Page 98 - Carbon Frauds and Corruption

Corruption of Bribery

Chapter 6 : Corruption in the “Carbon World”

There are serious problems over renewable electricity and claims made by companies that they have gone
entirely “carbon neutral”. In fact, as of January 2009, the UK is said to have generated 21,597.50 gigawatt
hours of renewable electricity. Yet if you were to add up CSR claims you will find that this total is exceeded.
Again the suspicion is of greenwash and false accounting

CSR programs are difficult to measure and there are at least eight different commonly used
methodologies, ranging from fairly simple balanced scorecards through to complex systems such
as models supplied by the Carbon Disclosure Project, Global Reporting Initiative and G3 Standard.
The criteria used by these alternative systems vary widely and they can be “cherry picked” to
produce the best results, based on a “self evaluation” thereby hiding less than optimal
performance.

The CSR reports that some companies misrepresent such things as carbon dioxide footprints and the efficiency of
offset mechanisms. They happily confuse “capacity” with “load” for renewable energy and especially wind
turbines. These facts have not gone unnoticed by the Advertising Standards Authority and some companies have
been exposed. And if companies lie to about sustainability stuff can their other claims – like raising their chickens
in luxury at Hilton Hotels – be trusted?

Finally, possibly the greatest single fraud risk involved in CSR is that the normal criteria applied
for competitive tendering is overridden by complex subjective factors. Public procurement is a
simple way in which governments and others can force suppliers to support the climate change
agenda. This trend is already evident in “Pre‐qualification Questionnaires” (PQQ)and it is
corrupting.

PRINCIPLE
Many CSR programmes are a rip off: a greenwash and a cynical scheme to mislead gullible
consumers

20 CREATION OF A NEW FINANCIAL SYSTEM
The “Carbon World” has created completely new financial systems with few of the conventional
controls or regulatory standards. There is no such thing as a Suspicious Activity Report in this
sector. Slush funds can be accumulated off book (see page x) and used to pay or conceal bribes;
credits can be shared, subject to off record assignment or manipulated in other ways to provide a
financial advantage to a corrupt decision maker. And better still, from a crook’s point of view,
offset project accounts, carbon trading, and investments are difficult to audit, even if there is any
attempt to do so and there seldom is. “It’s a noble cause, innit?”

One of the easiest ways to pay bribes is to “carbon trade” with an extorter in any context so that he makes a
“profit”. In most cases, under‐pricing, off record options, forward sales, hedges or derivatives are impossible to
audit. To obscure matters even further phantom trades may be through an exchange or entirely off record with
side letters or guarantees. For these reasons, the finest detail of trading and settlement must be effectively
audited.

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