Carbon deal project’s benefits outweigh risks — Forestry Dept

KOTA KINABALU: The state government acknowledged the risks involved in the controversial carbon trading deal, or Nature Conservation Agreement (NCA), involving two million hectares of Sabah’s forests but said that the advantages would also be highly beneficial.

State chief conservator of forests Datuk Frederick Kugan said that the deal had yet to be finalised due to outstanding matters but said it would be cautious when it comes to developing the best mechanism and terms to protect the state.

“By virtue of being a frontrunner, the state government acknowledges that there is always the element of risk. However, the state government envisions great benefits from being a frontrunner in an era where the world is rushing towards a low-carbon future.

“The state will try its utmost to mitigate the risks but will not let the people down by shying away from being a frontrunner. We invite all stakeholders to engage and evaluate the government’s performance in relation to the implementation of the NCA. An appropriate mechanism for doing so will be developed,” he said in a statement on Thursday night.

Kugan said that the matters of importance that must be resolved before the state would go ahead with the deal involved the land size and area, native customary rights and ownership, and the nature conservation management plan.

“Addendum to the framework agreement which specifies that an initial area of 600,000 hectares is to be identified as a pilot scheme first. Only upon the success of that pilot scheme will the state government consider approving such further areas as it deems appropriate — up to a potential total area of two million hectares,” he said.

“Pre-existing native customary rights of ownership have previously attached to certain Totally Protected Areas (TPAs). As these rights belong to native communities and not the state, consent from each respective native community is required before these rights are signed away through the NCA.”

The provisional framework agreement was signed with Hoch Standard Pte Ltd, a private Singaporean company that would market the state’s carbon through financial networks that are capable of funding and realising the objectives of the NCA.

The focus of the NCA will be on forests classified previously as Totally Protected Areas (TPAs).

“TPAs are areas already locked in for conservation and protection under various state laws and international treaties. As such, these areas are under no threat from any mining, logging or industrial agriculture, contrary to the allegations made in the November 9, 2021 article by Mongabay.

“To be clear, the TPAs in question were not, are not and will never be in danger of commercial exploitation or deforestation,” it said.

The article referred to had first exposed the deal, taking Sabahans and conservation groups by surprise with the magnitude and novelty of the project.

The article stated that leaders in Sabah had signed on October 30 a deal to market carbon and other natural capital from more than two million hectares (4.9 million acres) of the state’s forests for at least the next 100 years; granting 30 per cent of the profits to Australian and Singaporean companies while 70 per cent remained with the state.

It also pointed out that communities were not informed of the deal, in contradiction to the free, prior and informed consent policy designated by the United Nations Declaration on the Rights of Indigenous Peoples of which Malaysia is a signatory.

Meanwhile civil society and conservation groups here are calling for details of the controversial two-million-hectare carbon trading deal to be made public.

The 10 entities, in a joint statement, voiced their concern about being left in the dark over a project of such magnitude — involving natural assets of some half of Sabah’s forests and over a period of at least a hundred years.

“As a group of civil society organisations working in environmental and social fields, we collectively voice our concern for transparency and due process. Any such agreements involving major public assets of state heritage, which the government holds in trust, must be entered into with the prior knowledge of its society and stakeholders.

“Decisions today will impact many generations,” they said.

They said that there were many local, national and international safeguards in place that make transparency and consultation of stakeholders the foundation for such decisions, in particular Free, Prior and Informed Consent (FPIC) — an enshrined policy within the United Nations Declaration on the Rights of Indigenous Peoples of which Malaysia is a signatory.

“Approval of agreements at this scale cannot be done without technical review of the terms and a transparent process. There must be rigorous open tendering and evaluation processes that scrutinise candidates and options for partnerships to ensure they best align with interests of Sabah and Sabahans present and future,” they said.

They said that a practice which violates the policy would damage the state’s reputation as a conservation powerhouse, a reputation which many have worked to build over decades.

“Many in the civil service, civil society and private sector have worked hard over the decades to build Sabah’s good work and reputation in conservation, and reputation underpins carbon prices and credibility. Today, transparency and FPIC are key to a good reputation. Regional or international entities doing due diligence to invest under this deal in Sabah will investigate these matters as part of verification under independent international standards such as Verified Carbon Standard,” they added.

They also said that Sabah did not need to engage third-party brokers for such deals, having internal expertise which will keep the state’s interests at heart.

“Sabah has the in-house capacity to manage and market its own carbon to the world without the need to share profits with external brokers. Signing such a deal will also have implications for existing conservation, carbon and ecosystem service agreements that have been initiated by Sabah’s own institutions and longstanding partners,” they said.

The joint statement yesterday day was made by Bornean Sun Bear Conservation Centre, Borneo Rhino Alliance, Danau Girang Field Centre, LEAP – Land Empowerment Animals People, PACOS Trust, Sabah Environmental Trust, Seratu Aatai, South East Asia Rainforest Research Partnership and WWF Malaysia.