International probe uncovers Malaysian loggers' offences

An independent review commissioned by Europe's leading tourism group, Accor, confirms that Interhill Logging, a Sarawak logging group, is routinely violating the forest legislation and failing to comply with internationally acknowledged social and environmental standards.

The review has been undertaken following accusations by indigenous Penan communities in the East Malaysian state of Sarawak that Interhill Logging was violating their rights and damaging their forest environment. Interhill employees have also been accused of intimidating the locals and of sexually abusing Penan girls and women. The Paris-based Accor group subsequently drew public criticism for its cooperation with Interhill on the construction of the "Pullman Interhill", a 23-storey luxury hotel in Sarawak's state capital of Kuching.

The report shows that Interhill's logging operations in Sarawak's Middle Baram region lack the free, prior and informed consent of the local communities. Conflicts between the company and the local communities have arisen on numerous issues, including the logging of community forest reserves, the felling of fruit and poison-dart trees, the pollution of drinking water supplies, the non-payment of adequate compensation and a lack of transparency with regard to the quantity of logs harvested. While the review provides details of how Penan have been intimidated by logging company officials, it does not draw any conclusions regarding the issue of sexual abuse, making reference to the official investigations into this matter.

Logging operations "very definitely not sustainable"

According to the review, Interhill entered the 61,000-hectare concession in Sarawak's Middle Baram region in 2002, immediately after another logging company had logged the area twice within ten years. Interhill expects to cut a total of 940,000 cubic metres of logs (20 tons per hectare) by 2013, whereas 2.2 million cubic metres (60 tons per hectare) had already been removed from the Penan's forests between 1989 and 2001.

Right from the start, the review underlines the fact that "logging in natural forest on such short cycles is very definitely not sustainable as can be seen from the reduced harvest volumes being achieved by Interhill compared to the much higher volumes achieved ten years ago (...)." It concludes that certification according to the internationally acknowledged FSC standards was out of the question, with the lack of long-term land tenure being another reason why such logging operations could not qualify as being sustainable.

While stating that "the forest is inevitably suffering degradation" from Interhill's operations and that the future of the forest is "already threatened", the review implicitly criticizes the fact that the Sarawak Government permits short cycle re-entry. Peninsular Malaysia and Indonesia, by comparison, do not allow re-entry logging within a period of 35 years.

Compliance with the law in some cases minimal or absent

According to the review, Interhill Logging does not comply with the legal requirements as defined by Sarawak's Natural Resources and Environment Board: "Field observation indicated that full compliance was not being achieved and in some cases was minimal or absent".

While the review thus states that Interhill is committing a number of illegal acts, it fails to specify which legal requirements have not been met by the loggers. One major offence appears to be the company's failure to acquaint itself with the boundaries of the Native Customary Rights lands within the logging concession, as stipulated in the logging licence.

Another shortcoming of the review is that it fails to provide basic documentary evidence, such as the logging licence, the forest management plan or an apparently existing Environmental Impact Assessment Report. While Sarawak's logging industry is used to operating under a cloud of secrecy, the provision of such documents would be required for an external review to be credible and transparent. International standards for public access to environmental information were set out by the United Nations in the 1998 Aarhus Convention.

Logging fails to contribute to long-term development

Whereas the review suggests that the local communities derive some kind of benefit and compensation from Interhill's logging operations, the distribution of compensation is being handled arbitrarily, with several communities insisting they have not been compensated at all. It is significant to note that Interhill fails to keep records of the compensation allegedly provided to the communities.

More importantly, the review concludes that "there is no inherent long term development advantage" from the social benefits provided by the company: "When Interhill eventually completes the logging and presumably withdraws from the concession area, the Penan will be deprived of the current benefits received and are unlikely to have achieved much to elevate themselves from their current status, described by the Marudi District Officer as being among Malaysia's hard-core poor."

Sarawak's legal framework deeply unjust towards the local communities

While this review exposes a number of legal offences and shortcomings relating to a specific logging company, it must be borne in mind that Interhill is profiting from a deeply unjust legal and political framework that systematically disadvantages and discriminates against the indigenous communities.

It is generally acknowledged that Sarawak's forest legislation by no means fosters sustainability and that forest law enforcement is a serious problem. It is thus not surprising that the review states that official inspections of Interhill's operations "do not appear to be routinely conducted and are perhaps only very cursory" and that "the pressure to comply with legally required terms and conditions is not great."

Among the logging companies active in Sarawak, Interhill is a medium player, and other companies might engage in even worse behaviour. The Penan point, in particular, to misdeeds committed by Rimex, a company that had been logging the area before 2002, and by Samling, a multinational logging giant that is active in several adjacent concessions and shares logging roads and a timber camp with Interhill.

Conclusions and demands formulated by the Bruno Manser Fund

The Bruno Manser Fund welcomes the release of the independent review and thanks Accor for facilitating a dialogue process involving all the stakeholders, of which the current review marks an initial outcome. It must, however, be borne in mind that Interhill – and subsequently Accor as its business partner – will be judged by deeds and not by words.

For a company like Interhill, corporate social responsibility must first and foremost mean respecting the free, prior and informed consent (FPIC) of the local communities. All measures must be undertaken from a long-term perspective, permitting the local communities to engage in sustainable development in what is already a heavily damaged forest environment, even after the expiry of the current logging licence in 2013.

In practical terms, the Bruno Manser Fund asks Interhill

- to scale down its logging operations with immediate effect and to remove all machinery from areas in which the company lacks the free, prior and informed consent of the local communities.

- to remove from the field all employees who have intimidated the locals or who have factually or allegedly been involved in cases of sexual abuse.

- to stop denying that sexual abuse is a serious problem for the indigenous communities and to fully comply with and actively support police investigations.

- to acknowledge that the local communities, in particular the Penan, have legitimate claims to the forests within the Interhill concession and to refrain from legal action that is directed against the Penan's land claims.

As for the social benefits and compensation owed by Interhill to the local communities for its past and current logging operations, a solution will have to be negotiated between the actors involved. Social benefits and compensation should be aimed at empowering the local communities and must not be allowed to corrupt indiviuals or to increase the communities’ dependency on the logging company.

(15 September 2009)