Gateway to international timbertrade


Forest resources

Malaysia is composed of West Malaysia, also known as Peninsular Malaysia (with 11 states), and East Malaysia consisting of two states; Sabah and Sarawak. Responsibilities for forestry are divided between the federal and state governments. The forestry departments of each state are responsible for regulating forest exploitation and management. The departments of the 11 states of Peninsular Malaysia come under the umbrella of the Forestry Department of Peninsular Malaysia (FDPM), while the forest departments of Sabah and Sarawak are autonomous.

According to the Malaysian Timber Council (2017) the country has a total forested area of 18.27 million ha that equates to 55.3% of the total land area. It is divided between Sarawak with 8.03 million ha, Peninsular Malaysia with 5.80 million ha, and Sabah with 4.44 million ha.  The data presented does not include agricultural tree crops such as oil palm, rubber, cocoa or other trees grown for horticultural products.

Malaysia has three main types of timber sources:

1. Natural (or semi-natural) forests. Natural forests are under state ownership, except for some alienated (privatised) land where forest clearance is permitted for private use. Forests under state ownership are broadly classified as either Permanent Reserved Forests (PRF) or state land forests. PRF areas can include both commercial forests, protected forests and communal forests.  The total area gazetted as PRF in Malaysia is approximately 13.24 million ha, which is divided between Sarawak with approximately 4.9 million ha (PRF & Protected areas), Peninsular Malaysia with 4.8 million ha, and Sabah with 3.54 million ha. State land forests are generally used for commercial purposes and often planned for conversion to other land use. The State Forest Departments in Peninsular Malaysia directly manage most of the commercial areas within the PRF and issue annual cutting permits to companies for timber harvesting.  Sabah and Sarawak have issued long term concessions to private companies to manage commercial forests within the PRF.  

2. Timber plantations. Timber forest plantations are often established in the PRF, managed under private concessions. Peninsular Malaysia has 120,000 ha of timber plantations and Sabah approximately 158,000 ha, while Sarawak has so far planted 446,000 ha within 2,368,000 ha of LPF (License for Planted Forests) concession areas. Sabah plans for extensive expansion of timber plantations to support the timber industry. Timber plantations have not been well established on private land, since it is perceived to be more profitable to grow oil palm or rubber trees – See below.

3. Agricultural areas. Agricultural areas provide a significant source of timber to the industry in relation to existing rubber tree plantations (for latex) and to salvage logging for site preparation before planting oil palm or rubber trees. Rubber trees are felled when they are considered to be over-mature for latex production, usually after 25 years. Rubber tree plantations are dominated by smallholder farmers associated with government agencies (FELDA; RISDA & LIGS) that support planting, latex processing and replanting. Malaysia has an estimated 1.08 million ha of rubber tree plantations (of which nearly 60% are going untapped due to currently low prices of latex).  Sarawak has 165,000 ha planned for rubber tree plantations and Sabah has developed 250,000 ha, including 190,000 ha supported by RISDA & LIGS smallholder agencies.

About 34% of the Permanent Reserved Forest (PRF) is designated as protected. Such protected forests are managed by the state and include: non-harvestable forests (areas above certain altitudes, slopes), virgin jungle reserves, recreational forests, catchment forests and reservoirs; National and State Parks, Wildlife & Bird Sanctuaries. Currently Peninsular Malaysia has 1.83 million ha of protected forests, Sabah has 1.88 million ha, and Sarawak has 0.82 million ha.

The size of the forest sector and the sources of timber vary significantly from one region of Malaysia to another. Sarawak accounted for nearly 60% of the total natural forest production in Malaysia in 2012, Peninsular Malaysia for 28% and Sabah for 12%. Most timber production in Sarawak is from natural forests, while in Peninsular Malaysia production is predominantly from natural forest production but also from clearance of rubber plantations (Hoare, 2015). Sabah relies heavily on natural forest production too, but plantations are becoming increasingly important, accounting for just over one-third of log production in 2013, mainly for pulp.

Much of Malaysia’s forest is degraded: for example, approximately 80% of forests in Sabah and Sarawak have been heavily impacted by unsustainable logging. There have been high levels of deforestation in the country: satellite data indicate that the annual deforestation rate was 1.6% between 2000 and 2012. Expansion of agricultural plantations (mainly oil palm) has been the main driver for loss of natural forest areas in the country (Hoare, 2015).

Malaysian natural forests can be distinguished in three main biological types:

  1. Dry inland forests, accounting for the great majority of the Malaysian forests, where common tree species or groups of species found in these forests include Anisoptera (Mersawa/ Pengiran), Dipterocarpus (Keruing), Dryobalanops (Kapur/ Keladan), Hopea (Merawan), Shorea (e.g. Meranti/Seraya) and Parashorea (e.g. Gerutu);
  2. Peat swamp forests, with species such as Gonystylus bancanus (Ramin), Durio carinatus (Durian) and various Shorea species; and
  3. Mangrove forests in Malaysia have over 60 species with the main genus of Avicennia (Apia Api); Rhizophora (Bakau); Sonneratia (Perapat) and Bruguiera (Berus/Tumu).  

Production and export

According to ITTO (2020), the Malaysian industry produced in 2018 about 18.6 million m3 of logs, of which around 9% was exported in round logs, for a value of around 230 million US dollars, while the total exports of the main primary timber products accounted for a value of around 2175 million US dollars.

Peninsular Malaysia banned sales of round logs, Sabah banned log sales in 2019 with some exception on plantation logs, while Sarawak maintains quotas for each Forest Timber License.  The forestry sector in Malaysia comprises four major sub-sectors with regard to wood-based processed materials and goods: (i) sawn timber, (ii) veneer and panel products (i.e. plywood), (iii) mouldings and builders’ joinery and carpentry (i.e. doors, windows, etc.) and, lastly, (iv) furniture and associated components. Sawn timber is produced mainly in Peninsular Malaysia (nearly 70%); 20% comes from Sarawak, and 10% from Sabah (Hoare, 2015). The majority of plywood is produced in Sarawak (about 70%), while 20% comes from Sabah and the remaining 10% from Peninsular Malaysia. The industry is predominantly owned by Malaysian companies and roughly 80-90% of these businesses are small and medium enterprises (Forest Legality Alliance).

Asia is the major export market destination for Malaysia’s timber products, notably Japan (plywood being the main product exported) but also others such as India, Thailand and China (logs, sawnwood and plywood). The US and the EU are other important markets importing significant volumes of wood-based products from Malaysia, plywood, sawnwood and furniture. The US and EU markets are predominantly supplied by Peninsular Malaysia (Hoare, 2015).

Commonly harvested species from natural forests include Meranti (Shorea spp.), Keruing (Dipterocarpus spp.), and Merbau (Intsia spp.), although many more species are harvested. Commonly harvested species from plantations include Acacia (Acacia spp.), Eucalyptus (Eucalyptus spp.) and Rubberwood (Hevea brasiliensis).

Sources of information


Legality framework

Malaysia is composed of West Malaysia, also known as Peninsular Malaysia, and East Malaysia consisting of two forest states, Sabah and Sarawak. Generally, while forestry matters are managed by State governments, under the Constitution the Federal government can enact laws to harmonise and standardise State enactments. To this end, the National Forestry Act 1984 was formulated and later adopted by the individual States in Peninsular Malaysia.

The forestry and timber agencies in Malaysia who issue harvesting permits, licenses and log transport documents are:

  1. Forestry Department Peninsular (FDPM) and the State Forestry Departments
  2. Sabah Forestry Department (SFD)
  3. Forest Department Sarawak (FDS); Sarawak Forestry Corporation (SFC)*; Sarawak Timber Industry Development Council; and Harwood Timber Sdn Bhd.

*Note: the role of SFC has been changed to manage protection forests and wildlife, while FDS will assume the previous functions of SFC

Forest governance

Peninsular Malaysia
Forest governance in Malaysia is divided into 3 main jurisdictions that establish legislation and regulate forest and timber activities: 1) Peninsular Malaysia and the 11 state governments that regulate forest activities, 2) Sabah Forest Department under the Chief Minister’s Department, and 3) Sarawak state government agencies that are under the Ministry of Urban Development & Natural Resources of Sarawak (MUDNR).

Federal Laws

  • Aboriginal Peoples Act, 1954 including relevant decisions of the Civil Courts
  • Employment Act, 1955
  • Employees Provident Fund Act, 1991
  • Employees’ Social Security Act, 1969
    - Employees’ Social Security (General) Regulations, 1971
  • Environmental Quality Act, 1974
    - Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order, 1987
  • Factories and Machineries Act, 1967
  • Human Rights Commission of Malaysia Act, 1999
  • Industrial Relations Act, 1967
  • International Trade in Endangered Species Act, 2008
  • Land Conservation Act, 1960
  • National Forestry Act, 1984
  • Occupational Safety and Health Act, 1994
    - Occupational Safety and Health (Notification of Accident, Dangerous Occurrence,
    - Occupational Safety and Health (Use and Standard of Exposure of Chemicals Hazardous to
  • Health) Regulations, 2000
  • Pesticides Act, 1974
  • Trade Unions Act, 1959 (Act 262)
  • Wildlife Conservation Act, 2010
  • Workmen’s Compensation Act, 1952

State Laws

  • State Forest Enactments
  • State Forest Rules
  • Johor State Park Corporation Enactment, 1989
  • Perak State Park Corporation Enactment, 2001
  • Selangor State Parks Corporation Enactment, 2005


  • Code of Conduct for Industrial Harmony, 1975
  • National Forestry Policy, 1978 (revised 1992)
  • National Physical Plan - 2, 2010
  • National Policy on Biological Diversity, 1998
  • National Policy on Environment, 2002
  • National Timber Industry Policy, 2009-2020

Forest governance in Sabah is administered by the Sabah Forest Department that is under the Chief Minister’s Office.  Sabah Forestry Department has district offices and staff to regulate forestry activities within the state.  Sabah has recently developed a forest policy and has series of state legislative acts to regulate the forest & timber industry:


  • Biodiversity Enactment, 2000
  • Environment Protection Enactment, 2002
    - Environment Protection (Prescribed Activities) (Environmental Impact Assessment) Order, 2005
  • Forest Enactment, 1968
    - Forest Rules, 1969
  • Interpretation (Definition of Native) Ordinance, 1952
  • Labour Ordinance (Sabah Cap. 67)
  • Land Ordinance, 1930 (Sabah Cap. 68)
  • Native Court Enactment, 1992
    - Native Court (Native Customary Laws) Rules, 1995
  • Sabah Parks Ordinance, 1962
  • State Cultural Heritage (Conservation) Enactment, 1997
  • Wildlife Conservation Enactment, 1997
  • Water Resources Enactment, 1998
  • All adat recognised and enforceable by the Native Courts, including relevant decisions of the Civil Courts


  • State Forest Policy, 2018
  • National Policy on Environment, 2002
  • National Policy on Biological Diversity, 1998
  • National Timber Industry Policy, 2009-2020

Forest governance in Sarawak is administered by the Forest Department Sarawak (FDS) that is under the Ministry of Urban Development & Natural Resources of Sarawak (MUDNR). FDS now assumes the functions previously administered by the Sarawak Forest Corporation (SFC) since the role of SFC has been changed to forest protection and wildlife.  Harwood Timber Sdn Bhd (HTSB) conducts log inspections and the endorsement of logs to licensed mills or export points. The Sarawak Timber Industry Development Corporation (STIDC) regulates manufacturing and trade of timber and timber products. The regulating agencies have created Inter-Agency Standard Operating Procedures (IASOPs) to implement the Sarawak Timber Legality Verification System (STLVS). The STLVS includes the Legality Standard for Forestry Operations under Principles 1-4 and Chain of Custody Standard under Principles 5-6 that is independently monitored under a voluntary system. Sarawak has a forest policy and legislative acts to regulate the forest & timber industry:

State Laws

  • Forests Ordinance (Cap. 126)
    - Forest Rules, 1962
  • Interpretation Ordinance (Cap. 61)
  • Labour Ordinance (Sarawak Cap. 76)
  • Land Code (Cap. 81)
  • National Parks and Nature Reserves Ordinance, 1998
  • Native Courts Ordinance, 1992
    - Native Courts Rules, 1993
  • Native Customs (Declaration) Ordinance, 1996
  • Natural Resources and Environment Ordinance (Cap. 84)
    - Natural Resources and Environment (Prescribed Activities) Order, 1994
  • Sarawak Cultural Heritage Ordinance, 1993
  • Sarawak Forestry Corporation Ordinance, 1995
  • Sarawak Rivers Ordinance, 1993 (Cap. 4) and Regulations
  • Water Ordinance, 1994 and Regulations
  • Wild Life Protection Ordinance, 1998 (Cap. 26)
    - Wild Life Protection Rules, 1998
  • All adat codified under the Native Customs (Declaration) Ordinance, 1996 and any other adat recognised and enforceable by the Native Courts under the Native Courts Ordinance, 1992 and the Native Courts Rules, 1993
  • Decisions of the Civil Courts pertaining to legal or customary tenure or use rights


  • Statement of Forest Policy, 1954
  • A Master Plan for Wildlife in Sarawak, 1996
  • National Policy on Biological Diversity, 1998
  • National Policy on Environment, 2002
  • National Timber Industry Policy, 2009-2020
Legal rights to harvest


Peninsular Malaysia
Any company or person wishing to take or remove timber from a forest area must first have a valid Harvesting license. The first step to securing a Harvesting license is to obtain approval from the state authorities or the relevant state forestry departments. Both are involved when issuing licenses for concessions. There is no requirement to get approval for harvesting on private land if the timber is not going to be traded.

Only companies or persons registered with the state forestry departments are eligible to apply for the Harvesting license. Concession licenses are awarded through open tender or by direct award by the State Forestry Department. In Peninsular Malaysia, concessions are categorized by size, each with its own length of tenure. Concessions up to 1,000 hectares are allocated for 1–2 years; 1,001–2,000 ha concessions are allocated for 1 - 5 years; 2,001 - 20,000 ha concessions for 10 - 30 years; and those exceeding 20,000 ha for 20 - 30 years.

A licensee-to-be must prepare a Forest Harvesting Plan for the approval of the state forestry departments before a license is issued for the Permanent Reserved Forests (PRF). The Licensee must then register its Classification mark with the relevant State Forestry Department.

A Forest Harvesting Plan is not required for privately-owned forest land. But a Harvesting permit from the State Forest Department is required for harvesting timber on either private and state land.

The following harvesting permits can be obtained (Note: “Licence” is often spelled as is in the regulations, when used as a noun):

  • Timber Licence (Form 1) - Licence to take forest produce), applicable for PRF and State land;
  • Minor licence (Form 3)  - Minor Licence to take major forest produce not exceeding 70 cubic meters or any minor forest produce, applicable for PRF and State land;
  • Removal licence (Form 5): To remove timber from private land and reserved forest.


Parties wishing to commercially harvest timber shall be legally registered with the Sabah Forestry Department. Any company or person/organisation who intends to harvest forest produce from a forest area needs to have a valid Harvesting licence which, in Sabah, can be in the form of:

  • Sustainable Forest Management License Agreement (SFMLA) / Long-term License Agreement (LTL) for concessions on PRF;
  • Form I license: a short-term license for logging activities in forest reserve or State land;
  • Form IIB: Normally issued for transporting logs harvested from alienated (privatised) land, where timber can be harvested for land clearance for agricultural purposes (mostly oil palm, rubber and other short-term crops).

Concession areas are subdivided into coupes and compartments. Under the principle of sustainable forest management (SFM), one company is permitted to harvest only a few compartments at any given time in accordance with the Forest Management Plan (FMP), Comprehensive Harvest Plan (CHP) and Annual Work Plan. The Coupe permit validity is normally 15 years depending on the conditions of the license. The Company is not permitted to operate in any area for which it has not yet been issued a Coupe permit even though that area may be within its concession.

All concessions must have an approved 10-year Forest Management Plan (FMP) and/or 10-year Plantation Development Plan (PDP). The FMP describes the long-term management and land use for the SFMLA areas, based on forest types, terrain and current conditions of the forest management unit (FMU). The FMP and PDP identify areas for conservation and production along with social issues and schedule for harvesting and site preparation. The licensee (SFMLA/LTL) must then have an approved Annual Work Plan (AWP) containing maps and description of areas and types of operations to be carried out during the year. The licensee is required to obtain approval for the AWP based on the schedules defined in the FMP / PDP. 

Currently, parties wishing to commercially harvest timber shall be legally registered with the Forest Department Sarawak (FDS). The Sarawak Timber Industry Development Corporation Ordinance of 1973 also requires those involved to establish, manage or operate any mills or manufacturing, sale, distribution or marketing activity of timber and timber products, to register with STIDC. Timber may be harvested in Sarawak from Gazetted Forests meant primarily for sustainable timber production and agriculture plantation. There are three types of harvesting licenses in Sarawak:

  1. Forest Timber Licence (FTL)
  2. License for Planted Forests (LPF)
  3. Occupation Ticket (OT) Licence (clearing of forest for plantations and native land)
  4. Mangrove and Belian (Iron Wood) Licence

Each forest concession area must hold a Forest Timber License (FTL), which can be obtained from the Director of FDS (often referred to as the 'Director of Forests'). Attached to the FTL is the Forest Management Plan (FMP) that sets out management and harvesting prescriptions. When issuing concessions, there could be a call for tender; however, the Director of FDS has the power to issue licenses and permits under conditions as he deems appropriate. Thus, information relating to the allocation of concessions is not publicly available. The license period of timber concessions is at the discretion of FDS and generally is for a period of 25 years but it has been up to 60 years in cases where the Licensee had received MTCC certification.

The FDS issues the FTL in conjunction with an approved General Harvesting Plan (GP), which has been prepared by the concessionaire. The GP shows the layout and size of coupes, the harvesting sequence, proposed road networks, camp sites, log yards and other general planning particulars.

Before extraction can commence, the permit holder is also required to prepare a Detailed Harvesting Plan (DP) and to submit it for approval. The FDS processes and approves the DP, which contains operational prescriptions at coupe level, the layout of logging blocks, surveyed road networks, and protected or conservation areas as well as the proposed harvesting methods.

Taxes and fees


Peninsular Malaysia
Concessions or Harvest permits will not be allocated or issued if relevant fees have not been paid by the Forest Management Enterprise (FME) or private land owner. In Peninsular Malaysia, the State Forestry Department is the tax authority that collects the following types of fees from licensees:

  • Deposit
  • Premium charged on land area under permit
  • Boundary preparation fee
  • Royalty & Cess on log volume extracted (see next section).

The State Forest Rules includes: First Schedule (license to take forest produce); Second Schedule (premium rate), Third Schedule (royalty rate), Fourth Schedule (forest premium and Cess – “Cess” is another word for an extra tax levied for a specific purpose like Education) and Fifth Schedule (liquidated damages). Rates may vary as these regulations change over time. The Malaysian Timber Industry Board (MTIB) is the tax authority setting tax rates in Peninsular Malaysia. This includes Cess rate of timber and timber products. Cess is collected when the exporter applies to MTIB for an export licence, after registration procedures have been fulfilled. So, the taxation of exports is internalised with the export process with MTIB to obtain export licenses, and taxes are paid in relation to each export consignment and license. There is no export tax on logs (total log export ban from Peninsular Malaysia) nor on processed wood products. More information on registration and Cess rates is available here.

The Sabah Forestry Department (SFD) is the tax authority setting rates and collecting taxes in Sabah. Forest concession holders must pay fees to obtain a permit for removal of forest produce (log). Fees include: licenses & permit fees; royalties, based on volume and species of logs extracted; premium (unless exempted); Community Forestry Cess; Forest Conservation Fees; and Forest Rehabilitation Fees (unless exempted). The logs are scaled at a stumping site (log yard) within the forest to assess fees payable for logs. The Forest Department staff will issue a Timber Disposal Permit (TDP) and Removal Pass as well as Royalty hammer mark each log prior to transport to a defined destination recorded on the Removal Pass and TDP.

There is no expo rt tax on logs (temporary log export ban) nor on plantation logs from Sabah. Processed wood products with a volume-based export tax include: sawntimber, plywood, veneer, mouldings, and woodchips. The taxation of exports is internalized with the export process with SFD to obtain export permits, and taxes are paid in relation to each export consignment and permit.

The Forest Department Sarawak (FDS) collects the following types of fees from licensees: Annual Licensing Fees, Annual Land Rent, Royalties, and premiums charged for log extraction. Rates charged are available from FDS. Fees for royalty and premium are invoiced monthly, based on batches of logs that are assessed to obtain a Removal Pass Royalty.  There is no Cess/export tax on either round logs or processed timber products from Sarawak. Royalty assessment: see next section.  

Timber harvesting activities

Peninsular Malaysia
Management and harvesting plans are prepared by the FMEs (forest management enterprises), and have to be approved before harvesting can take place. In Peninsular Malaysia, felled logs are inspected for payment of royalties and premium fees at the Forest Checking Stations (FCS) manned by State Forestry Department officials. FME places a deposit for payment of Royalty & Cess based on anticipated harvest volumes. Final payment is then made through deduction of the prepaid deposit against volumes for each lorry inspected at the checking station. Once payment of the balance is registered, a Removal Pass (RP) is issued by Forestry Department staff at the checking station for each lorry load to transport the logs to a processing mill. The RP references the log number, tree species, diameter, length, volume, that royalty and premium fees are paid, and destination. Once the royalty is assessed, each log is Royalty Hammer Marked at the FCS.

Timber tracking systems are used only for logs harvested from permanent reserved forests (PRF). Peninsular Malaysia has a paper-based tagging system and a RP system to trace logs from the forests to the mills. The licensee must ensure that all logs transported from the FCS to the mills are accompanied by an RP or Exchange Removal Pass (ERP). An ERP is issued by the relevant State Forestry Department in cases where the loads have been inspected during transit or for a load transported from one mill to another.


All timber harvesting in natural forest concessions requires the development and approval of a Comprehensive Harvest Plan (CHP) that defines the compartment boundaries and areas for protection, identifies infrastructure, and lists all commercial trees planned for harvesting.  SFD requires all harvesting within natural forests to use Reduced Impact Logging (RIL) techniques based on RIL Guidelines developed by SFD.  All logs extracted from the compartment are traceable to the marked felled tree listed in the CHP and must be inspected by SFD staff for royalty assessment and issuance of transport permits.

Following approval of the Detailed Harvest Plan (DP) the felling permit (commonly known as a Permit to Enter Coupe - PEC) is issued and endorsed by the FDS which allows for harvesting in the approved block. The PEC process requires verification of satisfactory ground compliance in terms of coupes and block boundary demarcation, preparation of topographical work map, road alignment and construction, tree enumeration before endorsement of blocks for logging. Enumeration is not applicable to planted forest.

A licensee is required to register the company Property Hammer Mark with the FDS. At the forest landing, the Licensee marks both ends of each log with his registered Property Mark, affixes a unique pre-approved Log Production Identity (LPI) tag to each log. The Licensee then scales and grades each log and submits log details in the Daily Production Return (DPR) to the FDS, together with their Log Specification Form and Log Specification Summary. FDS then checks to ensure that harvesting operations have taken place within approved areas in compliance with the Forest Timber License (FTL) terms and conditions and that licensees have used only approved LPI numbers. FDS checks the DPR information and uploads this this to the online information system called LoTS, which is used in Sarawak to monitor and control the movement of logs. After this the Licensee moves the logs from the licensed area to the Forest Checking Station (FCS) where logs are royalty-assessed and physically inspected.FDS conducts the royalty assessment of the logs by embossing the Government hammer mark 'JH' (which stands for Jabatan Hutan / Forest Department) at both ends of the logs. In addition, Harwood Timber Sdn Bhd (HTSB), a subsidiary of the Sarawak Timber Industry Development Corporation (STIDC), carries out an independent check of logs to ensure they have been royalty-assessed.

Third parties' rights

Peninsular Malaysia
Rights of local stakeholders are addressed as part of management planning. Management plans must identify local communities that claim user rights to the PRF and address claims in regards to harvesting of forest produce prior to operations.

Sabah acknowledges native and community rights as part of the Sabah Timber Legality Assurance System (Sabah TLAS) under Principle 4 (Other User Rights) that include the following requirements.

  • The Organisation shall conduct a Social Baseline Survey and Social Impact Assessment of the licensed area as part of the preparation of a 10-year FMP, which shall include:
  1. Identification of communities
  2. Identification of potential impacts
  3. Mitigation measures.
  • The Organisation shall identify and set aside Community Forestry Areas in their licensed area (where relevant) and include such areas in the Forest Management Plan (FMP).
  • The Organisation shall identify and respect community rights within the licensed area and exclude community areas from harvesting.
  • The Organisation shall record and document communications and consultation with communities
  • Areas with Native Customary Right (NCR) claim described under the Land Ordinance shall be excised from Temporary Occupation Licence (TOL) area
  • Native rights shall be respected

Sarawak legislation defines the rights of third-party claims to forest land in respect to Native Customary Rights (NCR).  Sarawak has recently developed a Timber Legality Assurance System (STLVS) that identifies the need for a social assessment along with agreements by local communities that claim third party rights to the Permanent Reserved Forest (PRF) prior to logging operations.  The requirement for social assessment and formal agreement with communities prior to starting operations, forms the basis for Free Prior and Informed Consent (FPIC).

Trade and transport

Peninsular Malaysia
The quantity of logs received by the mills as recorded in the Removal Pass (RP) will also be kept and maintained by the mills. The mills are required to keep a log book containing information on logs stored and processed in these mills.

The holders of the RP/ERP are the primary processing mills (that is, the sawmills and plywood mills). Value-added processing mills, which usually source their timber supplies from primary processing mills, do not possess a RP/ERP.

Any company/person engaged in the export of timber products must register with the Malaysian Timber Industry Board (MTIB). To register with MTIB, a company must first be a member of any of the eight associations recognised by MTIB. Upon approved registration, MTIB will issue a Certificate of Registration depending on the types of application, i.e. timber exporter, timber supplier, timber processor or jetty operator. Registered companies are allowed to export these products upon obtaining an Export License from MTIB. Export licenses will be issued following online application and submission of all required supporting documents including an RP. In the case of export timber, MTIB is responsible for conducting the final check at the company premises before the timber can be transported to the port for export. This includes inspection of the timber itself and of the required documentation. Every shipment must pass through this procedure before any export is allowed.

A licensee must register a Property Hammer Mark, and said Mark must be stamped at the end of each log produced (natural forest) or per batch (plantation forest). Additionally, the Licensee must incise each extracted log with a serial number. Daily felling and extraction is recorded on official documents, and harvested trees are inspected by the District Forestry Officer (DFO) prior to removal. The DFO marks the harvested trees with the SFD Inspection Hammer Mark, after which the marked logs can be transported to the approved "stumping site" (log yard) for royalty assessment. All timber to be transported must be accompanied by a Removal Pass (RP) upon payment of the royalties to the government, or a Transit Pass for transportation of logs from the extraction area to the royalty assessment area. After royalty has been assessed at the stumping area or in a later stage the trees are marked with an SFD Royalty Hammer Mark. For plantation logs from Permanent Reserved Forest (PRF) area the licensee records the production based on volume or weight and submits the records to the DFO for the issuance of a Transit Pass. Royalty-paid logs are accompanied by a Timber Disposal Permit (TDP) that provides details of the logs, including: the license where the logs were extracted, the serial number, log specification by species, log diameter and length, date of scaling and reference to the royalty payment receipt.

When the truck arrives at the mill, logs, trucks and RPs are recorded by the SFD in the Log Arrival Book kept at the mill and the used RPs are stamped as 'Used Removal Pass'. The Organisation must also register a Property Hammer Mark for sawmill/plymill processing and incise a serial number on all logs for sawmill processing.

A company intending to export timber and timber products must possess an Annual Export License from the SFD. The Company declares to the District Forestry Officer the timber and timber products to be exported with a valid export permit or annual export license, with supporting documents such as Log summary, Sales Contract, Invoice, Packing List and a declaration on the source of processed timber to be exported. A Timber export permit is issued by SFD to these persons/companies upon satisfaction of all export requirements.

Resulting from the assessment and inspection activities, FDS issues a Removal Pass (Royalty) while HTSB issues an Endorsement Clearance Certificate (ECC) as well as Transportation Pass or Shipping Pass, both pre-requisites to FDS’s issuance of a Transit Removal Pass (TRP) to transport the logs from the forest to manufacturing or export. Upon arrival at mills, logs are inspected by both FDS and HTSB and reconciled with ECC and TRP. All mills must have a valid Mill license issued by the FDS and all mills, except sawmills, need to obtain a Manufacturing license from STIDC demonstrating registration as manufacturer. The Mill and Manufacturing Licences are valid for only one year and subject to annual renewal.

Exporters need to be in the possession of a Certificate of registration with the STIDC. STIDC is also responsible for issuance of Export Licenses for every shipment of timber and timber products from Sarawak.  The issuance of Export licenses is done through an e-Permit System on STIDC's portal. Additionally, exported sawn timber shall be accompanied with a Grading certificate.

Logs for export are first physically inspected by the HTSB to ensure that (i) export consignments do not include any logs supposed to be reserved for milling and (ii) royalty has been paid on them. HTSB then issues an Export Clearance Certificate (ExCC) as a pre-requisite to SFC’s issuance of a final Removal Pass (Transit/Export). STIDC issues the Export Licence, and finally the Royal Malaysian Customs Department undertakes customs clearance.

Key documents

The below listed key documents are based on the applicable legislation and are considered to play a key role in demonstrating legal origin. The full list of applicable legislation is accessible here (NEPCon).


Peninsular: Concession license
State Forestry Department, Peninsular Malaysia
License to operate as a forest management company in a specific forest area
Peninsular: Approved Forest Management Plan
Approval by State Forestry Department, Peninsular Malaysia
Forest management plan for the licensed area prepared by licensee and approved by the forest licensee
Peninsular: Approved Forest Harvesting Plan
Approval by State Forestry Department, Peninsular Malaysia
Forest harvesting plan prepared by licensee detailing the requirements for harvesting in the licensed area.
Peninsular: Harvesting permit
State Forestry Department, Peninsular Malaysia
Permit for harvesting in the annual block of harvest based on a pre-felling assessment by the SFD.
Sabah Forestry Department
License for large-scale timber concession providing long-term tenure of 100 years.
Sabah: Coupe permit
Sabah Forestry Department
License to operate in a specific area of the concession with a validity of 15 years.
Approval by Sabah Forestry Department
Management plan describing the long-term management approach for a specific SMFLA / LTL area.
Approval by Sabah Forestry Department
Plan detailing the planned harvest for a specific block of forest.
Sabah Forestry Department
License to harvest forest produce from a forest area. For PRF concessions this is a SFMLA/LTL (see above); for other activities this is a Form I or Form IIB license.
Forest Department Sarawak (FDS)
License to operate in a concession area.
Approval by Forest Department Sarawak (FDS)
Map of the Forest Timber License identifying protected, social (SA) and production coupe areas, roads and rivers. It is prepared by the concessionaire, detailing the general harvest planning, including the layout and size of coupes. A partial photo of a GP (GP maps are A2 size documents) is provided as an example.
Approval by Forest Department Sarawak (FDS)
Map of the Harvest Coupe showing protected areas, SA areas, production areas, secondary roads, rivers, and main skid trails. It is prepared by the concessionaire, detailing the harvest planning of a specific block of forest. A partial photo of a DP (DP maps are A2 size documents) is provided as an example.
Forest Department Sarawak (FDS)
License to harvest in the approved block.
Forest Department Sarawak (FDS)
An official form detailing the harvested logs, which needs to be completed by the Company and which will be used for royalty assessment by the FDS.

Processing and trade

Companies Commission of Malaysia (SSM)
Certifies that a company is on and from the date specified in the certificate incorporated and established. An example of this is provided in Malay
CITES Management Authority in the respective Region/ State
A CITES permit is requested and must be obtained from the legal CITES Authority in Malaysia for exporting wood and other derivative products from tree species listed on the CITES Appendix II.
Malaysian Timber Industry Board (MTIB)
Annual registration as exporter, supplier, processor, grader
Sarawak: STIDC Registration Application Form
Sarawak Timber Industry Development Corporation (STIDC)
Registration with STIDC of those involved to etablish, manage or operate any mills or manufacturing, sale, distribution or marketing activity of timber and timber products
State Forestry Department, Peninsular Malaysia
The RP carries a record of the type/species, volume of produce, and the royalty and Forest Department CESS payable. All logs transported from the Forest Checking Stations to the mills must be accompanied by a Removal Pass
State Forestry Department, Peninsular Malaysia
An ERP is issued by the relevant State Forestry Department in cases where the loads have been inspected during transit or for a load transported from one mill to another.
Peninsular: Mill license
State Authority, Peninsular Malaysia
Operating license for processing mills
Malaysian Timber Industry Board (MTIB)
License for export covering a specific load.
Sabah Forestry Department (SFD)
Document accompanying harvested timber when payment of royalties has been made.
Sabah Forestry Department (SFD)
Operating license for processing mills
Sabah Forestry Department (SFD)
A TDP accompanies royalty paid logs and provides details of logs, including the license where the logs were extracted, the serial number, log specification by species, log diameter and length, date of scaling and reference to the royalty payment receipt.
Sabah Forestry Department (SFD)
Annual license confirming registration as an exporter from Sabah.
Sabah Forestry Department (SFD)
Permit for export covering a specific load.
Sarawak Forestry Corporation
Transport document accompanying harvested timber confirming that royalty has been paid.
Harwood Timber Sdn Bhd
Certificate issued after physical inspection, confirming that logs are legal and that royalty has been paid for them.
Sarawak: Transportation Pass, or Shipping Pass
Harwood Timber Sdn Bhd
Transport document accompanying Transit Removal Pass that certifies the transport lorry or ship (with license number) and the destination of the logs.
Forest Department Sarawak
Document confirming logs for local processing to be delivered to local mills.
Forest Department Sarawak
Operating license for processing mills.
Sarawak Timber Industry Development Corporation (STIDC)
Legal registration as a timber exporter from Sarawak.
Sarawak: Export License
Sarawak Timber Industry Development Corporation (STIDC)
Export license covering a specific load.
Sarawak: Grading certificate
Sarawak Timber Industry Development Corporation (STIDC), the grading authority of Sarawak.
All sawn timber to be exported from Sarawak must be graded by registered competent Timber Graders. STIDC is the Grading Authority for Sarawak to issue grading certificates for all sawn timber graded under the Malaysian Grading Rules for Sawn Hardwood Timber and issued a grading certificate by STIDC.
Harwood Timber Sdn Bhd
Export clearance certificate for the export of logs, confirming that (1) the logs do not fall under the reservation quota, and (2) royalty has been paid on them.
Forest Department Sarawak (FDS)
ExCC is a prerequisite for this final removal pass that FDS issues after verifying the parcel of logs deemed for export, to allow logs to be moved from the transit log pond to the vessel.

Bans and quota

  • There is a total ban on the export of round logs from Peninsular Malaysia.
  • Sabah export of logs has been temporarily banned as of 2019 with special permits issued only for plantation logs by the state government.
  • Sarawak has log reservation quotas issued by Forest Department Sarawak for local processing, which is monitored by Harwood Timber Sdn Bhd.

Cites and protected species

A list of protected tree and plant species from Malaysia is available here (source: NEPCon, 2018).

There are also some tree species listed on the CITES Appendix II from Malaysia:

  • Agarwood (Aquilaria spp.). The CITES listing applies to all parts and derivatives except: seeds and pollen; seedling or tissue cultures obtained in vitro, in solid or liquid media, transported in sterile containers; fruits; leaves; exhausted agarwood powder, including compressed powder in all shapes; and finished products packaged and ready for retail trade; this exemption does not apply to beads, prayer beads and carvings.
  • Chinese yew (Taxus chinensis), Himalayan yew (Taxus wallichiana), and Serpentine wood (Rauvolfia serpentine). The CITES listing applies to all parts and derivatives except: seeds and pollen, and finished products packaged and ready for retail trade.
  • Ramin (Gonystylus spp.). The CITES listing applies to all parts and derivatives of the tree, except seeds; seedling or tissue cultures obtained in vitro, in solid or liquid media, transported in sterile containers; and cut flowers of artificially propagated plants.

Management Authorities responsible for the issuance of CITES export permits:

  • For Peninsular Malaysia, the Malaysian Timber Industry Board (MTIB). Exportation of CITES are subject to annual export quota imposed by MTIB. CITES Export Permit for Ramin and Agarwood will be approved and issued by MTIB by submitting all required documents including Removal Pass
  • For Sabah, the Forest Department of Sabah
  • For Sarawak, the Forest Department of Sarawak

National action on timber legality

Malaysia was one of the first countries to begin negotiating an EU FLEGT Voluntary Partnership Agreement (VPA) with the EU in January 2007, and negotiations are still ongoing.

Different Timber Legality Assurance Systems (TLASs) are operated as Due Diligence systems for Peninsular Malaysia; Sabah & Sarawak. Peninsular Malaysia operates MYTLAS; Sabah has operated the Sabah TLAS since 2010 in concession forests and in January 2015 included all forests, mills and trading companies. Sarawak operates a Sarawak Timber Legality Verification System (STLVS) that was developed in 2016 and has been operating under a voluntary system since 2017.

The Malaysian Timber Legality Assurance System (MYTLAS), is managed by the Malaysian Timber Industry Board (MTIB), it is in place, and issuance of a TLAS License is subject to inspection of the timber consignment by MTIB. MYTLAS certificates are being issued for exports on a voluntary basis to help meet the due diligence requirements of the EU Timber Regulation (EUTR).

The Sabah TLAS is actually the first Malaysian Due Diligence system on forest legality since it started in 2010 based on expansion of an EU FLEGT project in 2008 - 2009. The Sabah TLAS started with evaluation of commercial natural forests against the Sabah TLAS Principles 1-4 developed in conjunction with the EU FLEGT VPA negotiations.  The Sabah Forestry Department (SFD) expanded the Sabah TLAS in January 2015 to cover all licensed forest concessions as well as all manufacturing and trading companies in Sabah to monitor compliance to the Legality standard under Sabah TLAS Principles 1-6.  Monitoring is conducted by the Legality Verification Services’ provider Global Forestry Services (GFS). SFD issues a certificate of compliance for companies that demonstrate compliance based on GFS’ annual monitoring reports. A total of 53 Forest Licensed Areas have been assessed for compliance to Sabah TLAS P1-4 totalling 1.1 million ha in 2019. A total of 127 manufacturing and trading companies have been assessed for compliance to Sabah TLAS P5-6 in 2019. SFD issues penalties for companies that do not demonstrate compliance and are required to address non-conformance within 2 months.  Results of due diligence monitoring are available under the client database of the GFS’ website ( 

Sarawak Timber Legality Verification System (STLVS) was developed in 2016 through an interagency committee that included both Sarawak Timber Industry and Government Agencies.  The STLVS consists of 6 principles in conjunction with the EU - Malaysia FLEGT VPA negotiations and was field tested in Aug./Sept. 2016 on 6 forest licensed areas and 6 manufacturing companies. The current version (02) of the STLVS Standard is dated January 2019 and available on the Forest Department Sarawak website. STLVS has been in operating since 2017 on a voluntary basis with 8 Forest Timber Licenses (FTL) areas and 1 License for Planted Forests (LPF) area assessed by GFS against STLVS Principles 1-4 with a total area close to 1 million ha. There are 12 companies participating in the STLVS Principles 5-6 for chain of custody monitored by GFS that mainly produces veneer and plywood products and sawn timber.

Third party certification

The principal certification scheme in Malaysia is the Malaysian Timber Certification Scheme (MTCS) that has been endorsed by the Programme for the Endorsement of Forest Certification (PEFC) system since 2009. The MTCS has a total of 25 forest and plantation management certificates covering around 4.6 million ha. Peninsular Malaysia has 5 Forest Management (FM) certificates held by State Forestry Departments (Pahang; Perak; Terengganu; Selangor and Negri Sembilan).  Several State Forestry Department certificates in Peninsular Malaysia have been rescinded (Kelantan; Johor and Kedah). There are 2 MTCC certificates issued in Sabah and 18 have been issued in Sarawak. MTCC has issued a total of 360 Chain of Custody (CoC) Certificates that are jointly under the PEFC system.

The Forest Stewardship Council (FSC) is another important certification scheme in Malaysia, with 11 FM certificates issued covering 684,913 ha. Sabah has 9 forest areas, and Peninsular Malaysia has 2 forest areas certified under the FSC system.  There is a total of 189 FSC CoC Certificates issued in Malaysia as of Dec. 2019.

Other initiatives regarding external verification of Malaysian forest products have been deployed by Global Forestry Services (GFS). Participating companies can be verified based on summary reports listed on the GFS website, both under the GFS Wood Tracking Program (WTP) and the GFS Legal Verification Services (LVS).  GFS is a forest & timber industry specialist company, not an accredited certification body as there is no accreditation system associated with legality verification. GFS operates the LVS & WTP to monitor compliance to Due Diligence Systems such as the Sabah TLAS and STLVS as well as the GFS generic standard in accordance to formal procedures based on ISO systems (9001 2015 & 17021).

Sources of information


Federal Land Development Authority (FELDA)
FELDA Tower, Platinum Park, No. 11, Persiaran KLCC, 50088
Kuala Lumpur, Malaysia
Federal government agency that promotes smallholder agricultural systems such as Rubber tree plantations and palm oil plantations.
Forest Department Sarawak (FDS)
Bangunan Wisma Sumber Alam
Jalan Stadium,
Petra Jaya 93660
Kuching, Sarawak, Malaysia
Tel: 0060 82 442180
Tel: 0060 82 319102
Tel: 0060 82 319103
The FDS is responsible for the management of Sarawak’s forest resources; the constitution of Totally Protected Areas (TPAs) and Permanent Forest Estates (PFEs); and the enforcement of the ordinances.
Forest Research Institute Malaysia (FRIM)
52109 Kepong,
Selangor Darul Ehsan
The FRIM was created by the Malaysian government and is administered by the Ministry of Natural Resources and Environment. It promotes sustainable forest management and the optimal use of forest resources through the knowledge and technology generated from the five research arms (Divisions): Forestry & Environment; Forestry Biotechnology; Forest Products; Forest Biodiversity; and Medicinal Plants.
Forestry Department of Peninsular Malaysia (FDMP)
Jalan Sultan Salahuddin
Kuala Lumpur, Malaysia
Tel: 0060 3 26164488
The FDPM is responsible for the management, planning, protection and development of the Permanent Reserved Forests (PRF) in accordance with the National Forestry Policy (NFP) and the National Forestry Act (NFA) in Peninsular Malaysia
Global Forestry Services Inc.(GFS)
C/O Whitespace Bangsar, No.3.02D (East Wing), Level 3,
Menara BRDB, 285, Jalan Maarof, Bukit Bandaraya, 59000
Kuala Lumpur, Malaysia
Tel: 0060 12 310 6007
GFS is a forest & timber industry specialist company with tropical forestry experience in Malaysia and SE Asia. Under its Legality Verification Services / Wood Tracking Program, it supports due diligence systems to meet international timber trade requirements. GFS conducts independent monitoring for the Sabah Forestry Department covering Reduced Impact Logging & legal compliance to the Sabah Timber Legality Standard (TLAS) for all forests, manufacturing, trade and export companies on Sabah. GFS also assesses, and monitors for chain of custody, companies participating in Sarawak’s Timber Legality Verification System (STLVS).
Harwood Timber Sdn Bhd (HTSB)
1st, 2nd, & 3rd Floor
Sublot 4-6, Lot 320
Section 5, Wisma PTBS, Jalan Kulas
Kuching, Sarawak, Malaysia
Tel: 0060 82 414589
Tel: 0060 82 414520
HTSB is a subsidiary of the STIDC, and its principal activities involve the physical inspections of logs in Sarawak at the various stages of the supply chain to ensure that the logs are legal and have proper documentation.
Lembaga Industri Getah Sabah (LIGS) (Sabah Rubber Industry Board)
Aras 3, Blok A, Wisma, Pertanian Sabah, Jalan Tasik Luyang (Off Jalan Maktab Gaya)
Kota Kinabalu, Sabah, Malaysia
Tel: +60 88-212 311
State government agency to support smallholder rubber plantations in Sabah.
Malaysian Timber Certification Council (MTCC)
C-08-05, Block C, Megan Avenue II
No. 12, Jalan Yap Kwan Seng
Kuala Lumpur, Malaysia
Tel: 0060 3 2161 2298
The MTCC developed and operates the Malaysian Timber Certification Scheme (MTCS), which provides independent assessments of forest management practices in Malaysia.
Malaysian Timber Council (MTC)
18th Floor Menara PGRM
8 Jalan Pudu Ulu Cheras
Kuala Lumpur, Malaysia
Tel: 0060 3 9281 1999
The MTC is an initiative of the Malaysian timber industry dedicated to leading and promoting the development and growth of the Malaysian timber industry.
Malaysian Timber Industry Board (MTIB)
Level 13 - 17 Menara PGRM,
No. 8, Jalan Pudu Ulu,
Cheras 56100
Kuala Lumpur, Malaysia
Tel: 0060 3 9282 2235
MTIB promotes and coordinates the overall sustainable development of the Malaysian timber industry while continuing to extend quality services to the public.Regulate and control the trade in, and the marketing and distribution of timber.
Malaysian Wood Industries Association (MWIA)
19B, 19th Floor Tower 1 Menara PGRM,
8, Jalan Pudu Ulu, Cheras 56100,
Kuala Lumpur, Malaysia
Tel: 0060 3 9282 1778
MWIA, formerly known as Timber Trade Federation Malaysia, is a voluntary association comprising of 8 State Association in Peninsular Malaysia. Originally comprising of mainly sawmillers in Peninsular Malaysia, MWIA now represents the interests of the whole range of upstream and downstream activities in the timber industry.
NEPCon Malaysia
Christian Schriver
59 Jalan Memanda 13
Taman Dato Ahmad Razali
Ampang, Selangor, Malaysia
NEPCon is a non-profit organisation that builds commitment and capacity for mainstreaming sustainability. NEPCon works as a certifying body forest sustainability certification (FSC and PEFC), as well as on forest legality.
Rubber Industry Smallholders Development Authority (RISDA)
Bangunan RISDA, Km 7, Jalan Ampang,
Karung Berkunci 11067, 50990
Kuala Lumpur, Malaysia
Federal government agency that promotes smallholder agricultural Rubber tree plantations.
Sabah Forestry Department (SFD)
Locked Bag 68
Sandakan, Sabah, Malaysia
Tel: 0060 89 242500
The SFD is the responsible authority in Sabah for sustainable forest management and conservation.
Sabah Timber Industries Association (STIA)
Lot 25 & 26, Block E, 1st Floor, Phase III,
Damai Plaza, Luyang Commercial Centre,
Kota Kinabalu, Sabah, Malaysia
Tel: 0060 88 249186
STIA, formerly known as the Sabah Sawmilling Industries Association, represents the interests of the timber industry of Sabah.
Sarawak Forestry Corporation Sdn Bhd
Lot 218, KCLD Jalan Tapang
Kota Sentosa
Kuching, Sarawak, Malaysia
Tel: 0060 82 610088
Sarawak Forestry Corporation undertakes the management and conservation of Sarawak’s forests.
Sarawak Timber Association
11th Floor, Wisma STA
Jalan Datuk Abang Abdul Rahim,
Kuching, Sarawak, Malaysia
Tel: 0060 82 332 222
Sarawak Timber Association represents the interests of the timber industry of Sarawak.
Sarawak Timber Industry Development Corporation (STIDC)
Wisma Sumber Alam,
Jalan Stadium, Petra Jaya, 93050

P.O. Box 194, 93702
Kuching, Sarawak, Malaysia
Tel: 0060 82 473 000
STIDC aims to plan, coordinate and develop the wood-based industries in Sarawak.
Timber Exporters' Association of Malaysia (TEAM)
19C, 19th Floor, Tower 1, Menara PGRM,
8 Jalan Pudu Ulu, Cheras,
Kuala Lumpur, Malaysia
Tel: 0060 3 9284 7443
Tel: 0060 3 9284 7445
The principal objectives of TEAM are: (i) striving to improve the conditions of the timber export trade with particular reference to Peninsular Malaysia and (ii) to advocate, support, negotiate on, object to, any legislation affecting the timber export trade.
Regional office South-East Asia
Unit 3-2, 1st Floor, Jalan SS23/11, Taman SEA, 47400
Petaling Jaya, Selangor, Malaysia
Tel: 0060 3 7880 3940
TRAFFIC is an international NGO committed to fighting illegal trafficking of flora and fauna. In Malaysia, it is also dedicated to implementing and enforcing the nation’s commitment to CITES.
WWF Malaysia
1, Jln PJS 5/28 A, Pusat Dagangan Petaling Jaya Selatan, 46150
Petaling Jaya
Selangor, Malaysia
Tel: 0060 3 7450 3773
WWF Malaysia promotes wildlife conservation, sustainable forest management, timber certification, and capacity building.


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