The Norwegian government has blacklisted two of Sarawak’s giant timber companies for severe environmental damage caused by their logging operations in the state.
The US$760 billion (RM2.4 trillion) Norwegian Government Pension Fund Global (GPFG) - the world’s largest sovereign fund - had divested its stakes in WTK Holdings Bhd and Ta Ann Holdings Bhd, based on the recommendations from the fund’s Council of Ethics.
Both WTK and Ta Ann, have extensive logging operations and timber plantations in the Borneo state.For WTK, the council found that the company had logged outside its concession boundaries, in buffer zones along river banks and roads, and on steep slopes.
Investigations conducted by the GPFG council found that there was “unacceptable risk” of non-compliance with environmental laws, poor forest management practises and large-scale forest destruction.
It also did not rule out that WTK’s intense logging operations inside primary forests in the heart of Borneo might have caused the 50km clog up along the Rajang river in 2010 where the river was blocked by logs.
“Based on the available information, the council concludes that WTK’s forest operations appear to cause extensive and irreversible environmental impact.
“The Council finds that WTK does little to reduce the environmental damage associated with its forest operations," it said in a report.
In the case of Ta Ann, the council found shocking forest destruction in the Heart of Borneo, including re-entry logging without Environmental Impact Assessments (EIAs).
It noted although Ta Ann had put in place a number of measures to limit environmental damage, it appeared insufficient to protect the habitats of endangered species and ecosystems.
This is not the first time GPFG has divested its stake in companies found to have breached environmental practices.
In 2010, the fund also divested its stake inSarawak timber giant Samling Global and one of its subsidiary Lingui Development Berhad for similar reasons.
In welcoming the Norwegian decision, Swiss environmental group Bruno Manser Fund said the move highlighted the extent of the governance crisis in the Sarawak timber sector caused by the deliberate non-implementation of forest laws by the state government under Chief Minister Tan Sri Taib Mahmud.
“The conduct of the Sarawak government is also the main reason for the failure of negotiations between the European Union and Malaysia on a Voluntary Partnership Agreement (VPA) within the EU's FLEGT (Forest Law Enforcement, Governance and Trade) programme,” it said in a statement, and called on traders to stop selling timber supplied by the blacklisted companies.
Ta Ann, Samling and Shin Yang are alleged to have close ties with Taib.
In March this year, Taib was cast into the international spotlight after Global Witness released a video documentary that showed him allegedly received millions of ringgit in kickbacks over land deals that have stripped bare the Borneo state.
In response, Taib challenged the activist group to debate with him on the issue and accused them of having a hidden agenda by visiting Malaysia’s biggest state in a “sneaky way”.
Deforestation rates in Sarawak are among the highest in the world, and only 5% of the state’s original forest cover remains unaffected by logging or clearance for plantations, Global Witness had said. - October 16, 2013.
~ The Malaysian Insider