These rainforests hold a precious resource.
Their trees are meant to be protected.
The carbon saved here is supposed to allow Australian companies to offset their emissions.
That doesn't always happen.
The south-western shores of New Ireland, Papua New Guinea, are fringed by pristine rainforest.
An American company called NIHT Inc has partnered with local people here to put an end to deforestation in the region.
NIHT stands for "New Ireland Hardwood Timber", and as the name implies, it started out as a timber company with its own plans to cut down the rainforests.
It shifted instead to preserving the trees and turning the carbon within them into an asset.
Businesses in Australia have been enthusiastic customers of NIHT Inc.
The Sydney Opera House, Planet Ark, Nespresso, the law firms Gilbert + Tobin, and Corrs Chambers Westgarth, and Active Super are among its clients.
They've been buying carbon credits from the NIHT project to offset their greenhouse gas emissions. And the pitch is attractive, with NIHT promising to stop "exploitative commercial timber harvesting in the project area" and to "alleviate the impact of poverty".
But there's a gap between the NIHT marketing and reality.
We'd heard there was logging taking place on part of NIHT's dedicated carbon project, the very land it has been promising to protect.
So we travelled for days, first by boat to reach this remote province, then into its isolated forests.
What we found was shocking.
It wasn't local villages harvesting timber, it was commercial logging that appeared to have been permitted by PNG authorities.
The businesses which had bought into the scheme say they had no idea.
The company now concedes logging has been happening since 2020.
Locals paid 'peanuts'
How is logging taking place in a rainforest meant to be protected by the carbon credits scheme?
In the village of Watpi, Nasson Audy, who said he was speaking "on behalf of my people", gave us an answer.
"NIHT, they promise us some of the benefits like school, church, road, health centres, [a] housing scheme, they would build houses for local people," he said.
"They only paid 200 kina ($80) each.
"So, while waiting for NIHT, the landowners, they get a logging operation in our area … now both of them are operating."
NIHT presents the 200 kina as a fair payment – but we didn't meet anyone who was satisfied.
The company says money went to every man, woman and child in a broad local government area on New Ireland, under a fair and equitable model devised by the community.
Sionel Topen signed a contract with NIHT three years ago on behalf of some members of the Kamlapar clan, and soon came to regret it.
He claims he and his fellow landowner representatives signed a contract they did not understand and weren't offered independent legal advice.
"There was never any proper explanation about the contract or how the project would work. There was only talk about the money," he said.
Less than a month after signing the contract, the landowners wrote to NIHT and said they wanted all their business to be done through their lawyer, to protect their legal ownership and control over their resources.
They also demanded a review into how the revenue would be split between different stakeholders.
NIHT has sold more than 1.3 million carbon credits from its project so far, for an average of $US4 ($5.78) each.
It declined to reveal how much total revenue and net revenue it had made, on the basis that it's a private company.
NIHT's marketing material boasts that 47,000 individuals have received benefits.
It now concedes it's well under half that number.
Lawyer George Akia, who represents some members of the Kamlapar clan, believes the contract is "one-sided".
The document states that net revenue is defined as all revenue collected from the sale of the carbon credits "minus any unusual costs associated with the issuance of the carbon credits".
"NIHT has the unfettered discretion to take out any costs it wants to and ultimately minimise the payment to the customary landowners," Mr Akia said.
"It's totally unfair."
In an email, NIHT told Four Corners it only deducted costs directly related to the certification, issuing and marketing of the carbon credits.
Local school teacher Domen Gibson said people here were upset with the way NIHT conducted its business.
"Sometimes [people] show their frustrations by getting angry, burning the bushes," she said.
"Some, they take alcohol, using that little bit of money because they said, 'That's only peanuts.' It can't buy a tin roof [for a house]."
George Akia said land was the most valuable asset for the people of Papua New Guinea.
"Land is connected to people, land is where they make their garden, they survive out of it, they build a house," he said.
"For a company like NIHT to go to and benefit out of their land, which they hold dearly, that's appalling. That's something that boils blood."
'My heart cries out'
NIHT is one of several companies trying to get in on the carbon trade in PNG.
In the country's remote western province, we found a battle for hearts and minds between Malaysian logging interests and an Australian-based company, Mayur Resources.
The area is home to clans that own a vast forest resource known as the Kamula Doso.
Mayur wants to use these forests to create carbon credits that offset emissions from its own ventures, but the serious money may come from selling carbon credits to the oil and gas industry.
Last year, Mayur announced a tentative plan to jointly develop PNG carbon credits with the Australian gas industry giant Santos.
Mayur's managing director Paul Mulder told Four Corners he estimated there was $US2.8 billion ($4.05 billion) of carbon, more than half of which would go to local landowners.
There's little doubt that what it's offering is better for the Indigenous landowners, and the environment, than logging.
"On logging, the landowners will get a tiny fraction of that, 30 times less," he said.
But on the ground, some people don't understand what they're being asked to sign up to.
Local man Konny Amula told Four Corners about the time Mayur representatives came to his village last year for "awareness raising". They gave a presentation and handed them a booklet about a carbon trading proposal.
During a second visit a few months later, the company wanted the people to sign a consent form for the project to go ahead on their land.
Mr Amula, who supports the proposal, told us he read the information booklet but had now forgotten how carbon credits worked.
Jimmy Obabo who represents members of the Odoodee tribe, said the booklet wasn't helpful.
"We cannot read," he said. "So these booklets just got in the rubbish bin."
Another landowner representative, Willie Kade, repeated a common misconception about what carbon trading involved.
"They suck the oxygen out of the tree, they put the machine to suck the air or the juice out of the tree," he said.
Mr Mulder said Mayur representatives presented their case to local landowners verbally in their own dialects, and through booklets and presentations that used simple pictures and diagrams.
He said they gave landowners months to consider the materials before presenting it again.
"That is the best that one can do," he said. "If they still don't understand that process, they will not sign."
He said it was invited in by landowners and had overwhelming support.
"We've gone back to them and said, is this something you want? Do you want to maintain your homes, and do you want to get far, far more money in carbon versus logging? And the answer was, yes."
Under PNG law, developers must gain the free, prior and informed consent of Indigenous landowners. Mayur used a leading academic expert and experienced consultants to ensure its approach complied with these laws.
Human rights and environmental lawyer Mary Boni fears that what's happening with carbon trading is echoing a pattern she's seen time and again with logging and mining.
"The government is not there, an informed person is not there, a lawyer or somebody professional is not there to assist these people to understand what they're signing up to," she said.
She said PNG was not ready to cater to the voluntary carbon market because there was not yet an adequate legal framework in place.
"My heart cries out that there is nothing protecting these people and they're dealing directly with the developer," she said.
The government is working on new guidelines.
Protecting forest from imaginary trains
Maverick politician Gary Juffa is concerned about the carbon trade coming to his province.
"I think it is a form of neo-colonialism. That is my opinion," he said.
"If we claim to be a sovereign nation, we need to protect our people and their interests, current and future."
At a rally in a village on the Managalas Plateau he told locals that some people were coming to his province "to steal, to take, to con and fool".
"My job as your elected leader is to protect you, and we only allow those who are genuine to come and work with us," he said.
The governor was particularly scathing about a carbon market player from India called KMS that has been operating in his province.
"I actually invited one of the representatives to my office and he sat there with me and I had a discussion with him and I could tell that he did not really know what he was talking about," he said.
KMS claims its proposed project would protect land under threat from logging, livestock projects and ranching.
Paul Barker, a leading expert on economic development in PNG, said the claims were "ridiculous".
"There is no large-scale ranching … there's no cattle in that area," he said.
KMS' proposal also claimed there were railways in the area, even though there are none across PNG.
"It's beyond the realms of being imaginative," Mr Barker said.
Verra, the standard-setting body for the voluntary carbon market, has found 90 flaws in KMS' submission and declined to register the project as it stands.
KMS will have the opportunity to redo the paperwork and resubmit its proposal.
Four Corners sent the company a list of questions, but it did not respond.
Project's uncertain future
The NIHT project's future is now unclear.
Carbon project verification body Verra suspended NIHT's right to trade credits after Four Corners provided it with information about CEO Stephen Strauss's chequered corporate history.
A decade ago, US regulators took civil action against Mr Strauss after he issued a series of false statements which inflated the stock price of a company he ran.
The court judgement states: "Strauss repeatedly and knowingly and/or recklessly defrauded investors by disseminating false and misleading information."
NIHT told Four Corners it was supporting the New Ireland provincial government’s efforts to stop unwanted logging.
The company said it had now managed to end two instances of logging in its carbon project area.
It's not clear what the logging means for the value of the carbon credits.
Environmental social scientist Andrea Babon, who wrote her PhD on carbon trading schemes in PNG, believes that were the logging to expand, it could compromise their integrity.
"They do not represent real emissions reductions. They're hot air, they're not worth the paper they're printed on," she said.
NIHT is adamant that the logging does not affect the integrity of its carbon credits already sold, but conceded it cost it 300,000 credits, estimated to be worth $US3 million in net revenue.
The broader question is the lack of transparency.
Four Corners could not find any publicly available disclosure from NIHT about the logging.
Australian Mutual Bank CEO Mark Worthington said the company should've been informed.
"We need to have faith in the projects, in the legitimacy of, and the integrity of the projects that we are buying into," he said.
Sam Nickless, chief operating officer at law firm Gilbert + Tobin said the credits were bought in good faith based on accreditation from the Australian government
"That we saw anything that raises concerns about whether they're having the impact that they were going to have … that's a worry," he said.
"It's really made us think about the credits that we're going to buy into the future."
Watch the full Four Corners investigation on ABC iview now.
EDITOR'S NOTE: March 14, 2023: Four weeks after this story was published the carbon project verification body Verra advised NIHT that it had lifted the suspension of its right to trade carbon credits.
Credits:
Story by: Stephen Long, Meghna Bali and Max Murch
Photography: Stephen Long, Louie Eroglu ACS, Martyn Namorong, Scott Waide, Cathy Undaba Popondetta
Cinematography: Louie Eroglu ACS
Digital Production: Nick Wiggins
