Open Case Studies/FRST522/Malaysia

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Illegal logging in Sabah, Malaysia by Jiadong (Donna) Ye


Malaysia had approximately 20.46 million ha (about 62% of the land) of forest cover in 2010. However, its forest cover fell to 18.5 million ha (about 56.4% of the land) after only one year. Undocumented logging has been recognised as the dominant driver of deforestation in Malaysia.[1]

Forest logging in Malaysia

The government of Malaysia started forest management in the 1900s. According to the Federal Constitution of Malaysia, each state has its own power of administration and management of the forests. Although the states have their own rules for forest management, the National Forestry Act of 1984 and the National Forestry Policy of 1978 are the two dominant laws in Malaysia. Particularly to the State of Sabah, forest management and use are mainly governed by the State Forest Policy of 1954 and the Forest Enactment Policy of 1968.[2] Although natural resources governance varies in each state, deforestation due to expanding industrial forestry and agricultural plantation is severe in the entire country[3].

History of land ownership and logging in Sabah

Map of Sabah (the area in red)

Sabah is located in the north of the large island of Borneo. It used to be governed by the English Brooke family, the so-called White Rajahs Sulu Sultanate, and was later controlled by the British North Borneo Company in 1881. After a long period of British colonization, the area joined the Malaysia federation in 1963 as the State of Sabah. In the mid-1990s, a political party intervened and stripped Indigenous peoples' ownership of their land. Nowadays, it is the state government which owns the forests. In theory, Indigenous land rights should be protected under the Sabah Land Ordinance 1930 and the Sarawak Land Code. In practice those laws have been ignored, impeding the customary rights, and focusing on developing logging and other activities.[4]

The State of Sabah had about 10% of Malaysia's primary forest, but most of the forests in Malyasian Borneo have been damaged by logging[5], and the remaining forest stands are usually found degraded by oil palm plantations[6]. In Sabah, both the forest cover and forest quality have declined since the period of logging, tabacco and rubber plantations introduced by colonials between 1890 and 1930. More than one third of the natural forest was destroyed over a century, especially in the 1970s and early 1980s.[7] Intensive logging in Borneo started after World War II. At the beginning, only the trees that are most highly-valued and can be easily accessed were cut. Later the logging pattern changed because of the high revenue that could be derived from some of the world's most valuable hardwood timber in the rainforest. In the 1970s, a large global demand for timber stimulated the logging in Sabah and in the entire Borneo forests.[8] Logging has been affecting around 80% of forests in Sabah[9]. Sabah has one of the highest rates of timber extraction in the tropical area, which can be as high as 120 m3 ha-1[7]. In the past 30 years, over extraction of timber and massive conversion from forestland to other land uses have severely degraded the forest resources in Sabah[10]. Although Sabah has better regulations on forest conservation and reforestation compared to other states in Borneo, there still are concerns about weak enforcement of the rules and the potential of land conversion for oil palm by the government[8].

The Problem of Illegal Logging its Implications: A Forestry Perspective

In Malaysia, illegal logging is defined as "any activities that include offenses relating to logging without permit, logging outside a licensed area and construction of infrastructure including unauthorized building of forest roads"[11]. About 35% of the forest production in Malaysia is illegal[12].

Illegal logging has serious impacts on different aspects of the environment and the society:


Along with invasive species and clearing for oil palm plantations, illegal logging is one of the three biggest threats to forests in Malaysia[2]. As a consequence of illegal logging, some highly valued species are locally extinct in their natural habitats. For example, Ramin (Gonystylus spp.) is popularly used as a decorative timber, and fetches a high price. Unfortunately, deforestation and degraded habitat caused by illegal harvesting for the international market are driving a great decline of the Ramin population in Malaysia. All parts and derivatives of Ramin are now on the CITES list.[2] Cleared land, increased number of roads and logging trails and poaching are all threatening the endangered species in Malaysia.

Logging can have broad impacts on the environment and the whole forest ecosystem. Logging destroyed 80% of Malaysian forests in Borneo. From 1990 to 2010, Malaysia experienced a fast deforestation rate, and lost 1,920,000 ha of forest cover. Deforestation and forest degradation at this scale can result in a large amount of carbon emission.[13] It also threatens biodiversity in the tropical areas. As logging trails create access, more extraction and land conversion can then follow in intact forests. Increased woody debris due to logging makes the micro-climate drier, which causes the forests to become more vulnerable to extensive fires. Loss of timber also leads to further de-gazettement in Sabah.[7] Fragmented forests will lose essential ecosystem services that humans and wildlife rely on for living. Malaysia provides habitats for 15,500 species of higher plants, 746 birds, 300 mammals, 379 reptiles, 198 amphibians, and 368 species of fish[5]. Deforestation and forest degradation resulting from logging and land conversions can have devastating impacts on biodiversity due to decreased resources and suitable habitats.


In 2011, the forest sector provided approximately 210,000 jobs and accounted for $5.7 billion (2%) of GDP of Malaysia[9]. The timber industry has been a foundation of the economic development in Sabah[14]. Production from both natural forests and plantations contribute significantly to economic growth in Sabah[9].

The strategy in action maximizes the short-term economic rent, but puts forest quality and yield at risk for long-term considerations[7]. The conventional forest management system is criticised due to its negative impacts on the environment[15] and unsustainable yield[7]. However, sustainable forest management has not been implemented in Sabah, except in a small forest called Deramakot[7]. The higher cost of sustainable forest harvest is one of the barriers of moving away from traditional management. Compared to the old management regime, the cost of sustainable management and harvesting can increase by 41% per m3 of timber and 38.5% per ha.[15]

Malaysia and its forest products are highly engaged in international trade. Malaysia exports nearly 5 million m3 of tropical logs every year[15]. It is ranked as the 8th largest sawnwood exporter, and the 10th largest wooden furniture exporter in the world[15]. Exported products from Malaysia mainly flow to Asian countries, the US and Australia[2]. Japan is the major importer of plywood from Malaysia, followed by India, Singapore, South Korea, Thailand and China for plywood, logs, sawnwood and paper. The US and the EU also import a notable amount of wooden products from Malaysia.[9]

The State of Sabah is not only a timber producing region, but also a significant importer of illegal logged timber. The official data show that imports in Sabah were 3.5 higher than the exports, and about 90-97% was imported illegally which is up to 33 times greater in volumes than the official records. Illegal loggers sell their timber to the mills in Sabah by paying bribes for permits, royalties to village heads, and bribes to police and military for transport. However, the amount they spent as bribes was higher than the potential revenues from logging.[16] Illegal logging and corruption break the normal market rules. It places economic pressure on the loggers and the producers, while the government agencies and other regulating bodies take advantage of benefits generated by illegal logging industry. Illegal imports also worsen logging and deforestation in other log producing regions such as Indonesian Borneo[16].


In Sabah, land tenure is held by the state government[10], and forest management and conservation activities are primarily guided by four regulations[2]:

Current laws and acts regulate forest production licensing and land use, while there are still some gray areas of overseeing and responsibilities that need to be addressed. In the Forest Enactment of Sabah 1968, the decisions on changing state land to forest reserves made by the Forestry Department can be legally challenged. However the law does not authorize challenging any failure of government to apply the forest laws. Another act that specifically tackles illegal logging is the Anti-Corruption Act of 1997 (followed by Malaysian Anti-Corruption Commission Act 2009). The Act punishes corruption and bribery by fines and imprisonment which also applies to high-ranking officials. However, the current political system still allows corruption to happen. In Sabah, the authorized Conservators are capable of issuing licences for activities such as removing forests products from forest reserves. The chief minister can alter the conditions of a licence. However, there is no legislative supervision over the work done by the federal government's forest agencies. Lack of independent forest monitoring system also poses problems in such areas as inspecting timber export requirements and imports from Indonesia which are supposed to be prohibited.[9]

International political interventions are actively dedicated to mitigating climate change and sustainable management of forests in Sabah. Although it is acknowledged that deforestation is a result of illegal logging, whether programs like REDD+ can solve illegal logging are still under evaluation. Sabah is still under negotiation for a Voluntary Partnership Agreement (VPA) under the EU Forest Law Enforcement, Governance and Trade process (FLEGT). Sabah is establishing timber legality assurance systems that outline the legality criteria and processes for verifying legality, and identifying the scale of forestry information that should be open to the public.[9]

It is stated that there are three categories of property rights (i.e. State property rights, private property rights, and communal property rights). However, there is no solid record showing the area of land under each category.[10] Although the 1984 Forest Enactment recognises de facto Native Customary Land Rights of ethnic groups[7], allocation and management of rights to harvest timber are unclear. The allocation of forestry licences does not seem to require any competitive process nor consultation with local communities[9].


In Sabah and other states in Borneo, forests are highly valued as an essential ecosystem that provide local people with physical, cultural and mental health services. Forests can benefit people by protecting communities from extreme climatic events, supplying fresh water and air, and producing plants to be used as traditional medicine. Researches also find that deforestation may have led to the loss of forest-related culture and spirits for a long time.[17]

There are about 25,000 people living in the forest reserves or on the fringes in Sabah[10]. Unfortunately, the native customary land ownership has been jeopardized because the forests are categorized as forest reserves where logging permits are given without acknowledging Indigenous communities[4]. Illegal logging in Sabah and other states in Borneo is regarded as an essential way for local people to make a living. Illegal logging almost becomes the only income source and a very alluring business for locals[18]. For Indigenous groups such as the Penan in Sarawak, their livelihoods and cultures are tightly related to the forests. Thus, the impacts of commercial logging and forest loss are destructive to Indigenous peoples in Borneo[19].

Because of the ambiguous tenure system, Indigenous peoples and local communities can hardly declare and justify their property rights. Most communities do not fully understand their rights stated in the Land Ordinance. A number of communities are still not officially granted their traditional lands.[10] Additionally, cases of land use in Tawau implies that the land which should be turned back to Indigenous peoples are assigned by the government agencies for other land uses such as sold to companies for plantations[4].

Public attention to illegal logging and exposure of the issue on social media can indirectly reflect the effectiveness of current policies and programs. The quantity of publications about illegal logging in Sabah has been showing a decreasing trend since 2007[9]. Less publication may be caused by decreasing interests from researchers and media, reduced transparency of information available in the public domain for researchers, or simply slow progress in efficiently tackling illegal logging.

The Problem of Illegal Logging its Implications: Layering Perspectives

The information above outlines the problems associated with illegal logging in Malaysia and its implications from the perspective of a forestry student. In this section we welcome contributions from other perspectives. Those interested in contributing to this case study may use the following questions as a guide:

  1. How do scholars and professionals outside of forestry conceptualize the practice of illegal logging in Malaysia?
  2. What are other possible ways of framing this problem?
  3. What other implications become apparent when illegal logging is viewed through the lens of other disciplines and professions?
  4. What special expertise, resources, or theoretical orientations might others bring to help us better understand the issue of illegal logging in Malaysia?

Assessments and Recommendations: A Forestry Perspective

Shifting away from oil palm cultivation

Oil palm and rainforest fragment in Borneo

Oil palm is a major cash crop and one of the main drivers of forest conversion. The government's goal of development and economic obligations pose a big threat through official facilitation of a large expansion of oil palm plantations. In Sabah, oil palm plantationz are under expansion in order to meet the government's target of 5.6 million ha by 2020[9]. Clearing forests to plant cash crops like oil palm seems the only way to meet the government's economic obligations when the returns from conventional forest production are not adequate[8]. Instead of destroying forests for making profits, the government should strive to find economic alternatives while conserving forests at the same time. The state government should also modify its views on economic development to be more compatible with sustainability for both the environment and livelihoods.

Regulating supply and demand

Inadequate legal timber supply is one of the drivers of illegal logging. One suggested solution is restricting the licencing of mills with poor productivity. There should also be technical, financial and consultative supports for the timber industry to help advance the supplies of better quality and quantity of timber. In addition, regulations and international trade agreements should be negotiated to control the demand for illegally logged timber. The negotiations between the EU timber market and Peninsular Malaysia through the FLEGT VPA is an example of effectively reducing illegal logging in Peninsular Malaysia. Sabah and other states in Malaysia should also consider entering the negotiation[15], or initiating a similar process with its main export destination countries. Once the demand for illegally harvested timer decreases, the problem of illegal forest activities in producing states can be alleviated.

Establishing an independent monitoring system

Currently, it is an organisation authorised by the Malaysian government which takes the responsibility for monitoring forestry activities[9]. The government should establish an independent forest monitoring system as a basis to support forest conservation and sustainable production in the long term. History shows that forestry can become "the money pot for politicians" if the state government is controlled by a party that acts against the federal rules[8]. An independent monitoring system can help tackle corruption, especially with regard to the process of timber allocation and agricultural activities[9]. The government should also create a transparent system that is receptive to public review and innovation in order to sustainably manage forests in the long term.

Legally defining Indigenous tenure and rights

A great challenge facing local communities is the lack of legal recognition of their customary rights[10]. In Sabah, the absence of jurisdiction to identify land tenure (e.g. customary land or private land) has become a source of conflicts among local communities, between communities and licence holders or the government[15]. The policies and laws should be amended to develop the land tenure system with clear definitions of different types of property rights and responsibilities, precise records on the land areas under each type, as well as systems to improve the supervision over the tenure.

Assessments and Recommendations: Layering Perspectives

What recommendations might someone from another discipline or profession make to combat the issue of illegal logging in Malaysia? Examples might include:

  • Law
  • Geography
  • Environmental Science
  • Social Justice
  • Economics
  • History
  • Anthropology
  • Philosophy

External Links

Sabah Forestry Department

FAO Voluntary Guidelines on the Responsible Governance of Tenure

The Royal Institute of International Affairs (Chatham House)

The Center for People and Forests (RECOFTC)


  1. Forest Legality Alliance. (2016). Malaysia: Forest industry in Sabah. Retrieved October 31, 2016 from:
  2. 2.0 2.1 2.2 2.3 2.4 Forest Legality Alliance. (2016). Malaysia. Retrieved October 31, 2016 from:
  3. Hoare, A. (January 21, 2015). Corruption and poor governance impede progress in the fight against illegal logging in Cameroon and Malaysia. Chatham House. Retrieved October 30, 2016 from
  4. 4.0 4.1 4.2 Minority Rights Group International. (n.d.). Malaysia - Indigenous peoples and ethnic minorities in Sabah. Retrieved November 8th, 2016 from
  5. 5.0 5.1 Mongabay. (February 4, 2006) Malaysia. Retrieved November 8th, 2016 from
  6. Butler, R. (July 22, 2012). Sustainable logging in the rainforest. Mongabay. Retrieved November 8, 2016 from
  7. 7.0 7.1 7.2 7.3 7.4 7.5 7.6 McMorrow, J., & Talip, M. A. (2001). Decline of forest area in Sabah, Malaysia: relationship to state policies, land code and land capability. Global Environmental Change, 11(3), 217-230. Retrieved from
  8. 8.0 8.1 8.2 8.3 Butler, R.A. (July 17, 2012). Industrial logging leaves a poor legacy in Borneo’s rainforests. Mongabay. Retrieved November 8th, 2016 from
  9. 9.00 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 9.10 Hoare, A. (2015). Illegal Logging and Related Trade: The Response in Malaysia. Chatham House. Retrieved from
  10. 10.0 10.1 10.2 10.3 10.4 10.5 Toh, S. M., & Grace, K. T. (2006). Case study: Sabah forest ownership. FAO. Understanding forest tenure in South and Southeast Asia. Forest policy and institutions working paper, 14, 254-279. Retrieved from
  11. Gani, I. Q. L. M., Wahab, R., & Rasat, M. S. M. (2013). An overview of illegal logging situation in Peninsular Malaysia. Journal of Tropical Resources and Sustainable Sciences, 1(2), 24-30. Retrieved from
  13. Yeo. (July 18, 2013). 80% of Malaysian Borneo’s rainforests destroyed by logging. Climate Home. Retrieved November 8th, 2016 from
  14. Forest Legality Alliance. (January 1, 2014). Forest industry in Sabah. Retrieved on October 30, 2016 from
  15. 15.0 15.1 15.2 15.3 15.4 15.5 Ghazali, D.B.H. (n.d.) Malaysia and the VPA. International Timber Trade Organization. Retrieved October 30, 2016 from
  16. 16.0 16.1 Nellemann, C. (2012). Green carbon, black trade: illegal logging, tax fraud and laundering in the world's tropical forests. United Nations Environment Programme, GRID-Arendal. Retrieved from
  17. Abram, N. K., Meijaard, E., Ancrenaz, M., Runting, R. K., Wells, J. A., Gaveau, D., ... & Mengersen, K. (2014). Spatially explicit perceptions of ecosystem services and land cover change in forested regions of Borneo. Ecosystem Services, 7, 116-127. Retrieved from
  18. WWF Global. (2016). Threats to Borneo forests. Retrieved October 30, 2016 from
  19. Yeo. (July 18, 2013). 80% of Malaysian Borneo’s rainforests destroyed by logging. Climate Home. Retrieved November 8th, 2016 from