Sabah AG: NCA is non-binding until conditions met

 

The controversial Nature Conservation Agreement (NCA) between the Sabah government and a little-known Singaporean firm is non-binding in its current form and is subject to further due diligence, said the state’s attorney-general Nor Asiah Mohd Yusof.

Other conditions include that an addendum is added to the agreement to remove all “unfair and absurd” contract terms, to identify and obtain the free prior informed consent from all affected native communities as well as to identify and ascertain the ‘designated area’.

“The NCA is therefore not finalised nor is it binding because, among others, the designated area – which is the subject matter of the NCA – has not been ascertained nor identified.

“Until the designated area is ascertained and incorporated, each and every term, condition and penalty in the proposed NCA is rendered non-binding and unenforceable.“In short, the NCA in its present form is legally impotent,” Nor Asiah (above) said in a statement today.

The NCA, inked on Oct 30 last year, had been reported as a profit-sharing deal where the firm, Hoch Standard, will be given a 30 percent cut of Sabah’s carbon credit sales revenue, with the remaining 70 percent going to the Sabah government.

It was formerly reported that the designated area would cover an initial 600,000 hectares, with the potential of widening the total to two million hectares based on the success of the pilot project.

Sabah Deputy Chief Minister Jeffrey Kitingan, who was one of the NCA’s signatories, had said it is an agreement involving carbon credit trading that would benefit forest conservation and provide revenue to the Sabah government to develop the state.

Critics have slammed the deal for being shrouded in secrecy, with Warisan urging the government to axe the deal after Kitingan was revealed to have mistakenly claimed Hoch Standard had the backing of the Singapore government’s Temasek Holdings Ltd.

However, Sabah’s chief conservator of forests, Frederick Kugan had previously said the NCA was finalised due to a number of outstanding issues.

Unresolved issues

Nor Asiah said Kugan’s statement was accurate and stressed that the agreement is non-binding until Hoch Standard satisfactorily meets the state government’s requirements outlined in the addendum.

She added that the addendums would require absurd and unfair contract terms to be removed as well as put in place clear safeguards and protections for the state.

Though the state cabinet has approved the concept of carbon trading in principle, Nor Asiah said in relation to the proposed NCA, the finalisation is subject to “strict deliverables and the execution of the addendum”.

“Unless and until Hoch Standard, its promoters and affiliates, meet the requirements of the state government, the proposed NCA will not proceed,” she said.

Nature conservation

Among the issues of the NCA that remain unresolved, she said, are the designated area, the development of a nature conservation management plan, the consent from affected native communities where necessary, carbon pricing and price discovery mechanisms agreeable to the state, independent oversight of the implementation of the NCA and so on.

The proposed NCA and those involved are now being scrutinised by the state’s attorney-general chambers as part of a wide-ranging and ongoing due diligence exercise, she said.

She also noted that the Sabah Climate Change Committee (SCAC) would lead a multi-party dialogue with all stakeholders on this matter.

“The SCAC and its advisory committee will assess and advise the cabinet on all matters related to the NCA.

“The cabinet reserves its right not to finalise the NCA,” she said.

In a separate statement, a group of Sabah’s civil society organisations have voiced their concern that not enough attention is being paid to the “underlying technical issues” of the deal.

Climate change

The carbon market, they said, is based upon principles of transparency, sound governance and additionality, and these standards are getting stricter amid a growing sense of urgency surrounding climate change.

As such, they said Sabah will not be able to market its carbon, especially in premium markets, unless these issues are seriously addressed.

“These matters are complex and require technically competent people from relevant government departments, universities, civil society and other stakeholders to sit down and examine the ecological, social, economic, legal and institutional complexities together in good faith and with impartiality,” said the Sabah head of WWF-Malaysia Robecca Jumin in a joint statement with other civil societies today.

The statement was jointly issued by Borneo Futures, Danau Girang Field Centre, Ezplast Solution, Leap, Sabah Environment Trust, Sabah Human Rights Centre, Sabah Reform Initiative, Searrp, Serata, WWF-Malaysia and Zero Waste Sabah. - Mkini