World

An NFT Company Is Trying to Buy the Amazon to Save It. It’s Not Going Well.

Imagine a world where Indigenous peoples and under-funded, overwhelmed government agencies are no longer the sole barriers against deforestation, land grabbing, and illegal mining devastating the Amazon rainforest—a territory larger than the European Union. Imagine, instead, a global community of online “guardians” investing together in sustainable projects through the purchase of NFTs and fighting criminal activities by creating local economic opportunities.

This is the utopia that Flavio de Meira Penna, a U.S.-born Brazilian entrepreneur, is trying to implement in Pauini, a municipality in the Brazilian state of Amazonas, where his company Nemus is trying to acquire over 40,000 hectares (150 square miles) of rainforest. The firm is selling non-fungible tokens corresponding to individual plots of land to buyers, called “guardians,” who do not actually own the territory, but whose crypto investment will go toward local sustainable projects and the acquisition of new land.

Eventually, Penna hopes to form a “protective belt” of about 40,000 square miles, spreading across the Amazonian states of Acre, Amazonas, and Pará. This will be a natural barrier that he believes can turn local deforesters into protectors by offering them economic alternatives.

“We tend to think it’s institutionalized deforestation, but it’s not. It’s the people that live there that need some subsistence,” Penna said in a phone interview from the U.S. Having worked on several projects in the Amazon, this 67-year-old globetrotter became convinced that the lack of opportunities and access to technology is a major driver of deforestation, with local communities not only exploiting resources, but doing so in a particularly inefficient, wasteful way.

“It’s sort of a vicious process of gradual destruction, that’s very difficult for you to revert unless it’s done dramatically, with a significant alternative, and viable economic solution,” Penna said. “If I can implement real-life businesses and leverage this with social media and the financial potential of crypto, it’s a home run.”

On the ground, however, reality has proven a lot less rosy. The company has been beset by problems: burdensome bureaucracy, poorly designed land ownership regulation, and backlash from local Indigenous communities who are claiming some of the land Nemus is seeking to acquire as theirs. The communities filed a complaint with federal prosecutors, who, on Monday, sided with them and recommended that Nemus stop selling NFTs based on the land and follow international requirements for consulting Indigenous peoples.

Crypto and legal experts consulted by Motherboard also expressed skepticism about the company’s complex, multi-layered, and sometimes vague proposal, and the absence of regulation to ensure that it will stick to its word. Indigenous people in the region told Motherboard that Nemus’ activities are quickly sowing discord, and bringing back painful memories of colonial activities in the Amazon. 

Penna started putting Nemus together two years ago. The project aims to take a new approach towards environmental conservation, combining cryptocurrencies and gamification models to attract and engage investors in the preservation of the Amazon rainforest. As a foundation, Penna says 96.5 percent of revenues coming from NFT sales will go to the cause, whether to purchase new land or invest in local “sustainable” projects.

Even though it hasn’t finalized the purchase of any land, Nemus has already sold 1,500 NFTs. Nemus says token holders will be able to explore the land they symbolically purchased, its fauna and flora, and follow progress in real time on economic development, with ideas ranging from a large Brazil nut operation to a small honey production hub. Nemus says it also wants to open up regional basecamps, or small cities accessible to law enforcement, with users able to monitor deforestation and fires happening in their areas.

But after decades of colonialist disruption by companies seeking to exploit the region’s natural resources, members of the Apurinã Indigenous group have had to work hard to retrieve harmony in their community, which had been deadly split over the benefits of having outsiders leading economic development. Nemus’ visits to local caciques—as Indigenous leaders are known—is quickly sowing dissension.

Local Indigenous groups say that part of the land Nemus is acquiring is Indigenous territory, an area known as Baixo-Seruiní/Baixo Tumiã. With the help of the Missionary Council for Indigenous Peoples (CIMI), they filed a complaint with federal prosecutors, saying that all property titles on this land are therefore void, and that the company should have sought prior consent for its activities. 

Apurinãs in the region have been trying to get the government to establish the exact contour of their land for more than a decade, a process that has stalled under the administration of President Jair Bolsonaro, who swore not to grant “one more inch” of territory to Indigenous peoples. However, the Brazilian Constitution recognizes Indigenous peoples’ original rights to their ancestral land, regardless of whether the area has been delimited or not. Once the demarcation process is over, all property titles or contracts become null. 

“We had achieved a very strong social organization in the Seruiní but from the moment Nemus arrived, it started to divide people again,” lamented Makupanari Apurinã, who lives in the region. “They say they are bringing people together but it is a lie, they are actually dividing us apart.”

The strife, at such an early stage in Nemus’ endeavor, highlights the difficulties for outsiders, even with the best of intentions, to navigate local customs. Some of the faux pas that locals say Nemus has made are small and perhaps easy to fix, such as venturing into Indigenous land in spite of COVID-19 restrictions—something Penna said he was not aware of—or taking photos of Nemus representatives next to Indigenous people and officials and posting them on the internet.

“It made it look like we had reached an agreement, but we didn’t. We just heard what they had to say,” said Makupanari Apurinã.

For Penna, the accusations have come as a surprise. Penna says the few Indigenous leaders he has met—who often rule over small aldeias, or villages, made of a few families—have shown great interest. In one case, he said, an Indigenous leader even changed the name of his land to NFT, for non-fungible territory. Nemus posted a video of the event on Instagram. 

 “I am convinced that as we progress with our discussions and negotiations with local communities, NGOs and government entities, the true purpose of Nemus will become very clear, and hopefully we will have them as our true ambassadors and greatest fans,” he said. 

But actions like going straight to individual caciques, as opposed to seeking Indigenous organizations first, have made a more profound impact as they threaten a tenuous social order. 

“Who has legitimacy, which leaders can authorize projects?” wondered Juliana Batista, a lawyer at the Brazilian nonprofit Instituto Socioambiental (ISA), criticizing what she called a “very colonialist vision.”

“It’s not enough to speak to three Indigenous leaders, the land is collective. They risk affecting [Indigenous] peoples’ local organization and collective agreements,” she added. “These things that come from the outside in, they don’t work out. They just create conflict.”

After investigating the land claims, federal prosecutors in the state of Amazonas recommended on Monday Dec. 19 that Nemus “immediately” stop commercializing NFTs on the Baixo Seruiní/Baixo Tumiã Indigenous territory. It also asked that it does not make contact or co-opt Indigenous leaders without following International Labor Organization (ILO) requirements. In a previous July statement, prosecutors said ILO requirements included “prior, free and informed consultation with potentially affected peoples in the Seruiní river region.” 

Penna did not immediately respond to a request for comment about the prosecutors’ recommendation. 

Wallace Apurinã—who coordinates OPIAJ, a local Indigenous organization representing the Baixo-Seruiní Indigenous territory, among others—said Nemus’ recent arrival has brought back painful memories after a long history of deception, abuse and exploitation by white men.

Exploitation of local Indigenous populations and resources by rubber tappers in the region began in the 18th century. In 1913, at the end of Brazil’s first rubber boom, the government’s Indigenous agency displaced many Apurinã to “bring them to civilization” and turn them into “useful workers.” Then came logging companies, such as Zugmann and Sao Paulo-based Manasa, current owner of the 41,000 hectares of rainforest Nemus is in the process of acquiring. Although Nemus has signed a purchase agreement with Manasa, Penna said, the company doesn’t yet officially own the titles. 

North of the Seruiní river, which runs through the Apurinã territory, Indigenous people fought hard to keep intruders at bay, and when they were able to, they entered the lengthy process of getting their land delimited by the government. Today, their Indigenous territory is fully demarcated and all existing land titles have been rescinded, unlike their relatives south of the river, who yielded to pressure from extractive firms and continue to attract private interests from companies like Nemus. 

“Manasa created a deep division between the Indigenous people who submitted themselves to work for the company, and the others, who did not surrender,” said Wallace Apurinã.

Dispatches from the late 1970s and 1980s by CIMI described “the injustices and arbitrariness” that ruled in rubber plantations, causing great suffering but also a “loss of purpose and identity” among the Apurinã people. They found that Zugmann had been co-opting local Indigenous communities with empty promises and threatened to kill those who refused to leave their ancestral land.

Manasa, the company that later operated in Pauini, appeared at the top of a 2019 list compiled by federal prosecutors of organizations responsible for illegal deforestation in the Amazon. The company alone was targeted by 63 complaints between mid-2015 and mid-2017. 

Now long gone, the logging firms have left nothing but a trail of destruction and a few abandoned facilities, including a basecamp and a runway that the wilderness has since repossessed. 

Motherboard attempted to reach Manasa through multiple methods, but it is unclear if it ever received our messages and we did not receive a response. A notarized document obtained by Motherboard showed that Manasa was still the legal owner of the 41,000 hectares in question as of mid-2021. Manasa’s history in the area is well documented.

Legal and crypto experts say Nemus’ proposal raises more questions than it answers—and while its goals might be commendable, it also looks a lot like crypto-colonialism.

“It’s an interesting yet anxiety inducing project,” said Jillian Crandall, an architect and urban theorist whose work focuses on the impact of digital infrastructures on space and lives. Crandall said many so-called sustainable projects invoking the sale of digital assets such as cryptocurrency, blockchain or NFTs have turned out to be either greenwashing, crypto-colonialism, or both. 

“They often tend to use this language to get local buy-in without following through or having any plan for an equitable ownership, operation, and management structure for local residents,” she said. 

In Nemus’ case, after reviewing the company’s litepaper, she questioned the implications of a single private entity owning a territory about the size of Iceland. “It sounds like they really want to become… not necessarily landlords of the rainforest but, yeah, owning the rainforest.”

Nemus states that decisions on how to spend the money collected through NFT sales or economic activities, such as which projects will get funding, will be subject to a vote on a Decentralized Autonomous Organization, or DAO. A DAO is a group of investors that will vote using tokens on the Ethereum blockchain to decide which projects Nemus will fund. Nemus hopes to inaugurate the DAO some time before the end of 2023, once the firm has launched its own digital currency and sold enough NFTs. 

All Nemus NFT holders will gain access to the DAO, but it is not yet clear what participation local Indigenous people will get, and how it will compare to that of wealthier investors. Penna says the details of how the DAO will work are still being determined, but he said it will ensure that Indigenous people get a say.

What’s more, once the government concludes the demarcation process for the Baixo-Seruiní/Baixo Tumiã Indigenous territory, locals could claim any revenues made out of the NFTs sold on the back of their land, or from any projects. The Constitution says all resources on Indigenous territory belong to its inhabitants.

Still, Penna has big plans for Nemus’ portion of the Amazon. “The biggest issue with local NGOs is scale. They have interesting projects but never have the scale,” he said. Nemus is studying the launch of a Brazil nut operation in Pauini, a region already rich in what is locally known as castanha do Pará. Local ribeirinhos (riverside communities), he explains, harvest the Brazilian nut and sell it for 70 cents per kilogram, when he buys it in the U.S. for 40 dollars. “The wealth and value added disappear in the process. Our idea is to change that.”

To do so, Penna envisions building a processing facility in Pauini and boost production to 6,000 tons, if the Nemus DAO approves the idea. “With scale, you can go to a major supermarket chain (…) and then you have a business,” he said. 

Makupanari Apurinã insists that Indigenous people are not opposed to economic development, but wonders who will truly benefit from those big operations. He thinks it is unlikely Nemus will place Indigenous people at the helm of such projects, as most do not have higher education––a challenge Penna acknowledged. Makupanari would have much preferred for Nemus to come to the table offering training and education for locals to be in charge, he said.

When confronted with criticism, or questioned on the myriad of ethical dilemmas that Nemus will have to solve when trying to implement its vision, Penna seems to know the right things to say. 

“I’ve been a tree hugger since I was a kid, this is just the opportunity to hug a lot of trees,” Penna said. “I have a business that pays my bills. I don’t have to make money out of this. This is something that I do at 67 years-old, I’m OK in my own personal life, and this is something that I just enjoy.”

Crandall, however, urged caution over the power that Nemus would have if it owned all the land it aspires to. 

“If [Nemus] owns the land, the ultimate power and control goes to them,” she said. “At the end of the day, they can just shut the DAO down. They own the land. They can either stay true to their word or get rid of it.”

Additional reporting by Ekin Genç.

Supported by Omidyar Network. VICE World News retains complete editorial autonomy.

Update: This article was updated with a recommendation from Brazilian prosecutors.

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