conservation finance series #7
In this new publication, Andre Standing analyzes the initiative of a coalition of US environmental NGOs to convert US$100 billion of debt owed by Southern countries into conservation projects. The agreements face criticism for their lack of transparency, neocolonial undertones, and potential adverse impacts on local communities, particularly small-scale fishers.
Hand in hand with financial giants, these NGOs wield increasing influence over natural resource management in debtor nations, undermining their sovereignty. Standing warns against the rising financialization of conservation and calls for safeguarding the rights of local populations from the expanding influence of US financial interests.
Reading time: 28 minutes
Last November, at COP16 in Cali, Colombia, six of the largest environmental NGOs from the USA announced a global coalition to develop debt for nature swaps and unlock more funding for climate and biodiversity.
These organisations are: Conservation International (CI), The Nature Conservancy (TNC), The Pew Charitable Trusts, Re:wild, The Wildlife Conservation Society (WCS), and World Wildlife Fund (WWF). This coalition is supported by “Zoma Capital”, a US philanthropic foundation which helps other US NGOs access private finance. It also has the ambition to develop best practice guidelines, or standards, on managing these deals, and to create a global forum for sharing information.
Their marketing material says they aim to raise US$100 billion for climate and biodiversity projects from debt swaps over the next years. However, it is odd that a global initiative for debt swaps in countries of the Global South does not have any members from these countries, just organisations from the USA.
The new coalition’s website describes a need for ‘radical collaboration’ among NGOs working on conservation, climate, debt and the welfare of local communities. The coalition says it is inclusive and open, and they welcome other like-minded organisations to get involved ‘later on’. The coalition says it has been working together already, and the new standards for debt swaps will be released early in 2025. That does not bode well for an inclusive process if the exclusive group of members has already decided on the outcomes.
Despite the dubious interpretation of the principles of collaboration and inclusion, it would seem good news that environmental NGOs in the USA have committed to standards and policies surrounding debt swaps. Coalition members have used debt swaps since the late 1980s. Specific standards or policy guidelines for these swaps have never been produced before. Yet debt swaps have been subject to a large amount of criticism.
“The US Development Finance Corporation was established to counter China’s influence. After backing a debt swap in Ecuador designed the PEW Charitable Trust to create an MPA in the Galapagos, the US signed an agreement to open a US military base on the same islands.””
One of the latest examples is, in 2024, civil society organisations submitting a formal complaint to the Inter-American Development Bank (IDB) on the lack of transparency and community participation in the debt swap in Ecuador, designed by former staff at TNC and the PEW Charitable Trust, with financial support from the US government and IDB. Just after the complaint came the news that the US government had followed up its support for the Galapagos Island’s marine protected area by signing an agreement with the Ecuadorian government to open a US military base on the Galapagos Islands, now the 400th US military base bordering the Pacific Sea. It adds weight to the concern that the US government's interest in refinancing debts for nature in countries of the Global South is not just about saving nature. [Ed. note: The US government department that helps finance debt swaps is called the Development Finance Corporation, which was expressly established to counter China’s influence and promote US foreign policy.]
Environmental organisations have ignored criticisms about their debt swaps for the past forty years. They only ever refer to them as ingenious solutions to debt and biodiversity crisis in countries of the Global South, while also claiming these deals provide a critical lifeline for Indigenous Peoples threatened by investments in industrial extractive industries. The publicity material used to launch the new coalition still describes that debt swaps have “rigorous standards of quality that have sustained their success over decades” – clearly, the coalition members do not think their debt swaps are anything to worry about.
In response to this call for radical collaboration, we feel that it is vital to think about the bigger picture rather than getting drawn into simply reviewing and legitimising any voluntary standards. The bigger picture concerns the outcomes for local communities such as small-scale fisheries if the coalition of US environmental organisations meets its target of refinancing $100 billion in distressed debts of the Global South countries. The conclusion of a debt swap is not the end of the story, it is the start of a process. The question is, what comes next?
The transformation of US environmental NGOs into shadow banking
As we have set out in other publications, debt swaps refer to financial transactions that restructure the debts owed by countries of the Global South to foreign creditors. As a condition of the deal, governments of these countries must make environmental commitments. The savings created are then used to finance environmental projects.
Swaps involve refinancing the debts owed by countries of the Global South to either bilateral lenders (i.e. the US government) or commercial lenders (i.e. US banks and asset management companies). They occasionally involve debt forgiveness, but creditors usually agree to sell their debt at a discount. In these deals, US environmental organisations buy debt from creditors on behalf of debtor countries. In return, they determine – and control – how the savings in these deals are spent and what environmental pledges debtor governments make. Traditionally, these commitments are based on expanding protected areas – now framed around the global target of 30x30 – but recent deals have become much more ambitious and seek to affect national policies on a range of other issues, including the expansion of aquaculture, carbon trading and the regulation of marine fisheries.
Debt swaps flourish when countries of the Global South are in a debt crisis. It is then that their debts start to depreciate in the minds of foreign investors and governments (who worry that the debts might not be repaid), and, therefore, there are opportunities to buy this debt at a reduced price. The first wave of debt-for-nature-swaps came in the late 1980s during the international debt crisis, with its origins being the war in the Middle East, the steep increase in the price of oil, and the reckless lending by US banks to developing countries of the fabulous profits made by oil-producing states. These ‘petro-dollar’ loans were sold on the pretense that they would drive economic growth so borrowing countries could afford repayments. Most of these loans had high interest rates pegged to government interest rates in the US and Europe. When the US government dramatically hiked interest rates at the beginning of the 1980s – to stop runaway inflation back home caused by its war in Vietnam – countries started to default on loans, and the value of these loans to bankers depreciated rapidly. US conservation organisations had a field day buying discounted debt in return for nature parks, mainly in South America, Africa, and some Asian countries. Commercial debt swaps ceased to be viable when international efforts eventually becalmed the debt crisis.
Through these debt swaps, US environmental NGOs are becoming much more powerful actors for international conservation and development than the United Nations, for example, if they are not already. But who are they accountable to? Photo: Ilyass Sedoug.
The new wave of debt swaps is taking place due to another debt crisis with its origins in the financial crash in 2008 and a surge of reckless and opaque lending to countries of the Global South by USA and European banks and asset management companies. This crisis has been building momentum for several years but has been accelerated by climate breakdown, the COVID pandemic and war in Ukraine and the Middle East. These debts are no longer in bank loans – as in the previous debt crisis – but in sovereign bonds. Because the international community, led by the US, has failed to come up with viable solutions to the debt crisis, the market for debt swaps is, therefore, booming again. Today's debt crisis is far worse than in the 1980s, with research in 2024 showing that among low-income developing countries, debt repayments by governments account for more than half of their total expenditures. In many countries, particularly in Africa, the ratio is much higher. Meanwhile, the foreign creditors of this debt have become extraordinarily wealthy and include the most lucrative financial firms the world has ever seen.
Although there are similarities between the first wave of debt swaps and this one, US environmental organisations have radically changed how these swaps are financed. They are now relying on subsidies from the US government and multilateral development banks to raise loans from private investors in the USA and Europe to finance debt swaps at a scale far larger than they could manage in the 1980s and 90s. These new mega debt swaps are also a result of partnerships formed by US environmental organisations with investment banks, such as JP Morgan, Credit Suisse and Goldman Sachs; business consulting firms, such as McKinsey; and asset management firms, such as Blackrock and the Carlyle Group. These giants of US global finance now dominate the boards of the leading US environmental organisations, and many of the senior staff of environmental organisations working on these swaps come from these finance and business consulting firms. As such, debt swaps are one of the most explicit outcomes of the financialisation of conservation.
The scale of new debt for nature swaps – regarding the amount of debt they are refinancing – dwarfs what was achieved in the 1990s. Seychelles debt swap in 2015 was used as a pilot ‘proof of concept’. That deal involved TNC lending the Seychelles US$15 million to refinance debt it owed to other governments, including France, Italy and Belgium. Another US$5 million was provided by philanthropic donors, including an anonymous donor from China and Leonardo DiCaprio. That deal refinanced debt with a face value of about US$21 million. However, the first mega-deal targeting commercial debt was in Belize, where TNC arranged a ‘blue bond’ with Credit Suisse to restructure about US$530 million owed to commercial lenders. This was followed by a deal in Barbados that restructured $150 million, one in Gabon that restructured $500 million, and one in the Bahamas that restructured $300 million. TNC has just finalised another debt swap in Ecuador, refinancing US$1 billion of government debt for rainforest conservation. However, the biggest deal, in 2023, was organised by PEW Charitable Trust in partnership with the Ocean Finance Company, which lent the Ecuadorian government money via Credit Suisse to refinance US$1.6 billion. In addition to these commercial debt swaps, in 2024, TNC and Conservation International collaborated with the US government to refinance US$35 million owed by the Indonesian government to the USA, with savings ringfenced for marine protected areas.
As these deals have become larger, so too has the leverage gained by US environmental organisations over the conservation pledges by countries of the Global South. Debt-for-ocean swaps affect national policies over the entire ocean belonging to these countries. They are also designed for much longer time frames, involving contractual agreements with debtor countries that span decades. It is no wonder why those opposed to these deals consider them neo-colonialism.
“Environmental NGOs create two streams of income to be spent in conservation in the debtor country: one derived from the savings of the debt conversion, the other, through the creation of a fund (lended to the debtor country) which is invested in global markets. The debtor does not control these funds, as they are domiciled in a tax haven.””
The foreign environmental organisation creates two income streams from these deals that are supposed to be spent in the debtor country. One is derived from the savings made in the debt conversion. However, initial research suggests that the loans made to debtor countries are for a slightly higher interest rate than the ESG bonds used to finance these deals. That means that environmental organisations generate additional income streams from these deals they keep for themselves (while also charging debtor countries management fees). Unfortunately, the opacity of these deals means there is unreliable information in the public domain on who makes what.
The second source of money comes from separate trust funds established for debtor countries. In each debt swap transaction, US environmental organisations lend money to the Southern government to refinance its debt. But in addition to that, they lend them more money to create this separate fund for their benefit. The money deposited in that fund is then invested in global capital markets. The debtor country does not control the funds; they are owned by the US environmental organisation. The funds are domiciled in an offshore tax haven. The money accumulated in these funds becomes available for spending in debtor countries once they have repaid the US environmental organisation for the loan to refinance their debt.
In theory, these trust funds will pay for conservation in the debtor country in perpetuity, meaning the debt swaps are the start of a very long relationship. It is unclear how easy it would be for debtor countries to break from this relationship if they had a change of mind and what the cost of the divorce would be. Built into these deals are financial penalties for debtor countries if they fail to deliver, and the money held in the trust funds can be retained by the US environmental organisations as compensation for any loss they incur.
2. A winning formula: the US$100 billion target
In 2019, TNC launched the ‘audacious plan’ to arrange debt for ocean swaps in 20 countries. It set a target to produce US$1.6 billion for ocean conservation. At the time, this was an extraordinary target that few seemed to take seriously. It is tricky to calculate what is produced for ocean conservation in these deals, but six years after the launch of the plan, TNC ’s initial target appears to have been conservative.
The new wave of debt swaps arranged by US environmental organisations, starting with the Seychelles, has already refinanced about US$4.5 billion worth of debt owed by Southern governments to Northern creditors. It is still a tiny fraction of the total amount owed by countries of the Global South, which runs to trillions of dollars. However, the new debt for Nature Coalition estimates that the total amount they can release for conservation through debt swaps is about US$100 billion.
There is every reason to suspect that the pipeline of debt swaps is about to start pumping a lot of money. Led by TNC, US environmental organisations have struck a winning formula. It all boils down to their ability to raise money from investors at a preferential rate by acquiring political risk insurance from the Development Finance Corporation of the US government or a development bank. This money can then be used to refinance the debts of countries of the Global South trading below market rates, which is the case in so many countries.
In these deals, it is critical to understand that creditors to these countries are offered above-market rates for their debt. Debt swaps do not require any sacrifice by creditors and only happen when it is in their economic interest. This is one of the reasons why debt swaps are not serious efforts to address the debt crisis and are opposed by experts on debt justice. US environmental organisations claim that the debt crisis is one of the most significant barriers to sustainable natural resource management in countries of the Global South and their ability to protect themselves from climate breakdown. However, their debt swaps are not primarily designed to resolve this. They are primarily designed to supply environmental organisations with funds and political leverage in debtor countries. Indeed, US environmental organisations have been conspicuously absent from global campaigns on debt justice.
“Debt swap are not serious efforts to address the debt crisis: they do not require any sacrifices from the creditors to these countries and they only happen when it is in their economic interest, when they can get above-market rates for their debt.””
The strong demand among Western investors for these deals also helps the US environmental organisations expand debt swaps. Buying ‘blue bonds’ used to refinance debt assists investors in meeting voluntary targets for ecological investing. So, as long as countries of the Global South struggle to repay loans to foreign investors, and the US government or development banks are willing to back them, US environmental organisations have created a financial mechanism that allows them to generate an almost limitless supply of cash. What these environmental organisations are doing is quintessential rentier capitalism, creating revenues by playing debt markets. The US$100 billion might end up being another conservative target. Perhaps the only obstacle to this plan is the current pushback against environmental investing caused by the rise of President Trump and the political right, who denigrate environmental investing as ‘woke’. [Ed. note: Most of the largest US financial firms – including those with long-term partnerships with US environmental groups – have publicly denounced their commitment to net zero after Trump won the US election. It is possible – but unlikely – that this may make it more difficult for US environmental organisations to raise capital to finance debt swaps. There is also a lot of financial capital for these deals in Europe.]
Debt swaps are negotiated with creditors in secrecy. That is a necessary condition for the successful negotiation of debt refinancing. It is one reason why debt swaps are unlikely to achieve prior informed consent for those most affected by them, including coastal communities in debtor countries. It also means it is hard to predict where the next one will come. However, TNC has recently hinted at deals nearing completion in South Africa, Namibia, and Angola. Combined with Gabon, that would put them in the driving seat of ocean governance stretching most of Western and Southern Africa.
DEBT SWAPS GO beyond Us environmental organisations
These debt-for-nature – and debt-for-ocean – swaps arranged by US environmental organisations are not the only swaps taking place. In 2024, JP Morgan, working in collaboration with the US charity Catholic Relief Services, provided a loan to the government of El Salvador to restructure US$1 billion of its external debt, with savings earmarked for the conservation of rivers and wetlands.
Many debt swaps take place without the same fanfare attached to the ones organised by US organisations. Bilateral lenders use swaps quite regularly during periods of debt distress. According to the OECD, between 2020 and 2022, official donors have provided debt relief worth about US$5 billion, and much of this is through swap deals. Italy has swapped about US$1 billion in the last three years with countries including Jordan, Egypt and Cuba. The government of Portugal has also agreed to debt swaps with Cabo Verde and São Tomé and Príncipe, with savings earmarked for climate adaptation and mitigation. In these bilateral swaps, forgone debt repayments are reported by donors as aid grants, so they are cost-effective ways for donors to increase reported aid giving.
One of the most important deals happened in December 2024, and this seems to have flown under the radar. The World Bank financed its first-ever debt swap. This involved a loan to the Ivory Coast government to refinance commercial debt worth approximately US$500 million, with the savings being transferred into a national health and education programme. The deal has not gained widespread publicity, but it is potentially a significant development that could drive a new wave of these deals. Development banks have never lent money to countries of the Global South to refinance their commercial debts, and debt swaps involving loans from development banks are off-limits for debt swaps, at least for the time being.
The market for debt swaps is, therefore, expanding and drawing in more players. What is unclear is whether there will be competition. The World Bank’s press release for its debt swap in Ivory Coast was noteworthy for explicitly highlighting that its deal was less costly for the Ivory Coast compared to the deals arranged by US environmental organisations while also better respecting national sovereignty:
“Unlike other swaps that use costly structures, including offshore special-purposes vehicles and trust funds that often incur significant transaction, administrative, and financial costs, this operation uses country systems already in place.”
3. Anticipating the trajectory of debt swap for the oceans
There are profound questions about the desirability of this massive debt restructuring programme led by US environmental organisations. These should not be evaluated as isolated transactions. The bigger picture is the growth in power of US environmental organisations, which are not simply green charities but dynamic and competitive global enterprises deeply enmeshed with the largest financial firms the world has ever seen: firms that are among the most damaging to the health of the planet and its democratic governance, as well as being the most significant contributors to the debts of countries of the Global South. This fusion of environmentalism with US finance is, perhaps, one of the most inappropriate partnerships in international development.
The growth in the wealth and influence of the US environmental organisations is not only a product of the partnerships with financial institutions but also the booming world of private philanthropy, which reflects the obscene levels of private wealth inequality. In 2023, US philanthropists, such as Jeff Bezos, provided over $1 billion for ocean conservation, almost all of this going to the large US environmental organisations. Some of this money is used to cover their expenses in negotiating debt swaps. In total, grants made by US philanthropic organisations for the oceans have become larger than official development assistance provided by governments and multilateral banks.
“We must see the bigger picture around debt swaps: these environmental NGOs are not simply “green charities”, but rather competitive enterprises deeply enmeshed with the largest financial firms in the world - which are the most significant contributors to the debt crisis in the first place.””
Consequently, the combined incomes from philanthropy and private investments mean US environmental corporations have annual budgets far above the government budgets in most countries where they negotiate debt swaps. TNC remains the biggest, with assets valued at over US$9 billion and annual revenues in 2023 reported to be US$1.5 billion, double what was reported in 2022. Increasingly, the behaviour and culture of these environmental organisations have become a mirror image of their corporate and financial partners. Senior executives of these organisations are now paid between US$1 million and US$1.5 million annually. [Ed. note: This information is available from public tax returns in the USA.]
With US$100 billion targeted from further debt swaps, on top of the growing market in things like biodiversity credits, the size and power of US environmental organisations could be colossal over the next few years. They will be much more powerful actors for international conservation and development than the United Nations, for example, if they are not already. But who are they accountable to?
The move into debt swaps—and other forms of private finance—requires us to rethink who these organisations are. They are now engaged in what is called the shadow banking sector. This involves financial institutions behaving like banks without the regulations and supervision banks are subjected to. The shadow banking sector has exploded since the 2008 financial crisis, partly due to more stringent regulations in the US for the traditional banking sector.
Over the next few years, US environmental organisations will raise billions of dollars from private investors, and more and more countries in the Global South will have debts with them. At the same time, these environmental organisations will be investing a substantial amount of public money from these countries in capital markets via offshore tax havens, with the profits being used to fund conservation programmes. It is reasonable to predict that the future of international conservation will be dominated by the rents derived from private investments held offshore.
4. How will debt swaps evolve?
The model currently used by environmental organisations to finance debt swaps will change over time. How this will change is hard to predict, although there is some evidence for what is coming next.
One innovation will be the use of different types of bonds to finance debt restructuring. Up until now, TNC has designed their debt for ocean swaps to be funded through ‘blue bonds’. These are marketed to investors as bonds that will provide money for ocean conservation. The problem, however, is that most of the money raised in these bonds is not used for ocean conservation; most is used to pay for debt restructuring. International voluntary standards for blue bonds require 100% of the proceeds to be used for conservation. TNC has already been accused of ‘greenwashing’ about the blue bonds it has sold.
The solution to this problem is relatively straightforward: environmental organisations will issue performance-based bonds instead of blue bonds, as these do not require all the funds to be spent on conservation. Instead, a performance-based bond only requires the issuer to deliver on key indicators. They can spend the money on whatever they like, such as debt restructuring. However, performance-based bonds are issued with varying interest rates determined by the extent to which debtor governments meet key performance indicators (KPIs). The government of Indonesia issued the world’s first ‘coral bond’ in 2024, which provides investors with variable rates of return depending on how successful they are in enlarging marine protected areas.
In the future, the loans that countries of the Global South will be offered to refinance debt will likely be based on this approach: if they achieve conservation targets, they will pay investors a lower rate of return. If they fail, they will pay more. This arrangement will mean debt restructuring will become more risky for debtor countries, and there may be considerable incentives for dishonesty in how KPIs are measured and reported on. It is also an objectionable approach to financing climate and biodiversity, with the prospect of debtor countries paying more for their failures, including those that might be beyond their control, such as climate breakdown.
A more serious innovation is being developed by the Ocean Finance Company (OFC) and the consulting firm Aqua Blue Investments, which was set up by a former senior employee of TNC. The OFC was at the center of the debt swap in Ecuador. It is now the parent company of the Galapagos Life Fund, registered in Delaware. The main shareholder of the OFC is a Dutch asset management company called Climate Fund Managers, which specialises in raising capital through blended finance from the Dutch government and the EU for energy and infrastructure projects in developing countries. In May 2024, the Director of the OFC was interviewed by Reuters, where he described the next phase in raising capital for funding ocean conservation projects.
Whereas a debt swap involves lending money to developing countries governments to refinance their commercial debt, the OFC is working on a new approach where it raises private capital with the assistance of foreign governments and development banks to buy the distressed bonds of developing countries themselves. Borrowing money at a low interest rate means it can buy debt at a low market value. It will then use the dividends from owning this cheap debt to repay its loan from other investors. The ‘profit’ in this arrangement is then directed into the OFC for spending on ocean conservation. As the director of the OFC describes, the benefit of this new mechanism is that it does not require the approval of the debtor country.
There is limited information published on how far the OFC has advanced with this approach. However, it would seem a logical progression from the debt swap model. It would end any pretence that the ambition of environmental organisations in debt swaps has anything to do with helping countries out of a debt crisis. What OFC is doing resembles the actions of what is known as a vulture fund. These assets management companies specialise in buying distressed debt at a low value, and then aggressively ensuring the debtor pays the full face value. What the OFC is trying to do can be considered a green vulture fund.
5. From funding biodiversity projects to actively managing the assets of debtor countries for further profits?
One of the ambiguous aspects of debt swaps is the extent to which the environmental organisation managing these swaps gains control and ownership over territories in the debtor country. This is an issue that US environmental organisations have been sensitive to. Their approach to managing the proceeds from debt swaps has been establishing multistakeholder organisations in debtor countries that oversee spending. This gives the impression that foreign environmental organisations are taking a back seat in deciding how the money raised in these deals will be used. However, the US environmental organisation is always present on the governing board of these new multistakeholder organisations and, most critically, retains ultimate beneficial ownership. The new multistakeholder organisations in debtor countries are registered in the USA or in Ireland.
“In establishing multistakeholders organisations to oversee the spending in conservation in the debtor country, environmental organisations give the impression they are taking a back seat. But this is far from true, starting from the fact that these organisations are not even registered in the country, they are so in the USA or Ireland...””
As is evident in Ecuador with the OFC, the initial fund established through the debt swap is not a one-off entity. It is designed to grow through other revenue streams. What is also evident is that the role of these funds in managing nature conservation over large territories provides significant opportunities for promoting other income-generating activities. This includes ecotourism, carbon trading, aquaculture and biodiversity offsets. It may also include new investments in energy infrastructure and marine bioprospecting. The webpage of the Climate Fund Managers, which specialises in energy infrastructure projects, highlights that it supported the debt swap in Ecuador for the future investment opportunities it brings. In fact, the short description of their financial support for the debt swap in Ecuador suggests they have established rights to implement other investment opportunities that arise from this deal.
As the debt swap coalition gains momentum, it will enter into agreements that transfer considerable power over managing marine and terrestrial territories for decades. These environmental organisations are working in partnership with other financial firms already investing in these countries and will be interested in expanding these investments. The Carlyle Group, for instance, whose CEO is the Chair of the governing board of TNC, controls nearly US$400 billion. Among its vast number of companies, it owns those active in ecotourism in countries of the Global South, offshore oil and gas as well as the supply and maintenance of ships and military infrastructure. The Carlyle Group has also invested in industrial fishing companies, such as China Fisheries, which was active in West Africa’s small-pelagics before it went bankrupt in 2015. TNC also provides technical and financial assistance to aquaculture and blue carbon development companies. In 2024, TNC helped ‘Hatch Blue’ to raise over $90 million in capital investment for new projects in aquaculture, with TNC being an active partner in overseeing the implementation and monitoring of this investment fund.
In fact, the networks of financial firms and investors that are partners with US environmental organisations are far more extensive than simply looking at its central governing board. In South America, TNC has established the Latin America Conservation Council to facilitate its conservation deals. There are twenty members from Southern and Central America. All of them are prominent businessmen (there are no women) who have extensive investments in sectors such as energy, food production, mining and real estate. There is not one person on this council who represents the interests of small-scale fishers or forest-dependent people. Council members include the CEO of Hoschild’s Mining in Peru—a multinational company registered in the UK—who tried to sue the Peruvian government in 2021 for closing some of its mines for environmental reasons. It also includes Jorge Paulo Lemann, Brazil’s wealthiest man who established a vast network of food companies, including part ownership of Heinz Foods and Burger King. He is currently living in Switzerland amid investigations into what has been described as Brazil’s largest-ever financial fraud, with international arrest warrants issued for two senior executives of his companies.
Small-scale fishers need to be aware that debt-for-ocean swaps may permanently deprive them of their rights, transfering power over marine territories to US organisations and private asset management companies. Photo by Jorge Sá Pinherio.
TNC also has a similar Asia-Pacific Council, as well as an African Conservation Council. This also contains a list of prominent African investors and businesspeople, although there is no website for this group. The longstanding Chair of the Africa Council for TNC is Phillip Ihenacho, a former McKinsey Consulting associate and a Nigerian multi-billionaire who made his fortune from the oil and gas sector but has extensive other business interests. He has been subject to investigations of laundering $6 billion by the UK government. Although he is the chair of TNC’s advisory group, Philip Ihenacho, has also established a company called African Nature Investors that has commercial deals with TNC. TNC, for example, acquired the rights to a nature conservancy in Kenya, which was then handed over to the ANI to manage for high-end tourism. Local communities have campaigned against the privatisation of the area, the ecological impact and the large profits being made. It seems problematic that the Chair of an advisory board of a US conservation organisation uses this position for their own commercial interests, and it raises concerns over how TNC operates in other territories, including the management of Marine Protected Areas.
The expansion of environmental organisations through debt swaps will, therefore, open up risks of conflicts of interest, which will be extremely hard to predict and monitor. These environmental organisations are integrated into a dense network of private investors, business consultants, and asset management firms with commercial interests in natural resource exploitation.
Conclusion
The new coalition of environmental organisations seeking to grow debt swaps to US$100 billion presents a worrying future. They are requesting other like-minded organisations to work with them through ‘radical collaboration’. However, it is clear that US environmental organisations are turning themselves into global environmental asset management companies, and their ability and legitimacy to collaborate with grassroots civil society and community-based organisations has all but disappeared. They are deeply entwined with US private finance and the geo-political interests of the US government. Yet their networks of business partners and financial firms are extensive, as evidenced by their regional councils in Africa, Latin America and Asia-Pacific.
If the debt coalition succeeds, they will control a vast amount of money for conservation and have a powerful influence over how the oceans and land are governed and in whose interest. Its members will become far more influential in managing marine resources in countries of the Global South, for example, than organisations such as the World Bank and the FAO. We need to question whether this is a desirable future. Those opposed to US imperialism and the further financialisation of conservation should reject the coalition's objective, irrespective of what voluntary standards for their behaviours they agree to.
In opposing the spread of debt swaps, it is critical to realise these transactions are not isolated events but part of a process. As we set out in our paper about the illusion of a ‘funding gap’ for nature, the gap will never be closed. It is a bogus and movable target for environmental organisations to raise more financial capital and political leverage. Once the coalition has swapped billions of dollars in debt for conservation spending, they will not stop at that. In reviewing debt swaps, we need to think very carefully about what comes next: what is the trajectory of these transactions and relations? Small-scale fishers need to be aware that debt-for-ocean swaps may permanently deprive them of their rights, transfering power over marine territories to US organisations and private asset management companies.
Banner photo: Sandwich Harbour in Namibia, by Sergi Ferrete.
Hand in hand with financial giants, environmental NGOs wield increasing influence over natural resource management in debtor nations, undermining their sovereignty. The author warns against the rising financialization of conservation and calls for safeguarding the rights of local populations from the expanding influence of US financial interests.