Malaysia

Introduction

Of Malaysia’s total forest area, 11.18 million hectares (57%) is designated as production forest; 3.21 million hectares is designated protection forest; 2.40 million hectares is designated as one of a variety of conservation areas (National Parks, Wildlife and Bird Sanctuaries) of which a total of 0.25 million hectares are located in the Permanent Reserved Forests (i.e. production forest and protection forest), and 2.98 million hectares (15%) is designated for planned conversion to other uses (referred to as Stateland Forest).

More information on Malaysia is available on the Malaysia page of the Illegal Logging website, or on the website of the Malaysian Timber Council, MTC. You can also find out more in the Asia briefing pack of the UK TTF.

Forest Sector

Log production is falling in Malaysia due to tightening regulations on the harvest of wood from the permanent production forest and a progressive decline in the remaining area of Stateland forest which still accounts for around 40% of total production. Given the reduction in domestic harvest combined with the restriction on importing logs from Indonesia, Malaysia’s installed processing capacity is expected to continue declining in the coming years. Correspondingly, increasing focus is being placed on the establishment of plantation forest.

Trade statistics and trends

Malaysia is one of the world’s largest exporters of tropical hardwood products. Considering European markets, the UK is Malaysia’s largest export market for wood products in both volume and value terms. In 2004, the UK imported 820,000 m3 of wood products from Malaysia valued at €260 million. The Netherlands is the second largest European export market for Malaysian wood products, taking 440,000 m3 and €150 million in 2004. Malaysia became a net importer of logs in 1995 to supplement the supply of domestic logs for processing. ITTO data from 2004 indicates that the largest proportion of imports now consist of sawn timber (830,000m3 compared to 120,000m3 of logs in 2004). Key suppliers include Indonesia, Papua New Guinea (PNG) and Myanmar, as well as some non-tropical sources.

Legality

Within the context of Malaysia, jurisdiction over land, forest gazettement, management and licensing is divided among 13 states. Correspondingly, forest policy and legal verification systems have evolved separately between the timber –producing states of Peninsular Malaysia, Sabah and Sarawak. Different state –based systems for verification of legality have evolved without third-party verification. Malaysia shows a strong commitment to standards-based management through the incorporation of sustainable forest management standards into public-sector audits and wide-spread support for third-party certification. Timber tracking, CoC documents and checking stations establish tightly controlled systems for monitoring the movement of logs.

Legality standards in use in Malaysia are those of:

1. SGS-TLTV
2. The Keurhout Hallmark
3. MTCC
4. Smartwood-VLO

For more detailed information on systems of legality verification download the VERIFOR Case Study Summary 8.


Drivers for legal timber production and trade

Voluntary Partnership Agreements are currently being negotiated with Malaysia. Initial meetings have been held between the EU delegation and the Malaysian government in late 2006 and early 2007. Malaysian authorities have established detailed procedures to prevent licensed loggers from logging outside concession boundaries or in excess of the allowable cut. Extensive control systems have been set up to prevent unlicensed log transport and authorities are encouraged to report on illegal activities.

Other relevant organisations

• Forestry Department Peninsular
• Sabah Foresty Department
• Sarawak Forestry Department
• Malaysian Timber Certification Council (MTCC)
• Sarawak Timber Industry Development Corporation (STIDC)
• Malaysian Timber Industry Board (MTIB)
• Forest Research Institute Malaysia (FRIM)
• Asia Forest Partnership

Challenges

Some of the issues facing Malaysia’s timber industry are:

• Declining raw material supply
• Labour shortage
• Lack of modern technology for timber processing and manufacturing
• Competition from other timber/ low-cost producing countries
• Competition from temperate timber products and other substitute material
• Over regulation and globalization/ trade liberalization.
• High percentage of export to markets such as US, Australia, UAE, Japan, Korea & China that require less CoC certified or verified timber products.