THE CONTENTIOUS Nature Conservation Agreement (NCA) has been put on hold after proponents of the carbon credit initiative failed to meet the supplementary conditions set by Sabah.
The Sabah Forestry Department has affirmed that they had no objection to a pilot site proposed for the project.
Having the site was in the addenda to the NCA deal that the state government signed with Hoch Standard Pte Ltd, a company based in Singapore.
According to Sabah’s chief conservator Datuk Frederick Kugan, Deputy Chief Minister Datuk Seri Jeffrey Kitingan, in his capacity as the state minister in charge of agriculture and a proponent to the NCA, had officially requested for a 190,051-hectare natural land which can be used to assess the carbon credit venture in June last year
The area overs the Nuluhon Trusmadi Forest Reserve, a class-1 reserve near Tambunan, which among others features Malaysia’s second highest mountain, Mt Trusmadi.
“The department viewed at the time that such a request was reasonable as the site could test the framework for parts of the NCA and the potential gains for the state.
“The designated area is a non-issue as the deal is pending Hoch Standard’s fulfilling the request of the Sabah government, particularly (on) the addendum that is needed to describe the designated area and this is subject to the availability of the unencumbered areas,” said Kugan.
The issue hit the spotlight after an aide to Jeffrey, Anuar Ghani, alleged at a law conference in Kota Kinabalu recently that the Forestry Department was behind unknown “perceived delays” and had caused the project to be unable to be implemented.
For the NCA to commence, proponents had been instructed to resolve several “addenda” to the agreement that was set by the state attorney-general’s (AG) office.
They include ensuring a designated area, pilot area, a management plan, consent from native communities wherever necessary, carbon pricing, price discovery mechanisms agreeable to the state, independent oversight, objective performance goals, safeguards for key economic sectors and revenue sharing, as well as confirmation of the truth and reliability of Hoch Standard’s representation and capability to undertake the carbon trading project.
Further to this, Sabah AG Datuk Nor Asiah Mohd Yusof said the carbon credit project would also have to be screened by the Sabah Climate Change Action Council which was assigned the role of adviser to the state on carbon credits.
“The Sabah cabinet has approved the concept of carbon trading in principle,” said Nor Asiah.
“As it relates to the proposed NCA, the Sabah government calls for a more in-depth due diligence process which was initiated by the Sabah attorney-general.
“The cabinet reserves its right not to finalise the NCA.”
Not in line with Sabah Biodiversity Enactment
The NCA deal was signed in secrecy between the Sabah government and Hoch Standard on October 28, 2021.
It made headlines in the subsequent year after a story triggered opposition party Warisan and a coalition of 13 non-governmental groups.
The AG’s office declared the NCA legally impotent until Hoch Standard met all the additional requirements set.
Under the said deal, Hoch Standard will receive rights to around 2 million hectares of Sabah’s forests for an approximately 100 years for the purpose of carbon trading, with revenue being split 70:30. Sabah would have the larger slice of the profits.
The state later clarified that the deal was inked based on a non-binding framework and that Hoch Standard still needed to fulfil the additional addenda to the NCA.
Tengku Fuad Ahmad who served as the legal adviser to the Sabah government revealed that the NCA cannot move forward because it was flawed, stressing that it was not in accordance with the Sabah Biodiversity Enactment 2000.
Under the law the NCA must get approvals from the directors of the Sabah Biodiversity Institute and the Sabah Biodiversity Council, he said.
Sabah amended the Sabah Biodiversity Enactment in August last year to stop anyone from keeping, selling, buying, exporting or importing any protected biological resource without a valid licence, as well as sharing of benefits.
The latest amendments do not explicitly include carbon trade.
At present, it could not be ascertained further whether Hoch Standard and its counterparts have met with the additional addenda of the deal, other than that on the pilot site.
Further confirmation that the Sabah government has put on hold the NCA was the state’s response to a United Nations (UN) enquiry.
Malaysia’s ambassador and permanent representative to the UN in Geneva, Datuk Nadzirah Osman replied to the UN working group comprising four rapporteurs on human rights that the state had put the project on hold to refine various clauses and to sever erroneous clauses that were deemed “lopsided.”
The response dated February 29 was found on the office of the United Nations High Commissioner for Human Rights’ website.
It was made in response to the query of the four rapporteurs in December last year.
The state AG’s office stated that Hoch Standard has been told to consult communities on the use of such forest resources although the areas in question may not be inhabited with people as they were forest reserves.
The reply did not indicate further whether Hoch Standard and its local counterparts have met other requirements related to the addenda, but simply asserted that the project has been put on hold. – The Vibes, March 14, 2024
