KOTA KINABALU, Dec 8 — Little light has been shed over Sabah’s controversial carbon credit deal in the state assembly even after Deputy Chief Minister Datuk Seri Jeffrey Kitingan attempted to offer his explanation.

The state agriculture and fisheries minister again found himself in the hot seat as he was grilled over the carbon trading deal, called the Nature Conservation Agreement, but offered scarce new information, except to concede that the deal has yet to proceed because an addendum was not finalised.

Kitingan started off by clarifying that there was no “selling” of land as alleged by Opposition leader Datuk Seri Mohd Shafie Apdal, as any land designated would be under the Forestry Department and the state would not lose rights over it. He then asked the latter to retract his words which he said were damaging and untrue.

Shafie, however, said he did not want to retract his words, and asked Kitingan to be clear on whether the state government has approved the decision and who was put in charge of it.


After several attempts to evade the question, Datuk Ahmad Abdul Rahman instructed Kitingan to answer the question, to avoid the debate from dragging on, and accused him of “playing with words”.

Kitingan eventually told the House that the chief minister was given the mandate by the Cabinet to carry out the deal which was then handed to Kitingan to realise.

“So I have the locus standi to answer,” he said.


Kitingan then pointed out that the deal started with the Warisan government, to which Shafie retorted that he had turned it down without bringing it to Cabinet.

Kitingan also defended the third party, Hoch Standard, which was alleged to have a US$1,000 (RM4,225) paid-up capital in Singapore, which he explained was a global player who registered in the island republic for a platform.

“Hoch Standard has nothing to do with Kinabalu Point or Tierra Australia. They are a global player, with a stage for this business. They are a SPV — a Special Purpose Vehicle to triple A off-takers.

“When you trade carbon credit, you need this group of people. If we had the capacity to do it, why didn’t we do it all this while? Now we have an HS platform. They are given a trial of 600,000 hectares, if they succeed, then only will we increase the size. Give them a chance to do it. You cannot preempt them. When it is done, I will prove to you these people are real,” he said.

Unconvinced, Shafie later brought up a letter by the state attorney general (AG) who questioned the Singapore-based Hoch Standard’s credentials, and subsequently, instructed them not to proceed with funding activities for the NCA.

He read this along with an alleged exchange between Kitingan and Hoch Standard managing director where Kitingan told him that there was no question of credentials and to proceed with the terms of the NCA.

“You advised Mr Ho to proceed in spite of the AG’s instruction not to?” asked Shafie.

Kitingan then said, “There’s no contradiction here. That’s a question of timing. At the time, the AG had not yet received this,” he said, holding up a binder titled “Hoch Standard Pte Ltd related document — Confidential”.

“And there is no addendum yet. So now no conflict; just a matter of timing. That’s it.”

Ahmad then asked whether Kitingan was confirming the authenticity of the letter and the exchange, which he said Standing Orders would not allow if it was not.

Kitingan then said he would rather finish reading his winding-up speech. He did not entertain any more questions from the floor, even at the Speaker’s advice.

The NCA was signed in a discreet ceremony on October 30 by the Sabah Conservator of Forests and Hoch Standard with Kitingan as witness, without the knowledge of most Sabahans.

When news broke, many groups, including the public, conservationists and environmentalists, cried foul over the process which it was carried out — without transparency, and engaging a third party with no background in the industry to be paid 30 per cent of the profits.

Opposition lawmakers also made their concerns known during this state assembly sitting, with many supporting a carbon trading agreement, but criticising the manner in which the deal was carried out.