Sabah earns RM5.3 billion in timber royalties

Borneo Post

10-05-2025

Kugan (second from right) presenting the Biodiversity Conservation Partner Award to a representative of Sawit Kinabalu Group.-Information Department photo
KOTA KINABALU (May 10): Sabah has collected royalties totaling RM5.3 billion from timber harvests under the Sustainable Forest Management License Agreement (SFMLA) from 1999 to 2023.
Chief Minister Datuk Seri Panglima Hajiji Noor stated that this amount translates to an average annual revenue of RM213 million for the state government, while the SFMLA initiative has also created around 40,000 job opportunities for the people of Sabah.
'It cannot be denied that there are still some parties skeptical about the SFMLA's implementation. However, we should not be influenced by negative views that bring no benefit to the state's development,' he said in his speech at the Forestry Appreciation Ceremony at the Sabah International Convention Centre (SICC) on Friday.
His speech was delivered by the State Secretary, Datuk Seri Panglima Sr. Safar Untong.
According to Hajiji, Sabah has been a pioneer in implementing the Sustainable Forest Management (SFM) concept through long-term collaboration with the private sector since the introduction of the SFMLA in 1997.
'This approach not only contributes to economic gains through the timber and wood industry but also plays a crucial role in environmental conservation and improving the livelihoods of local communities.
'To date, 1.4 million hectares of Class II Forest Reserve have been licensed to 43 SFMLA concession holders,' he said.
He added that the state government, through the Sabah Forestry Department, continuously monitors the progress of each concession holder annually, and nine licenses have been revoked since the SFMLA's introduction due to failure to comply with agreement terms.
'Tonight, 32 concession holders received Compliance Certificates for achieving their 2024 Annual Work Plan targets. This demonstrates the strong commitment of the majority of concessionaires to sustainable forest management,' he said.
Hajiji also called on all involved parties to intensify forest plantation efforts to meet the target of 18,000 hectares of forest plantations per year, as outlined in the Forest Plantation Development Action Plan 2022–2036.
He further announced that Sabah received RM26.45 million under the first phase of the Ecological Fiscal Transfer (EFT) Fund after being recognized as the third-highest state in gazetting new protected areas from 2021 to 2023, after Johor and Sarawak.
To date, Sabah has gazetted 2.012 million hectares as Totally Protected Areas (TPA), accounting for 27.15% of the state's total land area.
'To achieve the 30% TPA target this year, Sabah needs an additional approximately 211,000 hectares.
'The Forestry Department is preparing a proposal to gazette several critical protected areas under Section 5A of the Forest Enactment 1968. I fully support this effort,' he said.
Meanwhile, Hajiji stated that amendments to the Forest Enactment 1968, approved last April, grant full authority to the State Government to regulate forest-based carbon credit trading activities.
He explained that with these amendments, all revenue from forest carbon activities will be channeled directly to the state, in line with conditions safeguarding the people's interests.
'These amendments also empower the Chief Forest Conservator to close parts of sensitive forest reserves, issue permits, impose fees for certain activities, and amend penalties for forestry offenses.
'This aligns with the amendments to the National Forestry Act 2022 and will further strengthen enforcement and combat illegal encroachment on forest resources,' he said.
He added that since 2010, 34 cases of forest encroachment could not be prosecuted because the areas were not officially closed to public access.
The Chief Conservator of Forests, Datuk Frederick Kugan, presented the 288-page 2024 Annual Report of the Sabah Forestry Department to Safar at the event.
Conservation Partner Award was given to seven recipients. Among them were International Society for Mangrove Ecosystems, Sabah Electricity, Sawit Kinabalu Group, St Michael Secondary School, Penampang and The Borneo Post Sabah.
KTS Plantation Sdn Bhd was among the companies receiving Compliance Certificate.