Reflections on Article 6.4’s SD Tool review process
The 21st meeting of the Paris Agreement’s Article 6.4 Supervisory Body presented a critical opportunity to strengthen safeguards for Indigenous Peoples and local communities whose lands are affected by land-intensive climate mitigation projects, such as reforestation initiatives and renewable energy developments.
Tasked with developing and supervising the requirements and processes needed to operationalise Article 6.4, also known as the Paris Agreement Crediting Mechanism (PACM), the Supervisory Body convened in Bonn, Germany from 18-21 May 2026. The Body’s meetings bring together members and observers to develop rules, approve methodologies, and ensure the integrity of PACM, as well as serving as a technical and regulatory forum for governing how carbon credits are generated, monitored, and used under Article 6.4.
One of the subjects discussed at May’s meeting was a recently published report by the Land Matrix Initiative and Carbon Market Watch, which assesses whether Article 6.4 adequately protects Indigenous Peoples and local communities from bearing the brunt of carbon market expansion (see a recording of this meeting session here). While the report’s recommendations were generally well received, laying the ground for positive further engagement, some points of concern were also raised. In this article, we clarify our critique of Article 6.4’s SD Tool, and respond to some of these concerns.
1. Human rights and national sovereignty
A key point made by the Secretariat during the session was that the SD Tool seeks to balance human rights considerations with respect for host country sovereignty, and that it therefore must rely on national legal frameworks and international obligations already accepted by the host government. However, while we recognise the importance of respecting the sovereignty of host parties within the United Nations Framework Convention on Climate Change (UNFCCC) processes and agree that the Tool should not override domestic legal systems, our analysis identified a lack of clarity regarding how safeguards should be implemented where national legal frameworks are weak, exclusionary, or do not fully recognise customary tenure systems, collective land rights, or Indigenous status.
In practice, many of the governance gaps identified in the report emerge precisely in these contexts. Therefore, even though the Tool does reference international human rights instruments, the absence of clearer operational language risks implementation defaulting primarily to what is formally codified and verifiable within domestic systems. This is particularly significant in countries where customary land use systems, overlapping claims, or collective governance structures remain only partially recognised. The recommendation was thus to establish greater clarity in terms of how international human rights standards should inform implementation where domestic protections are insufficient.
2. Involuntary resettlement
While we appreciate the session referencing international best practices and the United Nations Development Programme (UNDP) Social and Environmental Standards in the context of land acquisitions and involuntary resettlements, our concern remains that the current wording of the Tool still permits involuntary resettlement and frames displacement primarily through mitigation and livelihood restoration measures. The recommendation to strengthen the language from “avoid” towards a clearer protective threshold was based on documented evidence from projects already associated with displacement, unresolved compensation issues, and long-term livelihood disruption.
Similarly, the discussion on customary rights as a “legal grey zone” reflects precisely the governance challenge identified in the report. Many land-based Article 6.4 activities are being developed in areas where communities depend on customary tenure systems that may not be formally recognised by the state, despite longstanding occupation and use. The recommendation was therefore not for the UNFCCC to redefine domestic land tenure systems, but rather for the SD Tool to require more robust tenure clarification processes prior to project approval, including participatory mapping, identification of overlapping claims, and recognition of customary land use systems where they exist in practice.
3. FPIC and consent-based safeguards
The session clarified that Free, Prior and Informed Consent (FPIC) is a specific right of Indigenous Peoples recognised under international human rights instruments. Indeed, our recommendation with respect to FPIC was not intended to dilute or redefine it as an Indigenous Peoples’ right: rather, our concern relates to the absence of equivalent protections for other affected communities, including local communities, peasants, smallholders, and customary rights-holders, who may face similar land-related impacts, displacement risks, or loss of livelihoods. The recommendation was therefore that FPIC should remain fully upheld as a right of Indigenous Peoples in addition to equivalent consent-based safeguards being extended to other affected communities in situations involving land-related impacts.
4. Stakeholder engagement, governance, and monitoring systems
In terms of the point raised during the session regarding the role of Designated Operational Entities (DOE) and the multiple consultation layers that exist within the Tool, it is important to clarify that our analysis focused less on the existence of consultation requirements themselves, and more on who defines the assessment process, indicators, risks, and validation structures in practice. Specifically, our concern is that communities often remain respondents to externally designed assessments rather than active participants in shaping project design, risk identification, monitoring systems, or benefit-sharing arrangements. This becomes especially relevant in contexts characterised by significant power asymmetries, where procedural consultations alone may not adequately address risks of coercion, elite capture, manipulation of consultations, or pressure during land negotiations.
Similarly, we agree that the accreditation requirements and technical competencies expected from the DOEs, including expertise in environmental and social safeguards, Indigenous Peoples’ rights, involuntary resettlement, and local legal contexts, is clear. However, the concern raised in our analysis is not so much about whether DOEs possess sufficient professional qualifications on paper, but rather what this means in practice. For example, safeguards systems in many land-based projects globally already appear technically robust in formal documentation, with consultants, auditors, and experts conducting assessments and verification exercises, and yet conflicts, deficient consultations, unresolved land disputes, and displacement still persist.
The issue therefore relates more fundamentally to the governance structure through which risks and impacts are assessed and validated. At present, much of the SD Tool framework remains centred on developer-led assessments subsequently reviewed by external validators, while affected communities themselves are not institutionally embedded within the monitoring, validation, or verification structure. As a result, there remains a risk that assessments primarily reflect what is formally documented, measurable, or presented by project proponents, while more complex governance issues – including coercion, pressure during negotiations, elite capture, manipulation of consultations, or informal customary land use systems – may remain insufficiently captured.
This is particularly important because affected communities themselves often possess critical local knowledge regarding customary tenure systems, seasonal resource use, sacred areas, overlapping claims, and historical conflicts that external experts or short-term site visits may not fully identify. For this reason, we believe safeguards discussions should move beyond technical expertise requirements alone towards stronger participatory governance arrangements within the safeguards system itself.
Existing frameworks already provide useful examples of such approaches. The Association of Southeast Asian Nations (ASEAN) FPIC Handbook, for instance, promotes the establishment of community-inclusive FPIC structures involving customary leaders, community representatives, women, youth, and affected resource users as part of decision-making, validation, and monitoring processes. These approaches recognise that legitimacy and accountability cannot rely solely on external professional judgment, but also require direct participation and oversight from affected communities themselves. In this context, strengthening the SD Tool could involve clearer mechanisms for community-based monitoring, participatory validation processes, and community representation within safeguard implementation structures, particularly for high-risk land-based activities.
Moving from principle to practice
Our recommendations aim to support the development of a more explicit, rights-sensitive, and participatory SD Tool capable of responding to the governance realities surrounding land-intensive Article 6.4 activities. Given the scale of projects currently entering the mechanism and their substantial overlap with lands used and occupied by Indigenous Peoples and local communities, strengthening these provisions remains essential for the credibility and integrity of the mechanism moving forward.
We therefore welcome the openness expressed by Article 6.4 Supervisory Body members toward more participatory governance approaches. We believe this is an important direction for further development of the SD Tool, particularly if Article 6.4 aims to avoid reproducing governance issues already documented in other land-based mitigation and offsetting initiatives.
Access our full analysis and recommendations in our report here: Trading carbon credits for human rights: Does Article 6.4 of the Paris Agreement protect Indigenous Peoples and local communities?
Images: UNFCCC