malaysia shadow

Report / March 19, 2013

Inside Malaysia's Shadow State

How one ruling family cashed in on Sarawak’s timber wealth over 30 years, wiping out forest resources at the expense of indigenous communities and the state’s rainforests.

For 30 years, Chief Minister Abdul Taib Mahmud ruled Sarawak, Malaysia’s largest state. Today less than 5 per cent of the state’s once vast rainforests have been spared from logging or conversion to plantations. 

In this undercover investigation, Global Witness shows exactly how Taib’s family and their cronies by-pass Malaysian law to sell off Sarawak’s land and forests, using Singapore’s secretive banks to conceal corrupt deals.

Posing as investors, Global Witness secretly filmed family members and lawyers offering to sell land given to them by Taib at cut rate prices, and hide the profits offshore in Singapore to dodge taxes.  

Taib’s inner circle expressed disturbing contempt for Sarawak’s indigenous population who lived on land the family had been selling off for immense personal gain. Two of the Chief Minister’s first cousins repeatedly referred to indigenous communities as “naughty” people who “try to make money” through “squatting” on land. 

Within a year of our investigation, Taib stepped down as Chief Minister. His replacement has promised to crack down on corruption, but can he stand up to Sarawak’s powerful logging industry?


Sarawak’s timber boom has spawned some of the world’s largest and most ruthless logging companies, which operate in almost every tropical forested region in the world, from South America and Africa to the Pacific islands. 

What’s HSBC got to do with it?

Global Witness exposed how HSBC profited from lending money to several Sarawak logging and plantation companies involved in grossly unsustainable and in some cases illegal operations, in violation of its own forest policy. As a result HSBC dropped the Taib family and its business associates as clients. The bank has also shut down its Sarawak branch.