No end in sight to the carbon deal battle in Sabah

 

Soon after uniting to restore Sabah’s status as an equal partner in forming Malaysia, state leaders have turned against each other over a carbon-trading deal.

They are now engulfed in a bitter slanging match over the deal brokered by deputy chief minister Jeffrey Kitingan, the state’s agriculture and fisheries minister. Worse, it has drawn international attention putting the deal in jeopardy as many international companies may not deal with the state or its entities if there are suspicious circumstances or illegal practices involved.

The story of the carbon deal emerged in November after Mongabay published an article giving details of the closed-door carbon deal.

It said the state authorities had signed a “nature conservation agreement” in October with a Singapore firm, Hoch Standard Pte Ltd, and involving an Australian management consultancy called Tierra Australia.

The deal gave Hoch Standard the right to sell credits for carbon and other natural capital, such as clean water, from over 2 million hectares (4.9 million acres) of forested land for the next 100 to 200 years, quoting Peter Burgess, Tierra Australia’s CEO.

The deal was unknown to many Sabahans, especially the indigenous people who may be affected by the deal.

After Mongabay broke the story there was a flurry of investigations by various interested parties on the players and companies involved in the deal. Background checks were done of the associated companies in Singapore and Australia relating to the paid-up capital, the directors of the companies and the companies experience in dealing with carbon trade. The details appeared to be murky.

The biggest question was why the state government was willing to grant 30% of the profits to Australian and Singaporean companies.

A report by Al Jazeera last week gave an eye-opener estimate of the amount involved. Based on the 30% profit-sharing figure, the foreign companies involved will be looking at a total share of about US$24 billion over the period.

The fallout from the deal left Kitingan alone to answer the public.

In the several dialogues organised with the interested public and NGOs, there were more questions than answers, leaving many people confused and suspicious about the signed NCA.

While people in general supported carbon trade, those who questioned the companies’ capabilities and qualifications of the players were labelled as anti-carbon.

One critic said, “we are not against carbon trade, but why sign a deal with a company which was red-flagged by the state attorney-general and the conservator of forests. If all is above board, the chief minister himself should clear the air. But this has not been the case. The state government’s silence is deafening”.

Former chief minister Shafie Apdal, now leader of the opposition, likened the NCA to “selling” state land to foreigners, and said it was unacceptable that up to two million hectares of forest land would be “given away” to a foreign company under the deal.

He said the company also had no proven track record in the carbon trading industry.

In a tit for tat exchange, Kitingan responded by saying the idea of the carbon deal started during Warisan’s time.

One state assemblyman commented that the ball is now in Kitingan’s court as he is the minister in charge of the deal and could right the wrong. “The accountability lies with Jeffrey and the GRS government in power,” he said.

Complicating matters, Adrian Lasimbang, a former senator and president of Pertubuhan Suara Anak Sabah, filed a suit on Nov 29 to seek key documents that show what rights or areas have been given to Hoch Standard by the chief conservator of forests.

Lasimbang has also challenged Kitingan to sue him for exposing the NCA by talking to Al Jazeera. He said the suit would give Kitingan an opportunity to divulge the details of the NCA in court to prove to the public that the NCA was not a scam.

Kitingan had acknowledged to Al Jazeera that Hoch Standard was not backed by Temasek Holdings, despite his earlier claims, but said it had the backing of other “big funding agencies”. He maintained that Hoch Standard is valued at US$10 million even though company records show it has a paid-up capital of only US$1,000.

In all the dialogues organised by Kitingan’s office, there were no representatives from the AG’s office or the conservator of forest. One participant at the talk said “Jeffrey failed to address the issue head on with regards to the company and players involved and the details of the agreement” He said that the results of an investigation by NGOs seemed to show that “they are brokers of the deal rather than experts in their field and without a proven track record to undertake such a huge assignment”.

The battle is going to continue with no end in sight.

In view of the impending court case brought by Lasimbang it is unlikely that the state government will make any public statement soon as it will jeopardise the defence they will mount. Looks like Kitingan will have to continue this fight alone. - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.