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Danum Valley Conservation Area, State of Sabah, Borneo Island, Malaysia, August 5, 2019. © 2019 Emy/Abaca/Sipa USA via AP Images

(Bangkok) – The Sabah state government in Malaysia should immediately make public the terms and status of a land deal that would hand management of 4.9 million acres of tropical forest to a foreign company for up to 200 years, Human Rights Watch said today. The Sabah government is obligated to respect and protect the rights of the communities and tens of thousands of Indigenous people who call the forest their home and derive their livelihoods from it, and to ensure that any deal reached with the company upholds these rights.

The provisional conservation agreement, signed by the Sabah state government on October 30, 2021, gives Singapore-based Hoch Standard PTY Ltd. the exclusive right to monetize “natural capital” in vast areas of the state. This includes the right to seek payments for ecosystem services provided by the forest – such as the absorption of carbon dioxide by trees and plants – from other companies looking to offset their own greenhouse gas emissions. Since November, when media reports revealed the existence of the deal, Sabah state officials have given conflicting statements about the binding nature of the agreement and the need for or existence of prior consultations with Indigenous communities living within areas covered by the agreement.

“The lack of transparency about the deal with Hoch Standard, which has the potential to seriously damage the lives of tens of thousands of Indigenous people in Sabah, is simply outrageous,” said Richard Pearshouse, director of the Environment and Human Rights division at Human Rights Watch. “Government officials should publicly respond to the concerns raised by the state’s Indigenous communities and commit to a course of action that protects, rather than undermines, their rights.”

On February 28, 2022, Human Rights Watch sent letters to Hajiji Noor, the Sabah chief minister; Jeffrey Kitingan, the deputy chief minister; and Frederick Kugan, the chief forest conservator, asking a series of questions about the status and scope of the agreement. Human Rights Watch also sent similar letters to Hoch Standard and Tierra Australia, which is reported to have brokered the deal. More than a month later, none of those contacted had responded.

The land deal has raised many issues that the government and participating companies have not publicly addressed, Human Rights Watch said. For instance, it is unclear how the agreement will affect the management, use, or access-rights of Indigenous and other communities who live on or depend on the land covered by the agreement. The exact areas covered by the agreement have not been reported.

Indigenous people do not know whether traditional and other relevant knowledge will be financially compensated in the event that natural capital associated with Indigenous peoples – such as medicinal or food plants – is monetized. It is not publicly known to what extent the state government or the companies involved have identified and consulted with communities that may be affected by the agreement and obtained their free, prior, and informed consent.

The United Nations Declaration on the Rights of Indigenous Peoples specifically recognizes the need to respect and promote the inherent rights of Indigenous peoples to their lands, territories, and resources. It calls for good faith consultations with Indigenous communities any time that their rights to their land might be affected, including in the context of environmental conservation. Malaysia voted in favor of the declaration when it was adopted by the UN General Assembly in 2007. In addition, the Sabah Biodiversity Enactment (2000), enacted by the Sabah state legislature on December 29, 2000, requires financial benefit-sharing agreements with “native and local communities” for any use of biological resources on lands over which those people have rights or associated relevant knowledge.

Sabah is the second largest state in Malaysia, covering nearly 724,000 square kilometers on the northern tip of the island of Borneo. Unlike most other states in the country, the population of 3.5 million is predominantly Indigenous, with more than 33 recognized Indigenous groups making up approximately 54 percent of the population.

Proponents of the agreement with Hoch Standard have alleged that free, prior, and informed consent of the affected Indigenous population is not necessary because the land subject to the nature conservation agreement (NCA) is already protected land, and consent was obtained when the land was first given protected status. However, in a press statement on February 9, the Sabah attorney general said that “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.”

Conservation initiatives ostensibly intended to protect the world’s forests and address the climate crisis should not undermine the rights of forest peoples, Human Rights Watch said. Through a variety of certification mechanisms, the naturally stored carbon in forests can be claimed as avoided carbon dioxide emissions and then sold as “credits” to companies seeking to voluntarily offset the emissions from their own operations. There are serious concerns whether such mechanisms lead to an actual reduction of overall emissions.

“The Sabah state government should publicly disclose how the Hoch Standard deal was negotiated, what it purports to cover, and details about all parties to the agreement,” said Pearshouse. “The many unanswered questions about the impact of this deal mean the government needs to be incredibly vigilant in fulfilling its obligation to respect and protect the rights of affected Indigenous communities.”

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