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Would You Trust Management Consultants With the World's Rainforests? Our Governments Have -- Disastrously

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The two most dreaded words in any office any time, anywhere, are the same -- management consultants. Their arrival rumbles through a workplace like the approaching thwump-thwump of the T-Rex in Jurassic Park, rattling our desks and making us all fear we will be picked up and gored at random. We're right to be afraid -- and scornful. According to the study of management consultants Rip Off by David Craig, 170 organizations who used management consultants were studied in the 1990s by the Cranfield School of Management, and it turned out only 36 percent of clients thought they had brought any value. We all know now that management consultants were threaded through the banksters and hedge funders who just crashed the global economy.

But now management consultancy has been taken to a whole new level -- one that, at first glance, will seem almost impossible. Recently, I wrote about how the world is refusing to take simple steps to prevent the imminent destruction of the Ecuadorian Amazon. But since then, I've learned about something even worse, from a startling new study by Greenpeace entitled Bad Influence: How McKinsey-insipred plans lead to rainforest destruction. Management consultants have now been, in effect, tasked with setting the future of the world's rainforests -- and they are facing accusations that they are using our money to draw up plans that will result in their more rapid destruction. Instead of stopping the loggers and miners, the report suggests they are aiding them.

To untangle this strange story, you have to go back to the rubble of the Copenhagen climate conference in 2009, in which the world's leaders gathered and effectively announced they were going to collectively ignore the increasingly dire warnings of the world's scientists. They agreed only one good thing. It's called REDD -- Reducing Emissions from Deforestation and Degradation. Its purpose is simple. It is to provide financial incentives for countries with tropical rainforests to not hack them down.

It's hard to think of a more urgent cause. Dr Simon Lewis, the distinguished rainforest scientist, tells me: "To highlight the importance of rainforests, imagine if they were lost quickly. This would have catastrophic impacts for all of us, as global climate patterns would be severely disrupted, which would reduce global food production... But perhaps most catastrophic of all, the dead trees would release in excess of 900 billion tones of carbon dioxide into the atmosphere. This is as much as all humans have emitted from fossil fuel use since the industrial revolution." So there would be catastrophic global warming. And, he adds, "nature's store cupboard of medicines would be gone."

The countries of the world agreed to stump up $3.5bn to get us off the track towards this disaster -- which is one thousandth of the sum that Nobel Prize-winning economist Joseph Stiglitz calculated was the long-term cost of the Iraq War.

But at least, you might think, it is something. Except environmental campaigners believe the British and American governments then "recommended" that the plans about how the money should be spent had to be subject to the "advice" of McKinsey -- the management consultancy firm set up in Chicago in the 1920s that has trained the ruling classes of the West, from William Hague to Chelsea Clinton. The journalist Clayton Hirst writes it is "the ultimate old boys' network. Its tentacles reach into the boardrooms of Britain's biggest companies and snake through Westminster's corridors of power." The rainforest countries were, campaigners believe, then "encouraged" to employ them too, to show they were "serious". So the McKinsey climate desk swelled.

The official rationale for this is attractive. It's essential that REDD money is well spent -- and in theory, it's the job of McKinsey to figure out the cheapest possible way to save the largest possible amount of rainforest. Except when Greenpeace looked at what McKinsey actually advising, their study suggested that isn't what is happening at all.

McKinsey has invented something called a "cost curve", which they say figures out how best to save the rainforests. Except you and I -- the funders of this project -- aren't allowed to know anything about it. Nor are the world's scientists. McKinsey says its workings are subject to commercial confidentiality. So we have no information about it about its vital calculations. It is a black box.

We are supposed to take it on trust that McKinsey is acting dispassionately in the public interest on the best information. But BusinessWeek notes their clients have a strange habit of dying in agony -- Enron, Swiss-Air, Kmart, Global Crossing... the list goes on. The organization's bible, In Search of Excellence, written by its consultant Tom Peters, was published in 1982 and named 43 companies as models of excellence. Two thirds of them were dead or defunct within five years. We can't afford that success rate with the rainforests.

But Greenpeace warns that may be what we are getting. Its study claims the plans based on McKinsey's secret calculations almost always conclude it is expensive to stop massive logging and mining corporations from destroying the rainforests. Even though they are the biggest drivers of destruction, we shouldn't try. No. Instead, it would appear all the money should be spent stopping the powerless small farmers and subsistence peoples, who do far less damage.

Greenpeace studied the rainforest plans that have been substantially drawn up by McKinsey for four key rainforest countries -- Papua New Guinea, Democratic Republic of Congo, Indonesia and Guyana. They concluded something startling. They write: "McKinsey-inspired plans not only consistently fail to address the major drivers of deforestation, such as mining and logging, they actually reward the industries and interests that cause it."

For example, they drew up a plan for the Democratic Republic of Congo where logging companies will be paid to double existing logging rates. In Guyana, the plan drawn up would increase logging by 20 times its current rate. They note: "McKinsey's advice does not, in any example studied by Greenpeace, lead to a cessation of deforestation or forest degradation. Often it defends destruction by industrial interests." The consultants "repeatedly use tricks of data presentation to protect or promote industrial logging and large-scale agricultural interests at the expense of subsistence farming."

Why? Why would this happen? It's hard to tell, since we're not allowed to see their workings. There seem to be conflicts of interest here. For example, McKinsey has a large mining consultancy division. Mining is one of the biggest drivers of deforestation -- and one that Greenpeace argues is strengthened by these plans. But McKinsey strongly disagree with the report. They said in a statement to me: "We too see preservation of the rainforests as crucial, not only for greenhouse gas abatement, but also because these forests provide a broad range of other community and eco-system benefits. However, we do not agree with Greenpeace's findings and we stand firmly behind our work and our approach. We strongly believe that any REDD+ strategy should combine climate security with economic growth, good governance and social justice. Our work is only one input that sovereign governments consider when consulting with local stakeholders, making difficult policy decisions and building the institutions needed to improve forestry governance." They refused to respond on-the-record to any questions about conflict of interest.

For two decades now, the big-name management consultancies have been the bland, smiling shock troops of market fundamentalism. They have plastered the most rapacious interests -- from the con-men of Enron to the banksters of Wall Street -- in the respectability of pie charts and fancy jargon. We couldn't afford it when the stakes were the economy -- and we can afford it even less now the stakes are the long-term basis for continuing life on earth. These plans hand over to the market the very things on which the market depends for its existence -- a stable ecosystem.

When David Cameron proposed to hand over Britain's forests to multinational corporations, the people here instinctively and immediately rebelled, because we knew they would not survive. Our protests stopped this disaster. Today, something even larger is happening. The world's rainforests are being handed to management consultants. We need to reassemble our rage -- or gawk as the T-Rexes mangle our planet's life support system they way they mangled your workplace.

Johann Hari presents a regular podcast, uncovering the news you won't hear elsewhere. You can subscribe via i-Tunes or click here.

For updates on this issue and others, follow Johann on twitter at www.twitter.com/johannhari101. Johann Hari is a writer for the Independent. To read more of his articles, click here or here. You can email him at j.hari [at] independent.co.uk and follow him on Twitter at www.twitter.com/johannhari101

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