Timber Risk Score: 0 / 100 in 2018. The Timber Legality Risk Assessment contains an evaluation of the risk of illegality in Malaysia - Sarawak for five categories and 21 sub-categories of law. We found:
- Specified risk for 20 sub-categories.
- No legal requirements for 1 sub-category.
This page provides an overview of the legality risks related to timber produced in Sarawak, Malaysia. There are separate timber risk assessments for Sabah and Peninsular Malaysia.
Sarawak’s total land area is 12.4 million hectares, of which 7 million hectares (57%) is covered by forest. Forest land is Sarawak is classified:
- Permanent Forest Reserve (PFR). Logging and land clearance is permitted in those parts of the PFR that have been zoned for timber production, however the land must be replanted with timber species. No logging is permitted in those parts of the PFR that have been zoned for protection.
- Totally Protected Areas (e.g. National Parks)
- State/Alienated Land Forest. Logging and land clearance/conversion is permitted on most State/Alienated Land.
Sarawak has long suffered from deforestation; illegal logging is a key contributor to this. It has been estimated that about 35% of timber, from the whole of Malaysia, was produced illegally in 2015 (Hoare, 2015). However, only around 10,000 m3 of illegal timber was seized in Sarawak in 2012.
Several legality risks are present in Sarawak timber supply chains. The risks are wide-ranging and relate to legal rights to harvest, taxes and fees, timber harvesting activities, third parties’ rights, and trade and transport. If you are sourcing timber from Sarawak you should take care to ensure the risks identified are not present in your supply chains, or have been sufficiently mitigated.
This risk assessment was prepared between 2016-2018 according to the FSC-STD-40-005. The approved FSC Risk Assessment can be downloaded in the FSC Document Centre. ONLY Risk Assessments that have been formally reviewed and approved by FSC can be used by an FSC candidate or certified companies in risk assessments and will meet the FSC standards without further verification.
There are currently no armed conflicts in Malaysia according to the Council on Foreign Relations' Global Conflict Tracker.
According to the Uppsala Conflict Data Program there were 71 deaths in 2010-2017.
VPA status: Negotiating
CITES appendix II: Aquilaria rostrata spp., Dalbergia spp., Gonystylus spp., Taxus chinensis, Taxus wallichiana, Rauvolfia serpentina.
FSC Certified Forest Area (in Malaysia): 710,311 hectares (4 December 2019)
PEFC Certified Forest Area: 4,376,622 hectares (31 December 2019).
Information Gathering
Timber sources
- Find out the different sources of legal timber
- Determine which source type your timber comes from
Timber source type | Description of source type |
---|---|
Natural forest in Permanent Forest Reserve not being cleared for plantation/other land use |
Timber from natural forest in Permanent Forest Reserve that is being managed as a natural forest (i.e. it is regenerated after harvest) and not for clearance/conversion. A harvest permit or license is required. |
Natural forest in Permanent Forest Reserve being cleared for plantation/other land use |
Timber from natural forest in Permanent Forest Reserve that has been cleared as part of a timber plantation concession (i.e. concession for the clearance of natural forest for conversion to monoculture timber plantations). A harvest permit or license is required. |
Plantation in permanent forest reserve | Timber from a plantation (e.g. Acacia, Eucalyptus, rubberwood) in forest reserves. A harvest permit or license is required. |
State land and Alienated land |
Timber from the clearance of natural forest on:
Timber plantations on state and alienated land are rare. Timber plantations that are established on forest reserves are sometimes later excised to state land. Alienated land is usually used for growing oil palm or rubber, rather than trees for timber. A harvest permit or license is required. |
Agricultural land (primarily rubberwood) |
Timber from private 'agricultural' estates on alienated land. These are mainly rubberwood plantations that are being cleared for oil palm or for another rotation of rubber (i.e. grown primarily for latex rather than timber). Timber from agriculture on state land includes rubberwood harvested from rubber plantations. Very rarely, there are small agricultural rubber plantations (i.e. planted primarily for latex) in the Permanent Forest Reserve that can be harvested for timber. A harvest permit or license is required. |
Risk Assessment
Assess the risks in your supply chain
- Find out the main legality risks
- Download the full risk assessment to see more detail
- Find out which species have specified risks
Main legality risks
Legal rights to harvest
|
|
Taxes and fees |
|
Timber harvesting activities
|
|
Third parties' rights
|
|
Trade and transport |
|
Specified risk species
Common/trade name | Scientific name | Risk information |
---|---|---|
Agarwood |
Aquilaria beccariana | CITES-listed |
Agarwood |
Aquilaria hirta | CITES-listed |
Agarwood |
Aquilaria malaccensis | CITES-listed |
Agarwood |
Aquilaria microcarpa |
CITES-listed |
Agarwood |
Aquilaria rostrata |
CITES-listed |
Agarwood |
Dalbergia spp. |
CITES-listed |
Ramin |
Gonystylus spp. |
CITES-listed |
Chinese yew |
Taxus chinensis |
CITES-listed |
Himalayan yew |
Taxus wallichiana | CITES-listed |
Risk Mitigation
Mitigate the risks in your supply chain
Learn which actions we recommended to mitigate the risks associated with the timber sources from Sarawak, Malaysia
Source Certified Materials
NEPCon believes that third party certification (for example FSC and PEFC certification) can provide strong assurances of the legality of the products they cover. Companies seeking to mitigate the risks of sourcing illegal timber should seek to purchase third party certified materials wherever possible.
While the European Timber Regulation does not include an automatic “green lane” for certified products, it does recognise the value of certification as a tool for risk assessment and mitigation. The European Commission says that companies “may rate credibly certified products as having negligible risk of being illegal, i.e. suitable for placing on the market with no further risk mitigation measures, provided that the rest of the information gathered and the replies to the risk assessment questions do not contradict such a conclusion.”
For more information on using certified materials in your due diligence, including how to assess whether a certification system meets EUTR requirements, see the page on Certification and Due Diligence.
Mitigation recommendations
There are six recommended actions to mitigate the risks associated with the timber sources from Malaysia - Sarawak.
1. Fully map your supply chain
- Our supply chain mapping tool can help you do this.
2. Obtain and verify documents
- Land tenure and business documents
- Land registry. Confirm ownership and validity of property deed
- Tax-related documents
- Removal pass. Confirm based on Royalty Payment (cross check hammer markings (“JH”) on the timber)
- Sales documents. Confirm include applicable sales taxes (volumes, species and qualities should match the fees paid, and sales prices shall be in line with market prices)
- Receipts for payment of sales taxes
- Harvesting documents
- Forest management plans
- General and Detailed Harvesting Plans (consistent with the forest management plan)
- Maps of harvesting areas (consistent with the harvesting plan) and protected areas where harvesting is prohibited
- Valid permit to enter coupe (PEC) prior to harvest
- Records of protected species within the FMU and forest area
- Third parties’ rights documents
- Records of consultation between the forest enterprise and local indigenous people
- Maps showing the customary claims shall be available and any claims (verify validity) areas shall be excluded from the harvesting areas.
- Trade and transport documents
- Removal pass and transit removal pass. Check validity and that the species, volume and weight correspond with the actual logs, and fees paid
- Malaysian Inland Revenue Board (IRB) transfer pricing audit reports
- Corporate Income Tax Return Form ('Form'). Verify whether it contains disclosure as to whether transfer pricing documentation has been prepared
- CITES export, import and re-export certificates
3. Consult stakeholders
- Neighbours, local communities and others confirm that land tenure rights are clear
- Authorities confirm that registration of FME has been granted following legally prescribed processes
- Stakeholders confirm legal status of the operation or rights for conducting the established activities are not subject to court orders or other legally established decisions to cease operations
- Authorities confirm forest management plan has been approved according to legally prescribed process
- High Court of Sarawak and others confirm no major claims by indigenous peoples on customary rights within the concession area
- Financial authorities confirm all required income, profit, and sales taxes have been paid
- Staff confirm legal employment
- Staff and contractors confirm that legally required protection equipment is provided by the FME and used by labourers.
- NREB environmental controllers confirm conformance with EIA requirements
- Customary rights are observed during harvesting activities
- Relevant agencies confirm removal passes and transit removal passes are valid
- MTIB confirms authenticity of CITES permits. MTIB can be contacted by email
4. Carry out on-site verification
- Confirm that contractors have a valid Timber Extraction Contract
- Confirm that harvesting takes place within limits given in the harvesting permit
- Confirm that requirements of the General Harvesting Plan and the Detailed Harvesting Plan (DP), including layout of logging blocks, surveyed road networks, protected or conservation areas, and proposed harvesting methods, are implemented
- Confirm that mitigation measures prescribed in the EIA are implemented
- Confirm that occupational health and safety requirements by all personnel involved in harvesting and forest management activities are followed (provide and maintain a safe working environment; provide and maintain facilities for the safety and health of employees; ensure that machinery and equipment are safe for employees; ensure that working arrangements are not hazardous to employees; provide procedures to deal with emergencies that may arise while the employees are at work; and provide information, instruction, training and supervision as is necessary)
5. Conduct targeted timber testing on sample of purchased materials
- Conduct timber testing on samples of purchasd material to verify the species or origin of timber, where appropriate
6. Avoid / do not buy
- Avoid products that include materials bought at spot- and/or open-markets