Malua BioBank: biodiversity conservation certificates for a logged forest reserve in Sabah, Malaysia

The Malua BioBank was launched on 14 August 2008 in Kota Kinabalu by the Eco Products Fund, LP, a private equity fund jointly managed by New Forests Inc. and Equator Environmental, LLC, and the Government of Sabah. The press release called it "a first-of-its-kind business model for rainforest conservation". New Forests Asia was to manage conservation activities with the Sabah Forestry Department, and TZ1 Limited was appointed registry. The Malua Forest Reserve, about 34,000 ha, stayed a state forest reserve under a forest management licence held by Yayasan Sabah, a foundation set up by the Sabah government. The state assigned conservation rights for 50 years to the BioBank, and any profit was to be shared between Yayasan Sabah and the BioBank investor. Ecosystem Marketplace reported that logging and palm oil plantations were banned inside the reserve and that a breach would trigger financial penalties against the government.

One Biodiversity Conservation Certificate was issued for each 100 square metres, 3.4 million in all, at US$10 each. Mother Jones reported that New Forests hoped to sell them all within five years, "generating a projected $34 million"; Ecosystem Marketplace gave the projected return as US$36 million. According to Mother Jones the first 20 percent of revenue would go to a trust fund, and the remaining US$27 million would repay investors' original US$10 million plus half of net profits, with the other half going to the Sabah government. The press release said the fund had committed "up to US$10 million" for the rehabilitation of the reserve over six years; Mother Jones wrote that New Forests raised US$10 million from private investors and gave it to the Sabah government to restore Malua and to impose a 50-year moratorium on selling its timber. The sources do not reconcile the two descriptions of where the money went.

The press release named energy, food and cosmetics companies relying on palm oil, and private companies working in or sourcing from Malaysia, as target buyers; it said four Malaysian companies had bought certificates on launch day, without naming them or giving amounts. It stated that buyers "contractually agree that they do not represent an offset against clearing or degradation of other forests". Mother Jones reported that the main prospective buyer was members of the Roundtable on Sustainable Palm Oil (RSPO), who would buy an acre of Malua for each acre cleared in exchange for certification, and that the deal stalled when the RSPO doubted the offset value of biobanks that were not located where members had cleared land. By late 2009 New Forests had sold only US$215,000 in certificates, to the operator of an eco-resort in the Danum Valley and a few logging contractors, according to Mother Jones; IIED (2020), citing Brock (2015), attributed US$215,000 of purchases to four palm oil companies that announced their support in 2012. IIED judged that the project struggled with the stigma of for-profit investment, operated in an immature and weakly regulated market and failed to obtain enough predictable demand to be financially viable.

In 2012 the Sabah Forestry and Wildlife departments, four palm oil companies and New Forests signed a voluntary Malua Wildlife Conservation Agreement providing for joint boundary patrols. A Sabah Forestry Department official said in 2013 that the main threat to Malua was its long, porous boundary, and rangers were still finding snare traps, human trails and signs of hunters. New Forests' 2016 sustainability report said it continued to market the certificates and to explore developing the BioBank as a carbon project, that the fund's term would end in June 2017 and that it was preparing to hand management back to the Sabah Foundation and the Sabah Forestry Department. Its 2022 report records that the Eco Products Fund exited in 2020.

Malua was logged before the BioBank. Ancrenaz and colleagues (PLoS ONE, 2010) reported that logging began in the 1950s and continued to the end of 2007: about 2.5 million cubic metres in a first round (1957–1999) and a second round (1999–2007) over about 20,000 ha, leaving about 43% of the surveyed area degraded and 57% over-degraded in 2007, with orangutan densities of about 1.0 to 2.4 per square kilometre. A land-use paper dates the second round to 2003 to 2007 and says the large dipterocarps were almost entirely removed. Gregory and colleagues (2012) cited a reported extirpation of orangutan population groups in repeatedly and extensively logged forest in the Malua BioBank. The sources reviewed contain no orangutan count or forest evaluation from the BioBank period, and no item on the BioBank itself dated 2018 to 2026.