Table of Contents.
Imagine being curious about the Amazonian ecosystem or one day waking up and deciding you want to see the glory of Amazonia with your own eyes. You then start researching, only to realize that 9 out of 10 search results online are about the disappearance of the Amazon Rainforest. You find out that at least 17% of the largest rainforest in the world, a.k.a. “the planet’s lung,” is already gone.
If we continue like this, 27% of the Amazon will be without trees by 2030.
More importantly, once deforestation reaches its tipping point of 20–25%, the Amazon will go into suicide mode and turn into a savannah-like ecosystem. Amazonia will no longer be the planet’s lung but a huge CO2 emission generator. As a result, the global climate will enter an irreversible situation. What a terrible outlook, isn’t it? We thought the same thing in May 2021 when we found all this overwhelming information. It was so disturbing that we decided we had to do something. Learn more about deforestation in the Amazon
This is why we started to think about how we could acquire rainforest real estate to preserve it and how we could give people across the world the chance to participate in this endeavor.
Step 1: Scouting the Amazon rainforest (12 weeks).
- Where can you find rainforests?
There are 83 countries in the world with rainforests. However, the Amazon rainforest is the largest of them all, with 536 million hectares, followed by the Congo with 168 million hectares, and Australasia with 64 million hectares.(Mongabay, 2020)
The majority of the Amazon rainforest belongs to Brazil; however, acquiring rainforests in Brazil is very challenging. The Brazilian government strictly regulates the acquisition of rural properties by foreign entities. Additionally, most of the rainforest in Brazil is already involved in the Carbon Offsetting Program, called REDD and REDD+, run by the United Nations. Therefore, acquiring rainforests in Brazil would go against our promise to our RFT (Rainforest Token) owners.
Our RFT holders should be the only party accountable for the positive impact of the piece of land represented by the token. They are the only ones who can take credit for the amount of carbon the land captures, and they alone will be the sole protectors of the land’s biodiversity and carbon storage.
- Why did we choose Peru?
After 3 months of searching worldwide for possibilities, we decided to choose Peru as the starting point of our Rainforest Protection Campaign. One of the many reasons was that the landowner of this 567-hectare rainforest is actually a forestry engineer and has dedicated himself to preservation for 20 years. Currently, he is also the Executive Directorate of Forestry and Wildlife of the Economic Development Management of the Regional Government of Ucayali. The only wish he had for this beautiful piece of land was to sell it to a person or organization that would continue his work of preserving it.
Andre Lavaud (FUND THE PLANET’s broker), Angel Lopez (Former Landowner), Luis Jader (Angel’s broker), Kuan-Ning Tseng (Co-Founder and Chief Sustainability Officer of FUND THE PLANET) in Pullcapa, Peru
“It was a beautiful opportunity to have FUND THE PLANET as partners and new guardians of the rainforest. Preservation has always been my interest and I didn’t want any option but preserving and protecting the lands. As we share the same objective, I decided to join and work with them to keep the future in good hands. It’s a really disruptive and necessary project, for the well-being of everyone”.Angel Lopez (Former Land Owner)
Legal due diligence is essential, and there are numerous reasons why one needs it.
Latin America in general does not have the most accurate and comprehensive governmental database in the world. Especially in rural areas, ownership and geographical boundaries are often ambiguous. On top of that, the right of possession, surface right, timber concession, mining concession, and all other kinds of possibly overlapping rights need to be investigated.
The reason for this is that the governments in this region started integrating digital property management systems only a few years ago. The system does not document 100% of each legal paper across all authorities. Nowadays, you can even find a lot of Partidas (like a property ID in Peru) containing the GPS point, including the history of the property—all in handwriting.
Proper legal due diligence in a rural area consists of examining up to 20 different documents with up to 100 pages each. Each document needs to be acquired from a minimum of 10 other public registries. This procedure takes at least 2 months, including the coordination between the seller, buyer, law firm, and all types of governmental entities involved.
Yaritza Rivera (Legal Associate at DLA Piper Peru), Kuan-Ning Tseng (Co-Founder and Chief Sustainability Officer of FUND THE PLANET), and Rene Hennen (Co-Founder and CEO of FUND THE PLANET)
Step 2: Environmental Due Diligence (5 weeks).
From the moment we started the Rainforest Protection Campaign, the condition of the land was critical to us. Understanding the preservation level of a certain rainforest must be a top priority for us as we become the new landowners. The preservation level is determined by what kind of animals are threatened in this region, the carbon pool, the CO2 absorption capacity, sensitive biological areas, the type of forest, and similar attributes.
Apart from environmental aspects, it is also essential to study the region from a social perspective. Given that we are promising RFT holders to protect this land for 100 years once the token is minted, we will need to cooperate with the local community to guard the land. With the help of Angel Lopez, the former landowner, we are working on establishing a regional program to facilitate Rainforest Protection Awareness. (See our complete Environment Due Diligence Report.)
Denis Arica (Director of ASD and Forests and Water Resources Specialist) Mariella Ferreyra (Biodiversity Conservation specialist), Kuan-Ning Tseng (Co-Founder and Chief Sustainability Officer of FUND THE PLANET), Rene Hennen (Co-Founder and CEO of FUND THE PLANET)
Step 3: Foreign entity grants Power of Attorney to its legal representative (8 weeks).
Once the legal and environmental due diligence results indicate no problematic signals, both the seller and buyer can enter the phase of signing the contract. It is necessary to check all the legal procedures of different countries. As an example, in Peru, a legal representative of a corporation can’t enter into any contract. Every foreign entity needs to grant the power of attorney to its legal representative and register this power of attorney in the public registry in Peru. This extra step is not the norm for most countries. A lot of companies underestimate how much time this entire process takes.
- How do I apply for the Power of Attorney?
- Step 1: Request the legal documents from your home country.
- Step 2: Bring it to Peru and translate the whole document through a nationally certified translator.
- Step 3: Submit it to the relevant authority and wait for approval.
- Step 4: Register the power of attorney in the Peruvian public registry.
Step 4: Sign the contract (2 weeks).
- What is a Purchase Agreement?
The purchase agreement is a private contract between the seller and the buyer. It must be signed under the witness of the Notary. Legally speaking, the buyer becomes the official landowner by signing this. Once the contract is signed:
The buyer needs to pay the income tax.
The seller needs to pay the Alcabala tax, which is similar to a sales tax.
- What is a Public Deed?
Then, both parties need to submit proof of having paid all taxes, along with the signed purchase agreement, to the notary. The notary will then draft another contract based on the submitted purchase agreement in their version, the so-called public deed. At the exact moment when both parties sign the public deed, the buyer needs to insert the proof of payment (usually a certified cheque) along with the public deed.
Yaritza Rivera (Legal Associate at DLA Piper Peru), Adolph Braun (Temporary Peruvian Legal Representative of FUND THE PLANET), Angel Lopez (Seller), and Andre Lavaud (FUND THE PLANET’s broker)
Step 5: Public Registration (3 weeks).
After this, the notary will submit the public deed and proof of taxes paid, cheques, and other documents to the public registry to evaluate and register the buyer as the new landowner. This process takes up to three weeks. Once this process is finalized, the property documents become available for download in the Peruvian Public Registry. On top of that, if anyone has doubts about the title of the new landowner, they can always go to the public registry office to view all the archive documents associated with this piece of property. And that’s about it. This is how our journey looks, from deciding to protect the rainforest until we finally walk the talk
If you are still here reading this, you must be very curious about what an RFT, or rainforest token, stands for. Subscribe to all of our social media to get first-hand news about how we run the Rainforest Protection Campaign on our land. Thanks so much for being here, and welcome to the fellowship of the RFT!