Malaysia backtracks on timber allegations

Last week, a number of environmentalists managed to provoke the Malaysian government to address some long standing allegations of official complicity in the laundering of timber from Indonesia.

Friday evening's news broadcast played images of an angry Primary Industries Minister Dr Lim Keng Yaik telling off the foreign pressure groups to take the problem to the Indonesian authorities, rather than blame Malaysia for the illegal trade.

Reeling from the shock that a number of green groups had announced their intention to file a petition for trade sanctions against Malaysia - allowable under US law - unless "significant and verifiable" measures are taken against the illegal timber trade within 90 days, Lim said the accusations was an ill-disguised attempt to pressure Malaysia to ban the trade on ramin entirely.

Two days before, Lim told the press that reports released by watchdog group Environmental Investigation Agency (EIA) and its Indonesian partner Telapak had "taken things out of context and at times falsified information to make themselves heroes at our expense".

It was a serious allegation, particularly given that EIA and Telapak had managed to catch port officials and Malaysian businessmen admitting on camera to have either facilitated or participated in the illegal smuggling of Indonesian ramin timber.

Yet, at a meeting Wednesday between the EIA-Telapak, Lim and other ministry officials, it finally became apparent that the minister himself had not taken a close look at the evidence the two NGOs presented, nor the accompanying footage screened at a press conference during the UN convention on biodiversity last week.

While Lim did not admit to a wrong assessment, he nevertheless acknowledged the evidence of the investigation, adding that it was impossible for the government to bring smugglers operating within free trade ports to justice, as local authorities have no jurisdiction over them.

"If we have to change the law, it may take six months just to go through parliament," he told the press who were present at the meeting.

"But for the time being, we will cooperate with the EIA to try and find a solution."

Ramin, a blond coloured tropical hardwood, had been listed by Indonesia since April 2001 as a threatened species under the Convention on International Trade on Endangered Species (Cites); thus requiring exports to be accompanied by Cites export permits.

In Dec 2001, the Indonesian government followed this up with a ban on all ramin exports, with the exception of one small concessionaire in Sumatra. This essentially ended almost all exports of the timber from Indonesia.

But it seems that Jakarta has proven unable to enforce its own laws - illegal loggers circumvent the Cites prohibition by smuggling the wood into Malaysia for processing, and then re-certified as 'origin Malaysia' for re-entry into world markets, the EIA-Telapak report said.

This process, alleged the port officials and businesses interviewed by EIA-Telapak, occurs with the knowledge of the Malaysian Timber Industry Board and Malaysian customs.

Concerned by the diplomatic finger pointing that has been going on since last week, Indonesian Environment Minister Nabiel Makarim called a press conference yesterday morning requesting that both sides put a stop to the public bickering.

Instead, he proposed that nations meet to discuss clear steps towards eradicating the trade of illegally sourced wood.

Yet, at the same time, the minister warned that if the movement towards eradicating remains stunted, Indonesia will propose that the European Union ban all timber originating from illegal sources.

If the EU imposes stricter controls by raising ramin to Annex B of the European Regulation, this could end Malaysia's ramin export, not just Indonesia's.

"But please keep in mind that we are only proposing this as a last resort," said Nabiel.

Whether or not Indonesia intends for this as a veiled threat to Malaysia, the government here should nevertheless be concerned with its growing image as a rogue nation in the timber trade.

Just last year, EIA and Telapak undercover investigators who were taken on a tour of Johor Port (formerly Pasir Gudang) by a port official were told that the stacks of air-drying sawn ramin seen in three warehouses within the free trade zone arrived daily from Sumatra and were awaiting transhipment to Hong Kong, Taiwan and China.

A shipping agent with the Johor Port further provided investigators with an export flowchart on how the Indonesian ramin gets re-declared as a different species of white tropical wood and stamped as Malaysian origin when they arrive in Malaysia.

According to the EIA and Telapak, these allegations should not be new to local authorities.

They claim that throughout their two-year investigation into the matter, letters were sent to the government on five separate occasions between Aug 2001 and the end of last year.

The press, and particularly the BBC, picked up the controversial issue in 2002. Soon after, Lim assured that legislative changes would arrive.

The promise was kept and within a year of each other, the government instituted two bans: the first in June 2002 on Indonesian log imports, and the second on squared Indonesian logs in June 2003.

But doubts continue to fester over whether authorities were intent on ending the illegal trade.

Visits paid to Malaysian ports following the ban on whole logs found boats continuing to unload their illegal Indonesian logs in full open view, said EIA investigator Sam Lawson.

Once again, after the ban on squared logs came into force, illegal squared logs from Indonesia was filmed arriving at Tawau's Barter Trade Jetty, which is controlled by customs.

And just two days ago, the organisation found that an entire 'mountain' of what seems to be illegal Indonesian ramin, still sitting at the Johor Port (left).

EIA senior investigator Alexander von Bismarck told malaysiakini that while they did not enter the port grounds, the piles of sawn timber sitting in open air was clearly visible from across the fence - "there is so much of it that they have to keep it outside."

The ramin, which could be seen stacked in much of the same way that port officials had said only Indonesian ramin would be, was not difficult to identify, said von Bismarck.

While the government can claim innocence over the fact that illegally sourced timber is being stored in Malaysian ports, it is however another thing to claim that it is doing all it can to arrest individuals involved in the trade, and then contradictorily say that local laws have loopholes, because they don't give authorities powers to arrest illegal timber traders in free trade zones.

EIA had earlier raised concern over the government's notion of a proper investigation.

Lawson pointed out that a ministry official informed the local media last week that they had contacted the companies named in EIA's report.

"(He said) the companies had denied our information, said their statements were taken out of context, and that, I quote, they were only using illegal ramin before the ban," Lawson said.

"Quite apart from the admission that they were using illegal ramin, how does contacting a company for a response count as a proper investigation?"

Among those named in EIA-Telapak's report for possible dealings in illegal ramin are two Sibu-based businesses.

EIA-Telapak investigators claim that they have evidence of a ramin supplier admitting that part of the stockpile of ramin in the warehouse of a client - a maker and exporter of timber mouldings - had been laundered from Indonesia.

The supplier also alleged that the smuggling is done through the port of Tanjung Manis downstream from Sibu, once customs is paid to allow the shipment through.

The Sarawak Timber Development Corporation, who is Sarawak's issuing authority for Cites permits, will then visit Sibu mills along the Rejang river and issue certificates claiming the ramin as 'origin Malaysia'.

This is done by customs despite being aware of its origins, the supplier allegedly told EIA and Telapak.

As host to the biodiversity negotiations which began Feb 9, Malaysia's denial throughout the past week has now proven to be very embarrassing in the context of Lim's acknowledgement Wednesday that it will now work with the EIA to find ways around local limitations.

EIA president Allan Thornton said the organisation raised the issue openly because "the reports on Malaysia's involvement in illegally cut Indonesian timberhas been and remains so substantial, that it cannot be ignored anymore."

"The idea of port officials sitting back and allowing free trade to happen is wrong. They are deliberately facilitating that trade, and the government, through the Johor port, are making money from that trade," Lawson said.

Under Cites, signatories are supposed to ensure that local legislation allow them to seize shipment without valid export documentation.

Resolution Conf 9.7 of Cites is clear that there is no special provision for free ports or non-customs zones, because each party is deemed to have sovereignty over the whole of its territory.

But since Malaysia have no local laws to effect that, the resolution also recommends that countries unable to seize illegal shipment to at least inform the country of the final destination.

And Malaysian authorities have not claimed to have pursued this option either.

Observers to the three-week long UN convention on biodiversity are left wondering which is of greater embarrassment for Malaysia: the fact that non-governmental organisations may have found evidence placing us at the centre of a global timber smuggling racket; or the manner our officials had responded to the issue: through repeated denials and refusal to address the evidence at hand.

At the press conference last week, a senior member of the Malaysian delegation stood up and disputed the allegations that customs officers had actively facilitated the trade.

But rather than limit his comments to the issue of smuggling, the delegate controversially added that Malaysia's diligent policing of illegals even extends to the human traffic entering illegally from Indonesia: "we will whip them," he told the representative from Telapak.

The same sentiment was echoed by the rest of the Malaysian cabinet. This is not our problem, but a sovereign issue of Indonesia, they said.

"The (primary industries) minister has repeatedly said there is no such thing. So what is there? What is the issue?" said Deputy Prime Minister Najib Rajak when asked at a press conference yesterday.

But if EIA and Telapak is right, at least 70,000 cubic metres of illegal ramin go through the Johor Port alone - almost twice the amount of legal sawn ramin produced in the country.

Perhaps it is time the Malaysian government double check their facts to see if there is an issue to be tackled, before it is too late to reverse international calls for an EU ban on Malaysian and Indonesian timber, or worse, a US trade sanction against us.