The company is alleged to have engaged thugs and gangsters to settle the disputes, but the suspension was for flouting the Forest Department's guidelines and procedures on extracting timber.
Assistant Minister for Environment Datuk Len Talif said the suspension was ordered last month as the company "did not comply with certain logging procedures".
One of them was the failure of the company to leave a buffer between the area they were working on and the water catchment, said Len.
"We have ordered them to stop their operation until we complete our investigation. They have complied," he said.
Len also said the department found no illegal logging in the areas as claimed by the villagers but "there are some illegal activities".
"Don't get confused with illegal logging and the illegal activities we detected. They just failed to comply with logging procedures which led to the pollution."
The logging companies were given an "occupational ticket", or "OT", to extract logs in the area.
An OT is given when the company wants to log in lands other than state concession areas such as NCR lands or alienated lands.
Len, however, denied NCR land owners there were in dispute with the two companies.
On the log extraction, he said: "It has been going on for the last one year or so. There is no dispute on the boundary of the NCR land.
"From what I was told, the landowners were basically complaining about the polluted water catchment."
PKR's Batu Lintang state assemblyman, See Chee How, who is also the legal counsel to some of the NCR land owners, said there is a dispute and landowners from 17 of the 18 villages have filed their case at the Kuching High Court.
He said in a statement last week that landowners in the 17 villages are seeking declaration of native customary rights over a portion of the land the state government had leased to the companies.
See had also appealed to the state government to suspend the companies' operations in the disputed area.
He said this is to avert and prevent the sustained and escalating tensions between the plantation companies and the local villagers, while containing the clashes of rival gangs over the timber resources.
Sarawak's Land Development Minister Tan Sri Dr James Masing said last Friday that the two companies had engaged gangsters to threaten the land owners.
He said he would submit a "detailed account" of the alleged intimidation and assault to Bukit Aman and the Malaysian Anti-Corruption Commission (MACC).
Meanwhile, Assistant Minister in the Chief Minister's Office Datuk Naroden Majais - whom online news portal Sarawak Report alleged had "ownership ties" with one of the companies - denied he had anything to do with the company.
"I don't know the company and this company has got nothing to do with me," he said.
The news portal, linked to a UK-based environmental group, claimed the companies were tied to "powerful BN (Barisan Nasional) political figures in Sarawak".
The Sarawak Report also alleged that certain Sarawak state ministers used their influence to get the police to release four gang leaders who were caught after what it claimed was "the discovery of an enormous illegal arms cache at the disputed logging and plantation concessions". – November 12, 2013.
~ The Malaysian Insider