How a search for the truth stopped a contentious land deal in Malaysian Borneo | Mongabay Impacts

In November 2021, Mongabay broke a story about an agreement between the Sabah state government in Malaysia and a foreign company intent on securing the rights to sell carbon credits and other “natural capital” from 2 million hectares (4.9 million acres) of rainforest in the Malaysian state of Sabah to polluting industries for the next 100-200 years.

The initial piece probed the intentions and motivations of the officials and companies involved in the sale of carbon offsets in Southeast Asia as part of a long-running Mongabay series about Indigenous peoples and Conservation.

Over the course of the following months, Mongabay continued to cover the issue, unearthing new details about players involved, their murky financial connections and a battle behind the scenes over the control of the state’s forests in four more articles on the topic:

An oil palm plantation in Sabah seen from the air. The state provided 7% of the world’s palm oil in 2019. Image by Rhett A. Butler/Mongabay.

An oil palm plantation in Sabah seen from the air. The state provided 7% of the world’s palm oil in 2019. Image by Rhett A. Butler/Mongabay.

A land deal without Indigenous participation

Mongabay staff features writer John Cannon reported that, on October 28, 2021, a small group of leaders in Sabah had signed the nature conservation agreement with representatives of a private equity-backed Singaporean company called Hoch Standard, apparently without the meaningful participation of Indigenous communities.

Early on, Cannon spoke with Peter Burgess, the CEO of Tierra Australia, a consultancy, who said he had been involved in negotiating the agreement. Burgess confirmed details of the deal that had been leaked to Mongabay anonymously. The terms called for Hoch Standard to facilitate the marketing of carbon and other ecosystem services to companies looking to, for example, buy credits to offset their carbon emissions.

According to Burgess, the deal would ensure that 2 million hectares of forest in Sabah would be restored and protected from mining, logging and industrial agriculture for at least the next century. The state’s share of the profits would be invested in education, health care and employment, he told Mongabay.

However, after learning about the agreement, land rights experts and Sabahan Indigenous leaders raised concerns about the lack of consultation with communities living in and around these forests in the negotiations to that point. Later on, observers criticized the deal, which only surfaced publicly after Mongabay’s reporting, arguing that the terms strongly favored the company and provided the state with little recourse should the agreement not work out as planned.

Media attention in Malaysia

At the time Mongabay released the story, few people in Sabah were aware that the negotiations had been going on for months, let alone the deal had already been signed. Sources said negotiations included neither civil society nor substantive local community participation. However, the story was picked up by prominent Malaysian newspapers, which brought national and international attention to the matter and may end up leading to meaningful consultations with communities before the agreement’s provisions are set in motion.

During an interview on Mongabay’s podcast, Cynthia Ong, a Sabahan conservation and human rights leader in Malaysia and founder of the NGO Land Environment Animals People, said people associated with the agreement had been sent to COP26 in Glasgow from Sabah to drum up interest in the sale of carbon offsets. However, state government leaders told them to stop after Mongabay’s reporting made the existence of the deal public.

A man fishes in the Crocker Range of Sabah. Image by John C. Cannon/Mongabay.

A man fishes in the Crocker Range of Sabah. Image by John C. Cannon/Mongabay.

Local Indigenous leader sues the government

About a month after Mongabay published the first story, we released another story about how a local Indigenous leader decided to sue the government for signing away the rights to monetize the natural capital coming from the state’s forests to a foreign company. The lawsuit raised concerns about the potential long-term negative impacts on Indigenous peoples and local communities the agreement could have.

Mongabay’s reporting also uncovered further questions about whether Hoch Standard had the required experience, expertise or financial backing necessary to implement the terms of the agreement.

A community in western Sabah. Image by John C. Cannon/Mongabay.

A community in western Sabah. Image by John C. Cannon/Mongabay.

Malaysian officials halt the deal, calling for more due diligence

In February 2022, Mongabay reported that Nor Asiah Mohd Yusof, Sabah’s attorney general, declared that the contentious deal would not come into force until key provisions were met. “The State Government will not permit any land to be leased, transferred or otherwise ‘handed over’ as part of any carbon trading or carbon monetisation program,” she said in a statement on February 9.

Part of Asiah’s argument rested on provisions in the U.N. Declaration on the Rights of Indigenous Peoples requiring that governments obtain the free, prior and informed consent of communities when decisions could affect their rights to land and resources. “No carbon trading program will be agreed to nor implemented without the free prior informed consent of Native Communities whose customary rights may be impacted by such programs,” she wrote.

Civil society representatives said that a technical review of the agreement was necessary to vet both its feasibility and claims by the deal’s backers about the financial benefits it could bring to the state and its people.

Mongabay’s real-world impact

Mongabay’s dedication to revealing the truth about the secret land deal resulted in more transparency for the population of Sabah, especially among the communities that would be most directly affected by it.

Additionally, this investigation provided decision-makers with the information required to make environmentally responsible decisions, which led to further corporate and governmental accountability. State officials are now invested in ensuring that the proper consultations with communities take place, and the federal government of Malaysia is considering legislation that would regulate future deals involving the country’s natural capital.

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