenomenon,

The truth about ‘animal rights terrorism’
Statistics reveal that it consists of rare and mostly minor incidents carried out by a handful of losers. So why is everyone so obsessed with it?

The reputable organizations have done a lot more damage by encouraging destruction of the economic value of wildlife to landowners in Africa than the nutcases have done anywhere. By destroying incentives to conservation they have both encouraged the destruction of wildlife, and cut the income to Africans that could have flown from what was previously an asset, but is now just a pest.

The Equator Principles

In July the Equator Principles signatories published Equator II. The Equator Principles basically involves private sector banks adopting the International Finance Corporation’s (IFC) environmental and social guidelines for project finance. The goal is to establish a set of best practices for project finance. The IFC had updated its own internal standards, so the Equator Principles also needed to be updated.

What are some of the changes? The most important important is the lowered project size threshold from $50 million to $10 million. This means that smaller projects, e.g. hotel and real estate projects, will be subject to the guidelines.

The second important change to the Principles is the application of the Principles to project advisory work. Under Equator II, banks commit to making their clients aware of the Equator guidelines before the financing stage.

In 2005, $49 billion in cross-border project finance fell under the umbrella of the Equator Principles, and the number of supporting financial institutions is now 41. 80% of all project finance is now subject to the guidelines, i.e. the Equator Principles have become the de facto standard for project finance.

The NGOs involved in pressing for adoption of a code of conduct coordinate themselves through BankTrack. BankTrack members see the Equator Principles as a “baseline”, not a set of “best practices”.

What are some of the risks involved for the participants? For the participating banks, an obvious risk is involvement in a project that clearly violates Equator Principles. For a signatory to be involved in a dubious project and be found out could do a lot of damage to the institutions’s reputation.

For the NGOs, there will be a conflict between being outside agitators and being inside negotiators. NGOs can’t afford to be too involved in activities that lead to decreased fundraising, recruitment, and publicity. It will be a fine line to tread, and it will be interesting to see how they handle it.

For an earlier post on project finance, read here. Read also Building sustainability into syndication (pdf file) from Environmental Finance magazine.

Resources for conservation

U.S charities (in US$ billions)

Environmental Protection and Conservation, 265 charities
Total Expenses $1.88, Net Assets $7.12

Botanical Gardens, Parks, and Nature Centers, 98 charities
Total Expenses $0.47, Net Assets $2.28

Total, 363 charities
Total Expenses $2.35, Net Assets $9.40

 

Source: Charity Navigator

NGOs in the Mist

A recent news item from Conservation International’s Global Conservation Fund talks about the Tayna Gorilla Reserve in the Democratic Republic of Congo.

The Dian Fossey gorilla fund liked the idea of a new wildlife reserve and provided some support, but the small Atlanta-based nonprofit had limited funds. In 2003, recognizing a unique opportunity, CI became a partner with the group. Juan Carlos Bonilla, head of CI’s Central Africa program, negotiated $2.8 million in USAID funds and CI’s Global Conservation Fund added close to $1 million.

It could be an interesting place to visit, so I follow the link to the Tayna Gorilla Reserve. The website has obviously not been maintained, and the links are broken. Given that one additional paying visitor to the area would more than pay for the cost of fixing the website, it seems somewhat peculiar. I mean, the Dian Fossey Gorilla Fund had an ongoing project, they got an additional $3.8 million, and they can’t help maintain a website?

This brings me to a general observation about models such as the Global Conservation Fund’s. The GCF raises money and provides financial and technical expertise to smaller NGOs that don’t have the expertise needed, in this case the Dian Fossey Gorilla Fund, which then works as an intermediary or contractor.

So far so good, but what are the incentives for the smaller NGO to report bad news to GCF? What incentives does the local population have to report bad news to the Dian Fossey Gorilla Fund? Things can become completely dysfunctional, and in this case there is at least a small indication that things are not working as they should. Is this symptomatic of larger problems with the project?

Evaluation, continued

The American Institute of Philanthropy states that

1) A charity should spend at least 60% of its budget on program services.
2) Charities should spend no more than $35 to raise $100.

Of conservation organizations working internationally 

Conservation International gets an “A” grade (the best being “A+”). Information about Conservation International in Forbes Magazine’s list of the 200 largest charities, read here.

The Nature Conservancy get an “A-”. See also Forbes.

Evaluating NGOs

Environmental Protection and Conservation	Sector Average (265 Charities)
Efficiency Score	32.92
Capacity Score	18.49
Overall Score	51.41
Total Revenue	$8,268,175
Total Expenses	$7,109,564
Excess/Deficit	$1,158,610
Net Assets	$26,862,991
CEO Salary	$104,703
Fundraising Efficiency	$0.12
Fundraising Expenses	9.9%
Program Expenses	78.0%
Administrative Expenses	12.1%
Primary Revenue Growth	5.7%
Program Expense Growth	6.1%
Working Capital (years)	1.33

If you work for or give money to an NGO, you should take a good look at its financials. In the U.S. Charity Navigator does an excellent job. The numbers above are taken from Charity Navigator and give the average performance of 265 charities working in environmental protection and conservation. The financial ratios and performance categories are explained here.

So, if an NGO or charity you work with is not in Charity Navigator’s database, get its annual reports for the past few years, and do the math.

Charity Navigator states that “We believe that those spending less than a third of their budget on program expenses are simply not living up to their missions. Charities demonstrating such gross inefficiency receive zero points for their overall organizational efficiency score.”

In my opinion, that should be changed to 50%. Any charity that spends less than 50% on program expenses is just not doing what it is supposed to do with its money.

Microcredit Hype and Hope

Microcredit, the extension of small loans to poor people, is an attractive, but over-hyped idea. Thomas Dichter has written an excellent concise summary of the issues.

…microcredit is an almost perfect case of a phenomenon that has come to characterise much of development assistance - a widening gap between reality and propaganda. For while the promise of microcredit is irresistible - help the poor out of poverty using their own entrepreneurial energies, and in the process get our investment back - the hoped for poverty reduction impact of microcredit remains elusive. While much has been learned about managing microcredit in a sound manner, many newcomers to the field succumb to the temptation to trumpet success prematurely…

The little serious research we do have on microcredit’s impact shows that it helps poor people bridge cash flow gaps in their consumption cycle, and it can give more confidence to women…

And so we come again to familiar territory in the development industry. An idea that, after all, can produce some modest changes in the life of poor people (cash flow smoothing, confidence building, etc.) but that really works well only in some circumstances, is carried off by hype and urgency, offered as much more than it really is, and applied everywhere. As it grows it is inevitably caught up in the decades-old incentive structure of the development aid industry - people and institutions are rewarded for mobilising and moving money… our industry ignores complex and contextual approaches to development (institutional, legal, governance, and other reforms) in favour of superficial feel-good solutions that produce at best marginal changes, but satisfy the need to be perceived as ‘doing something for the poor.’

You can download the article here (pdf).

Update: There is now a shorter html version available here. The pdf version is better.

Critical Ecosystem Partnership Fund

I just received a copy of the 2005 annual report of the Critical Ecosystem Partnership Fund. The aim of the fund is to conserve biodiversity hotspots; the most biodiverse yet most threatened regions.

The fund received $29.5 million from donors, and spent $1.5 million or about 6% of this amount on fundraising.

It gave new grants of $23.3 million, with non-grant expenses (business development, monitoring and evaluation etc.) 14% of total expenses.

Just glancing at the list of grants, there seem to be a lot of grants of just under $20.000, some much larger, and a tiny one of $485 for Development of a Business Plan for a Donkey Trekking Route in Northern Cederberg.

The problem with small grants is, of course, the cost of processing the grant applications and following up with monitoring and evaluation. The risk is that the administrative expenses become an unacceptable larger proportion. CEPF tackles this problem by enabling local civil society groups to manage small grants programs.

But overall the annual report paints a picture of a remarkably efficient organization doing work that is really worthwhile. Is it also effective? That will be shown by the long term conservation of the hotspots.

The Marketing of Rebellion

A displaced person in war-torn southern Sudan recently cried, “Why do so many Americans care about saving seals and whales but not us?"

The quote is from Clifford Bob (editor) The Marketing of Rebellion : Insurgents, Media, and International Activism.

An excerpt can be read here. See also this list of global causes. What is hot, and what is not?