Help with contracts for ecosystem services
Oct 23, 2009 by gkimega
Click on the logo to access the template contracts
Is your organization ready to begin drafting contracts for ecosystem services between a community and a potential buyer?
PRESA and partners have produced template contracts to help organizations create legal agreements between buyers and sellers of environmental services. The guides can easily be downloaded from the Katoomba Group website and will soon be available on CD.
The guides are a series of templates for payments for environmental services (PES) contracts. There are drafting notes for watershed services, biodiversity services and carbon sequestration and storage. There is also a short guide for building equity into PES contracts.
All these are aimed at PES entrepreneurs, PES project managers and local lawyers who may not have much experience in making contracts but have already ascertained the presence of valuable environmental services, sufficient property rights and willing buyers and sellers. “The contents of the CD will help you move a PES concept to an early draft PES agreement which can then be amended to comply with local law,” says lead author Mark Ellis-Jones of CARE International.
CARE is among organizations and individuals that worked with PRESA in producing the contract guides. Others are the Richard and Rhoda Goldman Foundation, the World Agroforestry Centre and the Katoomba Group.
Legal contracts enable all parties to the transaction get an identical understanding of their own and the other party’s obligations and the allocation of risk within the PES agreement. This will reduce the likelihood of contract dispute and failure. The contract guides are meant to help formalize PES transactions so that essential contractual elements are standardized and facilitate a progression towards accepted norms.
A document titled the PES Transaction and Contract Design Brief provides an outline and explanation of contents within the contract guides. It talks about the advantages and disadvantages of written or verbal contracts. It emphasizes the value of defining which environmental service is being considered for the contract, that is, whether the focus is on watershed services, biodiversity, carbon sequestration or a combination. The brief also discusses various types of buyers and how to calculate the prices that communities should be paid for ecosystem services.
Since the PES contract guides are designed to be adapted in any country, it is best to seek legal advice from a qualified lawyer to ensure that contracts from these guides conform to local laws.