Chankuap Foundation (AIME)

Chankuap Foundation: A Cosmetics Factory In The Amazon Forest

Father Silvio Brosegihini knew nothing of marketing or logistics when he founded the Chankuap Foundation in 1996, but that didn’t stop him from helping the indigenous Achuar and Shuar people develop a sustainable cosmetics industry built on the oils of rare plants.

28 August 2017 | The Ecuadorian village of Wasakentsa lies in the foothills of the Cutucú mountains, at the edge of the Amazon Forest, in a transitional zone that nourishes scores of rare and often valuable plants that the Achuar and Shuar indigenous people use to manufacture soaps and cosmetics.

It’s a cottage industry that evolved from the actions of an Italian priest named Silvio Brosegihini, who came here more than 30 years ago to build a school but found the children too sick and hungry to focus on studies. He set out to improve their parents’ livelihoods and embarked on a long journey of trial, error, and adaptation that now supports more than 550 producers across the region.

The journey began in earnest in 1996, when Father Brosegihini created the Chankuap Foundation to help indigenous communities market their crops in the nearby city of Macas. It continued after his death in 2006, and is evolving to this day.

Getting Started

Father Brosegihini left his native Italy for Ecuador in the 1960s, and he’d become adept at navigating both the indigenous and outside worlds before arriving in Wasakentsa in the 1990s. Although his forte was education, he knew enough about economic development to know that the people needed a formal institution to link them with the outside world.

“An alternative was sought to help overcome the economic difficulties of families living in the jungle, and it was decided that the most convenient was to establish a foundation,” he said shortly before his death. “There are difficulties, but they can be overcome if we all feel responsible for this utopia: the elimination of poverty, the hope of a life worthy of the human being.”

He used his contacts to recruit agronomists and lawyers for the foundation’s board of directors, and one of the foundation’s first acts was to help the different members of the Achuar Nation create a cooperation agreement. This essentially formalized the informal networks they already used, but in a way that would be recognized under Ecuadorian law. Then they began helping indigenous farmers blend their traditional methods with modern organic farming.

Internally, the foundation focused on the recovery of seeds for cash crops like peanuts, cacao, and ginger, so that farmers could increase their yields without purchasing expensive inputs. Externally, the foundation began looking for ways to certify the products as organic – an effort complicated by the fact that the communities are scattered across 70 thousand hectares, and the production processes and conditions varied from region to region.

So the foundation recruited and trained “promoters”, who are community members qualified to teach standardized procedures to farmers across the territory. They introduced enough standardization and verifiability to earn an organic certification from the German organization BCS Oko Garantie in 1998.

That gave them a product to sell, but neither the board nor the communities had experience in retail marketing or logistics.

Moving up the Value Chain

The isolated community is two days’ journey by boat from the nearest city, Macas, so the foundation arranged weekly airlifts. That got the products to market but at a cost of roughly 50 cents per pound (Ecuador abandoned its own currency, the Sucre, in 2000, and has used the US currency ever since).

Father Brozegihini quickly realized that, to compete, the farmers would have to deliver higher-value products – such as the oils they had long extracted from local plants.

One particular oil, that of the Ungurahua tree, has traditionally been used to increase the strength and brightness of their hair, so Father Brozegihini reached out to Ctm Atromercado, a fair trade organization in his Italian homeland, for help. Atromercado responded with hand-cranked presses for extracting essential oils, and soon the communities were producing these in small flasks.

Unfortunately, the numbers still weren’t adding up, so Father Brozegihini again reached out to the old country – this time to Italian NGO VIS (Voluntariato Internazionale per lo Sviluppo) which had long worked with his Salesian Order, and they proposed moving even further up the value chain with indigenous-produced cosmetics.

“It was then that we began to develop this line of cosmetics called Ikiam, which now is comprised of about 20 products,” says Paul Arevalo, the foundation’s commercial director. “Through these products, we were able to have an outlet for these raw materials.”

A Factory in the Forest

With management advice from VIS, the foundation built a small processing plant and began offering uptake agreements to community farmers – essentially promising to buy any certified organic oils they produced. Today, the plant buys and purifies the oils, and it hires other community members to blend those oils into lotions, shampoos and soaps.

The value-added products attracted enough income to overcome the transport costs, but to draw top-dollar they’d have to certify all products – as opposed to just a few ingredients – as organic.

By then, members of the Achuar and Shuar had learned to work with networks of indigenous women who sold handicrafts in Macas, Guayaquil, and Quito – and who blended Ikiam into their product lines. The foundation then began sending the most effective representatives to trade fairs around the world – earning international customers and learning enough about the certification process to earn certification in Europe.

As the commercial enterprise grew, the foundation became self-sufficient as well. Today it covers most – but not all – of its operating expenses from commissions rather than donations. It’s grown to include 550 suppliers, but it still lacks the capacity to help new communities get up to speed.

“Sometimes communities come to us and say, ‘I want my production to be guaranteed through your marketing,’” says Arevalo. “Unfortunately, the limitation of economic and human resources does not allow us to accommodate them, so we have to ask the communities to organize themselves, to gather more interested people, to be able to arrive with a whole team of work to the community and to train and give technical assistance.”

He says the foundation has tried for forge alliances with other institutions, but has had difficulty finding ideal fits – although last year it was a finalist for the Innovative Experiences in Latin America Prize, which was awarded by Canopy Bridge, the online platform connecting environmentally-conscious consumers with sustainable producers. It entered to context to support organic certification of its creams. Although it didn’t win the prize, it did earn certification in June.

Unification: a Byproduct of Produce

The shared enterprise has had the unintended consequence of uniting the Shuar and Achuar people like never before. Indeed, these two peoples – who traditionally competed for territory and resources, are now united against oil companies seeking to disrupt the forest.

Norway, Germany, UK Pledge $5 Billion to Combat Tropical Deforestation

The first full day of the climate talks in Paris included a major announcement when Norway, Germany and the UK jointly pledged $5 billion to reducing deforestation in tropical forest countries over the next five years.

Author: Kelli Barrett

30 November 2015 | PARIS | Usually the United Nations climate talks start off rather slow, with technical and procedural discussions consuming most of the first week of the negotiations until presidents and prime ministers jet in towards the end of week two. But the 21st Conference of the Parties (COP 21) to the United Nations Framework Convention on Climate Change (UNFCCC) is already proving to be different, with heads of state coming together on Day 1 of the talks for a major announcement for forests.

At a press event today, Norway, Germany and the United Kingdom entered into a joint agreement pledging US $5 billion to reduce carbon emissions caused by tropical deforestation, known as REDD+ (Reducing Emissions from Deforestation and Forest Degradation) under the UNFCCC. The countries intend to shell out around $800 million per year starting in 2015, with finance reaching $1 billion per year by 2020.

From left are Indonesian president Joko Widodo, Norway’s prime minister Erna Solbergof, UN special envoy on climate change and former Irish president Mary Robinson, Colombian president Juan Manuel Santos, and Gabonese president Ali Bongo.
From left are Indonesian president Joko Widodo, Norway’s prime minister Erna Solbergof, UN Special Envoy on Climate Change and former Irish president Mary Robinson, Colombian president Juan Manuel Santos, and Gabonese president Ali Bongo. | Photo by Steve Zwick

“We’re here to witness an extraordinary and diverse group of world leaders affirm their political will for strong, collective and urgent action to reduce greenhouse gas emissions from forests through partnerships that put people right at the heart of action on climate change,” Mary Robinson, the UN’s Secretary General’s Special Envoy on Climate Change, said during a press event at the COP.

The Details

This agreement builds on previous pledges made in September 2014 through the New York Declaration on Forests, an action statement to end tropical deforestation by 2030 and halve it by 2020. In association with the New York Declaration, Norway, Germany, and the UK said they would fund up to 20 new REDD+ programs by 2016 – a goal they say they’re on track to meet due to several new financial pledges since last September. These include:

  • $100 million from Germany and the UK to the World Bank’s BioCarbon Fund Initiative for Sustainable Forest Landscapes
  • $71.4 million from the UK to the World Bank’s Forest Carbon Partnership Facility’s (FCPF) Carbon Fund
  • $114 million from Germany to Brazil’s Amazon Fund
  • $150 million from Norway to Liberia
  • $240 million from Norway to Peru

The statement signed in Paris today includes three new specific pledges:

  • $339 million from Germany, Norway, and the UK to the FCPF Carbon Fund. The breakdown is: $135 M from the UK, $146.7 M from Norway, and $57.2 M from Germany, subject to budgetary and parliamentary approval.
  • More than $100 million from Germany, Norway, and the UK to Colombia through the REDD Early Movers Program (REM). The breakdown is: $48 M from the UK, $53.3 M from Norway, and $12 M from Germany.
  • Continued support from Norway to Brazil’s Amazon Fund “at around current levels up to 2020”, if Brazil continues to reduce deforestation. Norway’s payments into the Amazon Fund over the last three years have been: 1,000 NOK (US $115 million) in 2013, 900 NOK (US $103 million) in 2014, and 1,025 NOK (US $118 million) in 2015.
Ministers sign Memorandum of Understanding committing to new financial and implementation goals for REDD+.  | Photo by Steve Zwick
Ministers sign Memorandum of Understanding committing to new financial and implementation goals for REDD+. | Photo by Steve Zwick

The significance

Today’s announcement is a significant policy signal placing high-level importance on forests in the plans to fight climate change, Robinson said. Governments have been working for years to advance the REDD+ and broader forest agenda at climate talks.

Steven Schwartzman, the Senior Director of Tropical Forest Policy at the Environmental Defense Fund, agreed.

“This is the most important signal that this COP can send for forests,” he said. “What forests needed here was a real signal that donor countries were going to come up with adequate funding to support countries that are really putting serious programs in place to reduce deforestation and show that it’s working.”

The $5 billion in new finance is framed as a “pledge” in a continuing shift towards payment-for-performance agreements in which tropical forest countries receive REDD+ payments only if they meet the terms of the agreement, which may include implementing certain readiness activities or achieving and verifying emissions reductions (VERs), quantified in tonnes of carbon dioxide equivalent (tCO2e). For example, in Norway’s payment-for-performance pledge to Liberia signed last year, $70 million is for readiness activities and $80 million is for VERs. In Norway’s agreement with Peru, the breakdown is tipped more heavily towards payments for VERs: $200 million available after 2017, versus $40 million for readiness before then.

The recent flurry of public sector payment-for-performance agreements is a major shift documented in Ecosystem Marketplace’s State of Forest Carbon Finance 2015, released this month. Developed country governments have paid a total of $1.1 billion for REDD+ VERs since 2009, mostly through Brazil’s Amazon Fund. Today’s $5 billion pledge indicates that these type of public sector results-based payments for REDD+ – which occur outside of traditional carbon markets – may be scaling up quickly.

Though the agreement does not specify a target number of emissions reductions, some information on the potential financial flows can be deduced from previous agreements. For instance, the $339 million pledged to FCPF’s Carbon Fund will fund five new emissions reductions programs and nearly double the $465 million previously in the Fund. So far, eight countries – Chile, Costa Rica, the Democratic Republic of Congo, Ghana, Mexico, Nepal, Republic of Congo, and Vietnam – have signed letters of intent with the Carbon Fund for up to 90.4 MtCO2e in emissions reductions. Guatemala, Indonesia, and Peru are also in the FCPF pipeline, and investors have signaled that they’re willing to pay around $5/tonne.

Private sector role?

In the joint agreement, Norway, Germany, and the UK also indicate that they want to “partner with the private sector to transform supply chains to become deforestation-free, and leverage hundreds of billions of private investment in forests and agriculture.” Recent research from Ecosystem Marketplace’s Supply Change initiative shows that nearly 300 major commodity companies – including household names such as Walmart, L’Oréal, Danone, McDonald’s, and General Mills – have made commitments to purge deforestation from their often long and complicated supply chains.

Gustavo Silva-Chavez, a longtime COP analyst and Program Manager at Forest Trends’ REDDX initiative (Forest Trends is Ecosystem Marketplace’s publisher) welcomed the announcement today, saying it incites more private sector involvement, which is badly needed. According to new data from REDDX, private money accounts for only 10% of forest finance in the 13 key tropical forest countries that the initiative tracks: Brazil, Colombia, Democratic Republic of Congo, Ecuador, Ethiopia, Indonesia, Ghana, Liberia, Mexico, Papua New Guinea, Peru, Tanzania, and Vietnam.

Silva-Chavez said REDD+ will require much more private sector finance in order to ramp up and be successful.  This new $1 billion per year, added to the current $10 billion in REDD+ pledges, is still far short of the estimated $20 billion a year we need to cut deforestation by 50% globally, he wrote in a blog post.

According to Schwartzman, acquiring the bulk of that finance will require robust carbon markets for REDD+ offsets. “Until those markets exist, public funding has to make up part of the gap, and we just saw that happen here,” he said.

In 2014, voluntary market actors spent $63 million on 16.1 MtCO2e in REDD offsets sourced from 41 different projects, according to the State of Forest Carbon Finance 2015. No compliance carbon market currently includes REDD+.

Kelli Barrett is a freelance writer and editorial assistant at Ecosystem Marketplace. She can be reached at [email protected].

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