Clarification on oil palm grown in Paitan, Sugut forest reserves

Oil-PalmBy Sam Mannan

It has been brought to the attention of the Sabah Forestry Department of a website allegation that FMU 2, a forest management unit, covering Paitan and Sugut Forest Reserves, has been planted with oil palm covering some 250,000 acres.

To avoid confusion and to dispel any misleading conclusions, the Sabah Forestry Department would like to clarify as follows:

A SFMLA or FMU Licence, for The North Borneo Timbers Corporation Berhad, was issued on Sept 10, 1997, covering a licensed area of 94,277 ha, encompassing two forest reserves – Paitan and Sugut.

It was a long-term licence of 100 years, under Section 15(1), Forest Enactment 1968. The main objectives are to emulate the Deramakot model that includes: tree planting, natural forest management, conservation and community requirement.

The choice of the licensees at that time, 10 in number, was made by the government of the day on the basis of best knowledge at that time and the potential ability of the licencee to deliver.

In any case, the government was aware at all times that there may have been non-performers who have been inadvertently chosen at that time but the benefit of the doubt was allowed until proven otherwise.

The likelihood of non-performance may include: trying to change terms and conditions to make them more palatable; “selling off ” once the licence is in hand; logging but not planting; assigning/mortgaging although these are not allowed unless approved by the government to borrow funds from financial institutions.

The records showed that there had been no progress on the ground in the case of FMU 2. The licence was virtually dormant.

We understand later on, the government received news that the licence of FMU 2 had in fact been used as collateral to raise funds, the purpose of which are not known, for managing forests or whatsoever.

The lending financial institution that lent the money obviously did not do its homework. It should have realised that an FMU agreement is not bankable or recognised as such by the state government. It is merely an agreement on usage of lands and forests.

It would appear later that the shares of the licensee had been virtually sold to a 3rd party by them inheriting and paying off the debt, the amount of which we do not know.

The conclusion is although no work was done on the ground, the licenced area had new owners.

The new owners then re-structured the company and had its management revamped.

This culminated in the split of the original licence into two portions – namely: Eco-Plantations Sdn Bhd of 44,580 ha (name changes approved by the Companies Commission ) and Anggerik Mahawangsa Sdn Bhd of 49,647 ha.

All terms and conditions remained and the validity is as originally stated, effective from Sept 10, 1997, although the re-licensing was signed on July 23, 2014.

In the interim, further assessments of the area under licences revealed the following:

The existence of settlements in the licenced areas occupied by the original natives (Orang Asal) who have been there since time immemorial – e.g. Kampung Pantai Boring, Kg Tampus, Dalamas, etc.

The unsuitability of Sugut Forest Reserve for large-scale tree planting because of the swampy/peat swamp, conditions, vulnerability to fires, high wildlife population of endangered species ( e.g. Tembadau, Malayan Sunbear etc).

Overlapping with villagers in sporadic places, living in the vicinity or inside the reserves.
and the need for consultation with the native communities in making land use changes.

In 2015 and 2016, the state government decided, after a land use assessment that, the utilisation for the area had to be improved to address: conservation issues, socio-economic development and the “best use” option for a portion of Paitan and Sugut Forest Reserves.

At the November state assembly sittings of 2015 and 2016, the state assembly made the following decisions: to excise 55,494 ha in both Paitan and Sugut Forest Reserves to address socio-economic development and conservation.

Of these 17,764 ha of the total area excised were set aside for Class I reservation.

Returning 38,733 ha back to the licensees to continue their obligations and to re-plan because of the land use policy changes. From a total area of 94,227 ha, the licenced areas have now been reduced to 38,733 ha, in two portions.

On the 37,730 ha of areas excised for socio-economic development, the lands have not been allocated to any party yet.

The settlements/community profiles are still being assessed by the (director of) Lands & Surveys through a social baseline survey to ensure the target groups will get their lands. Under the gazettes of Paitan/Sugut, the conceded rights of the surrounding communities are stated.

Once the exercises are completed, the final land allocation will be made on a communal title basis.

If there is still surplus land available after allocation to the communities, the government will then decide on the best option for usage with priority given to state government-owned companies.

So far, the excised lands for development have not been alienated yet.

The accusation of oil palm planting inside a licenced area therefore does not arise. The excised lands have not been allocated/titled yet.

Whatever oil palm are seen in the excised areas, are owned by the local communities, whose rights and privileges mentioned in the gazettes of A403/32 (Jan 2, 1962) and A.403/44 (Jan 15, 1963), were granted by the colonial government. Are native rights now being questioned?

The allegations made are therefore malicious untruths that have been made to alarm and confuse the public. We regret it very much.

Sam Mannan is Sabah Chief Conservator of Forests.

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