sustainable forest management - sabah forestry...

181Sustainable Forest Management

Sustainable Forest Management

IntroductionOur program aims to accelerate the implementation of SFM principles together with our SFM partners namely, the Sustainable Forest Management Licence Agreement (SFMLA) and Long-Term Licence (LTL) holders. This annual report highlights the principal accomplishments on the implementation of sustainable forest management (SFM) in calendar year 2012. This past year has been a time of challenge and opportunity, but through the myriad changes, the implementation of SFM in Sabah remains as one of the leading programs of its type and is poised to achieve even higher levels of excellence in the future. In fact, the year 2012 was a new record for us when 20 of the 29 SFMLA/LTL holders received their Compliance Certificate, an increase of 5 from the previous report, indicating that these SFMLA/LTL holders have performed exceptionally well in their respective SFM implementation. Many of them have completed at least 70% (a minimum passing mark) of their planned activities for the reporting period and/or managed to conduct additional activities that were not planned despite significant budgetary problems. This shows that the private sector is already significantly engaged in SFM in Sabah.

Translating The SFM Concept Into Action In 2012, there was one (1) SFMLA issued and one (1) surrendered to the government. This means the number of SFMLA/Long Term License (SFMLA/LTL) holders participating in the implementation of SFM in the State remained at 29. Besides the SFMLA/LTL holders, we in the Sabah Forestry Department (SFD,) also acknowledge the importance of partnerships by involving other stakeholders such as, the local communities and NGOs in all aspects of forest management decision-making and implementation of specific elements of SFM into practice under different circumstances and for different forest management objectives and levels of scale. There were already signs that our efforts to achieve SFM at the State level since 1997 and in 2012 in particular, have so far been moving in the right direction. Besides the Sabah Forestry Department, almost 80% of the SFMLA/LTL holders had demonstrated their high commitment, financial and technical capability and have the means and resources to translate plans into actions. For the other 20%, they had good performance on the ground and had met most of the basic requirements of the Licence Conditions but need to step up ground implementation. Nevertheless, there was a widely-shared understanding of the very concept of SFM. What was also emphasized was a more coherent and focused approach to implement those actions recognized as essential for progress in SFM. There is a supportive government policy to help and guide the SFMLA/LTL holders to manage and sustain forest resources to meet shared goals. We have ensured that our forestry operations are socially responsible, particularly to communities living within and adjacent to the FMUs by incorporating appropriate social programmes into management planning, as well as, the development of the SFMLA/LTL areas. In addition, good governance in the State has received a lot of attention since 2012. It was a key approach to strengthen SFM in Sabah. It also offered concepts that reinforced and strengthened the implementation of SFM on the ground. Besides, good governance in the State, created mutually supportive and cooperative relationships among government agencies, NGOs and the SFMLA/LTL holders. This effective change was realized due to strong political will.

Progress In 2012 – What Have Been Accomplished? Throughout 2012, we continued to equip ourselves with qualified personnel and scientific support in order to meet the requirements of SFM, best management practices guidelines and management audits. Despite the high investment costs in SFM, our SFM assessments in 2012 showed that we continued to make significant progress and good performance on the ground. The State SFM policy has brought us benefits that we are only now beginning to reap such as success in expanding the concept of Reduced Impact Logging (RIL), thus reducing harvesting damage on the future tree crops; possessing world experts at all levels on forest management planning; SFM implementation; RIL; silviculture and forest rehabilitation; a resounding success in phasing out short term logging licences; establishing forest crops for future harvests under both the industrial tree plantation (ITP) and natural forest system (NFM), with investments coming from both the public and private sector; and maintaining the bio-diversity resources relatively intact despite losses of commercial trees, that is, the timber volume harvested within the SFMLA/LTL areas (natural forests) continued to decline from 1,280,842 m3 in 2011 to 581,314 m3 in 2012 – a decrease of 55%. Similarly, there was a 10% decrease of plantation timber volume harvested from the industrial tree plantation (ITP) areas. Further information on this can be referred under Forest Harvesting. Besides timber products, the year 2012 showed two SFMLA holders had started producing rubber latex (non-timber forest produce) on a trial basis from their Rubber Forest Plantations. Through SFM, greater attention has been paid to forest restoration, silviculture and ITP in order to enhance the growing stock. We also expect ecological values (such as healthy wildlife, water, soils) and social values (recreation, aesthetics, historical significance) are improved and maintained. To balance all of these expectations, for example, to ensure that trees can be harvested while non-timber benefits are maintained, the SFD has established forest planning processes. These processes have grown more complex over time as the State’s values have changed and we have learned more about how to successfully meet our sustainability goals.

Plan Formulation: A prerequisite for SFM As in the previous year, there must be an approved Plan in place before any forest operations in the SFMLA/LTL areas can begin. Usually, there are four types of Plans to be prepared. These are the Forest Management Plan (which is the main plan), Plantation Development (PDP), Agroforestry Development Plan (ADP) and Forest Conservation Plan (FCP). These Plans are prepared in conformity with the State’s forest policy, legislation and regulations, as well as, the SFMLA/LTLA terms and conditions. Our forest planning is based on strategic decisions about land use - decisions that are made by the FMP Team with considerable public consultation and subject to a systematic internal peer review prior to their approval to ensure that due diligence has been taken in their preparation. Public consultation is a way of ensuring that forest management planning reflects the input of all parties affected by proposed operations - a key element of SFM. In addition, forest management plans (FMP) and other Plans require careful scrutiny; there are no shortcuts to preparing them. The Plan, which outlines a strategic vision and a commitment to multiple forest values, projects within a 10-year period and to be reviewed every five years. It lays out

Sabah Forestry Department

Annual Report 2012182

in detail the current state, and the desired future state, of forest values in the management unit, based on known science. It also prescribes the harvesting, silviculture and enrichment planting/restoration and other activities to be carried out in the SFMLA areas (FMUs) to achieve the stated objectives for all values.

The status of the plan preparation in 2012 was as follows:

1st Forest Management Plan (Approved)

1. Lagenda Aktif Sdn. Bhd. – SFMLA 02/2012 – Ulu Sungai Milian Forest Reserve (Part of) – Prepared by Lagenda Aktif Sdn. Bhd.

2. Yayasan Sabah (JV Empayar Kejora Sdn. Bhd.) – SFMLA 09/97 – Gn. Rara Forest Reserve (FMU 23) – Prepared by Empayar Kejora Sdn. Bhd.

3. Warisan Majuria Sdn. Bhd. – SFMLA 01/2011 – Sg. Pinangah Forest Reserve (Part of) -FMU 17B- Prepared by the SFD.

4. Lower-Kinabatangan-Segama Wetlands Ramsar Site Forest Management Plan Volume 1 – Prepared by Sabah Biodiversity Centre.

2nd Forest Management Plan (Approved)

1. Sabah Forest Industries Sdn. Bhd. (NFM Areas) – JP (KSG) 108/96 (CO) - Sipitang and Ulu Sg. Padas Forest Reserves - FMU 7– Prepared by SFI.

2. Bornion Timber Sdn. Bhd. - SFMLA 03/97 – Ulu Sg. Milian FR and Sapulut FR (Part of) – FMU 11- Prepared by Bornion Timber Sdn. Bhd.

1st Forest Conservation Plan (Approved)

10 – Year Forest Conservation Plan for Darvel Bay Islands Forest Reserves (Saga Island, Saddle Island, Laila Island, Saranga Island, Tabun Island, Baik Island and Kalung Kalungan Island) – Prepared by the SFD

1st FMP completed but to be reviewed further

1. Top Quantum Sdn. Bhd. – SFMLA: 01/2009 (FMU 25 – Sapulut FR – Partly) - Prepared by Top Quantum; and

2. First Greenworld Sdn. Bhd. – SFMLA: 02/2009 (FMU 25 – Sapulut FR – Partly) – Prepared by First Greenworld.

1st Agroforestry Development Plan (Approved)

1. Benta Wawasan Sdn. Bhd. (Ratus Awansari Area) – JP(TKA)122/96(CO) – Kalabakan FR (Part of) - Prepared by the SFD.

2. Aspirasi Kristal (M) Sdn. Bhd. – JP(SBN)01/2011(CO) – Bonggaya Forest Reserve (Part of) – FMU 18 – Prepared by the SFD.

3. Satria Eramaju Sdn. Bhd. - JP(SBN)02/2011(CO) – Bonggaya Forest Reserve (Part of) – FMU 18 – Prepared by the SFD.

4. Ultra Surge Sdn. Bhd. - JP(SBN)03/2011(CO) – Bonggaya Forest Reserve (Part of) – FMU 18 – Prepared by the SFD.

1st Plantation Development Plan (Approved)

1. Yayasan Sabah (JV with Empayar Kejora Sdn. Bhd.) – SFMLA 09/97 – Gn. Rara Forest Reserve (FMU 23) – Prepared by Empayar Kejora Sdn. Bhd.

2. Yayasan Sabah (JV with Indah Serimas Sdn. Bhd.) – SFMLA 09/97 – Sg. Pinangah FR (Part of) – FMU 16 – Prepared by the SFD.

3. Yayasan Sabah – SFMLA 09/97 – Part of Kalabakan and Gn Rara FR (FMUs 24 and 26) – Prepared by the SFD.

4. Sabah Forest Industries Sdn. Bhd. (NFM Areas) – Titled Lands – CL 195317803(Ganui) and CL 195317821(Mendolong) - FMU 7 – Prepared by SFI.

New Plans under Preparation

Forest Management Plan1. Yayasan Sabah’s 10 – Year FMP (Kuamut FR – FMU 20); 2. Yayasan Sabah’s 10 – Year FMP (Northern Gn. Rara FR, Mt. Magdelena FR, Batu Timbang Virgin

Jungle Reseve (VJR) and Imbok VJR) – FMUs 23 & 24); and3. 10 – Year FMP (Timimbang-Botitian Forest Reserves – FMU 4).

Plantation Development Plan1. Yayasan Sabah’s 10-Year PDP (FMU 16 – Part of Sg. Pinangah FR).2. Lebihasil Sdn. Bhd.’s PDP – SFMLA 1/2007 – Part of Sg. Pinangah FR – FMU 17B (Area C) – to be

prepared by the SFD.

Agroforestry Development Plan1. Benta Wawasan‘s 10 – Year ADP (JV with Rinukut Sdn. Bhd.) - FMU 26 – Part of Gn. Rara FR and

Kalabakan FR.2. Benta Wawasan’s 10 –Year – ADP (JV with TSH Ventures Sdn. Bhd.) – FMU 26 - Part of Gn. Rara FR

and Kalabakan FR.

1st Forest Conservation PlanKK Advantage Sdn. Bhd’ 10 – Year Forest Conservation Plan – Part of Bonggaya FR – FMU 18.

Website: www.forest .sabah.gov.my


Plans under Mid-Term and Final Management ReviewThe FMP/PDP/ADP typically undergoes a formal review every five or ten years, with regular interim assessments and inspections for compliance during the life of the Plan. In this context, some of the FMPs and PDPs were reaching either the end of their first 5- year period (mid-term review) or the 10 – year period (final management review). Consequently, the Sabah Forestry Department and Yayasan Sabah had undertaken some steps to carry out its mid-term review for its 1st FMP (Ulu Segama – Malua FRs – FMU 20, 21 and 22) in 2012, while four (4) SFMLA/LTL holders had undertaken some steps in 2011 and continued in 2012 to carry out a more comprehensive review of the operation of their Plans. This includes examining the effectiveness of their management performance against the objectives, prescriptions, implementation schedules and budgets. The final management review forms a platform or foundation for the preparation of their 2nd or 3rd 10 – Year FMP/PDP. The following are the SFMLA/LTL holders that had undertaken their final management review for their 1st or 2nd

FMP/PDP in 2011 and continued in 2012:

Final Management Review 1. 2nd FMP - Timberwell Berhad (FMU 3 – Lingkabau FR). 2. 1st FMP - K.M.Hybrid Sdn Bhd (FMU 9 - Part of Kuala

Tomani FR).3. 1st FMP - Sapulut Forest Development Sdn Bhd (FMU14 –

Sapulut FR).4. 1st PDP - Timberwell Berhad (FMU 3 – Lingkabau FR). 5. 1st PDP - Bornion Timber Sdn Bhd - SFMLA 03/97 – Ulu

Sg. Milian FR and Sapulut FR (Part of) – FMU 11.

Forest Harvesting – the source of SFM financing?Forest harvesting is the driving force for the regeneration of revenue from which all SFM activities are supposed to

be funded. A total of 581,314 m3 of timber (based on actual harvesting record) was harvested in 2012 from natural forest management (NFM) and industrial tree plantation (ITP) compartments – a decrease of 55% compared to 2011. The total area harvested from NFM compartments in 2012 was approximately 18,317 ha with the total volume of 93,367.9 m3

(Table 20.1). This is almost a 54% decrease in area compared to 2011, which were 39,767 ha. The highest timber production from NFM areas came from Rakyat Berjaya Sdn. Bhd./Yayasan Sabah, which is approximately 79,758.9 m3 (Chart 20. 1). This is followed by Deramakot SFM Project (13,369 m3) and Timberwell Bhd (240 m3). Harvesting in these areas was based on the prescribed standard of Reduced Impact Logging (RIL). The total area harvested from ITP areas in 2012 was approximately 22,861 ha, while the total volume of timber extracted was 487.945.7 m3 (Table 20.1). This is about a 58% decrease compared to 2011 (55,083 ha). Sabah Forest Industries Sdn Bhd (SFI) has the highest production from their ITP areas (114,585.4 m3). This is followed by Yayasan Sabah (97,730.3m3), Lagenda Aktif Sdn. Bhd. (68,061.7m3), Bornion Timber Sdn. Bhd. (59,509 m3), Timberwell Bhd. (49,318 m3), Sapulut Forest Development Sdn. Bhd. (37,403 m3), TSH Resources Bhd. (30,857 m3) and KTS Plantation (17,014 m3). The total production of plantation timber in 2012 was approximately 1,146,542 m3, a decrease of about 10% compared to 2011 (1,278,923 m3). Approximately 69% of the production came from the SFMLA/LTL Holders, 17% came from SAFODA, 11% from Sabah Softwood Bhd, and 3% from the smallholders (Table 20.1). Sabah Forest Industries produced approximately 684,291m3 and thus, maintained as Sabah’s biggest plantation timber producer (Chart 20.2). This is followed by SAFODA (196,885m3), Sabah Softwoods Bhd (129,058m3) and Benta Wawasan Sdn Bhd (100,737m3).

No.SFMLA Holders/Agency/Company/

Smallholder

NFM Area ITP Area Plantation Trees

TotalForest Reserve Forest Reserve Forest Reserve Alienated Land Stateland

Area (ha) Vol (m3) Area (ha) Vol (m3) Area (ha) Vol (m3)Area (ha)

Vol (m3)Area (ha)

Vol (m3)

A SFMLA/LTL Holder1 Sabah Forest Industries Sdn. Bhd. - - 675.00 114,585.40 4,269.00 624,034.00 440.00 60,257.00 5,384.00 798,876.402 KTS Plantation Sdn. Bhd. - - 1462.0 17,014.5 - - - - - - 1,462.0 17,014.53 TSH Resources Bhd - - 1,287.9 30,857.0 - - - - - - 1,287.9 30,857.04 Sapulut Forest Development Sdn. Bhd. - - 1,590.7 37,402.9 - - - - - - 1,590.7 37,402.95 Bornion Timber Sdn. Bhd. - - 4,188.8 59,508.9 - - - - - - 4,188.8 59,508.96 Lebihasil Sdn. Bhd. - - 147.0 3,675.0 - - - - - - 147.0 3,675.07 Timberwell Berhad 80.1 240.0 484.0 49,318.1 - - - - - - 564.1 49,558.18 Rakyat Berjaya Sdn. Bhd. 17,920.0 79,758.9 8,545.0 97,730.3 26,465.0 177,489.29 Benta Wawasan Sdn. Bhd. - - 685.0 1,703.2 4,675.0 100,737.0 - - - - 5,360.0 102,440.2

10. Lagenda Aktif Sdn. Bhd - - 2,465.0 68,061.7 - - - - - - 2,465.0 68,061.711 Kelola Maju Sdn Bhd - - 1,330.7 8,088.8 - - - - - - 1,330.7 8,088.8

Sub-Total 18,000.1 79,998.9 22,861.0 487,945.7 8,944.0 724,771.0 440.0 60,257.0 - - 50,245.1 1,352,972.6

B SFM Project1 Deramakot FR 317.0 13,369.0 - - - - - - - - 317.0 13,369.0

Sub-Total 317.0 13,369.0 - - - - - - - - 317.0 13,369.0

C Agency1 Sabah Softwood Bhd - - - - - - - 129,058.1 - - - 129,058.12 SAFODA - - - - - - - - 196,885.0 - 196,885.03 Lembaga Industri Getah Sabah (LIGS) - - - - - - - 19,941.9 - - - 19,941.9

Sub-Total 149,000.0 196,885.0 345,885.0

D Company1 Sime Darby - - - - - - - 282.6 - - - 282.6

Sub-Total - - - - - - - 282.6 282.6

E Small Holders - - - - - - - 14,408.3 - 938.0 - 15,346.3

Total 18,317.1 93,367.9 22,861.0 487,945.7 8,944.0 724,771.0 440.0 223,947.8 197,823.0 50,562.1 1,727,855.5

Table 20.1: Area and Volume of Timber Harvested in 2012.



Chart 20.1: Areas harvested in NFM, ITP and Forest Plantations by the SFMLA/LTL Holders and the SFD in 2012.

Chart 20.2: Log Production from NFM, ITP and Forest Plantation Area by the SFMLA/LTL Holders, the SFD and Smallholders in 2012.



Chart 20.3: Forest Areas silviculturally treated in 2012

Silviculture and Enrichment PlantingSilvicultural treatment and enrichment planting/forest restoration were continously carried out in 2012 in order to enhance the growing stock of our forests. In 2012, approximately 19,984 ha of our forests were silviculturally treated (Chart 20.3), a slight decrease (10%) compared to 2011 (22,275 ha). Amongst all SFMLA/LTL Holders, Yayasan Sabah has the highest forest area silviculturally treated with a total of 2,726 ha. This is closely followed by Anika Desiran Sdn Bhd (1,689 ha), KTS Plantation Sdn Bhd (1,562 ha), TSH Resources Bhd (1,030 ha) and Timberwell Bhd (1,022 ha). The other SFMLA/LTL Holders, who carried out silviculture treatment in their licensed areas are Eco-Plantations Sdn Bhd (603 ha), Kelola Maju Sdn Bhd (300 ha), Ikatan Kayangan Sdn Bhd (272 ha), Maxland Sdn Bhd (220 ha) and Sapulut Forest Development Sdn Bhd (82 ha). Meanwhile, Yayasan Sabah in collaboration with the SFD had also treated another 4,284 ha in the USM SFM Project. As for the FMU areas managed by the SFD, about 6,195 ha of forests were silviculturally treated in 2012 under the various SFM projects implemented throughout the State - an increase of about 13% compared to 2011 (5,492 ha). The highest forest areas silviculturally treated were Timimbang and Botitian Forest Reserves (1,780 ha). This is followed by Pinangah Forest Reserve (1,000 ha), Northern Gunung Rara Forest Reserve (1,000 ha), Tangkulap/Pinangah Forest Resreves (941 ha), Deramakot Forest Reserve (814 ha) and other SFM Projects (660 ha). Overall, the cumulated total area of forests, which have been silviculturally treated as of December 2012 is approximately 194, 329 ha (Table 20.2). Enrichment planting and forest restoration activities were also carried out to restore the poorly stocked forests. The total area enriched and restored in 2012 is approximately 6,045 ha, which is a 57% increase compared to 2011 (3,844 ha). The highest forest areas enriched and restored was in the USM SFM Project, that is approximately 2,308 ha followed

Silviculture Treatment (KTS Plantation)

by Ulu Kalumpang and Wullerdorf Forest Reseves (1,062 ha), Rakyat Berjaya Sdn Bhd in FMU 15 (517 ha), Madai Baturong Forest Reserve (428 ha), collaborative projects (403 ha), First Green World Sdn Bhd (363 ha), INIKEA Project (226 ha), KTS Plantation Sdn Bhd (221 ha), Ikatan Kayangan Sdn Bhd (145 ha), and INFAPRO Project (106) - Chart 20.4. The cumulated total area of forests rehabilitated (Silviculture treatments and enrichment planting/forest restoration) as of December 2012 is approximately 234,532 ha as shown in Table 20.2. Meanwhile, the trend of the cumulated total forest areas treated and enriched for the period of five (5) years, from 2008 until 2012 is shown in Chart 20.5. Based on the chart, it shows that the trend is steadily increasing at an average rate of 17% for both silviculture and enrichment planting respectively, annually.



Chart 20.4: Forest areas enriched and restored in 2012

Chart 20.5: The Cumulated Total Forest Areas Treated and Enriched (2008-2012)

Laran plantation (Timberwell Bhd)

Industrial Tree Plantations and AgroforestryThere were thirteen (13) SFMLA/LTL Holders actively involved in forest plantation establishment in 2012. The total SFMLA/LTL areas planted was approximately 17,285 ha (Chart 20.6), which is a 48 % increase compared to 2011 (11,680 ha). Sabah Forest Industries Sdn. Bhd. (SFI) has the largest FMU area planted (7,385 ha) followed by Bornion Timber Sdn Bhd (2,892 ha), TSH Resources Bhd (1,587 ha) and Sapulut Forest Development Sdn. Bhd. (1,038 ha). The other SFMLA/LTL Holders involved in Industrial Tree Plantation are Lembaga Tabung Haji (603 ha), Jayakuik Sdn. Bhd. (453 ha), Maxland Sdn. Bhd. (356 ha), Timberwell Bhd (233 ha), Lebihasil Sdn. Bhd. (197 ha), Eco-Plantations Sdn. Bhd. (173 ha), Asian Forestry Company Sabah (Begaraya Sdn. Bhd.) (165 ha) and K.M. Hybrid Sdn Bhd (32 ha) - Chart 20.6. The cumulated total area of forest plantations established in Sabah as of December 2012 is approximately 239,112.1 ha (Table 20.2), which is a 6% increased compared to 2011 (225,682 ha). The main species planted are Rubber (51%), Eucalyptus grandis (19%), Acacia mangium (28%), Dipterocarp sp. (4%) and Paraserianthes falcataria (2%) - Chart 20.7.



Nursery at Asian Forestry.

The trend of forest plantation development in Sabah by type of lands, from 2008 until 2012 is shown in Chart 20.8. Agroforestry development, which includes oil palm planting, forest tending/silviculture treatment and forest restoration planting were also carried out in 2012. Approximately 193,821 metric tonnes (MT) of fresh fruit bunch (FFB) of oil palm were produced, with royalty payment of RM 4,678,078.00 (Chart 20.9 and 20.10). As of December 2012, the accumulated total FFB produced was approximately 317,850 MT. Meanwhile, accumulated achievement for forest tending/silviculture treatment and forest restoration planting were approximately 3,599 ha and 320 ha respectively (Table 20.3).

Table 20.2: Accumulated total area of Forest Plantation, Mosaic Planting and Forest Rehabilitation Establishment in Sabah as of 31st December, 2012


Smallholder

Forest Plantation (ha) Forest Rehabilition (ha)Total Area

Rehabilitated & Planted (ha)

Fast Growing Species

High Value Species

GaharuMosiac planting

Total Area (Ha)

Enrichment Planting/

Restoration

Siviliculture Treatment

Total Area Rehabilitated

(ha)

A Forest Management Project Under Sabah Forestry Department1 Research Plot (Forest Research Centre) - 30.2 0.6 - 30.8 239.4 - 239.4 270.2 2 Deramakot FR (FMU 19) - - - - - 1,380.1 16,200.2 17,580.3 17,580.3 3 Tangkulap Pinangah FR (FMU17A) - - - - - 829.8 26,255.8 27,085.6 27,085.6 4 Pinangah FR (FMU 17B) - - - - - - 1,000.0 1,000.0 1,000.0 5 Trus Madi FR (FMU 10) - - - - - 1,160.0 1,160.0 1,160.0 6 Ulu Kalumpang & Wullersdorf FR - - - - - 2,119.6 300.0 2,419.6 2,419.6 7 Timimbang & Botitian FR - - - - - 139.0 9,726.0 9,865.0 9,865.0 8 Pin Supu FR - - - - - 150.0 800.0 950.0 950.0 9 Tamparuli FR - - - - 32.0 - 32.0 32.0

10 Madai Baturong FR - - - - - 778.0 220.0 998.0 998.0 11 Sapulut FR - - - - - 364.0 603.0 967.0 967.0 12 Mangrove FR - - - - - 752.0 - 752.0 752.0 13 Mangkuwagu Social Forestry Project - - - - - 292.0 240.0 532.0 532.0 14 Bengkoka Social Forestry Project - - - - - 653.0 - 653.0 653.0 15 Kawang FR - - - - - 200.0 - 200.0 200.0 16 Gana Social Forestry Project - - - - - 176.0 - 176.0 176.0 17 Millian-Labau FR - - - - - 85.0 - 85.0 85.0 18 Garinono FR - - - - - 43.0 - 43.0 43.0 19 Keruak FR - - - - - 13.0 - 13.0 13.0 20 Ulu Segama (Tumunong Hallu) FR

(PPM Project) - - - - - 250.0 - 250.0 250.0

21 Mesapol VJR - - - - - 30.0 - 30.0 30.0 22 Sungai Serudong FR - - - - - 70.0 3,000.0 3,070.0 3,070.0 23 Tajong FR - - - - - - 418.2 418.2 418.2 24 Lungmanis VJR - - - - - 14.5 150.0 164.5 164.5 25 Babanga FR - - - - - 5.0 31.0 36.0 36.0 26 Membalua FR - - - - - 75.8 72.0 147.8 147.8 27 Mt. Andrassy FR - - - - - 374.0 - 374.0 374.0 28 Northern Gunung Rara FR - - - - - - 1,000.0 1,000.0 1,000.0

Sub-Total - 30.2 0.6 - 30.8 10,225.2 60,016.2 70,241.4 70,272.2

B. Yayasan Sabah/ Rakyat Berjaya Sdn. Bhd.1 ICSB Luasong 832.3 1,046.6 - - 1,878.9 - - - 1,878.9 2 PISP (Luasong) - - - - - 55.3 - 55.3 55.3 3 Forest Regenaration & Research Unit

(Danum) - - - - 148.0 100.0 248.0 248.0

4 INFAPRO Project - - - - - 6,296.4 6,480.5 12,776.9 12,776.9 5 INIKEA Project - - - - - 9,702.3 1,637.3 11,339.6 11,339.6 6 USM SFM Project - - - - - 6,392.2 29,800.9 36,193.1 36,193.1 7 Rakyat Berjaya Sdn Bhd [Nicohandal

Sdn Bhd] (FMU 26) - 1,462.0 - - 1,462.0 - - - 1,462.0

8 Rakyat Berjaya Sdn Bhd (FMU 16) - - - - - - 280.0 280.0 280.0 9 Rakyat Berjaya Sdn Bhd (FMU 15) - - - - - 721.1 2,402.1 3,123.2 3,123.2

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Smallholder

Forest Plantation (ha) Forest Rehabilition (ha)Total Area

Rehabilitated & Planted (ha)

Fast Growing Species

High Value Species

GaharuMosiac planting

Total Area (Ha)

Enrichment Planting/

Restoration

Siviliculture Treatment

Total Area Rehabilitated

(ha)10 Rakyat Berjaya Sdn Bhd (FMU 24 & 26) 198.0 - - 198.0 - - - 198.0 11 JV-Maxland Sdn Bhd (4,900 ha) - - 107.5 107.5 128.5 128.5 236.0 12 JV-Indah Serimas Sdn Bhd (15,000 ha) - - - 300.0 300.0 - 300.0 13 JV-Empayar Kejora Sdn Bhd

(28,000 ha) - - - 104.2 104.2 - - - 104.2

14 JV-Asiatic Organic Farm Sdn Bhd - - - - - 63.5 - 63.5 63.5

Sub-Total 1,030.3 2,508.6 - 511.7 4,050.6 23,378.7 40,829.3 64,208.0 68,258.6

C. SFMLA/LTL Holder1 Sabah Forest Industries Sdn Bhd

(FMU 7) 48,592.4 - - - 48,592.4 1,259.0 723.8 1,982.8 50,575.2

2 KTS Plantation Sdn Bhd (FMU 19B) 81.0 2,198.0 - - 2,279.0 4,073.0 15,023.0 19,096.0 21,375.0 3 TSH Resources Bhd (FMU 4) 4,783.0 3,732.0 - - 8,515.0 168.6 17,157.7 17,326.3 25,841.3 4 Maxland Sdn Bhd (17A &17B) - - - 1,276.5 1,276.5 - 1,086.7 1,086.7 2,363.2 5 Sapulut Forest Development Sdn Bhd

(FMU 14) 4,750.2 7,778.4 - - 12,528.6 32.0 14,389.9 14,421.9 26,950.5

6 Bornion Timber Sdn Bhd (FMU 11) 669.3 13,170.9 - - 13,840.2 24.0 8,992.4 9,016.4 22,856.6 7 KM Hybrid Plantation Sdn Bhd (FMU 11) 513.5 68.2 - - 581.7 - - - 581.7 8 Timberwell Berhad (FMU 3) 63.8 3,548.2 - - 3,612.0 - 15,390.5 15,390.5 19,002.5 9 Lebihasil Sdn Bhd (FMU 17A & 17B) 594.2 136.9 - 610.4 1,341.5 - 1,341.5

10 Total Degree Sdn Bhd (FMU 18B) - 2,220.7 - - 2,220.7 1.0 - 1.0 2,221.7 11 Lembaga Tabung Haji Sdn Bhd

(FMU 18A) - 2,844.0 - - 2,844.0 - 10.0 10.0 2,854.0

12 Anika Desiran Sdn Bhd (FMU 5) - - - - - - 9,808.6 9,808.6 9,808.6 13 Eco-Plantations Sdn Bhd (FMU 2) - 635.0 - - 635.0 - 7,302.0 7,302.0 7,937.0 14 Jayakuik Sdn Bhd (FMU 2) 878.3 - - - 878.3 - - - 878.3 15 Asian Forestry Company Sabah

(Begaraya Sdn Bhd) 165.1 - - - 165.1 - 165.1

16 Silam Forest Products Sdn Bhd (Ikatan Kayangan) (FMU 18)

- - - - - 145.3 1,174.0 1,319.3 1,319.3

17 Silam Forest Products Sdn Bhd (Arus Sawit) (FMU 18)

- - - - - 49.8 1,815.0 1,864.8 1,864.8

18 Silam Forest Products Sdn Bhd (Kelola Maju) (FMU 18)

- - - - - 80.0 610.0 690.0 690.0

19 First Green World Sdn Bhd (FMU 25) - - - - - 363.0 - 363.0 363.0

Sub-Total 61,090.8 36,332.3 - 1,886.9 99,310.0 6,195.7 93,483.6 99,679.3 198,989.3

D Agency/Company/Smallholder:1 SAFODA (Sabah Forest Development

Authority) 14,502.6 474.6 - - 14,977.2 - - - 14,977.2

2 Sabah Softwoods Sdn Bhd 26,652.1 - - - 26,652.1 - - - 26,652.1 3 Ladang Jati Keningau Sdn Bhd 15.2 1,462.8 - - 1,478.0 - - - 1,478.0 4 Boonrich Sdn Bhd, Lahad Datu 24.7 627.5 51.0 - 703.3 - - - 703.3 5 Kebun Rimau Sdn Bhd, Tawau

(a) Kebun Sg.Balung(b) Kebun Rimau Estate

--

168.46.8

47.621.8

--

216.028.6

--

--

--

216.028.6

6 Woodlots in Lahad Datu 13.0 - - - 13.0 - - - 13.0 7 Woodlots in Sandakan 5.2 - - - 5.2 - - - 5.2

Sub-Total 41,212.8 2,740.1 120.4 - 44,073.3 - - - 44,073.3

E Collabrative Project:1 SFD-ISME Collabrative Project

(Rehabilition of Mangroves in Sabah) - - - - - 50.0 - 50.0 50.0

2 RiLief Project (Collabrative project between SFD & Nestle Malaysia)

- - - - - 289.0 - 289.0 289.0

3 Leap’s Restoration Project in Pitas - - - - - 42.0 - 42.0 42.0 4 Tabin Wildlife Reserve (Under Rhino &

Forest Fund Project) - - - - - 22.0 - 22.0 22.0

Sub-Total - - - - - 403.0 - 403.0 403.0

Total (Sub-Total) 103,333.8 41,611.2 121.0 2,398.6 147,464.6 40,202.6 194,329.1 234,531.7 381,996.4

F Lembaga Industri Getah Sabah (LIGS) - 91,647.4 - 91,647.4 - - - 91,647.4

Total 103,333.8 133,258.6 121.0 2,398.6 239,112.1 40,202.6 194,329.1 234,531.7 473,643.8

....continued from previous page (Table 20.2)



Chart 20.6: Forest Plantation established by the SFMLA/LTL Holders in 2012

Chart 20.7: The main species planted under ITP program in 2012 Chart 20.8: Trend of Forest Plantation Development in Sabah by the Types of Land (2008-2012)

Chart 20.9: FFB Production by LTL Holders in 2012



Chart 20.10: Royalty collected from FFB produced in 2012

Table 20.3: Accumulated achievement of Agroforestry development in Sabah as of December, 2012.

No. SFMLA/LTL Holder

Agroforestry Development Forest Tending/

Silviculture Treatment

(Ha)

Forest Restoration (Ha)Total Area

Planted (Ha)

FFB Production

(MT)Royalty (RM)

1 Benta Wawasan Sdn. Bhd. 26,034.00 215,865.60 5,548,179.50 - 45

2 Benta Wawasan Sdn. Bhd. (Samel Plantation Sdn. Bhd.) 3,817.80 30,152.70 789,590.20 - -

3 Benta Wawasan Sdn. Bhd. (Serijaya Industries Sdn. Bhd.) 11,367.00 53,261.80 1,362,475.50 - -

4 Benta Wawasan Sdn. Bhd. (Ratus Awansari Sdn. Bhd.) 2,979.00 - - - -

5 Silam Forest Products Sdn. Bhd. (Ikatan Kayangan Sdn. Bhd.)

7,039.00 7,361.90 160,197.70 1,174 145.3

6 Silam Forest Producst Sdn. Bhd. (Arus Sawit Sdn. Bhd.) 7,043.30 12,458.20 305,470.80 1,815 49.8

7 Silam Forest Products Sdn. Bhd. (Kelola Maju Sdn. Bhd.) 2,776.40 - - 610 80

Total 61,056.50 319,100.20 8,165,913.70 3,599 320.10

The year 2012 also saw two (2) SFMLA Holders, i.e. TSH Resources Bhd and Lembaga Tabung Haji that began producing rubber latex (minor forest produce) on a trial basis from their Rubber Forest Plantations. In 2012, TSH Resources Bhd and Lembaga Tabung Haji had produced 16,096 kg and 2,256 kg of latex respectively (Chart 20.11). The accumulated volume of their total latex production and royalty payment as of December 2012 is shown in Table 20.4.

Mature rubber producing latex (TSH Resources Bhd)

Chart 20.11: Rubber latex production and royalty payment by the SFMLA Holders in 2012

Table 20.4: Accumulated rubber latex production and royalty payment as of December, 2012

No. SFMLA HolderRubber Tapping

(ha)

Rubber Latex

Production (Kg)

Royalty Payment

(RM)

1 TSH Resources Bhd 80.0 20,988.7 19,272.5

2 Lembaga Tabung Haji 115.0 2,255.7 1,654.7

Total 195.0 23,244.40 20,927.20



SFD – SFMLA/LTL Holders – Community SFM Partnerships: Coexistence? Establishing partnerships is increasingly perceived as an essential element of policies and projects aimed at fostering sustainable forest management and community development. Therefore, we in the SFD continued to have close partnership and actively engaged with the local communities to participate in SFM implementation. Involving the local communities means making them see the forest as an economic asset which they own in partnership with the SFD. So far, they have taken good care of the forests along the lines of sustainability based on our social forestry programs of which amongst them is our “joint-forest management” projects, which have been undertaken in Kelawat FR, Tamparuli FR, Mangkuwagu FR, Kg. Gana and in Bengkoka FR. A detail report on our social forestry programs can be referred to in Chapter 21. Likewise, the SFMLA/LTL holders notably the Sabah Foundation, Sabah Forest Industries Sdn Bhd, Bornion Timber Sdn Bhd, TSH Resources Sdn Bhd and Sapulut Development Sdn Bhd showed growing interest in partnerships with the local communities on the importance of social and cultural factors, the importance of differences in relation to forest management and systems of consultation and communication and development. For example, in 2012, the SFMLA/LTL holders have developed innovative structures and techniques for forest management in order to respond to the differing interests of the local communities. One of them was the Systems for Consultation and Communication. This specific process for consultation with the local communities was part of their strategies to reduce conflicts, such as land tenure, which is the most contentious issue where communities have historical claims to land ownership. The respective SFLMA/LTL holders have set up their team to facilitate the consultation process with the local community leaders. There were many questions of forest management discussed, which were well integrated into the consultation processes. The consultation processes did enable the local communities to have some understanding of forest management, but they also reflected a forest management system where responsibility lies with the SFMLA/LTL holder and not with the local communities. There will be more works to be done on this because each of the parties has their own way of viewing and understanding the forest landscape and each has developed their own systems for managing their utilisation of forest resources.

Monitoring and Assessment of SFM Implementation- FMU LevelAs reported previously, the SFD regularly monitors and audits the implementation of various activities carried out by the District Forestry Officers (FMUs managed by the SFD) and the SFMLA/LTL holders to make sure that they comply with their SFMLA, FMP, PDP and ADP and most importantly, what they have pledged in their respective AWP and good forest management practice. Our monitoring on operational performance is done on a monthly basis. This is done by the District Forestry Officer (DFO), while the information generated by the DFO is reported on a quarterly basis to the Director of Forestry. At the headquarters level (under the SFM Division), the quarterly reports are analysed/evaluated on how well the targets are being met, and to determine whether desired values/targets (as specified in the AWP) are being achieved/met. This provides feedback or recommendations to the DFO or SFMLA/LTL holders to evaluate whether their management

and practices have been effective in achieving their targets as specified in their AWP and whether adjustments are needed. Such recommendations can include operational adjustments and refinements to targets. At the end of the year (in the case of the SFMLA/LTL holders), they are required under Clause 56 (i) of SFMLA, to submit their compliance report to the SFD, indicating that the work described in the AWP has been completed. The report will then be verified on the ground by the District Forestry Officer, who will later submit the ground verification report to the Headquarters for assessment and subsequently to be awarded a Compliance Certificate, if they have performed well. Some aspects that are being assessed include the following:

• Performance: to confirm that desired outcomes are being achieved by the SFD or the SFMLA/LTL holders; and

• Compliance and enforcement: to confirm that the SFD or the SFMLA/LTL holders have complied with the SFM principles and SFMLA conditions; the prescriptions as stated in their FMP, PDP and/or ADP; the various activities prescribed in their respective Annual Work Plan (AWP); and the conditions as stipulated in the Coupe Permit and Comprehensive Harvesting Plan (CHP).

Our monitoring and assessment started in 2004 of which only two (2) SFMLA/LTL holders were awarded a Compliance Certificate then. However, the trend improved every year and thus, in the 2010 assessment, there were twelve (12) “Compliance Certificate Awards” and this has improved to fifteen (15) in 2011 and in 2012, it was a new record, where 26 Compliance Certificates were awarded to 20 SFMLA/LTL holders (see Chart 20.12). This shows that the SFMLA/LTL holders are serious and committed to make SFM a success in Sabah.

Those who have performed well and awarded with the Compliance Certificate in 2012 (as shown in Chart 20.13) are as follows: 1. Sabah Forest Industries Sdn. Bhd. (SFI) – FMU 72. KTS Plantation Sdn. Bhd. – FMU 19B3. Lebihasil Sdn. Bhd. - FMU 17A (Area A)4. Bornion Timber Sdn. Bhd. – FMU 115. K.M. Hybrid Plantations Sdn. Bhd. – FMU 116. Sapulut Forest Development Sdn. Bhd. – FMU147. Yayasan Sabah [received 7 Compliance Certificates, that

is, 1 for FMU 20, 21, 22 & 23 (USM); 3 for FMUs 15 & 16 (i.e., YS; YS JV with Maxland Sdn Bhd; and YS JV with Indah Serimas Sdn Bhd); 1 for FMUs 24 & 26; 1 for FMU 26 (Nicohandal Sdn Bhd) and 1 for FMU 23 (YS JV with Empayar Kejora Sdn Bhd.

8. Maxland Sdn Bhd [received 2 Compliance Certificates, that is, one for FMU 17A (Area A) and FMU 17B (Area B) and one for FMU 16 – JV with Yayasan Sabah].

9. TSH Resources Bhd – FMU 410. Timberwell Berhad – FMU 311. Ikatan Kayangan Sdn. Bhd. – FMU 812. Kelola Maju Sdn. Bhd. – FMU 813. Arus Sawit Sdn. Bhd. – FMU 814. Jayakuik Sdn. Bhd. – FMU 215. Lembaga Tabung Haji (Sabah) – FMU 816. Benta Wawasan Sdn. Bhd. – FMUs 23 & 2617. Lagenda Aktif Sdn. Bhd. – FMU 1118. Asian Forestry (Sabah) Sdn. Bhd. - FMU 219. Warisan Majuria Sdn. Bhd. – FMU 17B20. Serijaya Industries Sdn. Bhd. – FMU 26



Chart 20.12: Trend of Compliance Certificate awarded SFMLA/LTL Holders from 2005 to 2012.

2012 Compliance Certificate recipients together with the Right Hon. Chief Minister and the Director.

Forest Auditing – an essential element of certificationForest audits are central and a key component to sustainable forest management process. Forest auditing continues to play a key role in forest management, whether in the day-to-day management of sustainable forest management performance, in decision-making or providing assurance to stakeholders. It is also used as an instrument for forest management verification of the various soft law mechanisms such as third-party forest certification that are designed to regulate forest management practices. In Sabah, the performance of the SFMLA/LTL holders has been continuously been audited independently under the EU FLEGT collaboration of TLAS 3rd Party monitoring since 2009. Besides that, harvesting of timber in NFM areas is carried out under Reduced Impact Logging (RIL) and is being audited since 2010 with 3rd party independent auditing. The SFD recognizes that increasing transparency through forest auditing can also help reduce illegalities, assisting forest law enforcement and providing a basis for forest certification. Independent third party forest audit processes also provide the direction for the SFMLA/LTL holders to improve their forest management in their respective SFMLA area.

Sabah’s TLAS Independent AuditThe 2-year EU-funded Sabah Independent Auditing of SFMLA/LTL Areas project started in May 2009 and was completed in May 2011. The auditing covered four rounds of field auditing on sixteen (16) SFMLA/LTL holders. However the project was extended for another 6 months of which the field auditing

covered another two (2) rounds involving eight (8) SFMLA/LTL holders. The field auditing began on 15th August 2011 and was completed in September 2011. The field auditing was carried out by a third party auditor, that is, Global Forestry Services (Malaysia) Sdn Bhd. (GFS). Although the EU-funded Sabah Independent Auditing was completed in November 2011, the field auditing by the Third Party (GFS) auditor continued in 2012. In this round of audit, a total of sixteen (16) SFMLA/LTL holders were been audited. This involved fifth round audits for ten (10) SFMLA/LTL holders (see Table 20.5) and third round audits for five (5) SFMLA/LTL holders (see Table 20.6). There was one (1) SFMLA/LTL Area, that is FMU17B (Area C), which is managed by Maxland Sdn Bhd and audited for the first time. The audit was conducted against the normative TLAS SFMLA compliance revised checklist standard and scoring system. The auditing checklist comprises of 4 Principles, viz. Principle 1: Right to Harvest; Principle 2: Forest Operation; Principle 3: Statutory Charges and Principle 4: Other Users’ Right. They are supported with 30 criteria, of which, twelve (12) criteria are critical that must be in full compliance if applicable to the SMFLA/LTL holder and eighteen (18) non-critical. Basically, those criteria related to law are critical criteria, while other performance-based criteria are non-critical criteria. The critical criteria are weighted for two levels of compliance – Compliance and Non-Compliance, whereas, the non-critical criteria are weighted for Compliance, Partial Compliance and Non-Compliance. For each criterion, the score is 1.0 for full compliance, 0.5 for partial compliance and 0 for non-compliance. Each indicator is considered compliance if the score achieved is more than 80%, while for the partial compliance is between 50-80% and for non-compliance is less than 50%. For legal compliance, the SFMLA/LTL holders should achieve a minimum overall score of 70% of all applicable criteria.

i. Objectives and Scope of AuditThe objectives of the independent auditing are:• To ensure continuous compliance of SFMLA/LTL holders

with the terms and conditions of Sustainable Forest Management Licence Agreement (SFMLA) or Long Term Licence Agreement as well as legal compliance with Malaysian laws and in confirmation with the EU-FLEGT of TLAS requirement;

• To improve the performance of the SFMLA/LTL holders with systematic monitoring on the ground;

• To upgrade the skills and capacity of the Sabah Forestry Department’s Officers in carrying out auditing works;

• To instill transparency and professionalism of forest managers.



• To evaluate the corrective action taken by the SFMLA/LTL holders to address non-conformance issues raised in the previous audit.

The scope of the audit covers all aspects of forest operations in the SFMLA/LTL Areas including laws and regulations, the Sustainable Forest Management Licence (SFMLA)/Long Term Licence conditions, Forest Management Plan, Annual Work Plan and TLAS requirements.

ii. Accomplishment for Year 2012Similar to the previous round of audits, all criteria that are related to compliance to legal requirements were strictly followed. Besides that, the auditors also evaluated the actions taken to address the GAPs issues from the previous fourth round and second round of audit respectively. In this fifth round of audit, the average performance score of the SFMLA/LTL holders audited was 85.18%, which dropped by 3.2% from the 4th round of audit. As shown in Table 20.1, only one (1) SFMLA/LTL holder (Lebihasil Sdn Bhd, FMU17A) achieved 100% legal compliance and one (1) Licensee (Maxland Sdn Bhd, FMU17A) scored above 90%.Three (3) Licensees, namely Rakyat Berjaya Sdn Bhd (FMU16), TSH Resources Berhad and Eco Plantation Sdn Bhd, passed the audit with a score of between 70% - 90%. The results also showed that there were four SFMLA/LTL holders who failed the audit due to inability to fully comply with the applicable critical criteria even though they achieved the minimum passing mark of 70%. These SFMLA/LTL holders were TH-Bonggaya, TH-Usia Jatimas, Rakyat Berjaya FMU 15 and Bornion Timber Sdn Bhd. In terms of criterion performance, the SFMLA/LTL holders had showed highest progress in overall performance for criteria 1.4 and 12.1 with an increased score of 10% respectively from the last audit. This indicates that the Licensees have made great efforts to protect their licensed area from any illegal infringement and at the same time managed to mitigate potential impacts of forestry operation on local communities. The weakest compliance was observed in criterion 10.1 with an overall score of 55%, which significantly dropped by 35% from the last audit. Out of ten (10) SFMLA/LTL holders audited, only four (4) of them had fully complied with the criteria. The rest of the SFMLA/LTL holders were given three (3) non-compliance and three (3) partial compliance records involving issues on recruiting foreign workers without legal documentation, workers operating within the forest reserve without valid Certificate of Identity, poor in general cleanliness in camp sites, trash burning in an open space and camps built

within the riparian buffer zone. As for the third round audit, out of five (5) SFMLA/LTL holders audited, only two (2) SFMLA/LTL holders passed the audit. One of them, that is, Lebihasil Sdn Bhd, achieved 100% legal compliance whereas Maxland Sdn Bhd (FMU17B) scored 97.9%. Three (3) Licensees (Rakyat Berjaya Sdn Bhd - FMU24, Top Quantum Sdn Bhd and First Greenworld Sdn Bhd) did not pass the third round of audist, either due to not being able to achieve a minimum passing mark of 70% or not fully complied with the applicable critical criteria. Overall, the average performance score of the third round of audit for the five (5) SFMLA/LTL holders being audited was 87.04%, which is lower by 5.24% from the second round of audit. In terms of criterion performance, criterion 12.2 showed great improvements with the highest score that increased by 30% from the second round of audits. The main factor contributing to the improvement of the TLAS performance was the commitment made by SFMLA/LTL holders for their continuous improvement to address issues related to land disputes and users’ right such as, in the establishment of a communication system between the Licensees and respective communities for land dispute resolution, conduct discussions and develop proper recording systems. The overall performance for criterion 3.7 was also improved by 33%, which showed that the SFMLA/LTL holders were committed in establishing proper and appropriate planning for the development of timber plantation. The weakest overall performance was observed in critical criterion 3.1 with a score of 50% that is Forest Management Plan. In this audit, out of five (5) SFMLA/LTL holders audited, only two (2) of them fully complied with the criterion, while the other two (2) Licensees failed to comply.

iii. Overall AssessmentOverall, the TLAS audit in the fifth and third round showed a decline in the performance of the Licensees compared to the last previous audit where the average score decreased by 3.2% and 5.24% respectively (see Chart 20.14 & 20.15). The percentage of SFMLA/LTL holders that passed the audit also significantly dropped by 20% with only five (5) of them or 50% complied with the TLAS audit. The inability of the SFMLA/LTL holders to comply with the applicable critical criteria was observed as a contributing factor that led to the decline of the Licensees’ overall performance score. In terms of Principle, the SFMLA/LTL holders consistently scored 100% for Principle # 3 (Statutory Charges) for both the third and fifth audit rounds. Good progress was also observed for Principle # 4 (Other Users’ Right) where the average score achieved for third and fifth audit was 90.39%, which increased by 19.55% from the last audit. This showed that the SFMLA/LTL holders were very committed to address and close the GAPs, which were raised in the previous audit. The score for Principle # 1 (Right To Harvest) in the third audit decreased by 3.83% but in the fifth audit, it increased by 2.41%. The average score for both audit rounds (third and fifth audit) was 89.97%, which is lower by 0.71% from the last audit (second and fourth audit).The score for Principle # 2 (Forest Operations) in the third audit increased by 2.92% but dropped 7.3% in the fifth audit. The average score for Principle # 2 for both audit rounds (third and fifth round) was 88.63% which is lower by 2.19% from the last audit (second and fourth audit). With regards to Principle # 2 (Forest Operation), we found that most of the SFMLA/LTL holders were quite weak to comply with OSHA related issues. Please refer Chart 20.16 & 20.17.

TLAS audit at FMU 16



Table 20.5: Sabah Independent Auditing of SFMLA Areas: Summary Results for 4th and 5th Audits

No. SFMLA Holders FMU

4th Audit Round (November, 2010 – February, 2011) 5th Audit Round (June – December, 2012)

% C C P NC NA

Total Criteria

Total Applicable C

riteria

% C C P NC NA

Total Criteria

Total Applicable C

riteria

1 Maxland Sdn. Bhd. 17A 97.37 18 1 0 9 28 19 97.6 20 1 - 9 30 21

2 Lebihasil Sdn. Bhd. 17A 97.06 16 1 0 11 28 17 100 20 - - 10 30 20

3 Rakyat Berjaya Sdn. Bhd. 15 93.18 19 3 0 6 28 22 91.6 27 1 2 - 30 30

4 Rakyat Berjaya Sdn. Bhd. 16 97.5 19 1 0 8 28 20 85 24 3 2 1 30 29

5 KTS Plantation Sdn. Bhd. 19B 100 23 0 0 5 28 23 * * * * * * *

6 Eco-Plantations Sdn. Bhd. 2 69.44 9 7 2 10 28 18 79.55 13 9 - 8 30 22

7 Anika Desiran Sdn.Bhd. 5 62.50 8 9 3 8 28 20 * * * * * * *

8 USM (Sabah Foundation) 20, 21, 22 100 17 0 0 11 28 17 * * * * * * *

9 Timberwell Berhad 3 71.73 12 9 2 5 28 23 69.23 15 6 5 4 30 26

10 Bornion Timber Sdn. Bhd. 11 97.90 23 1 0 4 28 24 89.10 20 1 2 7 30 23

11 KM Hybrid Plantation Sdn. Bhd. 11 100 22 0 0 6 28 22 * * * * * * *

12 TSH Resources Berhad 4 94.4 24 3 0 1 28 27 86.2 24 2 3 1 30 29

13 SFI Sdn. Bhd. 7 91.3 19 4 0 5 28 23 * * * * * * *

14 Sapulut FD Sdn. Bhd 14 100 28 0 0 0 28 28 * * * * * * *

15 LembagaTabung Haji 18C 92.50 17 3 0 8 28 20 78.3 18 4 3 7 30 23

16 LembagaTabung Haji - USIA Jatimas

18C 72.50 11 7 2 8 28 20 75 14 5 3 8 30 22

No. SFMLA Holders FMU

2nd Audit Round (August – September 2011) 3rd Audit Round (June – December 2012)

% C C P NC NA

Total Criteria

Total Applicable C

riteria

% C C P NC NA

Total Criteria

Total Applicable C

riteria

1 Rakyat Berjaya Sdn Bhd 23 96.87 15 1 0 12 28 16 * * * * * * *

2 Rakyat Berjaya Sdn Bhd 24 80.00 14 4 2 8 28 20 93.5 21 1 1 7 30 23

3 First Greenworld Sdn Bhd 25 85.70 5 2 0 21 28 7 68.8 5 1 2 22 30 8

4 Top Quantum Sdn Bhd 25 100.0 5 0 0 23 28 5 75 4 1 1 24 30 6

5 Begaraya Sdn Bhd 2 97.60 20 1 0 7 28 21 * * * * * * *

6 Jayakuik Sdn Bhd 2 94.12 15 2 0 11 28 17 * * * * * * *

7 Lebihasil Sdn Bhd 17B 95.70 21 2 0 5 28 23 100 24 - - 10 30 24

8 Maxland Sdn Bhd 17B 100.0 21 0 0 7 28 21 97.9 21 1 - 8 30 22

Table 20.6: Sabah Independent Auditing of SFMLA Areas: Summary Results for 2nd and 3rd Audits (Extension area)

LEGEND:%C: Percentage complianceC: No. of full compliance criteria – no gaps in performance on elements of the standard that are applicable P: No. of partial compliance criteria – with minor gaps in complianceNC: No. of non-compliance criteria – inadequate compliant to the criteriaNA: No. of not applicable criteria

Weighting procedure for all audit cycle:Critical criteria : Compliance must achieve 80% and above of the total criteriaNon-critical criteria : Full compliance must achieve 80% of the total criteria, whereas Partial compliance is at least 50% - 80% compliance of the total criteria. Anything below 50% would be considered Non-compliance.

*Licence not audited in year 2012.



Chart 20.14: SFMLA/LTL holders’ performance by score in the fourth and fifth rounds of audit.

Chart 20.15: SFMLA/LTL holders’ performance by score in the second and third rounds of audit.

Chart 20.16: The Scoring Results for Fourth and Fifth Audit by Principle.

Chart 20.17: The Scoring Results for Second and Third Audit by Principle.



Forest CertificationImproving forest management in the State offers a significant means of improving environmental, social, and economic conditions; and this was widely recognized since 1989 when we took a great leap of faith to establish the Deramakot Forest Reserve as a model for a best managed forest and became the first tropical forest in the world to be certified in 1997 as a well managed forest under the prestigious FSC system. Since then, we never turned back. Forest certification in Sabah is no longer voluntary. It became a policy of the State Government, which was announced by the Director in 2009 that all SFMLA/LTL areas that are managed by the SFMLA/LTL holders must be certified by 2014 under any credible internationally recognized system. This was again reaffirmed by the Director in 2012 to all SFMLA/LTL holders that they must take steps to obtain forest certification by 2014 especially those SFMLAs that have been issued prior to 2011.

How did we perform in forest certification as of 2012?The year 2012 was one of the most crucial years for all SFMLA holders to meet the target of obtaining full certification. Many of the SFMLA holders have taken steps to obtain forest certification under some form of certification system (FSC, PEFC and MTC) but unfortunately, there was no SFMLA holder certified. Thus, there was no change in terms of total hectarage of forests under some form of certification. It remained at 864,386 ha of forests, that is, about 447,194 ha are fully certified forests and 417,192 ha are partially certified forests. Out of the 864,386 ha, 389,947 ha are certified as well-managed forest by the FSC. The current status (as of 2012) is depicted in Table 20.7 and their locations are shown in Map 20.1. Meanwhile, SFI’s VLO Verification Statement expired in June, 2012. Subsequently, an audit was carried out against the

Table 20.7: Fully and partially certified forest areas in Sabah as of 2012

Locality (Forest Reserve) Size (Ha) Certification System ValidityDeramakot Forest Reserve 55,139 Full certification under The FSC (Natural Forest) April, 2008 – April, 2013

(Re-certified twice since 1997)Sungai Pinangah Forest Reserve(FMUs 15 & 16) (Sabah Foundation Licensee)

176,993 VLC (verified legal compliance ) of the FSC system under Smartwood (Natural Forest )

May, 2010 – May, 2013

Sipitang/Ulu Padas ForestReserves (Sabah Forest IndustriesSdn. Bhd. Licensee)

107,053 Controlled Wood Forest Management Certificate (Natural Forest)

October, 2010 – October, 2015

224,199 VLC (Verification Statement – RA-VLV- 0055726) - ITP in Forest Reserve and Alienated Land and Partly in NFM

September, 2012 – July, September, 2015

Sabah Softwoods Sdn. Bhd.(Private land)

28,000 Full certification under the FSC (Tree Plantation) 29 October, 2012 – 28 October, 2017

KTS Plantation Sdn. Bhd. 57,247 Full certification under the MTCS (Malaysian TimberCertification Scheme) (Natural Forest )

December, 2009 – December, 2012

Ulu Segama – Malua 241,098 Full FSC – NFM June, 2011 – June, 2016Tangkulap – Pinangah FMU 17A 50,070 Full FSC – NFM June, 2011 – June, 2016Hijauan Bengkoka Plantations Sdn Bhd (SAFODA)

15,640 Full certification under the FSC (Tree Plantation) June, 2011 – June, 2016

Kalabakan Forest Reserve (FMU 24) (Sabah Foundation Licensee)

16,000 Controlled Wood Forest Management Certificate (Tree Plantation) - FSC

February, 2011 – February, 2016

Map 20.1: Certified forest sites endorsed by some form of certification system (FSC, PEFC and MTC)



higher VLC standard by SmartWood under the FSC system. As a result, a VLC Verification Statement was issued, which is valid from September, 2012 to September, 2015. Sabah Softwoods Sdn Bhd’s FSC Certificate (Private land), on the other hand, expired on September, 2012. However, it was renewed for the second time when Sabah Softwoods Sdn Bhd met all the necessary qualifications to be certified as a Well-Managed Plantation in accordance with the FSC’s Principles & Criteria. The new FSC certificate is valid for 5 years, that is, 29th October, 2012 until 28th October, 2017. In spite of the steps taken, most of the SFMLA holders were informed by the FSC Certification Bodies (such as SmartWood and Scientific Certification Systems) that it is not possible to obtain FSC certification for their SFMLA area if there is an ITP component because FSC does not support the conversion of natural forests into plantations. On the other hand, under the MTCS Standards, the ITP areas could be certified. However, the Plantation Standard generally prohibits conversion - a dilemma to most SFMLA holders.

Certification Support ProgrammeAs part of the ongoing efforts to increase the State’s forests under certification, the department had identified 5 Forest Reserves totalling 169,177 ha (Table 20.8) to be prepared for full forest management certification under the WWF/GFTN Certification Support Programme.The Baseline Assessments for the additional areas i.e., Trus

Table 20.8: Sabah Forestry Department’s managed Forest Reserves to be certified under the WWF/GFTN Certification Support Programme

No. NameFMU/

LocalityTotal Area

(Ha)Certification

SchemeAssessor

1. Trus Madi Forest Reserve

FMU 10 74,736 FSC SCS (To be certified 2013 – 2014

2. Timimbang-Botitian Forest Reserves

FMU 4 13,610 FSC SCS (To be certified 2013- 2014)

3. Pin Supu Forest Reserve

FMU 19 4,696 FSC SCS (To be certified 2013 – 2014)

4. Ulu Kalumpang, Madai Baturong & Mt.Wullersdorf Forest Reserves and Kalumpang Virgin Jungle Forest

FMU 27 64,929 FSC SCS (To be certified 2013 – 2014)

Madi, Timimbang/Botitian, Pin Supu, Ulu Kalumpang/Mt. Wullersdorf/Kalumpang/ Madai-Baturong were successfully conducted in May – June 2012 by Scientific Certification Systems (SCS). This was funded through the WWF Malaysia-GFTN Certification Support Programme. The purpose of the assessment is to identify gaps to be addressed as preparation for full forest management certification. An Action Plan that identifies the gaps and the recommendations to be undertaken in a period of 5 years was formulated. Based on the Action Plan, the Department expects to enter a Participation Agreement (PA) with WWF- Malaysia under the GFTN Certification Support Programme in 2013 to bring the above Forests/FMUs under certification by 2013/2014.

SFM is a process …

“It is important to consider sustainable forest management as a process, rather than as an endpoint to be achieved in one huge leap ..... Seeing it as a process should help to move away from the perception that irresolvable conceptual issues inhibit implementing action towards SFM, and rather, that it helps to facilitate action, including incremental steps towards it.”

(United Nations Forum on Forests, 2007)

In this 2012 report, we demonstrated how the SFD and our partners (the SFMLA/LTL Holders) worked together as partners to shoulder the responsibilities to resolve the specific challenge of translating high-level goals into landscape-specific objectives. A common element in our success so far is a partnership approach. This is one of the signs that we are moving in the right direction. However, there is more to be done; and this means that we will continue to exercise and reinforce our culture of seeking good operational practices in compliance with the SFM principles. We will continue our programme of work to improve our knowledge base of forestry attributes and operations to support forest planning. We will challenge ourselves to redouble our efforts to manage our forests in ways that enhance their environmental and economic values and that are socially acceptable, and to build partnerships across the various communities of interest.

No one can predict the future - how people will live, or what exactly they will need - but it is possible to foresee the likely effects of some of today’s decisions and to make choices that honor the interests of present and future generations.

(President’s Council on Sustainable Development 1996)

The large beautiful flowers with bright pink inner petals of keruing kerukup, Dipterocarpus humeratus (Dipterocarpaceae).

Ubaldus M

ajawal

sustainable forest management - sabah forestry...

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