The Vanuatu Minister of Lands and Energy, Paul Telukluk, has warned a company developing a jatropha plantation that it must respect the country's laws.
The warning came after ECO2 acquired 20,000 hectares of lands in Espiegle Bay on the island of Malakula.
It plans to plant over a million jatropha trees there.
At this stage ECO2 has yet to register with the Vanuatu Promotion Authority and the Vanuatu Financial Service Commission but it has given 20,000 US dollars and a Toyota Hilux to the local community.
But Mr Telukluk says there must be an Environmental Impact Assessment before the harvesting of the forest and the planting of the jatropha trees can start.
The minister says the laws must be respected to avoid pollution and to assess the impact of the project on the environment and local communities.
He says the project must also be owned by the land owners and not by the middle men who would benefit from what would be Vanuatu's first attempt to seek benefits through the Carbon Credit Fund on climate change.