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A coalition of environmental, human rights, and Indigenous organizations is urging the European Union (EU) to classify Malaysia’s Sarawak state as “high risk” under its new anti-deforestation regulation. Sarawak, home to millions of hectares of ancient rainforests, faces severe deforestation risks and violations of Indigenous peoples’ rights, according to a joint assessment by groups including Human Rights Watch, RimbaWatch, and SAVE Rivers.

The call to action comes ahead of the EU’s pending decision to categorize regions based on their deforestation risks under the new law.

The EU Deforestation-Free Products Regulation (EUDR), set to be enforced from January 2025, aims to curb the import of commodities like timber and palm oil linked to deforestation and human rights violations.

Sarawak’s history of deforestation, especially for timber and oil palm plantations, makes it a significant concern. A high-risk designation under the EUDR would lead to stricter import checks and increased due diligence requirements for EU companies dealing with products from Sarawak.

Land Rights Violations and Deforestation Concerns

The coalition’s analysis highlights Sarawak’s controversial land laws, which undermined Indigenous land rights while promoting commercial exploitation of the state’s forests.

According to Luciana Téllez Chávez, senior environment and human rights researcher at Human Rights Watch, Sarawak’s land code places “insurmountable obstacles” on Indigenous communities’ ability to gain legal recognition for their ancestral lands.

These laws allow companies to operate with impunity, often disregarding Indigenous land claims. The coalition argues that Sarawak’s record justifies a “high risk” classification, which would necessitate increased oversight of timber and palm oil imports into the EU.

Sarawak’s ambitious plans to expand industrial timber plantations, aiming to establish one million hectares by 2025, are another point of concern.

Achieving this goal would require converting over 400,000 hectares of naturally regenerating forests between 2022 and 2025. This trend poses a significant threat to biodiversity and the rights of Indigenous peoples.

Deficiencies in Certification and Transparency

Despite Sarawak’s reliance on the Malaysian Timber Certification Scheme (MTCS), civil society organizations have flagged significant flaws in the program.

Local activists argue that MTCS does not adequately protect Indigenous rights or prevent deforestation. Celine Lim, managing director of SAVE Rivers, emphasizes that logging continues on Indigenous lands without proper consultation or consent, further eroding trust in certification standards.

Additionally, Sarawak’s opaque land management practices hinder transparency. The state has not made available comprehensive data on Indigenous lands or disclosed the locations of leases granted to logging and palm oil companies.

This lack of transparency prevents Indigenous communities and civil society from holding companies and the government accountable.

EU’s Role in Enforcing Sustainable Practices

Under the EUDR, the European Commission will classify regions as “low, standard, or high risk” by the end of 2024.

A high-risk designation for Sarawak would mandate EU member states to triple their customs checks on imports of wood and palm oil products from the region.

EU-based companies would also need to conduct more rigorous checks to mitigate environmental and human rights violations linked to these products. This process would require close collaboration between the EU and Malaysian authorities to reduce risks and ensure compliance with the new regulation.

Sarawak’s timber and palm oil exports to the EU have been significant in recent years. According to a Sarawak government report, the state exported at least MYR 37.3 million (€7.8 million) worth of timber to EU countries like the Netherlands, France, and Greece in 2023.

The EU remains the third-largest market for Malaysian palm oil exports, underscoring the importance of Sarawak’s compliance with international sustainability standards.

Challenges in Malaysian Government Response

The Malaysian government has pushed back against the EUDR, criticizing its definitions and monitoring processes.

The government contends that industrial timber plantations, which involve replacing natural forests with single-species plantations, should not be classified as deforestation. Critics argue that this stance overlooks the environmental degradation and loss of biodiversity associated with such practices.

Adam Farhan, director of RimbaWatch, warns that Malaysia may be attempting to bypass EU restrictions by downplaying the scale of deforestation in timber plantations. Farhan stresses the need for stringent due diligence on Malaysian forest-risk commodities.

The federal government has mandated that palm oil plantations established after 31 December 2019, on deforested land, cannot receive sustainable certification under the Malaysian Sustainable Palm Oil (MSPO) standard.

However, enforcement remains uncertain, as states hold jurisdiction over land and forest administration. Civil society groups are urging the Malaysian government to strengthen its oversight mechanisms and improve its sustainability certification programs to meet EU requirements.

International and Local Advocacy for Reform

In May 2024, the coalition of civil society organizations submitted recommendations to Malaysia’s federal Plantation and Commodities Ministry, urging reforms to align with international human rights and environmental standards.

Key recommendations include incorporating the United Nations Declaration on the Rights of Indigenous Peoples into federal legislation and introducing laws to prevent strategic lawsuits against public participation (SLAPPs), which are often used to silence critics of deforestation practices. The government has not yet responded to these calls.

As the EU moves forward with its anti-deforestation law, the decision to designate Sarawak as high risk could have far-reaching implications for Malaysia’s timber and palm oil industries. Environmental groups argue that strong enforcement of the EUDR is necessary to prevent further forest loss and protect Indigenous communities’ rights in Sarawak.