DNV has validated close to half of the CDM projects registered so far by the UN. The suspension was triggered by a spot check on the company's operations in November, where five procedural 'non-conformities' under the Kyoto Protocol were identified.
According to a statement issued by the DNV, the non-conformities related to DNV's practices for internal audits; how the company documents the allocation of specific competencies to the projects and refers to emerging requirements for allocating competencies.
DNV's chief executive officer Henrik Masden says news of the suspension has come as a shock. "We are surprised that the CDM Executive Board decided to temporarily suspend our accreditation for validation and verification of CDM projects," he said in a statement. "We acknowledge and accept that we have to improve in some areas, but in our opinion a temporary suspension is a strong reaction by the CDM Executive Board."
Under the suspension DNV will not be able to file for project registration or request CDM credits for its clients, which include project developers EcoSecurities and Trading Emissions. According to the DNV, it will take one to two months to regain accreditation status.
According to EcoSecurities, the issuance of some of its CERs will now be delayed as a result of the suspension. EcoSecurities is using DNV's services as a designated operating entity (DOE) for 15 projects currently being verified and comprising 0.46 million CERs scheduled for issuance early next year and also for an additional 9.14 million CERs to be issued in the net pre-2012 portfolio.
"This situation is unfortunate for the CDM industry," says EcoSecurities' CEO Bruce Usher. "EcoSecurities is working to minimise any delays that this may cause to our CDM projects and I am confident in our ability to manage the impact of DNV's temporary suspension."
The week on Risk.net, July 7-13, 2018Receive this by email