A new report by the Bruno Manser Fund sheds light on the Sarawak timber sector's corruption and abuses, its close links with the Taib government and its leading role in the destruction of the world's forest environments. The report exposes the Sarawak timber industry's complex structure and its intimate links to Abdul Taib Mahmud (Taib's) who has been Chief Minister (head of government) of the Malaysian state on Borneo since 26 March 1981.
The study entitled Development of global timber tycoons in Sarawak, East Malaysia - History and company profiles examines the Sarawak tropical timber industry's development during the past three decades and shows its leading role in the cutting down of the world's forests, and particularly the tropical rainforests in South East Asia. The report is authored by researcher Daniel Faeh of the University of Bern'“s Economic Geography Group.
Thanks to windfall profits accumulated from destructive logging on their home turf, timber groups from Sarawak such as Samling, Rimbunan Hijau, WTK, KTS, Shin Yang and Ta Ann accumulated capital which allowed them to expand their business operations all over the globe. They are now operating not only in South East Asia but also in Australia, Africa, Central and South America, Russia and the Pacific. "Their track records of diversification and internationalization, however, go hand in hand with the violation of human rights, political patronage and the destruction of the environment in their home country and many other parts of the world", the study states.
"When it comes to land allocation, land tenure and native customary rights, the state of Sarawak still lacks a great deal of transparency and legitimacy", the author says. The study identifies the specific politico-economic situation in Sarawak" as the main driver behind the state's rapid deforestation, particularly the fact that Chief Minister Abdul Taib Mahmud (who is also Minister of Planning and Resource Management) "has absolute control over the allocation of timber licences and logging concessions to himself, his allies, friends and family. As a result, it is not surprising that the land claims of local indigenous groups have been systematically neglected."
The report identifies the Sarawak Timber Industry Development Corporation (STIDC), an official body headed by the top-political elites of the state, with controlling functions over the forestry sector, as "Sarawak's seventh major timber group". "The independent controlling functions of STIDC (e.g. illegal logging, import and export duties) can be very much questioned on account of its conflicting business interests (timber concessions, logging and manufacturing activities).
In terms of their size, the report ranks the Sarawak timber groups according to the size of their timber concessions in their home state. Samling (over 1.3 million hectares) and Rimbunan Hijau (over 1 million hectares) rank first, followed by WTK group (850,000 hectares) and the Ta Ann group (over 557,000 hectares) Two other major players, the KTS group and the Shin Yang group cannot be ranked due to insufficient transparency with regard to the concessions held by them. All these timber groups also hold major oil palm plantation land banks. At least four timber tycoons rank among Malaysia's top thirty richest people. Tiong Hiew King of Rimbunan Hijau, Yaw Teck Seng and Yaw Chee Ming of Samling Group, as well as Ta Ann's chairman Abdul Hamed Sepawi, who happens to be the first cousin of Sarawak's Chief Minister Abndul Taib Mahmud.
A closer look at the individual companies shows that the Samling group, which has recently been blacklisted by the Norwegian Government, has a long track record of illegal logging and severe environmental damage in Cambodia, Guyana, Papua New Guinea, the Solomon Islands and Sarawak. Samling is controlled by the Malaysian Yaw family. Other significant shareholders of Samling are Ahmad Bin Su'it, who is the spiritual healer ("bomoh") of Sarawak Chief Minister Abdul Taib Mahmud, as well as Hamed Sepawi, Taib's first cousin and chairman of the Ta Ann group.
Rimbunan Hijau group is notorious for human rights abuse, the violation of indigenous peoples' rights and severe environmental damage in a number of countries, including Malaysia (Sarawak), Papua New Guinea and Russia. Its controlling owner, Tiong Hiew King, and his family members have diversified from timber into the media sector, banking, property development and shipping. Tiong controls four Chinese newspapers in Malaysia with a combined circulation of approximately 2.6 million, as well as newspapers in Cambodia, Papua New Guinea, Hong Kong, Canada and the US. Rimbunan Hijau's board of directors comprises the former chief of the Malaysian army, Abdul Rahman Bin Abdul Ahmid, and the former Sarawak Commissioner of Police, Talib Bin Haji Jamal.
The WTK group, which is controlled by the Wong brothers, is involved in large-scale forestry operations in Malaysia, Papua New Guinea and Indonesia. It was also formerly active in the Republic of Central Africa and Brazil where it was accused of illegally logging indigenous peoples' lands in the Amazon. WTK has become a key player in the Sarawak oil palm industry and has diversified into land devlopment, trading, manufacturing and the food industry. One of its directors, Abdul Manap bin Ibrahim, is the former Deputy Chief of Army of the Malaysian Armed Forces.
The Ta Ann group is controlled by Hamed Sepawi, Sarawak Chief Minister Taib Mahmud's first cousin, and Wahab bin Haji Dolah, a member of the Malaysian parliament who represents Taib's party PBB in Kuala Lumpur. Besides its logging and plantations operations in Sarawak, Ta Ann is also involved in the highly controversial logging of old-growth temperate rainforests in the Australian state of Tasmania.
The Lau-family owned KTS timber and plantation group has invested extensively in the media sector and owns The Borneo Post, Sarawak's main English-speaking newspaper that successfully distorts and suppresses local concerns over the Sarawak timber and plantation industryr. Abdillah bin Wan Hamid, the former General Manager of the Sarawak Timber Industry Development Corporation, holds 20 % of KTS' shares.
The Shin Yang group is run and owned by the Ling family, whereby Pelita Holdings, an official body controlled by Sarawak Chief Minister Abdul Taib Mahmud, holds 26% of its shares. Gerald Rentap Jabu, son of Sarawak Deputy Chief Minister Alfred Jabu, is a member of Shin Yang's board of directors. Shin Yang is strongly involved in logging and shipping and is also aggressively venturing into the oil palm sector. The group holds a 30% share in the Malaysian stock exchange listed Sarawak Oil Palms (SOP). In 2009, Shin Yang was strongly criticized by Malaysia's Human Rights Commission SUHAKAM for its dealings with Sarawak's native communities.
The outcome of a patronage-based development model
The report concludes that Sarawak's patronage-based development model has resulted in severe environmental destruction and a very unequal distribution of wealth and economic opportunities. Right up to the present, the system of political patronage is still fueling the destruction of the rainforest in Sarawak, and local indigenous groups like the Penan are still fighting for nothing more than their legitimate rights to their land. The outcome of these past decades of timber industry development is huge timber tycoons, who now not only dominate the timber industry in Malaysia but also control many other important industries in Sarawak, including oilm palm, construction, property development, shipping, trade, tourism and media.
The report underlines the fact that Sarawak is one of the resource-richest states in Malaysia and earns billions of US dollars a year from timber and timber products plus the same amount again from crude oil, natural gas and palm oil. However, the government and the political elites have not only ignored the rights of local indigenous groups, they have also failed to distribute the timber wealth and revenues equally to the people of Sarawak.