Malaysia, a country with a forest cover rate exceeding 50%. The tropical rainforests in Malaysia are said to be older than those of the Amazon or Congo Basin. As one of the most biodiverse places on earth, these rainforests have provided many benefits over a long history. At the same time, forest destruction has been advancing in Malaysia. This article explores the background and current state of deforestation in Malaysia, and the measures taken in recent years.

A palm oil plantation in Sarawak, Borneo (2012) (Photo: Edgar Vonk / Flickr [CC BY-NC-SA 2.0])

About Malaysia

Let’s first look at some basic information about Malaysia. Malaysia comprises Peninsular (West) Malaysia on the Malay Peninsula (about 40% of its territory) and East Malaysia on the island of Borneo (about 60%) as its territory. The Malay Peninsula, especially Malacca, has long been a hub of trade connecting East Asia with the Middle East and Europe, and has been home to diverse peoples. European powers eventually expanded, and in 1795 Britain occupied Malacca. During British rule, to address labor shortages, people were brought to Malaysia from China and South India. After the Japanese occupation and other events, the Malayan peninsula gained independence in 1957, and in 1963 the Sarawak and Sabah regions of Borneo joined. Following Singapore’s separation and independence in 1965, the present-day Malaysia took shape.

Today, the Bumiputera—comprising ethnic Malays and Indigenous peoples who speak languages other than Malay (※1)—account for about 63% of the population. Bumiputera means “sons of the soil” and refers to peoples who have long lived in Malaysia. Ethnic Chinese make up about 20%, and ethnic Indians about 6%. Since independence from Britain, ethnic Chinese have generally held an economic advantage, and to counter this, the Malaysian government has implemented the Bumiputera policy, which gives preferential treatment to Bumiputera in access to educational institutions, civil service recruitment, and more. The policy has granted privileges to some ethnic Malays. However, some Indigenous communities—also Bumiputera—do not benefit from these privileges; living far from urban centers and practicing subsistence livelihoods, they face some of the country’s worst levels of poverty and hunger.

Next, let’s look at the economy. Overall, from 1960 to 2017, gross national income (GNI) grew at an impressive average annual rate of 6.9%. Malaysia’s main exports include integrated circuits, refined petroleum, natural gas, palm oil, and crude oil; in particular, palm oil—a key export—ranks second in the world by export value. About 90% of the world’s oil palm, the raw material for palm oil, is cultivated in Malaysia and Indonesia.

Finally, a note on the political system. Malaysia is a federal constitutional monarchy. It is governed through a federation of 13 states and three federal territories. In nine of the states, heads of state are essentially hereditary; these rulers typically rotate as the country’s monarch (sultan) every five years under a rotational system. This role is largely ceremonial, but in recent years, as parliamentary dynamics have shifted, the royal household has wielded greater influence. For many years, the Barisan Nasional (BN) coalition led by the United Malays National Organisation (UMNO) held power in parliament. Since the 2018 change of government, Malaysian politics has entered a new phase, and in the November 2022 election, the opposition Pakatan Harapan (PH) led by Anwar Ibrahim increased its seats. The selection of a prime minister proved difficult, but ultimately a governing coalition was formed with advice from the king, and Anwar became prime minister.

The state of Malaysia’s forests

Malaysia has long been blessed with forest resources. The country developed by clearing forests and exporting timber. In the 1950s, when demand for timber was still low, logging typically meant felling mature trees while leaving younger ones for the future. From the late 1970s onward, rising demand led to more proactive management and replanting. As discussed below, plantation conversion meant trees were cut regardless of their growth stage. Moreover, land shifted not only to timber but to more profitable plantations such as oil palm and rubber.

As of 2020, Malaysia had 19.1 million hectares of forest. About 20% of the country’s land is classified as plantations, 58% of which are oil palm estates. Rubber plantations account for 3.6%, and timber plantations 2.4%. Yet between 2002 and 2023, 2.93 million hectares of primary forest were lost.

Deforestation cannot be assessed solely by the area lost. Logging also brings the problem of forest “degradation.” The rainforests of Borneo are particularly affected. Heavy machinery such as bulldozers is used during harvesting. These affect soils, waterways, and forest structure, inflicting 40~70% damage even on younger trees left standing. Even selective logging that aims to spare younger trees still affects the trees that remain.

As forests are cleared and converted to timber extraction or plantations, Malaysia’s biodiversity is being lost. For example, in 2019 Malaysia’s last Sumatran rhino died. The Malayan tiger, estimated at around 3,000 in the 1950s, has dwindled to about 150 today, and government protection policies have not worked well. Plants are also affected: 79.6% of species found in forested areas were not observed in oil palm plantations. One view attributes this to the prevalence of non-native plants in plantations. Humans are also affected: Indigenous peoples living in forest regions are sometimes forced to relocate due to logging.

Plantations and their background

Plantations are essential to understanding Malaysia’s forest issues. Monoculture plantations have major impacts on forests. Unlike traditional timber harvesting, converting forests for plantations typically begins by clearing all vegetation and rendering the land completely barren. This is tantamount to breaking the land’s natural cycles entirely. The rapid expansion of commodity-crop plantations has had enormous impacts on Malaysia’s natural environment.

Yet demand for palm oil has shown no sign of abating. One reason is its versatility: palm oil is used in everything from food ingredients and biofuels to engine lubricants and as a base for cosmetics. With growing attention on biofuels, palm oil prices have generally trended upward. Research shows a correlation between global palm oil prices and rates of plantation expansion and forest loss, indicating that rising demand and value are driving expansion.

Transport of felled trees in Sabah, Borneo (2009) (Photo: Alexey Yakovlev / Flickr [CC BY-SA 2.0])

Whether plantations should be counted as “forest” depends on classification methods, but the Malaysian government has included plantation-developed land in forest area figures, misleading the public. The Malaysian Palm Oil Council (MPOC) argues that oil palm plantations resemble forests more than other commodity crops and can be classified as forest. However, plantations mean large-scale cultivation of a single crop, and in Malaysia many non-native trees have in fact been planted. Their development processes also differ markedly from natural forests. Accordingly, critics argue that treating plantations as mere forests is incorrect.

Logging companies, state governments, and the relationship between Indigenous peoples and deforestation

Malaysia has national forestry laws, but under its federal system state governments hold most regulatory permit-granting authority over land use and environmental protection, including authority for forest management and logging. Because states derive revenue from taxes and fees associated with granting logging rights, oversight for environmental protection tends to be lax. Bribes of local officials and law enforcers are also believed to be widespread, amounting to political corruption. Moreover, even when permits are granted, companies are not required to disclose how the forest will be used; if another firm later uses the land after logging, responsibility for deforestation can become unclear, it has been pointed out.

Such corruption and complex rights arrangements have sparked conflicts with Indigenous peoples. In Sarawak and Sabah on Borneo, laws recognizing Indigenous customary land rights and customary law dating to the British colonial era remain in force. However, enforcement is inadequate, and the government prioritizes large-scale resource extraction and plantations by private companies and agencies over Indigenous communities’ rights and interests. The International Work Group for Indigenous Affairs (IWGIA) notes that this effectively ignores Indigenous peoples.

Nominally, Indigenous lands are also protected by forestry laws, which reserve rights to land for housing and communal spaces and to log for domestic consumption. Thus, when Indigenous communities assert any rights to such land, they must first undertake land titling procedures, a highly complex system. Conflicts between Indigenous peoples and logging companies or state authorities are unending. For example, in 2021 a logging company was alleged to have fraudulently obtained signatures from illiterate Indigenous people on a document stating they “accepted housing in support of a logging and reforestation project.”

A view of an Indigenous home (2008) (Photo: Nguyễn Thành Lam / Flickr [CC BY-NC-ND 2.0])

Where do palm oil and timber go?

Despite the many problems with plantations—both in terms of deforestation and protection of Indigenous rights—there is steady demand for Malaysia’s palm oil and timber. In 2022, Malaysia exported palm oil to India (20%), China (6.9%), and others. These countries are unlikely to reduce imports. That’s because plans to produce palm oil domestically are not progressing well in India—the world’s largest consumer—or in China. For the time being, palm oil imports are likely to continue with limited consideration of environmental impacts.

As for Malaysian timber, in 2022 exports went to Japan (24.9%), the United States (12.6%), and India (8.1%). In 2017, it became a controversy that illegally logged Malaysian timber was used at the construction site of the new National Stadium planned for the Tokyo Olympics. Residents of Sarawak sent a petition to then–Prime Minister Shinzo Abe calling for a halt to the timber’s use, with environmental and human rights NGOs in and outside Malaysia supporting the move.

Forest protection in Malaysia

In response, in 2007 the Malaysian government began the Forest Plantation Development Program. The project aimed to expand forest plantations by offering financial incentives to growers. After receiving state permits to harvest trees in forest reserves and replanting new trees, participants could obtain low-interest loans for 15 years, to be repaid from years 16 to 20. Screening of participants appears to have been inadequate, and some unscrupulous operators reportedly logged forest reserves and then failed to replant. According to Forestry Department data, only about one-third was replanted between 2012 and 2020. Many operators appear to seize the profits from initial felling, deferring long-term gains.

A worker cutting logs with a chainsaw (Kuantan, Malaysia) (Photo: Azami Adiputera / Shutterstock.com)

In 2022, the federal parliament also passed amendments to the forestry law. The new law requires state governments to conduct studies before granting logging permits in forest reserves. It also increases fines for illegal possession of forest products. Because it imposes harsher penalties than the previous law, it is seen as creating incentives for forest protection. However, as noted, most authority over forests rests with the states, leaving the federal government with very limited powers. Under Malaysia’s system, even if the federal government adopts amendments, they do not apply in a state unless passed by that state’s state legislature. As of April 2024, only two states had passed the amended law, underscoring the need for stronger cooperation between state and federal governments.

The federal government also serves as the nation’s interlocutor with the world. In June 2023, the European Union enacted the EU Deforestation Regulation (EUDR), requiring proof that products potentially linked to deforestation—such as palm oil, cattle, coffee, and timber—are deforestation-free when imported into or exported to the EU. In response, Indonesia and Malaysia, which together account for about 85% of global palm oil exports, initially criticized the EUDR as too strict. Subsequently, the EU, Malaysia, and Indonesia have held joint meetings to discuss implementation, while Malaysia has called for a delay to the EUDR’s application to ensure fair trade and protect smallholders. In October 2024, responding to such calls, the EU announced a one-year delay to the EUDR’s application. Attention will now focus on how Malaysia responds during the extended transition period.

Even so, the EUDR may not necessarily stop deforestation, as new buyers could replace the EU. Indeed, in September 2023 Malaysia and China announced US$4.1 billion worth of palm-oil-related investment deals, and Malaysia has indicated plans to double palm oil exports to China.

Deforestation in Malaysia has been severe; from 2000 to 2012 it recorded the highest forest loss rate in the world. However, in recent years the rate of loss has slowed. The introduction of a voluntary carbon market (VCM) in Malaysia has been suggested as a possible factor. Under this system, emitters purchase carbon credits, and the funds are invested in conservation activities such as reforestation. Balancing national growth and forest protection is complex, but the future of Malaysia’s forests is not necessarily bleak.

Other environmental concerns in Malaysia

Malaysia’s challenges go beyond deforestation; there are many issues to tackle, including air pollution, plastics, and waste management. Driven by a rapid rise in vehicle use, urban air pollution indices in 2020 recorded PM10 levels about 2.6 times the World Health Organization (WHO) guidelines, recorded. One study estimates that air pollution causes around 32,000 deaths annually.

A woman wearing a mask in Kuala Lumpur, Malaysia’s capital. At the time, air quality had deteriorated significantly due to forest fires in Indonesia (2019) (Photo: Abdul Razak Latif / Shutterstock.com)

The plastic waste problem is also severe. Malaysia generates over 940,000 tons of mismanaged plastic waste annually, ranking eighth globally. When China, long a destination for plastic waste, banned imports in 2018, Malaysia became the next dumping ground. However, Malaysia’s waste management systems cannot process it all, leading to leakage into the sea and marine pollution.

Global climate change is also affecting Malaysia. For example, Indigenous peoples whose livelihoods are based along the coast face sea-level rise that could inundate homes, making traditional lives impossible. Unstable weather and declining catches linked to climate change are already pushing some fishers to leave family livelihoods.

In response to these environmental issues, the Malaysian government has announced a National Energy Transition Roadmap. It targets a 45% reduction in greenhouse gas emissions from 2005 levels and net zero by 2050.

As noted, Malaysia faces many environmental issues, from deforestation to air pollution and plastics. Still, the government clearly recognizes the environmental risks. Malaysia’s steps toward environmental protection have only just begun, and developments ahead bear watching.

※1 Interpretations of “Indigenous peoples” in Malaysia vary. Here we follow the Aboriginal Peoples Act of 1954 definition: “persons speaking an Indigenous language and habitually following an Indigenous way of life and customs.” Ethnic Malays are not included as “Indigenous peoples.” According to IWGIA, Indigenous peoples constitute about 13.8% of the national population. On the Malay Peninsula they are collectively called Orang Asli; in Sarawak, Orang Ulu; and in Sabah, Anak Negeri.

Writer: Ito Risa

Graphics: Mayuko Hanafusa

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