Shifts in the Forest and Land Use Policy Environment: 1997 to Present

The process of reorientation in forest policy that has been adopted by the SFD in recent years can be explained by a combination of both internal factors within Sabah and wider influences taking place at international and federal levels. Many of the international policy movements outlined in Chapter Five have filtered down to the state and local levels, and in the process have been merged with specific federal, state and local policy movements.

2.1 The growing wider influence of environmentalism

A number of publications have observed that the evolving form of environmental policy in Malaysia stems from the emergence of an increasingly vocal environmental civil society, growing international pressure for forest conservation and the response of the federal government to these pressures. According to Weiss, civil society has traditionally been relatively weak in Malaysia owing to colonial legacies, government restrictions and the country’s particular racial politics that have impeded coordination between different ethnic groups. However, she also notes that the growth of an educated middle class and the greater influence of global influences have led to an expansion of civil society groups in many areas of Malaysian life (Weiss 2005). Both Weiss, and Hezri and Hasan, have highlighted the significance of the 1978 Endau Rompin campaign as the first successful example of an environmental civil society campaign. Here grass roots pressure successfully prevented the deforestation of a large area of forest in South East Peninsula Malaysia. This, in their opinions, laid the foundations for environmental activism as it has emerged in Malaysia in recent decades (Hezri and Hasan 2006, Weiss 2005, Aiken 1993).

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Both Brosius and Yee have conducted studies on an even more significant watershed in the environmental debate in Malaysia. This was the controversy that emerged in the 1990s in the Bornean state of Sarawak relating to the construction of the Bakun Dam. This project threatened 70,000 hectares of forest, as well as the livelihoods of local Penan communities. The campaign against this project involved not only Malaysian NGOs but also international environmental activists (Brosius 1999, Yee 2004). Brosius has shown how the initial response of the Federal Government was a defensive and confrontational one. This response was characterised by accusations of ‘eco- imperialism’ levelled at international NGOs, illustrated by Prime Minister Mahathir’s statement that “the North should begin to clean up its own backyard and stop scapegoating the South” (Brosius 1999: 47).

But Brosius also shows how the Mahathir administration did eventually realise that it needed to make some accommodation with international and domestic environmental organisations. Firstly, it was recognised that while they could combat northern NGOs within Malaysia, they had less control over campaigns that aimed to stop consumption of tropical hardwoods in developed countries. Secondly, they recognised the benefits of establishing collaborative partnerships with local and more moderate international NGOs, and in the process split them from more hard line environmental campaigning organisations (Brosius 1999). A third argument, as identified by Hezri and Hasan, is that under Mahathir, Malaysia was developing a high profile international standing as a spokesman for the G77 group of developing nations on the global stage. As a result, the Federal Government became far more sensitive to the potential political damage that uncontrolled environmental destruction could have on its international standing (Hezri and Hasan 2006).

As a result, instead of continuing along the lines of confrontational rhetoric about eco-imperialism, in the late 1990s and early 2000s the Federal Government shifted to a strategy of apparent conciliation that took advantage of the growing currency of the ideas of sustainable development at the international level. Sustainable development allowed the Mahathir administration to find common ground between itself, the international diplomatic community and many environmental NGOs, both international and domestic. In line with this, the Federal Government sought to embrace the ideas of SFM and timber certification at the core of environmental policy, as well as showing a willingness to work in collaboration with environmental civil society organisations. By such tactics, Mahathir was able to shift the terms of the debate and in the process, at least to some extent, draw the sting out of the controversy over continuing forest destruction (Brosius 1999, Hezri and Hasan 2006).

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From one point of view this tactical shift can be seen as rhetoric that has not been backed up by concrete political action, as the following observation by a consortium of NGOs on Malaysia’s environmental record illustrates:

“In essence the words are in the right place but in truth the actions are not. The commitment and focus to implement sustainable development practice is not forthcoming” (MNF for Rio +10, 2003 from Hezri and Hasan 2006: 46)

In many parts of Malaysia this observation may be true, particularly in the case of the state of Sarawak where unchecked deforestation continues (Yong 2006). In the case of Sabah however, as will be demonstrated below, the move towards the adoption of SFM and timber certification appears to contain greater substance.

2.2 Changes in forestry policy in Sabah: the role of the SFD

In a 1997 seminar, the Director of the SFD, Sam Mannan, admitted that “the history of forest management in Sabah over the last 30 years has been dismal by any standard of measure” (Mannan and Awang 1997: 2). The same year marked a watershed in the history of forest management in Sabah with the adoption of SFM at the core of the SFD’s mainstream policy approach. This move had earlier antecedents in the Deramakot SFM project. This was initiated in 1989 in partnership with the German Agency for Technical Cooperation. This project involved using the 55,000 ha Deramakot Forest Reserve as a pilot project for developing an SFM system in Sabah. This entailed substantial investment in terms of low impact harvesting equipment, infrastructure development, the creation of new organisational structures and the retraining of staff. In 1997 this project achieved the distinction of becoming the first area of forest in the developing tropics to be certified by the FSC (Mannan and Awang 1997, Mannan et al 2008, UNDP 2008).

Following from the Deramakot pilot project, in the early 2000s the SFD decided to apply this model to the whole of the Permanent Forest Estate. This involved dividing the Permanent Forest Estate into forest management units which were then contracted out to private companies under Sustainable Forest Management Licence Agreements (SFMLAs). Each SFMLA lasted for 100 years, as opposed to the previous 21-25 year concessions, in order to encourage long term planning and more sustainable practices. Licensees were required to abide by SFM management practices and commit to achieving accreditation under a recognised certification scheme. They were also required to pay a RM5 million bond (approximately £1 million), which would be lost if the licence was rescinded for non- compliance. The rationale behind this approach was that by handing over implementation of SFM to

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the private sector, the SFD would be freed to concentrate its resources into higher level capacity building and strategic planning (Mannan and Awang 1997, Toh and Grace 2006).

UN reports from both the FAO and UNDP show that the achievements of the SFMLA system have been mixed and compromised by three factors. Firstly, the start-up costs and capital investment of SFM are high, and given the highly degraded state of many of Sabah’s forests, the returns often have not proved high enough to justify the expense for private licensees. Secondly, while the SFD may have had the capacity and expertise to implement SFM at a relatively small scale in Deramakot, it has struggled to translate this to a larger scale on limited resources without external financial and technical backing. Thirdly, political support for a wider state level SFM policy strategy has been equivocal. Questions have been raised about the rationale behind handing control of forests to licensees with little technical experience of SFM. In addition, influential interests at State Government level still exist in favour of continued short term extraction and conversion to palm oil or timber plantations. As a result, the impact of the SFMLA system remains unproven. Few of the licensees have achieved the requirement of certification and some licences have been revoked for persistent non-compliance (Toh and Grace 2006, UNDP 2008).

Reynolds et al have commented on a further issue relating to timber plantations. They observe that the total area of the Permanent Forest Estate under timber plantation is currently relatively low and there has been some success in resisting attempts to convert some more ecologically important areas to plantation (see section on Ulu Segama Malua below). However, it is further observed that this policy option retains some strength both within the State Government and in the SFD. This may form a considerable part of SFD policy in future, with associated implications for the future of Sabah’s remaining natural forests (Reynolds et al 2011).

2.3 Policy change and the position of indigenous communities

A further complication that has arisen through this process of policy change relates to the position of indigenous communities. In a WWF report, Payne summaries the position of indigenous communities in Sabah by the late 1990s as follows:

“Communities have changed within the space of barely two generations from being almost self-sufficient in food and harvesting abundant forest resources for cash income, to being dependent largely on imported food and experiencing declining sources of cash income…Many local residents now find themselves with only small amounts of resources,

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and without the skills needed to seek alternative sources of sustained income” (Payne 1996: 5).

He goes on to contend that by this time communities had found themselves largely excluded from the Permanent Forest Estate. Further to this, with most state land converted to plantation, their position was generally one of marginalisation at the edges of extensive tracts of commercially exploited land. A UNDP report observes that often communities have to subsist on small areas of land, have no access to forest resources and have lost access to clean water as a result of pollution from oil palm plantations. In addition, many communities are isolated from markets, healthcare and education as a result of poor infrastructure. In this situation, poverty amongst indigenous communities has become endemic (UNDP 2008, Payne 1996).

However, Yong, Yee and Idrus have identified some signs of emerging pressure to ameliorate the condition of indigenous communities in Sabah. Some of this reflects a growing movement at the international level to promote the rights of indigenous peoples throughout the world with associated pressure to devolve forest management back to communities, a trend that was observed in the last Chapter. This means that more external support exists for projects that aim to improve the livelihoods of indigenous people. In addition, because of the exposure provided by international NGOs, exploitation of indigenous communities is perceived amongst government and private sector actors as more likely to bring unwanted bad publicity (Yong 2006, Yee 2004). In addition, Idrus has observed that across Malaysia as a whole there is a movement of indigenous communities, in conjunction with international and domestic NGOs, to more aggressively pursue legal channels in order to secure better land rights and living conditions (Idrus 2010).

A particular way that this international pressure has impacted on forest policy in Sabah is through FSC certification. Article 3 of the FSC principles states that:

“”Indigenous Peoples’ Rights” requires all FSC certified forest owners and managers to identify and uphold indigenous peoples’ rights of ownership and use of land and resources” (FSC 1996: 5).

Give that the SFD has chosen the FSC as its certification standard of choice, forest policy in Sabah now has to take the situation of indigenous people more seriously. Toh and Grace observe that as a result of certification requirements, in the 1990s the SFD began to implement community forest management and agroforestry initiatives as part of the Deramakot project. It has since attempted to expand community forestry as part of the wider SFMLA strategy. All SFMLA holders are now

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required to address community development issues where communities exist within or next to their boundaries (Toh and Grace). There have also been attempts to improve security of tenure for communities in and around forest reserves. As a result, a limited number of successful examples of partnerships between the SFD and indigenous communities have emerged in recent years (Hamza and Mohamad 2012, UNDP 2008).

However, the wider success of this new policy direction remains open to question. Toh and Grace have observed that the best outcomes have been seen in reserves directly managed by the SFD under FSC certification, and that SFMLA holders have done little to engage local communities. They contend that current initiatives may be just a palliative rather than something that gets to the root of the problems facing indigenous communities. They summarise this problem in the following statement:

“Communities look more to agricultural production and market access to alleviate poverty than to forest resources. Hence access to land for cultivation is seen to be more urgent than access to forest resources. This trend requires larger areas of land to be viable, which cannot be met through Sabah’s present forest tenure system; this can only be addressed through land laws” (Toh and Grace 2006: 273).

At present there are few signs of a political will to comprehensively re-orientate the long standing legal framework enshrined in the Land Ordinance. As a result, future policy on indigenous rights seems unlikely to change from the current position of limited initiatives operating within the boundaries of the existing status quo.

2.4 Policy change through promotion of non-timber revenue sources

Since the 1990s, two new non-timber revenue sources from forests have become influential to forest policy in Sabah. These have created potential for these forests to gain an economic value in situ rather than as an extractive resource. As a result they have the potential to bring greater political weight to policy initiatives that favour forest conservation. The most significant of these to date is tourism, and specifically ecotourism, which has become one of the largest growth sectors in Sabah in the past 20 years (IDS 2008). The other is PES, as introduced in the last Chapter, and which in some respects the SFD has taken a pioneering approach to. These two revenue sources represent ways that international economic trends and global forest policy initiatives have influenced local level policy.

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According to a report by the Malaysian Institute for Development Studies, which was commission as part of a major State policy initiative entitled “The Sabah Development Corridor”, Sabah has exceptional potential to develop tourism. This is because of its wide range of tourist attractions which include traditional “sun, sea and sand”, accessible wildlife viewing and adventure activities such as mountaineering, scuba diving and white water rafting (IDS 2008). The tourist sector in Sabah has seen high growth levels in the past 15 years. In 1998 Sabah recorded visitor numbers of 423,284, of which 264,898 we international and 158,386 domestic. By 2012 visitor numbers had grown to 2,876,761 of which 941,766 were international and 1,933,996 were domestic (Sabah Tourism 2002, 2013). Tourism is now the third highest contributor to the State’s GDP after agriculture and manufacturing and the fastest growing sector overall. The Sabah Development Corridor policy initiative has identified the “enhancement of Sabah as a premier eco-adventure destination” as a key priority and a major contributor to the State’s future economic growth (IDS 2008: 33). A consequence of this policy direction is that mainstream economic policy now recognises that the ecology of Sabah’s forests has a tangible economic value in its own right.

However, questions have been raised about the limits of eco-tourism as a means of encouraging conservation and community welfare. Tourism in Sabah is dominated by private sector tour companies (IDS 2008). Payne has raised the issues that in the absence of an effective and coordinated policy structure to regulate ecotourism, these companies will cause disturbance to wildlife and other environmental damage, whilst also failing to contribute toward the conservation work on which their businesses ultimately depend (Payne 1996). Hai et al have further observed that much of the ecotourism development that has taken place to date in Sabah has been concentrated in a few locations, leading to tourist congestion at certain sites. In addition, they observe that tour companies often employ staff outside the locality, and that few benefits are accrued to indigenous communities (Hai et al 2001). While examples of successful community led tourist initiatives do exist, such projects remain only a small part of the wider ecotourism industry (Hamzah and Mohamad 2012).

PES is a less proven generator of revenue but has brought some tangible benefits to forest conservation. Reynolds et al have identified two main PES projects in Sabah that have been pioneering in the context of South East Asia. The first was initiated in 1992 as a joint venture between the Dutch foundation Forest Absorbing Carbon Emissions (FACE) and the quasi- governmental organisation and forest concessionaire Yayasan Sabah. The objective of this project was to restore 30,000 ha of degraded forest on the edges of the Danum Valley Conservation Area, to be funded by European companies seeking to offset carbon emissions. Up to 2011 the FACE project

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had been successful in restoring 12,000 ha of degraded forest. The other major project is the Malua Biobank. This was set up in 2006 as a joint venture between Yayasan Sabah, the SFD and New Forests, an Australian forest eco-products investment broker. This aimed to restore the 34,000 ha Malua forest reserve through the sale of bio-credits, and represents the first such project of its kind in the tropics (Reynolds et al 2011). In addition, the SFD is currently working on establishing baseline data on the carbon storage potential of Sabah’s forests in preparation for implementing a REDD+ strategy across the state. To date there has been little literature about the results of these initiatives in Sabah, and their relative impact will be discussed in more detail in the next three Chapters (Berry et al 2010, Mannan et al 2008).

The consequences of the developments outlined in this section mean that for the first time since the beginning of colonisation, significant pressure exists from several sources to halt long term trends in deforestation. This is particularly the case with lands under the administration of the SFD, which anticipated the problems of the “timber famine” early and created the foundations for new forest governance institutions. However, outside the Permanent Forest Estate, where the influence of the SFD is limited, the future prospects for remaining forests, most of which are now in isolated protected areas, is more uncertain. This contrast is illustrated in the two empirical examples used in this Thesis that were introduced in Chapter Four.