East Asia Minerals said it paid $500,000 and issued 2.5 million shares to Carbon Conservation in the deal.

Makmur Ibrahim, a spokesman for the Aceh administration, confirmed that Carbon Conservation had signed on to help create carbon credits in the 700,000-hectare Ulu Masen forest conservation project.

However, he said that if Carbon Conservation had auctioned off the sales and marketing rights to those credits, then its contract with the Aceh administration would have to be reviewed.

“We may even cancel the contract if we find that they’ve abused the agreement [by selling the rights to a mining firm],” he said.

Vanda Mutia Dewi, coordinator of the environmental group Greenomics Indonesia, also lashed out at Carbon Conservation for giving up the rights to the miner.

“East Asia Minerals has mining interests in Aceh, and Carbon Conservation had the exclusive right to sell and market the carbon credits from Ulu Masen,” she said. “Clearly there’s a conflict of interest here. Carbon Conservation has abused its contract with the Aceh administration.”

Hasbi Abdullah, speaker of the Aceh legislature, said he was surprised the Aceh authorities had never been involved in the talks about the equity stake that Carbon Conservation had sold to East Asia Minerals.

“It’s that kind of move that’s dangerous for the future of Aceh’s forests,” he said.

“We’ll immediately summon Aceh Governor Irwandi Yusuf to explain how this was allowed to happen,” he added.

“The governor must answer for this mess because it was his administration that struck a deal with the foreign firm without informing the legislature, and subsequently causing losses to the province.”