Merlins Wood’s mysterious REDD projects in Pakistan

In May 2011, a Memorandum of Understanding was signed in the province of Khyber-Pakhtunkhwa, Pakistan for a REDD-type project. Last week, Sarhad Awami Forestry Ittehad (SAFI) rejected the agreement. This is a strange story, involving the Taliban, an illegal logging mafia, carbon trading, REDD and a UK-based company called Merlins Wood

By Chris Lang | REDD-Monitor | 16th February 2012

The MoU was signed by Zahoor Ahmad Khalil, the Khyber-Pakhtunkhwa Secretary of Forests, and Surriekha Khan, the 32-year-old Director of Merlins Wood Limited. Under the MoU, a 40-year project would be established aimed at protecting forests, establishing plantations and promoting farm forestry in Swat, Battagram and Mansehra districts. Merlins Wood would pay £12 million (about US$20 million) to the Department of Forests for the project. Merlins Wood would then sell carbon credits and keep 80% of the revenue while the remaining 20% would go to the Department of Forests.

SAFI rejected the project because the agreement was signed between the Department of Forests and Merlins Wood with no consultation with the owners of the forests. According to anarticle in the Business Recorder, the forests in Khyber-Pakhtunkhwa are classified as follows:

Forest type	Area (% of total)	Ownership	Income from forest
Reserve forests	7%	State	100% Department of Forests
Protected forests	35%	Disputed	60-80% to people, 20-40% to Department of Forests
Guzara forests	58%	People (commons)	80% to people, 20% to Department of Forests

The deal outlined in the MoU seems to involve a radical change in who owns, and who might profit from, the forests of Khyber-Pakhtunkhwa.

The picture is further complicated by the fact that between 2007 and 2009, the Taliban controlled Swat province and was logging the forests to finance its military programme. Ameer Muhammad Khan of SAFI told IPS that,

“Nearly all the forested areas have been mercilessly stripped of trees but the Swat in particular has borne the brunt of the Taliban’s atrocities. . . . The government is responsible for protecting these forests but it has no authority to stop the Taliban from the ruthless laceration that has deprived 80,000 people of royalties from the sustainable sale of trees.”

The Taliban was driven out in 2009, but since then has been replaced by a shadowy mafia of influential men and desperately poor locals. “The forest is like a treasure to us,” Khalil ur Rehman a local resident in Swat told PACT Radio, “but we are helpless to protect it. The mafia members involved in the illegal logging are strong and backed by big fish.”

Merlins Wood has signed another MoU for a 40-year REDD-type project covering 200,000 hectares, with the government of Pakistan administered Kashmir. According to a notificationdated 31 October 2011, there was no bidding for the REDD project,

“because the experts and specialists in REDD+ projects is so narrow and limited that only a handful of international companies are in a position to advise, sponsor huge amounts and implement these projects.”

An opposition politician, Barrister Iftikhar Gillani of the Pakistan Muslim League (N), questions the deal with Merlins Wood. “We believe that kickbacks, not in rupees but dollars and pounds, are involved in this highly controversial and dubious deal and we will aggressively raise it in the house,” he told Dawn in November 2011.

Merlins Wood appears to have no previous experience of establishing REDD projects. The company does have a website, but it provides very little information. Here’s a screenshot of the company’s “About” page as it appeared on 15 February 2012 (click on the image for a larger version):

The website was registered on 27 August 2009, by Nadeem Khan. The company Merlins Wood Limited was incorporated in the UK on 10 June 2009. The Directors of the company are Nadeem Khan and Surriekha Khan. According to the website Company Database, a total of 1,940 companies are registered at the same postcode: NW11 7TJ.

A document filed with Companies House in the UK on 8 December 2011, reveals that the purpose of the company had been amended, to include the following:

3. The object of the company is:-
(a)
1. To develop, fund and implement REDD+ projects in the province of Khyber-Pakhtunkhwa in Pakistan, in partnership with the provincial government. . . .

2 To approach donor agencies, charities and sovereign governments on behalf of the Government of Khyber Pakhtunkhwa to raise and receive funding for the project to help meet capital development costs

3 To provide the financial and technical resources to manage the project area and develop Carbon Credits for activities in the project area.

4. To receive, market and sell all carbon credits derived from the project areas

5. To adapt a benefits distribution policy under which a share of the net income from the sale of Carbon Credits will be distributed to the provincial government and local communities for resource management, livelihood improvements and direct employment benefits

On 2 February 2012, Merlins Wood changed its registered address to Berkley Square House in the centre of London. It’s an impressive address. The main UK Bentley and Rolls Royce dealer has a showroom on the ground floor. It’s also one of the addresses offered by a virtual office company called Easy Office. On 16 December 2011, Merlins Wood filed a statement of capital from with Companies House. The company has the grand total of £200.

REDD-Monitor sent the following questions to Surriekha Khan and looks forward to posting her response:

From: Chris Lang
Date: 16 February 2012 12:30
Subject: Merlins Wood and REDD-type projects in Pakistan
To: info@merlinswood.co.uk

Dear Surriekha Khan,

Greetings from Jakarta! My name is Chris Lang and I run a website called REDD-Monitor (www.redd-monitor.org).

I recently came across some news reports about your company, Merlins Wood, and two REDD-type projects in Pakistan. I would be grateful if you could answer the following questions about the projects.

1. I understand that last year Merlins Wood signed Memoranda of Understanding for two REDD-type projects, the first in Swat, Battagram and Mansehra provinces and the second in Pakistan administered Kashmir. Could you please explain how these projects came about and how your company intends to reduced deforestation in these areas.

2. What preparation work, or feasibility studies, did Merlins Wood carry out before signing these MoUs? Are any of these reports publicly available?

3. As of 16 December 2011, according to documents filed with Companies House, Merlins Wood had capital of £200. How does the company plan to raise the finance to carry out the two REDD-type projects?

4. Does Merlins Wood have any experience in running REDD projects, forestry projects or conservation projects?

5. Could you please explain how Merlins Wood consulted with the local communities that live in the areas of the proposed REDD-type projects. How was a process of free, prior and informed consent carried out?

6. Has Merlins Wood hired any consultants to carry out the projects in Pakistan? Have any project documents been produced and if so, are copies available? If not, why not?

7. Do you actually have an office in Berkley Square House, or is it a virtual office? How many people does Merlins Wood employ?

8. Last year, Reuters described carbon as the world’s worst performing commodity. The European Trading System is in crisis (on.ft.com/x9HKcv). Could you please explain how you intend to make a profit from selling carbon credits from the projects in Pakistan. How many carbon credits do you expect to generate and how much do you anticipate being able to sell them for?

Thank you for your time and I look forward to hearing from you. Please consider your response to be on the record.

Regards, Chris Lang

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