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Corruption in the tropical-timber trade

Corruption in the tropical-timber trade

Trade in tropical timber has been a very lucrative business for Sarawak for more than thirty years and also one that is susceptible to corruption. Very few key individuals control the issue of logging concessions and the export of tropical timber. In Sarawak this power is concentrated in the hands of just one man: Taib Mahmud. For 30 years he had been the chief minister of Sarawak and at the same time the minister of finances and the minister for natural resources and currently, he is the governor of Sarawak. While the primary rainforest in Sarawak has shrunk to just one tenth of its original extent, his personal wealth and that of his family clique has grown to several billion dollars in the course of the past three decades. Taib’s own assets alone are estimated to be worth around 15 billion US dollars. The big losers have been the indigenous peoples of Sarawak, since their rainforest and land has been taken from them, while others are profiting from the proceeds.

Sarawak’s tropical-timber transactions

A tax dispute with the Japanese authorities broke out in 2007. One outcome was that it became known that enormous sums of money from the export of tropical timber from Sarawak were reaching Hong Kong via Japan. This particular case of corruption became known as the "timber kickbacks scandal". It provided evidence that money from the trade in tropical timber was being laundered through Hong Kong. There is no doubt that what has actually been discovered is only the tip of the iceberg.

Campaign launch

That is when the Bruno Manser Fund decided to investigate the corruption in tropical-timber transactions and to try and seek out the whereabouts of the Taib's family's assets around the world. In spring 2011, the BMF launched the "Stop Timber Corruption" campaign. A report on the "Taib Timber Mafia" produced by the BMF in 2012 showed for the first time that Taib family members had holdings in at least 400 companies in different parts of the world. The Taibs own real estate in countries like Canada, the USA, Australia, the United Kingdom and, of course, Malaysia. More than 300 companies in which the Taib family has a holding have their seat in Malaysia and benefit from their links with Taib Mahmud. One example is CMS (Cahya Mata Sarawak), in which members of the Taib family have a majority holding. Thanks to its virtual monopoly in cement and steel, it is a principal partner for state infrastructure projects.

Combating corruption through the courts

The fight against corruption does not function at all well in countries like Malaysia, where the anti-corruption authority is weak. The BMF has thus decided that it is better to rely on an international campaign and a worldwide search for the destination of moneys resulting from the corruption in Sarawak. One example is the criminal-law complaint against the UBS filed by the BMF in the case of Musa Aman, the chief minister of the Malaysian federal state of Sabah (see map). More than 90 million US dollars in bribes from the trade in tropical timber were laundered for Musa Aman through UBS accounts in Hong Kong, Singapore and Zurich. In August 2012, the Swiss federal attorney general’s office opened a criminal investigation into the UBS on suspicion of money laundering.

A small number of leading politicians and their clientele are becoming rich illegally through the trade in tropical timber at the expense of the rainforest and the inhabitants.

For more information

"Safe Haven Canada" (2017) - Report

"The Adelaide Hilton Case" (2015) - Report

"Corruption Management Sarawak - CMS" (2015) - Report

"Laundering dirty rainforest dollars? Manulife's dodgy deals" (2014) - Report

"The Taib Timber Mafia" (2012) - Report

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