Double deals kill Sabah's downstream industries

Sabah losing millions due to ‘double deals’ on logs
Uncontrolled log exports have forced many downstream businesses in Sabah to wind up.

KOTA KINABALU: The Sabah government is losing millions of ringgit in timber revenue due to “smuggling” activities and “undercounter” dealings. But does it care?

Former Yayasan Sabah director Jeffrey Kitingan thinks not. He alleged that there are “irregularities in the export” of Sabah logs commonly dubbed by the industry players as “under the counter” logs for which no royalties are paid.

He said the state government is simply not interested in how far the local timber industry has fallen following the timber crisis which began eight months ago.

He said he fully supported the recent pleas by the Sabah timber industry made through the Sabah Timber Industry Association (STIA) to reduce, if not ban, log exports to allow the sector to grow.

Last month, the STIA urged the state government to make available 20,000 m3 of round logs per month for the local timber industry, especially factories and sawmills which have been forced to close down over the last eight months due to lack of raw material.

Sabah officially exported 484,457 m3 of round logs in 2010 valued at RM224.84 million, with India and Japan as the biggest importers while sawn timber exports accounted for 423,457 m3 valued at RM641.33 million excluding other timber products, according to Malaysian Timber Industry Board (MTIB) figures.

Jeffrey, who is the chairman of Sabah rights NGO United Borneo Front, claimed that UBF had received several complaints from those in the timber industry who have been forced out of business due to what they say is the uncontrolled exports of log.

He said their request is not unreasonable given that the primary objective of the state government is to develop the local industries and to formulate and implement policies to protect local industries from foreign competition.

“This objective is obviously lost on the present state government and its leaders who are blind to the needs of the local industries.

“The local economy will be severely affected by the shutdown of factories, loss of jobs, reduction in income, partial unemployment, and loss of revenue for the state and the federal governments.”

Ban log export

He said the result of the current situation would be a shortfall in local timber and prices would increase and further affect the local housing industry.

“Worst of all, it seems that the state government is not only not supporting the local timber industry but is supporting industries in other countries,” he claimed.

He cited the claims that many furniture products from Vietnam and India, which are exported to Europe, are made from Selangan Batu and Merbau logs sourced from Sabah.

“The question begging to be asked is: Does the Sabah government truly care for the welfare of Sabah and its people?”

Jeffrey said that by ensuring that there are sufficient logs for the local timber industry, the state government would create a spinoff effect on the whole Sabah economy and add value to the products which would otherwise be lost through exports.

“The move to support the local timber industry will further spur economic growth in the state.”

UBF, he said, wants the state government to take immediate action “to drastically reduce if not totally ban the export of round logs from Sabah, with effect from Sept 16, 2011.”

He explained that the auspicious date was chosen as it is Malaysia Day and would mark a new mindset of the state government and Sabahans for a united and progressive Sabah.

Jeffrey also said the move to support the local timber industry would also help the “Cinta Sabah” (Love Sabah) campaign initiated by UBF’s parent body, the Borneo Heritage Foundation (BHF).
“The state government and the people should support the ‘Cinta Sabah’ campaign and foster love and patriotism for the state.

“The campaign is to provide a new beginning for Sabah, which will ultimately enable Sabahans to enjoy a better quality of life,” he said.

Queville To