November 29, 2007 (AAP) – An Australian forestry investment company is working with the Sabah Government in East Malaysia to create financial instruments [biodiversity credits] to allow palm oil producers to participate in forest conservation. The agreement between Sydney-based New Forests and the Borneo state will help protect about 34,000 hectares in the Malua Forest Reserve, which is home to orangutans, Sumatran rhinos and clouded leopards.
In return for an estimated $US10 million ($A11.4 million) investment to create a “conservation bank”, New Forests will sell so-called biodiversity credits in the protected site on the island of Borneo, with the Malaysian Government retaining ownership of the forest.
Biodiversity credits, similar to carbon credits, which create a financial incentive to reduce greenhouse gases, are tradeable securities that reward activities supporting conservation and the sustainable use of native ecosystems.
It was the first time any Malaysian government has entered into an agreement to deliver wildlife conservation on a commercial basis, New Forests said.
Managing director David Brand said the biodiversity credits would be sold to palm oil producers, energy companies and other businesses involved in producing biodiesel – a clean-burning fuel made from renewable sources such as palm oil.
The initiative was modelled on the US endangered species banking market, Mr Brand said.