Greenomics alleges Aceh forest used as collateral in deal
Hotli Simanjuntak, The Jakarta Post, Banda Aceh | The Archipelago | Sat, May 07 2011, 10:38 PM
The Greenomics Indonesia policy development institute says it is opposed to an Australia-based carbon brokerage firm’s move to make use of its partnership agreement with the Aceh provincial administration as an asset for a shares transaction with East Asia Mineral Corporation (EAMC).
“We hope the Aceh administration will not continue with the transaction,” Greenomics Indonesia national coordinator Vanda Mutia Dewi said.
According to Vanda, in the agreement with the Aceh administration, reached in July, 2008, the firm — Carbon Conservation Australia — obtained exclusive rights in marketing and trade in Aceh’s forest carbon credit in the Ulu Masen Block spanning 700,000 hectares.
In its press release on May 3, 2011, EAMC, a Canadian gold mining firm which is exploring gold deposits in Aceh’s forest and listed in the Toronto Stock Exchange, said it would pay US$500,000 in cash and issue 2.5 share units for Carbon Conservation.
Vanda said mechanisms of the shares transaction explicitly stated Aceh’s forest had been placed as collateral through a shares transaction scheme.
Greenomics Indonesia is a local NGO that monitors policy and legal changes in the forestry, mining, oil palm plantation and spatial planning sectors.
While the EAMC has gold mining business interests in Aceh’s forest (Miwah Project), Carbon Conservation Australia has obtained exclusive rights from the Aceh governor to sell and market carbon credit from the 700,000 hectares of forest located in the Ulu Masen forest block.
“Why did Carbon Conservation make Aceh’s forest an asset to obtain funds from the transaction of shares with the EAMC? This is clearly a conflict of interests,” Vanda said.
Carbon Conservation was considered to have abused the partnership agreement with the Aceh administration. “The shares transaction should be rejected outright,” she said.
The Aceh provincial administration is currently studying the case.
“It is true that Carbon Conservation has established a partnership with the Aceh administration, but we are unaware that the partnership deal had been used as an asset in the transaction,” Aceh Green director Yakob Ishadani said.
He said that if the Aceh administration found things that were inappropriate or devious, they would be used as a reference to dispute the agreement on the Aceh forest carbon trade with Carbon Conservation.
Vanda said the motive of the transaction was clearly for the sake of business between EAMC and Carbon Conservation.
She said that large-scale jewelry businesses had boycotted gold taken from mining practices which were deemed not environmentally friendly.
She added that the partnership agreement between the Aceh provincial administration and Carbon Conservation was just a cover up of the EAMC through a shares transaction between both companies. “Aceh’s forests, especially its protected forests, are regarded as environmentally sensitive areas,” Vanda said.
Greenomics Indonesia said the partnership agreement reached with the Aceh provincial administration used by Carbon Conservation as an asset in the shares transaction with EAMC breached Law No. 11/2006 on Aceh administration.
Greenomics has urged the Aceh administration to immediately ask Carbon Conservation to cancel the shares transaction.
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