Timber trouble

Malaysia is infuriated by Australia's moves to ban logging by foreign companies in South Pacific countries

Published: Friday 30 September 1994

At loggerheads: the latest fra (Credit: Anil Agarwal /CSE)Australia's new role as a protector of forests in the South Pacific is causing uneasiness in Malaysia. Trouble has been brewing since early August, when Australian prime minister Paul Keating accused Malaysian, South Korean and Indonesian logging companies of "ripping off" the island nations by paying too little for timber products.

Malaysia has now struck back. In late August, Malaysian prime minister Mahathir Mohamad questioned Australia's sudden green pretensions. His criticism centres on a $1.48 aid package announced by Australia for the Solomon Islands at the South Pacific Forum. In return, the government of the South Pacific nation is to ban logging, which was being carried out by the Malaysia-based Kumpulan Emas. "Unfortunately, the activities of the Association of South East Asia Nations (ASEAN) loggers to help the economy of many developing countries have aroused resentment among some regional powers," says Mahathir.

Australia's generous offer to the Solomon Islands, together with the South Pacific Forum's recent agreement to adopt a common forestry code, poses a major threat to Malaysia. The Malaysian state of Sarawak alone accounts for 80 per cent of the world's unprocessed tropical timber exports. However, environmental pressures have forced the country's timber conglomerates to spread their wings in other countries such as the Solomon Islands and Papua New Guinea.

The South Pacific nations are seething with resentment against Malaysia's increasing stranglehold on their valuable timber resources. Environmental groups in Papua New Guinea point out that Malaysian conglomerates control more than 60 per cent of the country's log exports.

These nations are now doing all that they can to get out of this vice-like grip. In the Solomon islands, the logging licence of Silvania Products, a unit of Kumpulan Emas, was suspended for flouting environmental norms. Besides, a senior executive of the Malaysian giant Berjaya Group resigned following allegations that he had attempted to bribe a Solomon Islands minister in connection with a timber deal.

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