Indigenous groups warn of continued deforestation in Malaysia, as EU law nears

Representatives of Malaysia’s indigenous peoples, along with climate and human rights NGOs, urged the European Commission to involve civil society in discussions about the EU’s anti-deforestation regulation (EUDR) during a visit to Brussels this week.

The indigenous representatives, visiting with researchers from Human Rights Watch (HRW), requested involvement in ongoing talks with the EU, Malaysian, and Indonesian authorities to iron out the details of the regulation’s implementation.

The EUDR covers several everyday food products—including cattle, cocoa, coffee, palm oil, and derived products like chocolate and leather—and requires producing companies to prove, using mapping and geolocation data, that they have not contributed to deforestation after 2020.

The rules, set to be enforced in January 2025, could significantly impact Malaysian farmers as the country is one of the world’s largest palm oil producers, alongside Indonesia. The palm oil boom since the 1960s has destroyed millions of hectares of forests and displaced indigenous peoples.

This expansion has been particularly severe in the state of Sarawak, on the island of Borneo, Malaysia’s largest producing region, where indigenous peoples constitute over 40% of the population.

For Celine Lim, director of NGO SAVE RIVERS, an anti-deforestation charity based in Sarawak, the EUDR is an opportunity to amplify the voices of Malaysian minorities in international forums.

“We have a saying that land is our life (…) So basically, it’s not necessarily that we look at land as an asset, but as it’s tied to our life source,” Lim told Euractiv in Brussels on Wednesday.

Despite concerns over the EUDR’s impact on small agricultural producers in Sarawak, who would face additional traceability requirements, Lim believes the EUDR’s intentions are positive.

She also noted that existing local policies and regulations are not “smallholder friendly”.

“I think the reason why there is more civil society engagement in the EUDR is that we haven’t been very welcome in local governing discourse,” Lim explained. “[EUDR] has given campaigners more tools to highlight issues and challenges on the ground,” she added.

Beyond palm oil

To address palm oil’s reputational issues and deforestation, Kuala Lumpur committed in 2019 to certifying all palm oil plantations under the Malaysian Sustainable Palm Oil (MSPO) certification scheme.

Earlier this month, EU Environment Commissioner Virginijus Sinkevičius commended Malaysia’s efforts to bring deforestation to “unprecedented low levels” and acknowledged the country’s commitment to certified sustainable palm oil production.

In turn, Malaysia’s Plantation Industries Minister Johari bin Abdul Ghani stressed the country’s efforts to meet EUDR requirements and to “attain sustainability targets and adhere to global standards.”

But a recent report from Malaysian climate watchdog RimbaWatch found that Malaysia could lose up to 16% of its remaining forests in the coming years based on unused land concessions.

“This is 3.2 million hectares of deforestation, larger than Belgium,” Adam Farhan, a climate advocate and co-founder of RimbaWatch, told Euractiv. Most of these concessions are in Sarawak, including forest reserves and semi-protected areas.

Despite Malaysia’s sustainability commitments, the analysis also found that palm oil could continue to fuel deforestation, although industrial timber production—also covered by the EUDR—is now the primary threat to Malaysia’s natural forests, representing more than 76% of land concessions, according to RimbaWatch.

However, the distinction between land for palm oil production and logging can be unclear.

In the peninsular state of Pahang, private companies are acquiring concessions for palm oil cultivation to extract valuable timber from primary forests and abandon the land.

Farhan explained that obtaining an oil palm concession is much easier due to Malaysia’s restrictions on cutting trees for timber production, linked to sustainable forest management rules.

“If you get an oil palm concession, you can clear-cut every single tree in an area with a single license,” he added.

The charity also tracked real estate listings of forests, previously published on online marketplace mudah.my and now on Facebook, revealing that hundreds of thousands of hectares are being advertised for sale, often in Sarawak and forest reserves.

Although trading forest reserves is technically illegal, companies sell ownership of concessions within these areas, taking advantage of legal loopholes.

“We’ve raised this issue with the government multiple times, and we’re not seeing any changes”, said Farhan.

Reputational concerns

As the EUDR’s start date in 2025 approaches, the Commission is still finalising aspects crucial to implementing the law, including a benchmarking system to categorise countries depending on their deforestation risk — high, standard, or low — which will determine the percentage of shipments checked by authorities.

Many of the EU’s trade partners, including Malaysia, are concerned about the negative reputation associated with a “high-risk” label, fearing it could lead companies to cease operations in these regions.

Farhan believes RimbaWatch’s report clarifies that Malaysian palm oil and timber should be in the high-risk category.

Luciana Téllez Chávez, a senior environmental and human rights researcher at HRW, stressed that countries that want to avoid the high-risk classification need to address the underlying causes.

“Countries should be concerned about what this means for their constituencies, who are the ones suffering from environmental harm and human rights abuses. The EUDR is just one more reason to tackle these problems,” she told Euractiv.

[Edited by Angelo Di Mambro and Zoran Radosavljevic]

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