UN investigates contentious forest carbon pact in Malaysian Borneo

The government of Sabah state in Malaysian Borneo will continue to move forward with an opaque nature conservation agreement despite concerns raised by the United Nations.

In a letter, the UN calls into question the transparency of the agreement and the state’s approach to the human rights law principle of free, prior and informed consent. Image: , CC BY-SA 3.0, via Flickr.

The state government of Sabah in Malaysian Borneo has reaffirmed its plans to proceed with an opaque nature conservation agreement despite concerns raised by the United Nations.

Representatives of Sabah’s government and a representative of a Singaporean company called Hoch Standard Pte. Ltd. signed the agreement, which included the rights to carbon and other marketable ecosystem services from more than half of the state of Sabah’s forests, in secret on Oct. 28, 2021.

As news of the deal broke in early November 2021, questions arose as to whether the state’s Indigenous peoples, who collectively account for more than half its population, had been adequately informed about the agreement’s plans for 2 million hectares (4.9 million acres) of Sabah’s forests. Hundreds of thousands of the state’s Indigenous people live in or around forest reserves and rely on them for their livelihoods.

Since the agreement’s signing, Sabah’s attorney general has called the agreement “legally impotent,” and more recently, a legal adviser to the state said it violates a 2000 law meant to protect Sabah’s biodiversity.

The state asserted that it intends to proceed with the agreement in a formal response to a December 2023 letter from the United Nations. 

The 11-page letter was written by a group of “special procedures experts” with mandates established by the UN Human Rights Council, including the special rapporteurs on the rights of Indigenous peoples, on human rights and the environment, and on the right to development. It cites the lack of transparency around the agreement and raises questions about the state government’s adherence to the principle of free, prior and informed consent (FPIC).

FPIC is a tenet of international human rights law and features prominently in the UN Declaration on the Rights of Indigenous Peoples.

The response drafted by the state government of Sabah on Feb. 26, “reiterat[es] its commitment to uphold FPIC,” Surya Deva, the UN special rapporteur on the right to development, told Mongabay in an email. “However, I believe that the government as well as the relevant company should do more to obtain a ‘social license’ from the affected indigenous peoples.”

States are the primary duty bearers in the context of human rights and are obligated to ensure that human rights are respected, protected and fulfilled.

David Boyd, special rapporteur on human rights and the environment, UN

It remains unclear where the bulk of the 2 million hectares included in the agreement will be situated, though the Sabah government has said they will come from the state’s “totally protected areas.” These forest reserves, they said in their response to the UN, were gazetted under the state’s 1968 Forest Enactment, with “an enquiry process that is strongly resemblent to” FPIC.

But as the state also noted in its response, the formation of these reserves predates the codification of FPIC as a principle.

Adrian Lasimbang, an Indigenous leader from Sabah and currently the executive director of the Right Energy Partnership with Indigenous Peoples, questioned how a proper FPIC process could have been carried out with so little transparency around basic details like the location of the forests in question.

“How can this be what we call FPIC when the people don’t even know whether they’re going to be affected?” Lasimbang told Mongabay.

The state also said that trading carbon credits produced in the areas covered by the agreement would require international certification, like that provided by Verra’s verified carbon standard for the voluntary market. Because such certifications require FPIC, the state wrote, “The Standard will itself, inadvertently, provide the necessary safeguards, to allow for mutual consent, and terms towards mutual benefits; and therefore, was not a necessary requirement to have been stated in the Agreement.”

Jeffrey Kitingan, Sabah’s deputy chief minister and the most vocal proponent of the nature conservation agreement, did not respond to requests for comment through his political secretary.

Such justifications have left Lasimbang wondering if the agreement’s backers understand “why FPIC exists … and what it actually is intended for.”

“It’s an Indigenous peoples’ tool to protect their interests,” he said. “It’s not a tool of the government to justify projects.”

Governments do have a responsibility to ensure that FPIC occurs, said David Boyd, the UN special rapporteur on human rights and the environment.

“States are the primary duty bearers in the context of human rights and are obligated to ensure that human rights are respected, protected and fulfilled,” Boyd told Mongabay in an email. “With respect to carbon credits in general, and especially in the voluntary carbon credit market, States have failed miserably to fulfill their obligations.”

The state wrote that the nature conservation agreement lays out “an admirable approach” to garner revenues from emissions reductions credits that could fund economic development. But such efforts should not sidestep consideration of those who may be most affected, Deva said.

“It is critical that the rights of indigenous peoples are not ignored or sacrificed to achieve cumulative economic development,” he said.

Anne Lasimbang, the executive director of Partners of Community Organizations in Sabah (PACOS) Trust, an Indigenous rights organisation in Sabah who has spoken out about the agreement’s lack of transparency, agreed.

“Definitely, the state of Sabah needs development funds,” she said. But, she added, “We also want to be consulted. We have our own view of development.”

Kitingan and other supporters of the agreement say monetising the state’s natural capital will bring in millions of dollars to fuel economic development and replace funding from more environmentally destructive industries like logging, and accuse the agreement’s detractors of impeding progress in Sabah. Adrian Lasimbang said those projections were “absurd.”

“How did he calculate all these figures when he doesn’t even know where are the forests, what type of forest is this, [and] what sort of methodology they are going to [use to] calculate the carbon?” he said.

The state contends that going through a certification process will ensure a rigorous consent process with affected communities. Adrian Lasimbang, however, said not having obtained FPIC before the deal was signed could make such certification impossible to achieve.

Nor is FPIC a standalone exercise that should happen at only one point in time. It “is a much higher standard than consultation,” Boyd said.

“It is an ongoing process that requires States to repeatedly engage with Indigenous Peoples as projects, plans, policies and developments evolve,” he added.

Verra and other certifiers also require that carbon project developers prove that the credits offered for sale represent carbon that would not have been otherwise sequestered from the atmosphere. Proving that “additionality” in Sabah’s totally protected reserves, which already benefit from the state’s most stringent regulations on use, could be difficult or impossible, Adrian Lasimbang added.

The apparent lack of consideration for these issues has led to scrutiny of Hoch Standard’s credentials since the agreement first became public in 2021. Investigations by independent researchers revealed that Hoch Standard is actually controlled by Lionsgate Ltd., a company based in the British Virgin Islands, where laws have kept its ownership a mystery.

Documents show that Ho Choon Hou, a Singaporean surgeon, is a director of Hoch Standard. A public relations firm representing Hoch Standard told Mongabay that media queries should be directed to the Sabah government, and Ho did not respond to an emailed request for comment.

Hoch Standard, meanwhile, has “no record in carbon trading,” the authors of the UN’s letter note. Given the involvement of these entities, United Nations Human Rights also sent copies of the letter to Hoch Standard, Lionsgate and the governments of Singapore and the United Kingdom.

The UN’s letter asks for further information about Malaysia’s plans to address the questions laid out in the letter. Three times a year, the Human Rights Council receives a report on all such communications and responses to them, Deva said.

“The goal is to seek information and encourage the relevant authorities to address the human rights concerns that we have received,” which often come from a variety of sources that are kept confidential, he added.

“Protection of the rights of indigenous peoples requires the government taking proactive measures in line with international standards,” Deva said. “Inclusive and sustainable development will only be possible if the voices and wishes of indigenous peoples are taken seriously and respected.”

This story was published with permission from Mongabay.com.

Like this content? Join our growing community.

Your support helps to strengthen independent journalism, which is critically needed to guide business and policy development for positive impact. Unlock unlimited access to our content and members-only perks.

Most popular

Featured Events

Publish your event
leaf background pattern

Transforming Innovation for Sustainability Join the Ecosystem →