Conservation: Deal with Aussie Co
First Conservation Bank on forest to lure more investment to Sabah
The State Government has sealed an MOU with a Sydney-based company to set up the first Conservation Bank in Asia to support the implementation of a biodiversity credits concept in the State for more sustainable conservation approaches. The establishment of the Bank, the second of its kind after the United States, is part of the arrangement between the Australian company, NewForest Pty Ltd, to collaboratively strengthen nature conservation in Sabah by providing new commercial approaches supported by private investments. Chief Minister Datuk Musa Aman said this new approach would greatly help bring in private investments in the conservation of natural forests. “Nature conservation is not cheap. We are hoping to cash in from biodiversity credits to finance a more sustainable conservation. These are the prospects we are seeking to help us in our conservation course,” said Musa after witnessing the signing ceremony held in conjunction with the international conference on Nature Conservation in Sabah: The Quest for Gold Standards here, on Monday The State Government faces a challenge to balance the dual objective of economic development and conservation and the new concept will provide an alternative to support conservation through tangible and predictable sources of funding, according to him. “I believe this new concept will provide a commercial solution which enables private investments to support conservation through biodiversity credits,” said Musa. He urged those interested in investing in conservation, especially those in sectors directly related to conservation issues such as the oil palm as well as the oil and gas industries to check with NewForest to find ways to purchase credits from the proposed Conservation Bank. Sabah Forestry Director Datuk Sam Mannan said there are currently no regulations requiring industry players to purchase conservation credits, but the department could impose it through contracts with oil palm companies when they opened up new areas. The conservation bank is an entirely new concept where biodiversity is valued in forms of Biodiversity Credits which will then be traded to interested investors, said NewForest Managing Director Mr. David Brand. He explained that the Bank’s concept of selling biodiversity credits is similar to selling share to stakeholders or other investors who are keen on conservation. The credits can be acquired by injecting money into conservation programmes. “The money raised would then be used for conservation purposes, which in this case,would be the Malua Forest Reserve,” said Brand. There are two types of conservation credits - one is the credit for investing in protection biodiversity or ecosystem that is already there, a habitat that is already functioning.
Nature becoming more and more valuable
The second type is credits for enhancement of an ecosystem value, for example, by improving the number of animals that can utilize that ecosystem. He said biodiversity credits are currently traded as over the counter product and could be traded at stock exchanges in the future due to continuously increasing interest among investors. He said conservation banking in US already has a turnover of more than USD1 billion per year and still growing extremely rapidly. “We believe there is a significant market from the consumers and people in the supply chain, for example for agro-based business and oil-palm related products. We believe there are also speculators who will be interested in participating in this type of market,” said Brand. He said as nature is inevitably becoming more and more valuable, people are placing higher prices on environment and this will continue to drive the market and create new opportunities for conservation banking. Under the MOU, NewForest will work with Yayasan Sabah and the Forestry Department to get the proposed conservation bank ready for operation in six months and develop a commercial wildlife habitat at the 240,000ha Malua Forest Reserve. Yesterday’s event also saw the Forestry Department launching a conservation fund aimed at restoring forests and biodiversity in the state. Sabah is home to 1.2 million hectares of state parks and protected areas rich in flora and fauna, with internationally acclaimed sites such as Kinabalu Park, Danum Valley and Maliau Basin. The State Government has set a target to certify an additional 450,000 hectares of forest reserves within the next two to five years in cooperation with WWF under the Malaysian Forest Trade Network (MFTN).