DCS 12: Simon Bakker of KenEco

In this episode of Developing Carbon Stories, we are speaking with Simon Bakker, CEO of Kennemer Foods International and Kennemer Eco Solutions. Kennemer Eco Solutions, also known as KenEco, is a nature-based solutions company based in the Philippines integrating sustainable forest management, viable rural livelihoods, and capacity building for rural communities.

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Transcript

Pauline Blanc: Hello, my name is Pauline Blanc, and this is Developing Carbon Stories, a podcast about product developers developing the most innovative and impactful carbon projects around the world. Developing carbon stories is a project by Abatable, a carbon procurement and intelligence platform that enables companies to purchase high-quality carbon offsets.

During each episode, we speak with an entrepreneur from a different part of the carbon ecosystem and talk about their journey so far and how they are acting on climate change. In this episode, we're speaking with Simon Bakker, CEO of Kennemer Eco Solutions, part of Kennemer Foods International. Kennemer Eco Solutions, also known as KenEco, is a nature-based solutions company in the Philippines integrating sustainable forest management, viable rural livelihoods, and capacity development for rural communities.

Hi Simon and thank you so much for joining our podcast today. It's really great to have you. As a very first question for you, I'd love to hear about your journey and how you get to work in the climate space?

Simon Bakker: Yeah. Hi Pauline. Thank you for having me. For us or for myself, it's really kind of evolved. I started our business very much more as a smallholder inclusive sourcing venture working in the cacao space, in the cocoa space in the Philippines.

And as you work in those environments, which we call it the first mile sometimes, right? Where you work really on the ground and trying to get support into those systems where people can, you know, improve their farms, improve livelihood, you know, I call it always like a problem-solving journey, you know what I mean? As you solve, you have to solve various problems.

There's a reason why there's poverty in those remote rural areas, and, and it's because certain things don't work. And for years, I have been looking at kind of payment for ecosystem services or, you know, as the whole climate, as a way to bring more support to those communities so that really is what drove it.

PB: Fantastic. Thank you so much. I'd love to understand more about what you do, what Kennemer Group does. I heard, you know, you had, you worked on the first project that validated and issued credits in the Philippines. Can you tell us a bit more about how the group works and what you're doing in the carbon space?

SB: Sure, sure. Maybe, I mean, just also kind of as a follow on of your earlier question. I mean, explain a little bit the journey we made as a, as a company. So, we started very much like that, almost like a trading organization. So, the Philippines cacao is unfermented. It originally was a lower-end product and we centralized post-harvest fermentation.

As we try to grow volumes, we realized that we need to have some sort of a planting program. So, we started to plant cacao trees in some sort of a contra-growing arrangement. Then we didn't have financing for farmers. We realized they didn't have funding to plant more trees.

SB: So, we actually ended up setting up a finance company, Atica, and together with training and support systems. And so, as we did that, we realized that, well, one of the things you realize also many of them. Especially upland farmers, they're really not ready for credit. And you, you actually wanna support them.

Now, sometimes governments work out, so we had for a while, good government program, but of course, as governments changed, these programs changed too. So that's why we looked at kind of climate and kind of trying to see, actually, what I was really hoping is that these cacao trees that we were planting, we planted over 20 million cacao trees over like an eight-year period.

I was really hoping that the kind of the sequestration that they kind of generated would help pay for more trees and would kind of create more of a self-sustainable system. And that's how we got started. We realized as we did that, of course, that cacao alone and an agroforestry system.

Especially in Southeast Asia, many of the smallholder farmers have a lot of other trees in their farms, and so we were not planting a lot of shade trees just a little bit. And so, a system like that doesn't generate if the additionality is just the cacao, it's very low on sequestration.

And so that is really the beginning for us on the, you know, the kind of trying to bring kind of support funding into these smaller systems. Right. first with cacao, then realizing you need shade trees. A number of parties came to us and came up with beautiful systems of 600 cacao trees per hectare and 50 forestry’s or, you know, kind of a bit of static models that we felt didn't really work in reality.

Because most farmers have less than a hectare or maybe 1.2 hectares on average, I think, you know, in the Philippines, probably quite similar in Indonesia and Vietnam. And, I mean, honestly, there's really a permanence issue, right? There's 50 forestry’s. It's on your one hectare. If you have to feed your whole family, you're gonna resist that.

So, we found that we tried to do that, it was hard to come up with, you know, on paper it's nice, but in real life actually, where do you plant them, parameters, and so often the farmers will just cut them also. So, you know, that's why we ended up having to work kind of on a larger landscape to say, okay, let's not look at it on a single farm, but you need to look at it as kind of a community, as a group, you know?

And, so that's kind of how the program evolves. It's really trying to kind of bring to the poorest communities, a more sustainable livelihood that does not involve cutting up trees.

PB: Thank you, Simon. And I'm sure people listening are curious about the carbon project element of this. Could you tell us a bit more about the projects?

You know, the one that I've just mentioned that's already issuing credits, but also what's in the pipeline. That'll be great to hear.

SB: The first project is our forestation and reforestation program. It's a Minal trees, MinTree, we call it for short. We kind of started with that whole validation process and preparation for the PDD really right in, during COVID.

And so that was kind of a little challenge. That must've been nice cause we had all these, yeah, we had all those farmers mapped, but still there were some additional, or, you know, documents had to be signed. And so, it was a little challenging to get, because at the time it's really 2020, it was quite a bit of restrictions on traveling.

So, we were able to, to get through that validation. I mean, it's really almost just to show that the model worked. I think for us so what, you know, just in short where we are right now, we have an AR program that we got validated and verified over the last kind of two years, as I mentioned earlier, right, is that because we realized that the cacao trees alone are, are not that, you know, don't question that much, we really started in our kind of next, in instances of min trees. Looking at more forestry planting. So now we've kind of moved a little bit to a kind of a larger landscape. We work in Minna now, Southern Island in the Philippines.

It's a large island and if you want to work in these larger areas, many of our farmers are on what we call ancestral land in the Philippines. It's a communal title. And so, the carbon rights are already with the community. These communities have received these titles in the last 15, 20 years from the government, and they're big, oh, 20, 30, 40,000-hectare titles, specifically with the, how do you call this, with the commitment.

They received the title and the right of the land with the assumed commitment that they would protect the natural resource protected by biodiversity. And in return the community gets to be the steward of the land, which is in a way kind of awarding them the land that they have been living there in six time in memorial.

And so, as we work with communities there, we realize that agroforestry alone is not enough. You need to work on a larger landscape. And then these communities actually have a commitment already to protect and to conserve. But they're underfunded, so there's hardly any government funding going to those communities to help them.

And so, the only livelihood you really see is more extractive. It's either small-scale mining is wood, you know, wood products. And so, it actually led kind of to a journey from where we started really more as a problem solving on livelihood of cacao to really realizing it is a reforestation element to this, but also a conservation element to this. We're now also with working on a conservation program.

PB: Simon, can I just follow up and ask you what was that engagement like with these communities and this success on this ancestral land?

What was it like? Was it, you know, carbon markets and carbon credits and all of this completely new to them? And can you walk us through maybe, you know, what that engagement looked like for you?

SB: No, that was totally new to them and, and still is, you know? I think it helped. You know, we are of course known as a company that works on these small livelihood programs besides cacao, we work in, in other crops also banana, a bit of corn, really kind of support programs.

So, the language of kind of understanding that kind of protect nature in return, kind of receive support, which leads to planting of additional crops, is something that the communities understand. And I guess we had a summary residue level of trust from having done those activities for the last 10 years. And so that really started to, you know, us on a joint journey, you know, with understanding what it means. And it's really in a way that's the free and prior informed consent process, right? So, this FBIC process is a real process where you, as we go through it, we also together as, as partners, kind of, understand better.

And so that took about a year? No, a year, a year and a half. I mean, it was easier with our MinTree ARR program, because these are purely smallholder farmers, so every participating farmer, so these are kind of communities and clusters of farmers that we work with anyway because we buy their cacao.

But as we started working on the conservation, you get into the leadership of the indigenous people and so that process takes time. Our first project, we're now going through validation for, yeah, validation for our MinFord Forestry Project, is with 11 indigenous tribes. I think it's 90+ villages.

So, you can imagine that kind of getting everybody comfortable with the concept of carbon and all of this, that it's taken a little time.

PB: I'm sure. I'm sure. And how was it received? Was there anything that you didn't expect? Was it harder, easier than you expected? I'd love to hear more, if you don't mind.

SB: In the beginning, there was some… well, when we came in, there had been some attempts before to do a red plus project, but they had not proceeded, you know, they didn't push through and, so there was a bit of skepticism in the beginning.

But I think it's kind of really, you know, it's with all things now, it's meeting, it's communicating, it is boots on the ground and repeat. So over time, people started to understand the concepts and then you start to think through, okay, how, what can we do to, you know, what wood-based industries do we have?

How can we stop that and what can we do in return? And what’s, actually interesting is that most leadership in the tribal communities we work with, they're very aware of their obligation to maintain their natural assets. Actually, these communities live really with those, you know, in that environment.

So, in fact, it is not that difficult because unlike maybe kind of migrants who really don't have that connection the original inhabitants do, and it's within the culture also very conscious that they have that relationship with their environment and the natural assets and having the opportunity to get additional funding to support and protect that is something that people really embrace.

PB: Thank you so much, Simon. I wanted to take a step back and ask you, you've mentioned, a couple of times, you know, the landscape approach in what you do. I know internally, you know if someone who's a big fan of the project loves the landscape approach, but I think it'll be great if you can maybe explain a little bit what that means and why you think it's so important that it's done this way and maybe not another way.

SB: Yeah. Well, I guess. As I was earlier also talking about the fact that gradually, you know, our scope, we started with a one Hectare farmer and planting cacao trees. And as we tried to get that system more sustainable, our land kind of broadened, because we realized we can't plant the shade trees.

How we start working with communities and preservation. And then of course once you look at the drivers of deforestation, you start looking also at kind of, it is policy. It is, you know, to what degree all the local governments have adopted national policies and are implementing those. So, as you kind of zoom out, the stakeholders involved that you need to engage with also increases.

And so, for us to do… and this is a bit what I mentioned in the beginning, is this kind of working at a smaller level, you are in the problem-solving business. And so, one of the things was is that you realize you need to work with all the actors in a landscape, because it is often a systemic issue.

And so, so for us, it has meant much more coalition-building skills. We had to really beef up, you know, we went from a journey where in the beginning our people were mostly technical trainers, how to prune a tree, how to, you know, how to improve the soil. To now also much more kind of community engagement and working with the local government, the provincial government, the department of environment, the church, the state universities.

So, it really made it a much broader coalition of actors. I think we get a lot more buy-in also, it's also a bit more complex, of course, to execute. So that's, I mean that to me is landscape. No, it's that, that kind of wider lens and getting a lot more people on board. It's no longer your own little project. No, it belongs to everyone.

PB: It would be great to hear a little bit, going back to the project, you know, being the first project to go through the process in the Philippines and as an organization, what was that validation, issuance, journey for you? Can you tell us a bit more?

SB: Sure. It was a journey, indeed. The first thing was really getting the right team in place. You know, it's hard for an organization. We were new to this and so we got some good kind of partners, consultants also, just partners in the whole process.

And, we had done other projects before. It was for us a bit of a challenge in the beginning because at the time we were full on COVID restrictions and what happened is that we kind of prepared, we thought we prepared well, but as you get ready, prepare for the validation, you realize you forgot a document or you forgot something hen it's a thousand plus people you need to go and, you know, so we had armies of our guys going around and getting stuff updated in preparation for this, for this validation.

Also getting the biomass team, I'm just kind of recollecting now, getting the biomass team properly trained, because you have many sites to check and how one team measures not, you know, kind of calibrating that. Also, just the whole logistics around it was quite a challenge.

We see that now we're going back to some sites. We actually find a lot more kind of biomass than before. So, it's also interesting. So that was a bit of a journey. The actual validation was okay. Some minor findings and this learning, you know, as an organization really how to do it.

And so, I think kind of for our next instances, it will be much smoother once you've gone through the pain of getting it done. What was of course tough was the delays after the verification and after the valid, after the validation, after the verification of Vera, right?

So, it took a long time for them to get back. They were and are a bit overwhelmed with the volume of work, and that meant basically months and months of radio silence. And so that is a tough part of the journey. You know, I think personally, you cannot be a carbon program only, you know, you, you really need another source of revenue to mitigate that risk.

There's no way we could have done this on a financial standalone basis. In fact, you know, I mean, I think we're on the journey, but I think we're not yet where I wanted to be, right? I think, the purpose of the journey, was and is, is to get meaningful support to communities, to help them build sustainable agroforestry systems and livelihood systems, you know, in a larger landscape. And ultimately, you want that contribution that comes from those carbon credits to those community to be significant such that it really, you know, they can plant additional trees, they can do this work.

And right now, it's just kind of helping a bit. And we're, you know, we're finding other sources of funding in other areas. So, I think it is a fantastic system and we need to continue to work on it. So, I wanna say we are there, you know, in a way we're verified, and we are. But that's in a way, the beginning, not the end of the journey.

PB: And can I ask about what those additional sources of revenues are, you know, now in the past, but also in the future? How are you thinking about this? Do you see yourself relying on carbon markets or not so much?

SB: And so, but we, you know, so what do we have? Of course, since we do livelihood programs, we buy the commodity that's grown by the farmers and we use the margins that we earn on those farmers, the trading of those products, or to kind of plow that back into the system, right?

So that's one. Two, more and more of course, buyers of the commodities recognize those things. So, we are able to negotiate premiums for the traceability sustainability. So, you get kind of premium pricing. And those premiums are really for the very purpose of kind of plowing them back into the system.

So training, better pricing at farm level, planting material, et cetera. So, it's really the combination of, you know, our own contribution, the premiums. Historically we've had some government programs here, there to help out also, but you know, right now not too many are there, at the farm level.

As we move forward, the way that I'm looking is over time, I'm really kind of counting on the carbon markets to contribute an ever-larger part of that, because as the volume of the number of farmers you work with… I mean, the premiums are good from the buyers, but you know, that is also, of course, you don't know how long that will last as well.

So, I really think that the carbon markets can play an enormously important role in building sustainable livelihood systems in these, you know, really vulnerable ecosystems, right? And so, if you don't do that, then that really poses a risk of additional deforestation. So, it kind of leads me to yeah, reforestation and conservation is kind of intertwined.

Livelihood, reforestation, and conservation are all parts of a similar system. So, the moment you don't have a livelihood, you know, anyway. I mean, everybody knows. Everybody knows that, but so, so for us carbon markets are going to be important, and this is the start of that journey.

PB: Okay. Well, you mentioned government support and as I mentioned earlier, you know, I focus on policy, and I'd love to hear more about… there's two things. There's the first question about what has your– I'm not gonna use the word journey again, but once your engagement with government's been around, what you've been doing, you know, previous to carbon markets. Then the second part of our question, which I can ask later again, is, you know, what is the policy landscape like for carbon projects?

So, if you can mention first, you know, how you've been working with governments in general, that would be great.

SB: We work with government at both local and national level. In general, I think, you know, we're all kind of aligned on what we wanna accomplish. Government also would like to do more, and sometimes they wanna get more budget or try to do more things.

And they cannot always do that. So, I find working with government, both at local, provincial and at national level, it's constructive. It works, it's just hard. It's hard to operationalize, to get extra support to your farmers. And so, we've had periods where, for example, there was plenty of material distribution, free plant of material, but without inputs, without training, without, and, you know, too much volume too quickly.

So, I try to modulate that. Well, we need to be more holistic. Otherwise, you don't, these trees are not gonna survive true enough. Of course, there’s a very high mortality in those programs. And so, I think, you know, it's good to work with government on this type of, on the ground programs, but it's not always easy to make it a success.

We are very open to continue to do that. At the carbon market side, we have been engaging with the Climate Change Commission in the Philippines and the Department of Environment and Natural Resources. And I would say in general, the Philippines is a private sector friendly environment, because I think the government recognizes the positive contribution the private sector can make, you know, just help in this joint journey of natural resource protection and poverty alleviation.

I think the government is still not where it wants to be in terms of having… there is a national registry for Red plus that's being developed. The idea over time would be to have kind of a national standard of registry with, with equivalence to, you know, Avera.

We are not there yet. I think even getting the registry now up and running, we, that should happen soon. But it's more kind of just coordinating all the activities in the country so that we all know what we're doing. It's not a properly nest strategy. Also, the Philippines hasn't really… I mean, right now the forest is not part of the NECs, you know, how the Philippines is going to, you know, meet its Paris accord commitments.

And so that in a way also gives us some flexibility. That's in a way good also, but, but that might change course in the future as this gets more organized, then they need to really figure out how it will, how the Philippines and nation is gonna meet its NDCs.

PB: And, just so in the meantime, you know, as these processes get the developed this registry that you've mentioned, there are different rules how.

How are you working with, you know, different levels of government to make sure that, you don't find yourself in, let's say, a Zimbabwe situation or an Indonesia situation. And effectively how friendly or how supportive is the Philippine governments to the project and to the work that you're doing?

SB: I think friendly is the right word. You know, I think in general what the key is, going back to an earlier point, it's communication. It's being sure that everybody knows what you're doing. It's kind of working with leadership in the government to be sure that what you're doing and how you're sharing and how you work with communities is understood.

And people understand the kind of positive side of that. That it's good for the nation, good for the communities, and that is in a way, you know, also, our best protection. As long as we ensure that we are embraced by the communities and that, they really want this also becomes, in a way our protection.

So, what we need to continue to do so. And so, yeah, what we do is we do ongoing continuous engagement to be sure that we understand what's coming new legislation, new initiatives. you know, we engage, and we talk. And I think, you know, I really don't think we, we all have a Zimbabwe step situation coming.

The Philippines in general is a kind of a collaborative environment where people would rather find solutions. I don't think we're gonna have crazy situations like that. I think it's a good place for climate programs.

PB: Amazing. And yeah, we're hearing this theme that you mentioned about engagement with communities and how strong that is when you are approaching governments and talking to governments.

And we see this as a really positive thing and something that we pay a lot of attention to is how engaged the communities are because we see it as a really strong correlation between the friendliness that you've just mentioned, of governments towards projects when, when that's, quite strong.

I wanted to ask you, what is next for Kennemer Eco? Are you, you know, massively developing in the Philippines? Are you looking at other regions? Can you tell us a bit about that?

SB: Yeah, yeah. For us, it’s two things. One is, I think we can scale up a little bit. No, there's, you know, there is already a bit of other communities like, what about us?

So, we would like to expand a little bit in the same model, and so the same model, what I mean then is, is basically the combination of the AR program as well as our conservation program combined. So, we will do that now. We're also looking at some other areas in the northern part of the Philippines.

In preparation, you know, kind of complimentary, we were in early stages of some mangrove initiatives to the Philippines, of course, has massive coastline mangroves. We have around 300,000 hectares worth of mangroves collectively, but it's spread out over a large area.

So individually, they're small patches. So, we'd love to work there also with existing NGOs and parties that have deep experience, and we can kind of help them with that. So that helps us a bit, kind of create a nice portfolio of different carbon assets and we can support existing initiatives there and strengthen those.

So, I think we're gonna, we have mangroves in the pipeline, additional hectares of within the minute now. We'd like to do also our cookstove project. We’re at the early stage of this, but we are really working on kind of technologies and adoption. You know, this really my worry is we’ll come up with something that doesn't work.

But charcoal production is a huge issue for deforestation. So having an element there where we can also reduce that, especially closer to the urban areas, I mean, there's really kind of open wood fire and using either charcoal or even this wood to cook is really quite common in rural areas.

We are then, we'd love to go to Indonesia. So, we're, we're actually in preparation there. I think now if you look at Southeast Asia for, of course Indonesia is seven times the size of the Philippines. It's a bit more complicated there, of course, obviously from a policy and legislative environment.

But also, there's a lot of opportunities there, both on that kind of cross point of biodiversity protection, preservation, reforestation, and sustainable labor, kind of working with communities. And we're excited. We are working with our clients, some of the commodity companies that we work with that buy our products want us to join there as well.

And so we are, we're exploring what the best model is. So that should come in the coming 12 months.

PB: That's very exciting. That's great. I wanted to ask about, you know, when you're considering other regions, countries, what is it that you most pay attention to when making that decision? Is it the opportunity, the risks? What is it that you're most focused on?

SB: Yeah.I think, I think for us though, because we are, our DNA really is communities and smallholder farmers. And so, I think, you know, there's many people that develop carbon projects and so, just kind of doing there needs to be an angle that I feel that we can make a bit of a difference and that our experience counts.

And I think the moment we can do something with the crops that we know, in systems where we can bring funding to improve livelihood, and that then therefore also helps in the whole conservation and restoration story. That's stuff we're interested in. So that to me is the, you know, and of course then, then you look at, you know, your, your kind of the legislative environment and how friendly is it?

But for me, the first and foremost is does it make sense for the, like at the camera model, does it work there? Can we add some value there? And, I feel also, again, going back, it's, it's a multi-revenue stream, it cannot rely on carbon alone. So, it's, it's carbon and commodities.

And so it could be that at some stage the carbon is ahead, and the commodities come later. It could be that temporarily– what you see right now, of course in Indonesia where the commodities side is maybe a bit more important, but we see nature-based solutions coming back strongly there, so could kind of even out again.

So, I think it's really that portfolio of commodities and, carbon together that we look at.

PB: Amazing. Thank you. I have my interview question now, which is, and again, I've said this another episode, but I would, I hate when I get asked that question, but I'm still gonna ask it. Where do you see Kennemer Eco in five years?

SB: I think, you know, for me, Kennemer Eco in five years is the vision that I just described being, you know, I love to be in the Philippines, and we protect and reforest, you know, covering a million hectares and you know, do the same thing in Indonesia with some large concessions.

And, and we’ve kind of basically… it's kind of the vision is we see those communities thrive. There are the, the model I see is it's, its core plantations, extensive smallholder kind of support systems and active reforestation and conservation programs or, you know, is kind of having several of these large landscapes.

For me, if we have two, three large landscapes in the Philippines and one or two landscapes in Indonesia, I'll be very happy. This is not a, we're not a tech company where you can, you know, this is a lot of work. So, five years, that is something we can envision and can strive for to achieve that.

PB: Amazing, very last question. If I was a buyer of carbon credits, why would I buy your credits? What's your, what's your quick pitch of why, why the amazing Kennemer Co credits?

SB: Well, I think, I think it's, I think you can see when you work with us, you know exactly where that money goes to and how it helps the communities and the diversity.

And so, I think there's, it's a very transparent environment. We're in this business, we've been doing this, you know, kind of programs for the last 13 years. So, I think you're working with an experienced player. We're in this for the long haul because thriving communities means that we also have produced to buy.

And so, it's the whole system and I think being part of that as a buyer of our carbon credits, I think, you know, I hope that people like that. But that's what I think, you know, I think being, we see it also on the community side, right?

So, clients, our partners and they come and visit us, and, and they, they go and visit our farms, our areas. And so, I think being part of kind of this Kennemer family of clients and, you know, including carbon and commodities, I think is something we can offer to buyers.

PB: Thank you so much, Simon, for your time and the fantastic conversation. I really look forward to continuing the discussion with you and keeping track of all the great work you're doing.

SB: Thank you. Thank you.