The two most dreaded words in any office are the same – management consultants. Their arrival rumbles through a workplace like the approaching thwump-thwump of the T-Rex in Jurassic Park, rattling our desks and making us all fear we will be picked up and gored at random. We're right to be afraid – and scornful. According to "Rip Off", a report on management consultants by David Craig, 170 organisations who used management consultants were studied in the 1990s by the Cranfield School of Management, and only 36 per cent of clients thought they had brought any value. We all know now that management consultants were threaded through the banksters and hedge funders who just crashed the global economy.
But now management consultancy has been taken to a whole new level, according to a startling new report by Greenpeace entitled: "Bad Influence: How McKinsey-inspired plans lead to rainforest destruction." Management consultants have, in effect, been tasked with setting the future of the world's rainforests – and facing accusations that they are using our money to draw up plans that will result in their more rapid destruction. Instead of stopping the loggers and miners, the report suggests they are aiding them.
To untangle this strange story, you have to go back to the rubble of the Copenhagen climate conference in 2009. Only only one good thing was agreed there. It's called REDD – Reducing Emissions from Deforestation and Degradation. Its purpose is to provide financial incentives for countries with tropical rainforests to not hack them down. It's hard to think of a more urgent cause. Dr Simon Lewis, the distinguished rainforest scientist, explains: "To highlight the importance of rainforests, imagine if they were lost quickly. This would have catastrophic impacts for all of us, as global climate patterns would be severely disrupted which would reduce global food production... But perhaps most catastrophic of all, the dead trees would release in excess of 900 billion tonnes of carbon dioxide into the atmosphere. This is as much as all humans have emitted from fossil fuel use since the industrial revolution." So there would be catastrophic global warming.
The countries of the world agreed to stump up $3.5bn to get us off the track towards this disaster. Except environmental campaigners believe the British and American governments then "recommended" that the plans about how the money should be spent had to be subject to the "advice" of McKinsey – the management consultancy firm that has trained the ruling classes of the West, from William Hague to Chelsea Clinton. The journalist Clayton Hirst writes it is "the ultimate old boys' network". The rainforest countries were, campaigners believe, then "encouraged" to employ them too, to show they were "serious". So the McKinsey climate desk swelled.
The official rationale for this is attractive. It's essential that REDD money is well spent – and in theory, it is the job of McKinsey to find the cheapest way to save the largest possible amount of forest. Except when Greenpeace looked at what McKinsey was actually advising, their study suggested that is not what is happening at all. McKinsey has invented a "cost curve", which, they say, figures out how best to save rainforests. Except you and I – the funders of this project – are not allowed to know anything about it. Nor are the world's scientists. McKinsey say its workings are subject to commercial confidentiality. So we have no information about its vital calculations. We are supposed to take it on trust that McKinsey is acting dispassionately in the public interest on the best information. But BusinessWeek notes their clients have a strange habit of dying in agony – Enron, Swiss-Air, Kmart, Global Crossing... the list goes on. We can't afford that success rate with the rainforests. But Greenpeace warns that may be what we are getting. Its study claims the plans based on McKinsey's secret calculations almost always conclude it is expensive to stop massive logging corporations from destroying the rainforests. Even though they are the biggest drivers of destruction, we shouldn't try. No. Instead, it seems the money should be spent stopping the powerless small farmers, who do far less damage.
Greenpeace studied the rainforest plans that have been substantially drawn up by McKinsey for four key rainforest countries – Papua New Guinea, Democratic Republic of Congo, Indonesia and Guyana. They concluded: "McKinsey-inspired plans not only consistently fail to address the major drivers of deforestation, such as mining and logging, they actually reward the industries and interests that cause it." For example, they drew up a plan for the Democratic Republic of Congo where logging companies will be paid to double existing logging rates. In Guyana, the plan drawn up would increase logging by 20 times its current rate.
Why? Why would this happen? It's hard to tell, since we're not allowed to see their workings. There seem to be conflicts of interest here. For example, McKinsey has a large mining consultancy division. Mining is one of the biggest drivers of deforestation – and one Greenpeace argues is strengthened by these plans. But McKinsey strongly disagrees with the report, writing: "We, too, see preservation of the rainforests as crucial, not only for greenhouse gas abatement, but also because these forests provide a broad range of other community and eco-system benefits. However, we do not agree with Greenpeace's findings and we stand firmly behind our work and our approach. We strongly believe that any REDD strategy should combine climate security with economic growth, good governance and social justice. Our work is only one input that sovereign governments consider when consulting with local stakeholders, making difficult policy decisions and building the institutions needed to improve forestry governance." They refused to respond on-the-record to any questions about conflict of interest.
When David Cameron proposed to hand over Britain's forests to multinational corporations, people immediately rebelled, because we knew they would not survive. Our protests stopped this disaster. Today, the rainforests are being handed to management consultants. We need to reassemble our rage – or gawk as the T-Rexes mangle our planet's life support system the way they mangled your workplace.
Johann has a weekly podcast that uncovers the stories beneath the headlines. You can subscribe via iTunes, or by clicking here
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