In October 2021, Hoch Standard Pte Ltd signed a carbon trading deal, also known as the Nature Conservation Agreement (NCA), with the Sabah state government. The deal gives Hoch effective control of the carbon trading rights of 2m ha of Sabah’s protected forest areas for 100 years, with the possibility of extending it for an additional 100 years. These so-called REDD+ (Reducing emissions from deforestation and forest degradation in developing countries) projects have the potential to incentivise developing countries to conserve swathes of forest under threat—an ecological and financial boon. But the peculiarities of this NCA, signed under seemingly surreptitious circumstances and reeking of neocolonialism, soon attracted critics.
Environmentalists, human rights activists, and many others have criticised the deal for its lack of transparency, disregard for local communities, and secrecy surrounding Hoch Standard Pte Ltd’s leadership, records, and financial ties. This arrangement failed to consult with or inform local indigenous groups who depend on the forest, violating the right to free, prior, and informed consent as granted in the UN Declaration on the Rights of Indigenous Peoples. Critics have also pointed out other issues: the deal lasts 100 years, over three times as long as most REDD+ projects; the Sabah government (or a future Sabah government) cannot cancel the agreement; and Hoch can sell the rights covered in the NCA without the consent of the Sabah government.
In addition, REDD-Monitor reported that Hoch was registered in Singapore in 2019, has just two officers, and a paid-up capital of US$1,000 (S$1,370), raising questions about how a company with no verifiable track record in carbon or natural capital markets has the capability to now be in charge of monetising carbon and other natural capital from Sabah’s forests—issues so glaring that the State Attorney General has declared the NCA “legally impotent”. Given that Hoch Standard Pte Ltd is a Singaporean company, the NCA is co-governed by the laws of Singapore and Sabah.
This deal dramatically highlights one example of Singapore profiting off the potential harm to communities around South-east Asia. Despite Singapore’s size, our island-nation is a financial powerhouse that wields disproportionate influence and responsibility by supporting multinational corporations and reaping extensive benefits from the extraction of natural resources in the region. Notably, Singapore hosts the world’s largest oil refineries of fossil fuel giants ExxonMobil and Shell, serves as a key commercial hub in the palm oil supply chain, and is the world’s largest bunkering port, amongst other things.
While these industries are extremely lucrative, supplying essential products for modern economies, they also inflict heavy environmental costs. With our economic and technological success built on past and ongoing environmental degradation and exploitation of vulnerable communities in the region, Singapore has a significant responsibility to lead in climate action and adaptation measures for these same countries.
South-east Asian countries, particularly Cambodia, Indonesia, Myanmar, the Philippines, Thailand and Vietnam, are some of the most climate-vulnerable in the world. They face existential threats such as rising sea levels and increasingly intense and unpredictable weather events—heat waves, floods, landslides, storms, wildfires, and droughts. An estimated 157m people in tropical Asia live within 2m above sea level, putting them in imminent threat of coastal flooding and future sea level rise. The Intergovernmental Panel for Climate Change (IPCC) predicts that by 2100, sea levels will rise between 0.6 and 1.1m at current rates of greenhouse gas emissions. In a one-metre sea level rise scenario, 38m people in Vietnam, 28m in Indonesia and 23m in Thailand would be living in a zone at high risk of frequent coastal flooding, even before considering increased urbanisation and population growth. The increase in these climate-related disasters leads to the irreplaceable loss of lives, homes, and livelihoods, and will only worsen without meaningful change.