Paid for Approval: How consulting firms and investment service providers enable human rights violations and climate injustice: the case of gas in Mozambique
This report looks critically at the systemic issues raised by service providers that are being tasked with assessing, tracking and flagging the risks of mega-extractive projects.Published by Justiça Ambiental.
Suggested Citation: Macmillen Voskoboynik, “Paid for Approval: How consulting firms and investment service providers enable human rights violations and climate injustice: the case of gas in Mozambique, 2024. Justiça Ambiental
For over a half-century, fossil fuel corporations funnelled tens of millions of dollars into lobby groups that sought to discredit climate science, dilute environmental policy, and delay efforts to address the ecological crisis. But over the course of the last decades, the increasingly undeniable and overwhelming impacts of climate violence and systemic contamination, and the persistent efforts of grassroots movements and communities, have changed the game. Corporate actors and corporate-captured governments have been forced to respond in diverse ways, with many seeking to capitalise on a political economy in transition.
Sustainability, good governance and development have now become embedded in mainstream corporate jargon, accounting and bureaucratic compliance. Many investors increasingly turn to external companies, such as ESG (Environmental, Social and Governance) rating agencies, to provide evaluations and assessments on the sustainability of their investments. This report looks into the role of service providers – auditing, accreditation, consulting and certification firms – in the corporate-extractive system, focusing on the gas industry in Cabo Delgado, Mozambique. Insight is also provided into the EIA process of the proposed Mphanda Nkuwa dam on the Zambezi river.
The quality of social and ecological data used in the assessments is poor:
- Assessors rely on company-reported data;
- When appraising social and communal concerns, ESG approaches rarely take into consideration community politics;
- Marginalised perspectives are underrepresented;
- Assessors frequently consult with local NGOs but this is often with NGOs who are already partial to the projects;
- ESG analysis rarely prioritises the kinds of backgrounds or skill-sets – local ecological knowledge, anthropology, fluency in local languages, ecological economics, war and genocide studies, epidemiology – that might facilitate a deeper understanding of socio-ecological impacts.
- Service providers, especially in the transnational ESG space, tend to have very little expertise on areas such as Lusophone Africa, let alone Mozambique.
Conclusions:
- A number of core problems are evident with service providers in the sustainability assessment sector
- The pattern of potential conflicts of interest needs to be made transparent and incorporated into decision-making
- Methodological decisions in research and analysis undercount and underplay the socio-ecological impacts of gas projects
- The consultancy system is failing to adequately inform investors about the implications of gas projects in Mozambique
- The ‘ESG’ or sustainable-investment model has failed, especially for communities in Mozambique.
Example: Gas extraction in Cabo Delgado
There are four approved gas projects in Cabo Delgado province. Each of these projects has financial support from a number of public and private financiers from a number of countries, including public funds and support from development institutions. Each of these institutes has frameworks or guidelines for assessing and mitigating the risks of the projects they support. A number of significant impacts and risks have been misrepresented or ignored in the various assessments. Most notably, the relationship between gas development and the ongoing insurgency in the province has been underplayed. Impacts on biodiversity are significantly underplayed, for example with gas companies claiming no impact on Quirimbas National Park because it is eight kilometres from the project boundary. Impacts from ballast water and bilge dumping are also not considered. Climate change impacts are under-reported, and use data that undercounts emissions intensity.
Example: Proposed Mphanda-Nkuwa mega-dam
The proposed Mphanda Nkuwa mega-dam project promotes a certification scheme for sustainability performance – Hydropower Sustainability Standards (HSS). HSS is non-binding and sets weak standards. Notably, it sets a greenhouse gas emissions upper bound at 3 to 4 times weaker than industry average. It respects the confidentiality requests of their clients, and uses vague and pliable criteria, enabling clients to adjust the certification to meet their project, rather than the other way around. “The glaring problem with HSS, inherent to many certification schemes across industries, is self-evident: those being held to account by a standard determine its stringency.”
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