Timber Risk Score: 23 / 100 in 2018. The Timber Legality Risk Assessment contains an evaluation of the risk of illegality in Malaysia - Sabah for five categories and 21 sub-categories of law. We found:
- Specified risk for 16 sub-categories.
- Low risk for 4 sub-categories.
- No legal requirements for 1 sub-category.
This page provides an overview of the legality risks related to timber produced in Sabah, Malaysia. There are separate timber risk assessments for Sarawak and Peninsular Malaysia.
60% of Sabah, or 7.3 million ha, is forested. Forest land in Sabah is divided into:
- Permanent Forest Reserve (PFR)
- Totally Protected Areas (e.g. National Parks)
- State / Alienated Land.
Harvesting is permitted in areas of the Permanent Forest Reserve that have been zoned for timber production. This land must be replanted with timber species. No harvesting is permitted in those parts of the Permanent Forest Reserve that have been zoned for protection. Harvesting and land clearance/conversion are permitted on most State/Alienated Land.
Log production from natural forests was 1.97 million m3 in 2012 while production from plantation forest was 1.12 million m3.
It has been estimated that about 35% of timber, from the whole of Malaysia, was produced illegally in 2015 (Hoare, 2015). However, only around 7,000 m3 of illegal timber was seized in Sabah in 2012. Several legality risks are present in timber supply chains from Sabah. 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 Sabah 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.
Score: 48 / 100 in 2021
Rank: 62 out of 180 countries in 2021
Chief Minister Shafie Apdal has instructed the state Forestry Department to immediately impose a ban on the export of logs. Shafie said this is a temporary measure to safeguard the resources in Sabah. The ban is in force until further notice.
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 2010-2019.
VPA status: Negotiating
CITES appendix II: Aquilaria 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 (in Malaysia): 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 | 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. 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 being 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. This is mainly rubberwood plantations that are being cleared for oil palm or for another rotation of rubber (i.e. grown primarily for latex and not primarily for timber). Timber from agriculture on stateland 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
Risk assessment summary
Legal rights to harvest
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Taxes and fees |
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Timber harvesting activities
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Third parties' rights |
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Trade and transport |
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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 |
Rosewood |
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 Malaysia - Sabah.
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 - Sabah:
1. Fully map your supply chain
- Our supply chain mapping tool can help you do this.
2. Obtain and verify documents
- Forest level documents
- Sustainable Forest Management License Agreements (SFMLAs), for forest in the Permanent Forest Reserve
- Occupation Permits (OPs) for the communities issued by the Sabah Forestry Department, for situations where communities are present in forest reserves (either PFR or SL)
- Concession licence
- Forest management plan
- Harvest permits
- Environmental impact statement for any area greater than 500 ha
- Reduced Impact Logging guidelines
- Environmental monitoring compliance reports prepared by the EPD
- Tax related documents
- VAT Invoices
- Removal Pass to ensure that the species and volumes are indicated with royalty payment correctly
- Transfer pricing documentation to prove market price-based transactions
- Health and safety related documents
- Accident records and related administrative procedures and measures
- Evidence of accident insurance to cover all workers
- Health and safety procedures documents
- Training records for safe operation
- Employment related documents
- Quarterly reports on direct employment in the logging and wood processing sectors through Shuttle Returns No. IV, V and VIII.
- Health and Safety Policy statement
- Work permit for foreign workers, if any
- Employee Provident Fund (EPF)
- Social Security Organization (SOSCO)
- Records of insurance policies
- Occupational Safety and health Committee
- FD Certificate of Identity
- Documents or records of consultations with local communities for any land or rights dispute resolutions
- Trade and transport documents
- The authenticity of CITES permits should be verified by MTIB
3. Consult with stakeholders
- Authorities confirm that claims to land ownership are approved and registered by the State
- Neighbours and stakeholders confirm that proper consultation has taken place with the communities on all types of land.
- Confirm that any public allegations of corruption in awarding of concession licence have been rebutted publically.
- Confirm that legal procedures for obtaining concession licenses have been followed
- Authorities confirm that harvesting permits are valid
- Confirm that customary rights are observed during harvesting activities
- Staff / workers confirm that they: receive wages (and those wages have not been deducted to cover work permits), work legal hours, have adequate living conditions, and that their insurance and travel documents are not being withheld by employers. This is particularly important for high risk migrant workers
4. Carry out on-site verification
- Confirm that maps reflect reality
- Confirm that harvesting takes place within limits given in the harvesting permits
- Confirm that information regarding area, species, volumes and other information given in the harvesting permit is correct and within limits prescribed in the legislation.
- Confirm that logging has been done in conformance with the EIA (if an EIA is required)
- Confirm that legally established procedures for surveying, managing and protecting endangered or threatened species within the management unit have been followed
- Confirm that health and safety equipment is used during harvesting
- Confirm that on-site staff are covered by labour contracts.
5. Avoid / do not buy
- Avoid using third parties to make tax payments (or mitigate the risk that the third party does not pass the taxes on to the appropriate authority)
6. Conduct targeted timber testing
- Conduct timber testing on samples of purchasd material to verify the species or origin of timber, where appropriate