NCA is not binding for now, says Sabah AG

9 February 2022

By Wartawan Nabalu News

KOTA KINABALU: Sabah Attorney General’s Chambers (AGC) has clarified that the signed Nature Conservation Agreement (NCA) was not enforceable as due diligence was still being conducted on the third-party company involved.

Attorney-General (AG) Datuk Nor Asiah Mohd Yusof said the agreement was not finalised nor binding despite being signed in October as it was still missing a lot of details, which also includes an agreed-upon forest area.

“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,” she said in a press statement today.

According to Asiah, amongst other issues that remained unresolved are the Pilot Area and map; development of a Nature Conservation Management Plan (NCMP); 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 an objective performance assessment in meeting the intended goals.

She also mentioned that the state intended to include safeguards to mitigate/avoid negative impact to current key economic sectors of the State; safeguards to ensure that revenue gained from carbon trading are leveraged for the long-term benefit for the people of Sabah; and a satisfactory due diligence report on and confirmation of the truth and reliability of Hoch Standard's representations and capability.

“The State Government will also require that an addendum to the NCA be executed where absurd and/or unfair contract terms are removed. The addendum will also put in place clear safeguards and protections for the State. Unless the addendum is executed, the NCA will not be finalised.

“The proposed NCA and its promoters are now being scrutinised by the State Attorney General's Chambers as part of a wide-ranging and on-going due diligence exercise. Unless and until Hoch Standard Pte Ltd, its promoters and affiliates, meet the requirements of the State Government, the proposed NCA will not proceed.

“Therefore, the statement released by Datuk Frederick Kugan, the Chief Conservator of Forests previously is accurate. The signed NCA is indeed incomplete and hence non-binding, until Hoch Standard satisfactorily meets the State Government's requirements outlined in the addendum. Datuk Fred's statement was correct and was not misleading as alleged by an NGO recently,” she asserted.

Meanwhile, Nor Asiah mentioned that Sabah will not permit its land to be leased, transferred or “handed over” as part of any carbon trading or monetising deal.

“Sabah has a right to carbon sovereignty and will harness and build its own expertise under the Sabah Climate Change Committee to manage a carbon future in alignment with recognised global standards, safeguards and processes that prioritises equity, inclusion, transparency and multilateralism,” she said.