filed in general | on Mar.19, 2013
VIDEO BY NGO GLOBAL WITNESS, REVEALS LICENSE ABUSE BY SARAWAK CHIEF MINISTER, ABDUL TAIB MAHMUD AND HIS FAMILY!! Watch and spread it far and wide!!
WHAT IS THIS FILM ABOUT?
This investigation provides undercover footage of the corruption and illegality at the heart of governance in Sarawak, Malaysia’s largest state, on the island of Borneo.
For over thirty years, Sarawak has been governed by Chief Minister Abdul Taib Mahmud, who controls all land classification, forestry and plantation licenses in the state. Under his tenure, Sarawak has experienced some of the most intense rates of logging seen anywhere in the world. The state now has less than 5 per cent of its forests left in a pristine condition, unaffected by logging or plantations and continues to export more tropical logs than South America and Africa combined.
The film reveals for the first time the instruments used by the ruling Taib family and their local lawyers to skirt Malaysia’s laws and taxes, creaming off huge profits at the expense of indigenous people and hiding their dirty money in Singapore. Taib and the local lawyers we approached denied Global Witness’s allegations of corruption. A summary of their responses are included at the end of the film.
HOW DOES CORRUPTION AFFECT SARAWAK’S PEOPLE?
Corruption is destroying the fabric of Sarawak’s society and squandering the state’s natural resources. The region’s indigenous people have born the brunt of this. Ancestral land to which they have claims has been routinely licensed for logging and plantations, badly damaging their livelihoods and violating their rights under Sarawak and Malaysian law. This has trapped many communities in a cycle of poverty and dependency.
Moreover, corruption affects the future well-being of all Malaysian citizens. This investigation demonstrates how money that should be driving development is being lost to corruption and hidden in secrecy jurisdictions overseas. Malaysia is thought to be the world’s third largest source of such illicit financial flows, losing the country an estimated US$285 billion (RM863 billion), or over US$43,000 (RM130,000) perhousehold between 2001 and 2010. This is money that could have been spent on improving key services and quality of life for ordinary Malaysians.
IS THIS A WIDER PROBLEM THAN SARAWAK?
The timber rush which occurred during Taib’s three decades in office has spawned some of the world’s largest logging companies. These companies have had a catastrophic effect on forests and indigenous communities in almost every major tropical forested region in the world, and are regularly implicated in major illegal logging scandals.
Global Witness’ analysis shows that Sarawak’s logging companies are currently logging or converting forests to plantations in at least 12 countries. Their operations cover an area of 18 million hectares worldwide, an area roughly three times the landmass of Norway.
(taken from Global Witness)
Allegations of corruption get louder following secret tapes showing plunder of resource-rich Sarawak province.
Long Napir, Malaysia – Plantations and logging are ravaging Malaysia's majestic Borneo region and indigenous people who have lived for centuries here say they are increasingly being uprooted from their once-pristine lands.
But as the timber and palm oil companies swarm over the rugged landscape of resplendent rivers and ancient rainforests, villagers in Long Napir in the country's biggest state Sarawak have vowed to thwart any further land-grabs.
The village is a settlement of longhouses, the traditional communal housing favoured by indigenous people in eastern Malaysia's Borneo island.
Under the Sarawak Land Law, indigenous people have rights over areas as long as they can prove they have lived in or used the lands prior to January 1, 1958.
But the surrounding ancient rainforests that are so essential to their traditional way of life is under threat because of logging and plantation companies. Over the past 30 years, Sarawak – one of the richest Malaysian states – has become one of the largest exporters of tropical timber.
Despite its wealth, profits have failed to trickle down, and the people here are some of the poorest in the country.
Long Napir villagers lay the blame for their plight squarely on one man: the state's powerful chief minister, Abdul Mahmud Taib, who is in charge of all land classification and the allocation of lucrative forestry and plantation licenses.
"He lives, the rest of us suffer," Tamin Sepuluh Ribu, a former village headman, told Al Jazeera. "We have no land to farm, our rivers have become muddy, there's hardly any fish left anymore."
'Coterie of cronies'
Global Witness, a non-governmental organisation working against environmental exploitation, has investigated and exposed the situation in remote eastern Malaysia.
An undercover Global Witness investigator posing as an investor was offered several opportunities to purchase land in Sarawak by company officials linked to Chief Minister Taib. In each instance, the land in question was occupied by indigenous communities, who have valid claims to ownership rights under Malaysian law.
Global Witness said the indigenous areas were being sold by companies with close personal or political ties to the chief minister.
Taib has held the post since 1981, and has been repeatedly accused of corruption during his nearly 32-year rule.
The US Embassy in Kuala Lumpur noted in one cable released by WikiLeaks: "Chief Minister Taib Mahmud … doles out timber-cutting permits while patrolling the underdeveloped state using 14 helicopters, and his family's companies control much of the economy."
The American cable added that, "All major contracts and a significant portion of land to be converted to palm oil plantations [including on indigenous 'customary land rights' that the state government has refused to recognize] are given to these three companies."
People in Sarawak are "fed up" with Taib's administration, "seen as only enriching his family and a small coterie of cronies", it said.
Global Witness released a November 2012 report titled, "In the future, there will be no forests."
"Taib's powerful executive position and personal responsibility for the issuance of lucrative logging and plantation licences has enabled him to systematically extract 'unofficial payments' from the state's timber tycoons for the enrichment of himself and his family," the report said.
Taib, meanwhile, denied the corruption allegations as "wholly untrue and malicious", said the report.
In 2011, the Malaysian Anti-Corruption Commission launched an official investigation into Taib, which continues at present.
In secretly taped negotiations provided to Al Jazeera, the Global Witness investigator discussed buying land with company shareholders Fatimah Abdul Rahman and Norlia Abdul Rahman – Taib's first cousins. Fatimah admitted the parcel of land under discussion had been transferred to them by Chief Minister Taib.
"Yeah, he's the one who gave us the land. He's my cousin," Fatimah said, laughing.
In 2011, Taib gave his cousins 5,000 hectares of land for about $300,000 dollars, according to leaked land registry documents. Having secured agriculture and timber licences, they were trying to sell it a year later for more than $16mn.
Later, discussing the ease of receiving a forestry license, Fatimah told the Global Witness investigator: "The Land and Survey Department, they are the ones that issue this licence. Of course, this is from the CM's [Chief Minister's] directive, but I can speak to the CM very easily."
Fatimah and Norlia did not respond to Al Jazeera's requests for comment.
Over the years, Taib's government has sought to limit the exercise of indigenous land rights. More than 200 land dispute cases are now before Sarawak courts, brought on behalf of claimants from indigenous communities.
Jannie Lasimbang, Malaysia’s National Human Rights Commissioner, told Al Jazeera that numerous amendments have eroded indigenous land rights over the years.
“The commission is concerned about the high degree of frustration, anger and desperation among indigenous peoples,” Lasimbang said.
In 1994, the Sarawak government gave the minister in charge of land the power to extinguish Native Customary Rights to land. Two years later, it was legislated that land dispute cases were automatically to presume the land belongs to the state, and the burden of proof was shifted to the claimant.
In 2011, the definition of "native" was amended to include "any party entering into a joint-venture plantation deal with the Land Custody and Development Authority".
In the secretly recorded conversations with Global Witness, Taib's cousins Fatimah and Norlia showed disdain and contempt for indigenous rights, describing local villagers as "naughty people".
"So the minute they hear this land has been given, has been titled to this company to do oil palm and what-not, they'll plonk themselves there," said Fatimah.
Her sister Norlia added, "They may harass you, that's all. They are actually squatters on the land, because the land doesn't belong to them. It's government land. So they're squatting."
The secret dealings caught on tape only just scratch the surface of the Taib family's business interests.
Leaked land registry documents analysed by Swiss non-governmental organisation Bruno Manser Fonds suggest that companies linked to Taib's family control about 200,000 hectares of land in Sarawak – an area twice the size of Hong Kong. Global Witness estimates it has a market value of $500mn.
Divorce settlement proceedings in Malaysia between one of Taib's son, Mahmud Abu Bakir Abdul Taib and his first wife Shahnaz Abdul Majid, also highlight the vast wealth of the family. The ex-wife testified that Mahmud had an estimated $233 million deposited in more than 100 bank accounts across the world.
In June 2011, the Malaysian Anti-Corruption Commission said it had launched an investigation into Chief Minister Taib, but gave no further details. When Al Jazeera inquired about the progress of the case last month, the commission said it had "no comment on the matter".
Taib's office did not respond to Al Jazeera's request for an interview, but he has consistently denied allegations of corruption.
The family appears not view the accusations with much seriousness. As Taib's cousin Fatimah declared on tape: "I know people are talking about him [Taib] being corrupted and all, but I think who isn't in this world when they're leaders?"
One villager in Sarawak promised not to allow the status quo to continue.
"We will fight on at all costs,” farmer Vincent Balingau told Al Jazeera. “We let them take timber in the past, but we had no idea they were planning to take our land."
Explosive video reveals licence abuses by Taib family
10:01AM Mar 19, 2013
EXCLUSIVE An undercover investigation by an international NGO has revealed video evidence of how Sarawak Chief Minister Abdul Taib Mahmud's family members and business associates abuse logging licences to enrich themselves at the expense of ordinary Sarawakians.
Two of Taib's first cousins, a family member of Taib's key business partner and a lawyer who represented the cousins have been caught on video explaining the mechanisms of circumventing existing laws to profit from the scheme.
The video was discreetly recorded by an investigator with Global Witness, a London-based NGO that investigates and campaigns against environmental and human rights abuses.
The undercover investigator was sent to Sarawak last year posing as a "foreign investor" looking to buy land to set up oil palm plantations.
The investigator approached the Regional Corridor Development Authority (Recoda), the state government body charged with handling foreign investments, and was immediately directed to certain members of Taib's family who were selling companies licensed to log and clear land for plantations in Sarawak.
These licences were issued by Sarawak's Ministry of Resource Planning and Environment, which is headed by Taib.
Caught on video
The investor was offered four land leases during the investigation.
Meetings with these family members and other agents of the companies were covertly recorded by Global Witness and produced into a 16-minute film posted on its website.
The largest lease was a 60-year licence issued to a company named Billion Venture Sdn Bhd for oil palm and commercial tree plantations covering an area of 32,000 hectares of natural forest in Limbang district, bordering the Gunung Mulu National Park, Malaysia's first World Heritage Area.
Billion Venture has also been issued with two more prized licences to log the rare and extremely valuable Belian tree species in the area.
The investigator met with Huang Lung Ong of Huang & Company Advocates, a representative of Billion Venture, who stated that the owner of the company is his uncle, prominent Sarawak timber tycoon Hii Yii Peng, and that Hii is very close to Taib.
Huang divulges that Hii would be expected to pay Taib a kickback of approximately 10 percent of the licence value in return for the directive from Taib's ministry to issue the logging licence.
"It's like, 'I [Taib] award you this licence. In return you grateful to me.' Maybe he say I give you a percentage…
"The existing owner [Hii] will pay him [Taib] up… probably 10 percent," Huang tells the investigator, as shown in the video believed to be filmed in a hotel room.
A RM22 million kickback
Huang stated that Hii is looking to sell Billion Venture for US$76 million (about RM230 million), which implies that Taib's kickback would be more than US$7 million (about RM22 million).
Asked about the allegation after the covert investigation was completed, Huang told Global Witness that "I have no knowledge how Hii Yii Peng obtained the asset or that there is a kickback, as alleged…
"Your allegations are untrue and not within my knowledge to answer… I am only aware of this asset through brokers middle of last year and these brokers asked me to act as solicitor to safeguard their commission… I have never been appointed by Hii Yii Peng as his solicitor."
Global Witness claims that the mechanism is consistent with allegations made by senior government officers and a timber industry executive in Sarawak that it interviewed.
However, Taib's solicitors in London told Global Witness, "Our client never demands or accepts bribes for the grant of licences and leases – whether for 10 percent of the value of those licences or leases or through structures designed to conceal his identity."
Documents from the Companies Commission of Malaysia confirm Billion Venture to be owned by the Hii family, who have extensive and enduring commercial interests with Taib and his immediate family in sectors including joint-ventures and common shareholdings in the palm oil, timber and hospitality industries.
Global Witness also found that the land under the licence issued to Billion Venture encroached into the ancestral land of Long Napir, a settlement of Penan and Kelabit indigenous people who told the NGO that they were never consulted by the government or company on plans to clear their land for plantations.
Global Witness claims that maps produced by the Sarawak Land and Survey Department show the Long Napir community have been living and farming the area before 1956 and therefore have robust claims to the area as Native Customary Rights land.
Land worth half a billion US dollars
Three other land leases offered to the Global Witness investigator, covering a total area of 23,438 hectares, were held by proxies or shell companies on behalf of family members of Taib.
Using a RM4,000 per acre sale price as discussed in the meetings with the sellers, the total sale value of the three leases would be US$77 million (about RM232 million).
This represents an investment return of about 3,600 percent for Taib's family, considering the total recorded premium paid to the state government for all three leases was just US$2.1 million (about RM6.4 million), according to data leaked from the Sarawak Land and Survey Department.
However, these three land leases represent just a fraction of the total land bank accumulated by Taib's family members.
An earlier analysis of leaked database from the state Land and Survey Department by Swiss-based NGO Bruno Manser Fund indicated that the total area held by companies linked to Taib's family members is nearly 200,000 hectares, representing assets worth more than half a billion US dollars.
In response to the questions Global Witness put to Taib, his solicitors told the NGO: "Our client's wider family consists of hundreds of individuals. Our client has no responsibility for or contact with the vast majority of these people…
"The government of Sarawak issues licences for land in very controlled circumstances, as part of a general policy for limited agricultural and industrial development. This is an administrative exercise, not political patronage.
"Individuals can apply for land under certain circumstances. Your statement suggests that the system is directed towards relatives of the chief minister. This is not the case."
Taib's first cousins
One of the shell companies that offered to sell its licence to the undercover "investor" was Ample Agro Sdn Bhd, whose six shareholders are Taib's first cousins and all daughters of former Sarawak chief minister Abdul Rahman Ya'akub.
The six sisters controlled the RM2 company through a holding company called Sateras Holdings Sdn Bhd.
The deal was proposed to Global Witness by Norlia Abdul Rahman (right in photo) and Fatimah Abdul Rahman (left in photo), both directors of Ample Agro.
Meetings with Norlia and Fatimah are recorded on the video.
They proposed the selling price of US$16.6 million (RM52 million) for their 5,000 hectares of land lease or RM4,000 per acre (RM9,884 per hectare).
Records show that the land lease was given by the state government in 2011 with a nominal premium of only US$300,000, which means a hefty profit of US$16.3 million or an investment return of over 5,400 percent for the sisters in the period of just one year.
"The Land and Survey Department, they are the ones that issues this licence. Of course it is from the CM's [Chief Minister] directive but I can speak to the CM very easily." Fatimah says in the video.
"Yeah, he was the one who gave us the land. He is my cousin, so… (laughing). His mother and my father are sisters and brothers, siblings. So he is my first cousin so it is quite easy."
In the footage, Norlia says: "I bought that company as a shell company for this land."
Two other Rahman sisters who would have pocketed millions of dollars from any such sale are Tanjung Manis MP Norah (right), who is a company shareholder, and Khadijah, a company director and shareholder.
Khadijah is also the sister-in-law of Prime Minister Najib Abdul Razak.
None of the six sisters from Ample Agro responded to the claims made by Global Witness.
Taib's lawyer: Allegations entirely untrue
The NGO also visited the area licensed to Ample Agro and was informed that there are 12 longhouse communities whose native customary rights would be encroached by the licence.
One community told Global Witness that they had lived on the land for more than 100 years. Aerial photos from 1947 taken by Britain's Royal Air Force shows the area being used for shifting cultivation at that time, providing backing to their claim.
The extensive aerial mapping carried out at that time is routinely used by Malaysian courts in deciding land rights claims.
Asked for response to the allegations, the law firm representing Taib, Mishcon de Reya, told Global Witness that the NGO's allegations "are entirely untrue", and they "call into question our client's personal and professional integrity and seek to say that he is unfit for the role he holds within Sarawak".
Sarawak's way of evading tax and shareholding rules
Sarawak's way of evading tax and shareholding rules
10:23AM Mar 19, 2013
EXCLUSIVE Not only was the abuse of logging licences by some of Sarawak Chief Minister Abdul Taib Mahmud's family members and business associates captured on video, their illegal modus operandi to evade tax and circumvent the government's requirement of 51 percent local shareholding ownership was also exposed.
An undercover investigation conducted by Global Witness, a London-based NGO that investigates and campaigns against environmental and human rights abuses, last year clandestinely recorded video footage showing two Taib's cousins and their lawyer explaining the mechanism.
Posing as a "foreign investor" looking to buy land for oil palm plantations, the undercover investigator sent by Global Witness went to a state government body charged with handling foreign investment and was immediately directed to certain members of Taib's family.
These family members were looking to sell their shell company which was issued with licences by Sarawak's Ministry of Resource Planning and Environment, which is headed by Taib, to log and clear land for plantations.
One of the companies is Ample Agro Sdn Bhd, whose six shareholders are Taib's first cousins and all daughters of Sarawak's former chief minister, Abdul Rahman Ya'akub (right).
They include Tanjung Manis MP Norah Abdul Rahman, and Khadijah, who is also sister-in-law to Prime Minister Najib Abdul Razak.
The six sisters controlled the RM2 company through a holding company called Sateras Holdings Sdn Bhd.
The deal was proposed to the Global Witness investigator by Norlia Abdul Rahman and her sister Fatimah, both directors of Ample Agro.
Sisters suggest two sets of agreements
During their meetings with the investigator, Norlia and Fatimah suggest that the proposed US$16.6 million (RM52 million) sale of their land lease could be done illegally to evade paying millions in Real Property Gains Tax (RPGT).
They suggest that two sets of agreements be drawn up, with one setting out a nominal sum that would be registered with authorities in Malaysia, while the principal amount would be paid through an undisclosed agreement in Singapore to evade paying any RPGT.
"Well, there are different ways of doing it, some people do it this way. Certain portions are paid here and the balance of it can be paid in Singapore. You know, outside, why they do that is to save on the RPGT," Norlia explains in the video recording.
"We will have to do two sets of agreements… both agreements are done here but the other one specifies the full amount where the details are spelled out, whilst the one here is only just for the portion that's here."
Asked whether the arrangement would breach any law, Norlia firmly replies, "No, it's been done… It's been done before."
Such an arrangement is in fact illegal under the Real Property Gains Tax Act 1976 and punishable with a prison sentence.
However, none of the Ample Agro shareholders, when contacted, responded to the claims made by Global Witness.
During the investigation, the investigator was also referred to lawyers acting on behalf of Taib's family interests, who divulged details on the corrupt system used to extract wealth from Sarawak.
'Singapore, the new Switzerland'
One of these lawyers is Alvin Chong Chee Vun of Alvin Chong & Partners, Kuching, who has represented the Sarawak government, government-linked companies and prominent public listed companies with close links to Taib's family.
Engaged by Norlia for the proposed sale of the land by Ample Agro to the "foreign investor", Chong explains in the video that their suggestion is to execute the deal in Singapore.
"The Singapore has a China Wall… They will not tell them, the Malaysian government, nothing… They [Malaysian government] ask them and they've been turned down…
"Sorry, it's none of your business. They are the new Switzerland. Jurisdiction by choice for people like us. We operate Singapore accounts too, both personal and corporate entities," Chong says in the video.
In addition, Chong advises another mechanism to allow foreign investors to circumvent existing company laws, which requires the majority of the shares to be held by a Malaysian citizen.
This mechanism involves finding Malaysian nominee shareholders, then arranging a "loan" between the foreign investors and the nominees for the "purchase of shares" in the local company, and in turn using these shares as collateral against the loan.
This in effect renders the local shareholders as nominees who remain "indebted" to the foreign investors and are thus compliant.
Although the law stipulates that local shareholders must not hold shares on trust, Chong assures the investigator that the agreement underpinning the mechanism would be "locked up offshore", meaning that the agreement would not be disclosed to the Malaysian authorities.
The proposed offshore jurisdiction for Chong's mechanism was Singapore, which he said would not comply with requests from Malaysian authorities for information about such agreements.
'Nominees' are ignorant villagers
When asked where the potential nominees could be found, Chong stated that he targets villagers from remote communities who are ignorant to the true nature of legally binding contracts, and who are unable to seek legal redress.
"From the lowest rank we can find in a remote area. They will not be distracted by clever advisers.
"What I normally do… so I'll tell you some trade secrets, as such… We find some guys who are villagers, sign them for all the stuff, you can't even reach them.
"They wouldn't know how to find a lawyer, would they? (Laughs) This is cheap, it's really cheap.
"Can you imagine the villager comes to town and you say 'I'm giving you 10,000 bucks'. My God, he is going back to the village, you know, he'll be the one-eyed man who is king in the land of the blind, you know," Chong elaborates.
Chong assures the investigator that the chosen nominees "won't surface" and "won't hold a shred of paper", and that he had used this mechanism "many a times".
In response to Global Witness' questions later, Chong's firm replies, "We categorically deny our Mr Chong acted as legal spokesperson for the alleged party.
"…We categorically deny each and every unfounded allegation made… We deny any discussions to allegedly evade tax and if there were any purported discussions, these were strictly hypothetical," the firm's statement says.
Global Witness is calling on Malaysia's federal authorities to set up a royal commission of inquiry to investigate the extent of corruption among Sarawak's leaders and state government institutions.
The proposed RCI should explore institutional reforms to improve systems of transparency and accountability, and to ensure prosecutions swiftly follow against those found to have been engaged in corruption.