THE timber industry, despite its substantial and significant socio-economic contributions to the state, is often seen as a ‘big bully’ and an unscrupulous business venture both on the local and international scenes.
Could it be that some big players in Sarawak have over the years extensively extracted forests in the Amazon, Papua New Guinea, Russia and Indonesia — and in consequence, caused the state to be seen internationally as the culprit responsible for environmental destruction?
Could it be that back in Sarawak, reports on the raping of young girls by timber workers have painted a bad picture of those in the industry?
Whether by reasons of events or pre-emptive international non-governmental organisations (NGOs) agenda, the industry is seen as doing more harm than good to mankind and the environment even with all the good deeds it has done — whether economically, through the substantiality of forests or on the back of its corporate social responsibility (CSR). Regrettably, such benevolent acts are often overlooked or even completely wiped out by flagrant misperceptions.
Recently, as forest enforcement officers went all out with the singular concerted aim to eradicate illegal timber logging, the industry, is again thrust into the spotlight.
The damage done to the industry through a misinterpretation by social media and online news portals of the Chief Minister’s speech when the industry’s so-called ‘Big Six’ signed the Corporate Integrity Pledge (CIP) on Nov 17 at the State Legislative Assembly Complex is quite extensive.
“Though it was rectified the very next day — that the Chief Minister Datuk Patinggi Tan Sri Adenan Satem did not accuse the Big Six of being involved in corrupt practices but was only asking them to monitor the activities of their contractors, sub-contractors, camp managers and workers to ensure they are not involved in timber smuggling or illegal felling of timber — the damage done is beyond repair,” a source close to the industry pointed out.
While it is a much welcomed move to eradicate illegal timber logging in the state once and for all, industry players and stack holders believe the industry itself needs much effort to build up and restore its reputation as a genuine corporate entity in international market.
thesundaypost’s political desk spoke to industry players, timber associations and various government authorities for a greater insight into the intricacies of the industry, widely regarded as growth engine that contributes substantially to the economy and development of the state.
Hopefully, this piece — purely viewing the industry from Sarawak’s point of view – could provoke some food for thought among fair-minded, intellectual and caring Sarawakians, and put the industry’s role in its right perspective to underline the need to firstly, recognise there are black sheep or rotten apples in every industry, and secondly, to achieve a fair and just cause for the state to stand united against all outside attacks for the betterment of Fairland Sarawak.
Though high risk and high cost, responsible timber companies would still be willing to participate in forest planting if the state government could come up with a comprehensive and effective policy to govern the industry.
Contributing to state coffers
Sarawak’s economy and wealth have been built largely on natural resources such as timber as well as oil and gas industries since the 60’s.
The timber industry was the biggest revenue earner back in the early days but the oil and gas industry has — gradually — taken over mainly because the latter has increased its production as well as prices.
Comparatively, the timber industry has diversified and turned to other sectors such as agriculture. It has been the lifeline of much of central and northern Sarawak.
In the central region, the industry has given rise to riverine towns and settlements. These regions could not have developed so fast and flourished on their own.
In 1991, the industry in Sarawak reached its peak with a production of 19 million cubic metres of logs. Thereafter, logs production has been decreasing with positive growth in plywood noted and gradually becoming the sector’s main export and revenue earner.
Last year, within the timber sector, the export value of plywood took up 57 per cent (RM4 billion) of export revenue — with logs taking only 24 per cent (1.7 billion) and sawn timber nine per cent (RM617 million).
From 2011 to 2013, the industry, on average, contributed an annual export value of RM7.13 billion and paid RM603,000 in timber loyalties to the state coffers respectively.
Though it has slowed down in recent years due to compliance with International Tropical Timber Organisation (ITTO) recommendations and the agricultural development especially oil palm plantation, the timber industry, being one of the chief contributors to Sarawak’s economic development, remains pivotal in propelling growth in the state.
Sustainability — Forest planting
Forest planting (FP) has been an alternative for natural forests. The state government had, as early as 1965, tested some fast growing species of tropical conifers though it was later found not suitable.
In the early 1970’s, acacia magnum, gmelina arborea and paraserianthes falcataria were experimented and found to be satisfactory. By 1995, there were 13,000 hectares of reforested areas in Sarawak.
FP is recognised as a long-term strategy to provide a new source of wood materials for local timber industry players who, after years of involvement, have gained substantial knowledge and confidence in best ways to manage the industry.
It is also the most effective way to lift pressure on natural forests, not to mention the fact that it will increase the state’s forest cover for environmental preservation.
The raw timber provided by planted forests can also be an alternative to natural timber, especially when there is always an increase in demand for local consumption as well as exports. It has been found fast-growing timber species in planted forests can produce five times as much as timber as natural forests.
Apart from being the source of raw timber, FP is also an effective way to rehabilitate degraded soil areas, caused by shifting cultivation.
Due to its multiple benefits, the government in 1997 had taken the initiative to embark on commercial scale forest plantations to ensure that growth and sustainability of the industry to supplement the state’s reliance on timber as well as for exports.
Consequently, the Forest Ordinance was amended and the Planted Forests Rules adopted to provide establishment and regulations for forest planting.
Those interested in participating, especially the timber companies, are also encouraged by the government through the grant of incentives such as tax exemptions and rebate in forest plantation investment from the federal government.
Other incentives from state government include licence tenure for 60 years whereby four to six rotations are predicted. There is also conditional exemption of annual land rent up to six years from the issuance of licence as well as a policy to allow 20 per cent of the plantable area for oil palm with one rotation cycle of 25 years only.
By 1998, the state issued the first licence for planted forest (LPF). And by 2011, a total of 43 LPFs were issued though one licence was later revoked. The 43 LPFs covered an area of 2.8 million hectares but only one million was considered plantable.
Species planted were mainly fast growing ones with short rotations, ranging from seven to 15 years, depending on intended end uses.
It has been the state’s target to achieve one million hectares of planted forests by 2020. However, progress of forest plantation development is slow — at about 20,000 hectares per year. If the state were to achieve its estimated production of 15 million cubic metres annually by 2020, the industry will have to commit to plant 90,000 hectares per year.
By 2013, production from natural forests had decreased to 8.2 million cubic metres while that from planted forests had increased to 537,000 cubic metres.
As of June this year, there are already 350,000 ha of areas in Sarawak planted with acacia, P. falcataria, eucalyptus, kelampayan, rubber, meranti, kapur and keruing.
FP — A private perspective
According to a stake holder, who is one of the pioneers in FP in Sarawak and has a LPF for 300,000 hectares of planted forests, among the reasons for the slow progress of FP development are land disputes, lack of quality planting materials, research and development, labour shortages, high investment risks as well as lack of coordination between the relevant agencies.
On land shortage, the stake holder said locals shunned working in the forests because of the tough working conditions it entailed, adding that locals preferred white-collar jobs in urban areas.
According to the state foreign labour policy, only Indonesians are allowed to be employed and that puts a lot of restrictions on those interested in participating.
The long gestation period and huge capital investments have contributed to what is often an already difficult situation, not to mention natural calamities such as forest fires such as the one that occurred at Oya Road Forest Reserve. All these point to a high investment risk.
On the field itself — as forestry policy is unclear — there is also confusion, resulting in overlapping areas for those holding timber licences and planting licences.
The stakeholder who runs a legitimate logging company, is also facing the problem of illegal logging.
“We are given an area to plant forests. But within the given area, there might be some unpalatable terrain such as mountain top where it is actually forbidden to harvest any timber for fear of soil erosion. When we follow the rules, other might encroach and fell trees there.
“Then, as LPF holders, we are facing the problems of irresponsible felling of trees which causes soil erosion and degradation of soil quality.
“The issuing and re-issuing of some licences also pose a problem. For example, in the same area, the timber licence holder may stop the LPF holder from felling trees to give way to replanting because valuable timber may still be there after years of being logged,” the stake holder pointed out.
He said at the end of the day, comprehensive and clear policy coupled with sound enforcement of forestry laws were crucial in ensuring successful forest planting within the state.
“Sabah has been more successful than Sarawak because there is an effective department in charge of forestry and related matters.
“For Sabah, the policy is clear. Those with licence to harvest timber are also responsible for forest planting. So after felling the trees, they can replant the area instantly.
“For us here, those given the licence to fell trees are not allowed to replant. What happens is that those given the licence to plant forests have to clear the mess caused by those harvesting the trees. And if there are still valuable trees in the area, there will be disputes between the timber licence holder and the LPF holders,” the stake holder explained.
Apart from ineffective policies, he believes Sarawak also needs to beef up the enforcement units to ensure legal practices within the timber industry.
“The Forest Department Sarawak (FDS) has about 800 staff members; the Sabah Forestry Department has 2,000 while peninsular Malaysia which is the about same size as Sarawak, has 14,000 staff members just to monitor wildlife alone,” the stake holder noted.
He pointed out that while staff strength could be a problem, the situation may be further exacerbated if there was a lack of efficiency and competence to carry out the work.
While they operate in accordance with laws and regulations, the stake holder hoped the state could provide informed guidelines or professional training on forest harvesting as well as forest planting and their certification.
“Only companies with certified worldwide standards should be given licences to harvest timber in the state. The state government must separate the wheat from the chaff.
“As a timber company complying fully with all rules and regulations, we have been blamed for bad practices by some quarters who reap all the benefits from the industry but yet do nothing to pay back to society or the state.
“The state government must also enhance and strengthen its forest policies or ordinances to suit the present market situation and encourage more intensive and extensive involvement of private sector in FP,” he suggested.
The availability of different types of licence for clearing forests and harvesting forests further complicates the matter.
Apart from LPFs, there are other types of licence involving land clearing or the timber industry.
For example, Occupational Ticket (OT) is licence to clear land issued by FDS while Provisional Lease for Plantation (PL) is the licence to clear land issued by the Land and Survey Department.
P3 is licence to clear land but only for PL holders whereas F30 is licence allowing the holder to only fell trees of certain diameter.
Then, there is Belian Licence strictly for felling of Belian trees and Mangrove Licence for harvesting of Bakau trees.
“With so many types of licence for tree felling and land clearing, there is inevitably confusion.
“For example, if there is a news story that some natives are objecting to tree felling and land clearing in their area to pave way for agriculture, those who do not know about the availability of the different types of licence will immediately think timber companies are involved because of the unsubstantiated pre-conceived notion that it must have something to do with timber companies.
“Of course, that’s not true. There are now many companies going around clearing land for agricultural purposes such as turning the land into mini rubber estates or oil palm plantations and they are not timber companies.
“That’s why we hope the government, especially the law enforcement agencies, will be more specific in giving the details whenever there is a case. Without the details, the general public will jump to the conclusion that one of the Big Six is involved,” the stake holder emphasised.
Enrichment planting not recognised
For those involved in forest planting, another mind-boggling fact is the state government’s relunctance in recognising enrichment planting which to the stake holder is the best way to rehabilitate logged over forest.
Enrichment planting means planting trees in the logged over forests. The practice not only enhances tree stocks but also minimises disturbances on the forest itself. It also allows good mother trees to be kept for future harvesting and prevents soil erosion because the forest is not laid bare.
“The state refuses to adopt and recognise enrichment planting, and the reason, I believe, is that there may be difficulties in collecting royalties from a plot of forest which has a mixture of natural trees and planted trees.”
“So when a LPF holder like us come alone, even if we support the concept of enrichment planting, we still have to level the whole forest area as it is one of the requirements for industrial tree planting or FP. Levelling of the land causes great disturbance and thus degrade the whole forest area. That is what we don’t want to see,” said the stakeholder.
Industry gives back to local communities
Though there are government incentives to encourage participation in forest planting, they are grossly inadequate.
“The cost is high, so is the risk. Though soft loans are available, the terms and conditions are difficult to meet.
“Waiving land rent for the initial six years is not enough. As forest planting is an expensive project, we hope the government can waive the land rent we have to pay after the sixth year.
“Under the present system, when paying the land rent, we have to pay the whole lot of it together, including the patches occupied by the natives or for their agricultural land, the area water body such as river occupies and also for the unplantable patches within the area. This is not attractive from our perspective,” the stake holder pointed out.
One major contribution of timber companies is the building of roads and bridges.
NCR problems-blockade
One of the major problems faced by LPF holders is resistance or encroachment from the locals. While the government may mark an area as state land and allocate it for LPF holders to plant forests, the locals may dispute and claim it as Native Customary Right (NCR).
Delicate negotiations have to be carried out with great care to reach an amicable solution. Objections from the local communities usually lead to intense conflicts which often end up in court or as confrontation in the form of demonstrations or setting up of blockades.
“We will always seen as the bad guys and the local communities as the victims, complicated with the intervention of international NGOs.
“And while this happens, the opposition will take advantage of the situation while most Barisan Nasional politicians prefer to stay out for fear of losing votes and grassroots support.
“Land is now such a delicate issue that it has become fertile ground for political exploitation and the most effective way to gain political mileage.
“Though forest planting is a noble and excellent idea to rehabilitate our land and at the same time, extend the lifespan of the timber industry to help the state earn revenue, it’s a venture all businessmen will think twice before taking on,” the stake holder said.
Corporate social responsibility of a local timber company is to provide medical service to the local community.
Logging problems
In terms of logging, the same stake holder who specialised in forestry in his tertiary education pointed out that the main problem is still lax implementation and enforcement of the rules and regulations by the relevant authorities.
In some areas, the relevant departments responsible in monitoring timber industry overlap in their duties while in other areas, there may be lax implementation or total negligence. There is a clear lack of co-ordination between these relevant bodies.
“For example whatever reports we submit to one department, we have to submit again to another except that we have to change the format as the two departments have different requirements.
He suggested that the Inter-Agency Standard Operating Procedures for Performance of Forestry Functions, aimed at streamlining the activities of the various agencies, be made more effective.
“There is a difference between illegal logging and irresponsible logging. Illegal logging is logging activities taking place without permits or licence while irresponsible logging means logging practices that are violating the stipulated rules and regulations.
“It is undeniable that there might be irresponsible logging going on with those with licences. For example, logs below 45 dbh are not supposed to be harvested yet some loggers fell them regardless.
“All these irresponsible and illegal practices can only be stopped by effective law enforcement and stringent monitoring the relevant authorities,” said the stake holder
CSR of timber companies
The stakeholder’s comments were echoed by a corporate social responsibility (CSR) manager of one of the Big Six logging companies.
The manager, who prefers anonymity, said the company had spent millions paying back to society, especially the local communities.
He pointed out that first of all, the timber company had been responsible for providing the local communities with basic amenities such as electricity (through the generator sets) and clean water (through water pipes or mini-hydro dams); repairing their longhouses and even building new ones or providing raw materials for their houses, schools and places of worship.
Regular visits would also be made to carry out maintenance of these basic amenities.
Moreover, the logging company also helped in site levelling for agriculture purposes as well as making transport arrangements for children of the locals to go to schools and the locals themselves to go to clinics. The company also provided fuel, among others.
“We believe in empowering the affected communities by teaching them skills for a sustainable livelihood. So we come up with a Community Skills Programme whereby the local communities will be taught skills on vegetable and fruit farming, fish farming, poultry and animal husbandry.
“A number of pilot projects are underway. When fully developed, they will enable the communities to be self-supporting even when our companies move out of the area,” the manager said, adding that there had been on-going medical outreach to ensure the local communities received medical care.
In terms of education, since 2011, the company had been giving bursaries to Curtin University and 51 primary as well as seven secondary schools in its area of operation such as Baram, Bintulu, Belaga and Lawas.
“We also give annual scholarships to students with outstanding academic credentials and leadership potential. Since the beginning of our scholarship programme, we have awarded a total of 64 scholarships, amounting to RM1.59 million, to students pursuing different courses in both local and overseas universities.
“From the group, there was a Kenyah PhD student, Dr Nelson Richard Seiling, who we supported financially during his medical studies in Russia. Now he is practising at the Marudi Hospital,” the manager pointed out.
In 2009, the logging company also signed a memorandum of understanding to provide two-year industrial or vocational training such as wielding and heavy equipment maintenance to the local youths.
“We sponsored 63 of them and on graduation, they were absorbed by us and now still working for us,” the manager revealed.
It has been an undeniable fact that logging companies are the catalyst in opening up roads to connect the most rural communities to the urban areas.
“We are not sure about other logging companies, but for our group alone, we have opened and built a total of 10,899km of road including 2,704km of main road, 1,857km of secondary road and 6,338km of village feeder road.
“Apart from that, we have constructed 81 bridges to connect these roads,” said the manager.
Education is high on agenda for timber companies when they carry out their corporate social responsibility.
Logs legality
In 2009, the state government implemented the Log Tracking System (LoTS) where modern technologies were employed to facilitate tracking along the chain of custody.
“With LoTS, each log reaching the timber mill or export point could be verified for royalty assessment and also traced back to the felling site in the forest,” Second Minister of Resource Planning and Environment Datuk Amar Awang Tengah Ali Hasan was quoted as saying.
In Sarawak, ‘legal logs’ are logs harvested in compliance with laws and regulations stipulated by the forestry authorities for licensed persons of approved areas.
Legal logs bear marks or stamps of verification from the relevant authorities whereby the origin of the logs is easily traceable and accounted for.
The whole process of log traceability starts from the forests — when a log is felled — to its last destination of either ending up in mills or export points, and the process includes critical stages and mechanisms for log identification, recording of production, royalty assessment and control of log movement, controlled and monitored by LoTS.
LoTS is to make available data in real time to authorised stakeholders such as Forestry Department Sarawak, Sarawak Forestry Corporation, licensees and auditors. Through LoTS, it is possible to detect irregularities such as tag/Log Production Identity (LPI) duplication and false declarations.
Conclusion
Many industry players who are genuine businessmen observing the rules and regulations, feel it’s unfair to categorise them as ‘bullies’.
One of them said: “It’s like playing a game. People inside the field follow the rules and score. There are also people playing outside the field without any regard for the rules, but they also score.
“Due to a few rotten apples, timber companies are all blacklisted or blamed and all their contributions to the state or society are nullified or totally ignored. For years, Sarawak’s timber has been so tainted.
“We thus support the Chief Minister Tan Sri Adenan Satem’s determination to clean up the industry and hope his initiative will be successful so that Sarawak’s timber will finally get its name cleared,” the stakeholder stressed.
A journalist — by his innocence or genuine desire to know the answer — asked the Chief Minister recently: “Do you mean there was no illegal logging previously?”
Indeed, will the Chief Minister be able to wipe out illegal logging completely when it has been there for decades?
How long will it take for the industry to be fairly viewed and appreciated for all the CSR projects and the revenue it has contributed towards the state’s growth and development?
The Chief Minister has answered the journalist that it was there long ago but the state was determined to put a stop to it.
It’s the same hope shared by the Big Six, the genuine industry players and law-abiding Sarawakians to keep the timber industry free of corruption and illegal activities.
Forest planting is an effective method to rehabilitate logged over forests.