The Paiter-Suruí are a tribe of roughly 1,400 people, uncontacted until 1969, who live in the Amazon forest on the border between the Brazilian states of Rondônia and Mato Grosso.

In 2013, they became the first indigenous population in the world to sell carbon credits under the UN’s major anti-deforestation scheme. Then, last year, they discovered the earth beneath their forest was rich with diamonds, and all hell broke loose.

The Paiter-Suruí’s 248,000-hectare Seventh of September territory sits on one of the largest unexplored diamond reserves on earth. Mining in indigenous territories has not been regulated in Brazil and remains illegal. But that hasn’t stopped diamond hunters from rushing into the area.

As the miners moved in, the carbon credit programme collapsed. But this was not a simple story of industry overpowering conservation. The destruction of this remote part of the Amazon forest reveals the tactics of a campaign by one of the Brazil’s most powerful institutions, the Catholic Church, that promotes divisions within tribes to bring down carbon credit schemes.

The Seventh of September territory – named after Brazil’s independence day – has long been the subject of the competing visions of two cousins and leaders in the Paiter-Suruí community, Almir and Henrique Suruí.

Almir dreamt of providing a long term, sustainable income for the community through carbon farming. In 2009, the Suruí Forest Carbon Project was realised after he managed to unite the Paiter-Suruí – including Henrique – convincing them to adhere to the rules of the UN’s Reducing Emissions from Deforestation and Forest Degradation (Redd+) programme and impose and enforce a logging moratorium. The scheme was supposed to run for 30 years and save more than 7m tonnes of CO2.

For a while, it worked. In 2013, the Paiter-Suruí sold 120,000 tonnes of carbon offsets to Brazilian cosmetics giant Natura – the first deal of its kind struck by an indigenous group anywhere on earth. The following year, Fifa bought the same number of credits in order to reduce the footprint of the 2014 football world cup in Brazil. In 2013, Almir won a UN Forest for People award.

But Henrique, who admitted to this reporter in 2015 he was involved in illegal logging during an interview published in the Brazilian newspaper Folha de Sao Paulo, was not convinced. The proceeds from the carbon were not being divided up evenly he said, and he began to campaign against his cousin, trying to convince villagers to reject the scheme.

Almir’s credit programme needed the support of the community, who had to prevent forest clearing in order to remain eligible for payments. It was a struggle of will and local politics. Then three years ago, Henrique enlisted an ally – the Catholic church.

Brazilian NGO, the Institute for the Conservation and Sustainable Development of the Amazon (Idesam), has been involved in the carbon credit project from its outset. Senior researcher Mariano Cenamo told Climate Home opponents inside the Paiter-Suruí had been heavily influenced by the Indigenous Missionary Council (Cimi), an arm of the Catholic church.

Created in the 1970s to aid indigenous resistance against Brazil’s military dictatorship oppressive policies, Cimi is linked to left-leaning groups inside the church and is overseen by the national conference of bishops. Usually, it denounces actions by big farmers and it is one of the most important supporters of the indigenous struggle for land rights. It is the most influential pro-indigenous lobby group in Brazil, even among non-Catholic groups like the Paiter-Suruí.

Cimi officially opposes carbon credits on the basis that they commodify the indigenous relationship to their land. It is widely rumoured in Brazil that in 2015 Cimi’s then president Bishop Erwin Kräutler, who advised Pope Francis on the writing of his encyclical on climate change Laudato Si, convinced the pontiff to include a passage that condemned carbon credits as “new form of speculation”.

“Cimi promoted the conflict between two different groups inside a territory in order to support a ideological position,” said Cenamo of the Paiter-Suruí. “They strengthened a group that destroyed a world-renowned project. It’s scary.”

Ivaneide Cardozo, the head of local NGO Kanindé, which works closely with the Paiter-Suruí, also criticised the Catholic organisation. “Cimi contributed to increased deforestation in the Seventh of September. It strengthened the party that cuts down the forest.”

The campaign began in late 2014 when Cimi’s newspaper Porantim, one of the major indigenous publications in Brazil, ran a interview with Henrique, in which he accused Almir of misleading the Paiter-Suruí and described an apocalyptic situation. “Life in the community has radically changed. It’s no longer allowed to hunt, to fish, to plant and to produce handicrafts.”

A few weeks later, accompanied by a Cimi lawyer, Henrique Suruí had an audience in the national attorney general’s office for indigenous affairs (Portuguese acronym MPF) in Brasília, some 2,000 km away from Seventh of September. According to official records, Henrique told the government the carbon project was “weakening” the Paiter-Suruí.

In an article about the meeting, Porantim said the carbon project was “loathed” by the Paiter-Suruí and depicted Redd+ initiatives as the “politics of green capitalism and neocolonialism”. As a result of Henrique’s lobbying, the prosecutor’s office in the state of Rondônia began monitoring the carbon project.

Five months after the meeting, in July 2015, this reporter visited the territory and could not verify the claims made by Henrique about the loss of community life. But by that time support for the carbon project was already dwindling: only 10 out of 25 Paiter-Suruí villages were still participating.

Disagreements over how to redistribute the money divided the Paiter-Suruí, and some leaders, notably Henrique, resumed alliances with illegal loggers.

In 2015, gold was discovered. Then, last year, it was diamonds. Recent operations from the federal police and Brazil’s government environment agency Ibama reveal the extent of the mining. Police footage, published here for the first time, shows the devastating scars left on this pristine part of the Amazon. Last year, 20 hectares were stripped by mining, according to the last monitoring report of the Suruí Forest Carbon Project.

But the problem extends much further. Money generated by diamonds fuels the conversion of forest into pasture. According to monitoring by NGO Imazon, between August 2016 and July 2017, Seventh of September had the seventh worst deforestation rate among 419 indigenous lands in the Brazilian Amazon. Between 2015 and 2016, the territory lost 653 hectares of forest, a deforestation rate 256% higher than the Redd+ project’s allowable limit, leading to the decision to suspend the programme.

“We couldn’t generate more carbon credits because the deforestation rate was larger than predicted,” said Almir, in a telephone interview with Climate Home. “We couldn’t control it.”

Redd+ is the UN climate treaty’s major tool for combating the destruction of forests in developing countries. Projects like the Paiter-Suruí’s become eligible to sell off credits for avoiding the carbon emissions caused by deforestation, if they adhere to UN-sanctioned forest management guidelines.

Florian Eisele, a spokesman for UN-Redd said no faith group was opposed to the programme on a global level and he was “surprised to hear that the Catholic church has been an opponent to Redd+ in Brazil”.

“Inclusion of communities in decision-making is actually one of the pillars of the UN-Redd programme’s success,” he said.

Climate Home has asked both Fifa and Natura if there was a clause in their contract with the Paiter-Suruí that guaranteed the ongoing protection of the forests. The cosmetics company explained that the carbon credits it purchased were certified between 2009 and 2012, so it no longer monitors the project. Fifa has not replied.

The inability of an existing and high profile project to deter mining highlights the difficulty of combating deforestation in an Amazon region increasingly falling prey to legal and illegal industries. Communities are faced with the choice of fast cash or slower, more careful sustainable income. Convincing them to take the long road is tough.

The extent to which the Paiter-Suruí exemplify this was revealed during police raids of the mines in their territory this year. According to a police report, seen by Climate Home, the main indigenous leader behind the diamond mining is Henrique Suruí.

“He only thinks and moves in accordance with mining interests,” said the report. “On the day of the raid, the federal police found heavy machinery in the mining area, which was under supervision and leadership of Indians. It is beyond doubt that they belong to the group led by Henrique Suruí.”

In a phone interview, Henrique told Climate Home the police accusation that he was a linchpin for current mining operations was “a big lie”.

“The guilty one is the federal government. The mining is a disgrace that affects our culture and our land. I blame the white man,” he said. “The carbon project is better than mining, it preserves the environment, but the money it generated should have been distributed for the whole community.”

According to federal police sources, since Climate Home last spoke to Henrique, he and two other Paiter-Suruí admitted involvement with illegal mining and struck a deal in order to collaborate in exchange of minor punishment.

By phone, Cimi executive secretary Cleber Buzatto, told Climate Home the relationship with Henrique was no longer close after the suspicions of his involvement in illegal activities. He said that, during Cimi’s involvement with him, there was nothing linking Henrique to forestry or mining.

“It was quite the opposite, he had always exercised an important leadership in Rondônia state,” said Buzatto. “He was interviewed under these circumstances. He expressed his criticism about carbon credits, which, in our opinion, was well-grounded, especially due to the concentration of the programme in Almir Suruí’s inner circle.”

Almir, however, said that he explained Henrique’s involvement with logging to Cimi as soon as the interview came out, to no avail. “I simply can’t understand why Cimi support the total annihilation of our land instead of a preservation project,” he said.

Buzatto said carbon credit programs tend to undermine collective organizations and change indigenous relationships to nature into mercantile transactions. “Historically, the indigenous peoples take care of the environment in a free and grateful way, as they see themselves as part of it. The Redd imposes a radical change, as it commodifies this relationship with nature.”

Cimi’s attention has now turned to another pioneering carbon credit agreement with German development bank KfW, in the neighbouring state of Acre. Tribes report similar tactics that have divided the community.

On 31 July, 57 indigenous leaders and 11 indigenous organisations signed a letter criticising Cimi’s campaign against the Acre scheme. “It comes as a surprise us that Cimi’s chapter in Acre is making intrigues, acting in bad faith and provoking discord and conflicts among us,” said the letter.

Regarding the controversy in Acre, Buzatto said most of indigenous leaders in the region opposed Redd+. He said that the subscribers of that letter were directly linked to the programme.

The Cimi leader also sent Climate Home a letter signed by six leaders of the Jaminawa ethnic group. They claim the letter criticising Cimi did not represent them and demanded an explanation of how money paid by KfW had been used.

“We oppose any form of economic exploitation of indigenous territories by third parties, even if there is some level of participation of some indigenous people, regardless of who they are”, says Buzatto.

Cimi opposition and ethnic internal divisions are not the only difficulties faced by carbon projects in Brazil. The federal government has refused to officially sanction the UN’s Redd+ scheme on the basis that it is a threat to the country’s sovereign power over forest policies.

Cenamo, from the NGO Idesam, said the lack of official support for carbon credit schemes stopped international funding reaching those charged with protecting the forests, such as the Paiter-Suruí, leaving forests exposed to exploitation.

“In ten years, Brazil achieved the largest reduction of carbon emissions, but we were not able to convert this into a sustainable development model for the Amazon… On the other hand, deforestation keeps generating profit,” he said. “The recent increase in the deforestation rate is a result of this.” (Brazil’s deforestation rate has increased by 24% and 29% in the past two years, after falling for a decade.)

Meanwhile in Seventh of September, with the carbon credit scheme in tatters, Henrique’s concentration has shifted to legitimising mining. In June, he travelled to Brasília and petitioned Brazil’s minister of justice Torquato Jardim to regularise mining in indigenous lands. He was joined by leaders from the neighbouring Cinta-Larga group, whose lands cover part of the same diamond deposit.

“As everybody wants to dig for diamond in our lands, we want it to be without the white man’s involvement,” he told Climate Home.

In a letter to the government in June, indigenous mining advocates argued most of the money from legal mining goes to non-indigenous businessmen and miners, while indigenous peoples working in their own lands are subject to police repression. So far, there has been no official response.

In a written response to Climate Home, Brazil’s Indigenous Affairs Bureau (Funai) refused to comment on the demand. Funai claimed mining in the Paiter-Suruí land had stalled and that the government was working to stop it spreading.

Buzatto said Cimi did not endorse mining activities in indigenous lands, especially when done by non-indigenous actors. “Our hope is that indigenous people generate income from traditional practices and a respectful relationship with the environment.”

As the schism among the Paiter-Suruí widens, Almir said that his followers, now a minority inside the ethnic group, are exploring alternatives to carbon. “Some of us went to Europe and struck deals to export coffee and Brazilian nuts. We will try to survive from sustainable agriculture and handicraft. We will find alternatives.”