At present, the majority of offset-like programs in Asia fall within the category of Environmental Impact Assessment (EIA). Countries with EIA laws or policies in Asia include China, India, Japan, Malaysia, Mongolia, Pakistan, Russia, South Korea, and Thailand. The region’s EIA policies lay out a framework for biodiversity markets by requiring adverse environmental impacts to be mitigated. Offset or compensation programs are currently active in China, the Phllippines, Saipan, and Vietnam. Several countries are also host to voluntary offset projects initiated by extractive and agribusiness industries.
Outside of EIA regulations, two compliance offset programs are currently in operation: China’s Forest Vegetation Restoration Fee and Saipan’s Upland Mitigation Bank. In Vietnam and the Phillippines, compensation instruments channel funds compensating for adverse impacts. Elsewhere in Asia, there are early indications that offset programs or policies may be developing in Japan, South Korea, and Israel.
While China has a multitude of ‘ecocompensation’ programs, the majority of them fall under the category of government-mediated payments for ecosystem services. Many focus on water quality and flood mitigation services rather than biodiversity. The one program with a biodiversity compensation focus is the Forest Vegetation Restoration Fee, a national regulatory program that requires developers impacting lands zoned for forestry to avoid, minimize, and then pay a Forest Vegetation Restoration Fee. The program has its basis in the Forest Law of the PRC (1998), with details provided in the 2002 Forest Vegetation Restoration Fee Levy, Use and Management Provisional Measures. The funds from the fee are used by the government for tree-planting and forest restoration activities at a minimum ratio of one square meter mitigated for every square meter impacted.
Saipan, part of the U.S. Commonwealth of the Northern Mariana Islands, hosts the Saipan Upland Mitigation Bank. The bank sets a precedent as the first mitigation bank in the region and follows the U.S. mitigation banking system. Established in 1998 to protect the habitat of the Nightingale Reed-Warbler, a bird on the Endangered Species List since 1970, the bank’s surrounding areas are under pressure from homestead development.
Vietnam is continuing to elaborate on details of its 2008 biodiversity law. In January 2011, Decree No. 113/2010/ND-CP (Nghi đinh sô 113/2010/NĐ-CP) went into effect. The decree regulates damages from pollution and degradation on water, land, ecosystems, and priority species and spells out the process for claiming compensation. Authority is generally decentralized to the provincial level and the Ministry of Natural Resources and Environment, depending on the scale of the damage.
In the Philippines, a compensation mechanism exists in the form of the Environmental Guarantee Fund to channel compensation and associate rehabilitation funds from projects leading to adverse impacts, though it doesn’t appear to be guided by the mitigation hierarchy.
Beyond government-led actions, voluntary and industry initiatives are arising in Asia, driven primarily by increasing public criticism of the environmental and social impacts of extractive and agribusiness industries.
Voluntary offset projects are underway in Mongolia, Malaysia (see details below), Kazakhstan, Russia, Uzbekistan, and India.
In 2008, the government of Sabah, Malaysia teamed up with the Eco Products Fund, a private equity investment vehicle jointly managed by New Forests Inc. and Equator Environmental, LLC, to invest up to US$10 million in the restoration and maintenance of 34,000 hectares of rainforest in a project called the Malua BioBank. The project sells “biodiversity conservation certificates” (BCCs) for the biodiversity benefits of 100-square-meter plots of restoration as well as for the maintenance of the habitat for at least 50 years.