Posted on octubre, 26 2010

A new report released today by the three Bornean governments - Brunei, Indonesia and Malaysia - is a leading example of how the economic value of forests is being recognized and secured through innovative finance.

The report: ‘Financing the Heart of Borneo – a partnership approach to economic sustainability’, outlines three main sources of finance for conservation and sustainable development activities within the 22 million hectares of trans-boundary tropical rainforest on the island of Borneo - known as the Heart of Borneo (HoB).

Two of these sources; in-country government based (such as royalties, incentives and tax breaks s) and market based (such as payments for watershed services, REDD+ and bio-prospecting) are sustainable in the long term. The third source, the more conventional donor funding, is seen as an interim form of funding to help build the enabling conditions for the first two.

The new tri-governmental report sets out a pathway to understand the economic value of the HoB’s natural capital in terms of the ecosystem services it provides, such as carbon storage, regulating water flow and providing new genetic resources for medicines.


Bio-prospecting in Brunei

Haji Saidin Salleh, from Brunei’s Ministry of Industry and Primary Resources, said the report is the first of its kind which demonstrates that protecting forest ecosystems in the HoB makes economic and social sense.
As an example, the Brunei government in partnership with the Japanese National Institute of Technology and Evaluation, is currently exploring the potential for ‘bio-prospecting’ of its rich forest and biological genetic resources.

“Brunei recognizes the tremendous value that the Heart of Borneo represents to the world, in terms of eco-system services and as yet undiscovered chemical compounds. The will to protect the area for future generations is very strong, but we need to generate additional financial support to achieve this vision – this report is our first steps to identifying where that support may come from,” he said.

Watershed protection payments in Indonesia

Indonesia’s HoB representative, Dr Andi Novianto from the coordinating Ministry of Economic Affairs said a crucial next step in securing sustainable sources of finance is to mainstream forest and watershed services in to national and local development plans.

For example, in the conservation district of Kapuas Hulu in Kalimantan, an on-going initiative supported by WWF, CARE and the International Institute for Environment and Development seeks to reward upstream communities for their stewardship of crucial watershed areas which provide a valuable ‘service’ to users downstream.

“The Kapuas Hulu project is our first ‘district level’ pilot program. The long term aim is to encourage all ten districts in Kalimantan to maintain their forests, in return for which, they would receive financial compensation for the carbon stored, biodiversity protection and ecosystem services that these forests provide the island, country, region and ultimately the world,” Dr Novianto said.

Malaysia’s Malua BioBank

Malaysia too has developed innovative financial arrangements, as the report demonstrates with the Malua BioBank in the Bornean state of Sabah. Here, the Sabah government has licensed conservation rights for 50 years to the Malua BioBank, with a private investor committing up to US$10 million for the rehabilitation of the Malua forest reserve.

International support at the CBD

Speaking at the report launch, Dr. Ahmed Djoghlaf, Executive Secretary of the Convention on Biological Diversity (CBD) said multi-national and multi-lateral agencies need to continue efforts to finance conservation and sustainable development and the HoB is proving to be a sound investment.

"It is my pleasure to launch the HoB sustainable finance report. This is important for the negotiators of this Convention as it shows how the ecosystems of HoB can be a part of a sustainable future. It is a call to stop talking, and start acting!" said Dr Ahmed Djoghlaf.

Leading global conservation organization, WWF, assisted the three governments in the preparation of the report and its Director General, Jim Leape, was on hand at the launch to pay tribute to the progress that had been made in the three years since the signing of the HoB Declaration.

“All three Bornean countries should be congratulated for their commitment towards this trans-boundary conservation programme and the progress made so far.”

“Finding appropriate sources of sustainable finance will be vital to tri-government conservation and development efforts for the HoB. We need to capitalize on the value of nature and mainstream it within economic development plans. It is obvious that protecting ecosystems and biodiversity makes long-term economic sense,” he said.