Sabah carbon deal scuttled but the issue is far from over

 

Finally, the Sabah state government has found a voice through the state attorney-general, Nor Asiah Mohd Yusof, to help calm the carbon fiasco which has all the potential to create turmoil. Social media has been abuzz with those seeking more information on the Nature Conservation Agreement (NCA) and those who are totally against how the deal was conducted based on the information leaked out.

Short of aborting the deal, Nor Asiah listed the conditions that have not been fulfilled or need to be fulfilled before the NCA can be considered a contract and binding for the next 100 years.

Using strong words such as “unfair and absurd contract terms” and “legally impotent”, her statement raises the question of why the state government signed the agreement in the first place without doing proper due diligence. The NCA is not like negotiating a shop rental agreement with some towkays in Gaya Street.

Furthermore, why was the deal, estimated to be US$80 billion or more, kept secret until it was leaked?

The government has a lot of explaining to do and the state AG’s latest statement falls short of satisfying anyone. The pertinent question is whether the state will go ahead with the deal if the other side fulfils its part of the bargain and whether there is a heavy penalty involved if the agreement is cancelled.

One way or another the losers will be Sabahans themselves over the state leadership’s failures.

It is too late to sweep the carbon deal under the carpet as international news agencies, social media, protectors of the environment and Orang Asal will expose every wrongdoing. We can’t blame the federal government if our state leaders failed in their fiduciary duties and failed to consult the stakeholders.

Sabah, as the poorest state in the nation, can ill afford another scandal depriving people of its rights.

Activists claim there are enough local experts who can conduct a detailed study, and companies like Petronas who can undertake the same. Since the carbon deal is a mammoth project involving billions over a period of 100 years, it is only wise to conduct open bidding to obtain the best deal for the state.

Not all carbon deals lead to success. Indonesia recently terminated an agreement in which Norway agreed to pay US$1 billion if Indonesia slowed its carbon emissions resulting from deforestation. The lack of progress in the payment was said to be one of the reasons to terminate the agreement.

If the deal goes through, there will be more red flags as to why the government agreed to pay 30%, estimated to be US$24 billion, to a foreign entity.

Sabahans are already fighting over oil rights and tax revenue based on the Malaysia Agreement 1963. Petronas has made RM15.6 billion cash payments to Sabah since 1976, a period of 44 years.

The petroleum deal will ring hollow if the Sabah government is willing to pay approximately RM120 million to a private company for the next 100 years.

Sabah would be better off if the deal was led by Yayasan Sabah, as the foundation and its various local and international stakeholders (scientists, universities and endowment funds) are already operating in its vast concession areas like Danum Valley, Maliau Basin and Imbak Canyon.

The proceeds can be used to fund more scholarships and loans for education.

The most important part of the money talk is which kitty it is going into and who will manage the funds if a carbon deal materialises. The state government should set up a sovereign fund like Singapore and Norway to manage any proceeds from the carbon trade in a clear and transparent manner.

One native chief when informed of the scandal said: “This goes against the promise of the Keningau Oath Stone that the Sabah government holds authority over land, and Sabah native customs and traditions will be respected and upheld by the federal government. It makes no sense when our own state government breaks the promises of the Keningau Oath Stone in favour of a foreign entity. Our land will be controlled by foreigners for the next 100 years and the state government has violated our customary rights without consulting us”.

The complexity of the carbon trade could be seen during the recent international climate change conference, COP26 in Glasgow.

Six years after negotiators adopted the Paris Climate Agreement, they finally completed the rulebook for implementing it in Glasgow (COP26). The sticking point was Article 6, which is central to the agreement because it guides how countries cooperate to generate cheaper and deeper greenhouse gas reductions.

If nations have difficulties in dealing with one another, it is unlikely that an unknown foreign company that signed the NCA with the Sabah state government can do better. - FMT

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