This story is produced in collaboration with the Pulitzer Center’s Rainforest Investigations Network. A version of this story was first published in SCMP.
Plantation company AA Sawit Sdn Bhd has just submitted an environmental impact assessment report to get federal approval for its new plantations in Johor. But development on the site had already begun two years ago.
Plantation company AA Sawit Sdn Bhd, with the Johor royal family as the indirect majority shareholders, appears to have been developing land without the compulsory approval.
Satellite images show that in 2020—2021, more than 600 ha of forests on the 3,775 ha site in Endau, northeast Johor, were cleared. By June 2021, kilometres of new irrigation drains crisscrossed the site.
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AA Sawit plans to plant oil palm and coconut on the site. The Mersing district local plan classifies the entire site as forest, but agriculture is allowed with conditions.
Logging and agricultural activity of such scale needs prior approval from state and federal authorities, as stipulated in regulations in the Environmental Quality Act 1974.
The federal Department of Environment (DOE) must first review and pass the project’s environmental impact assessment (EIA) report. An EIA report shows how a developer could mitigate environmental impacts.
No lack of impact
The AA Sawit site is sandwiched by forest reserves, plantations, rivers, and villages. Already, the environmental impact from existing plantations is felt around the site.
Local villagers told Macaranga that chemicals from plantations had turned the water of an adjacent river sour and sometimes as black as coffee. Elephants driven out of deforested lands have crossed the river into their village, once uprooting banana plants behind the school.
Last year, an elephant broke a villager’s ribs which pierced his organs; the father of six died on the way to the hospital.
AA Sawit’s EIA report, dated June 2022, was published online for public review on 7 July. But the site had been logged and worked on for two years, and this was mentioned in the EIA report.
Teckwyn Lim, a forestry consultant with two decades’ experience, says the AA Sawit scenario is typical. “It shows how EIAs are too often an afterthought,” he says. “A box to tick after the project has already been approved” by the state or local authorities.
“The question should be directed to the state and local authorities: why did they allow logging to commence without an EIA?”
Biodiversity consultant Dylan Ong says that the DOE might not know that work had already begun. He suggests that the DOE should run basic verification during the EIA report review and not depend solely on the EIA consultants.
When asked, the federal DOE told Macaranga that they are investigating “the actual situation at the proposed project site.”
“Carrying out or initiating earthworks for the purpose of development” of activities prescribed in the Environmental Quality Act without prior approval of the EIA report is an offence. If convicted, a party is liable to a fine of up to RM500,000 or five years imprisonment or both.
DOE added that “if there is an offence, then enforcement will be taken accordingly against the party concerned.”
Macaranga investigated the chain of events to see if indeed development had happened before the EIA was submitted. We gathered evidence from the EIA report, satellite images, official documents, field visits, and interviews.
Neither the federal DOE nor the Johor state government responded to questions on AA Sawit’s project. Likewise, neither AA Sawit nor the Johor royal family responded to interview requests.
Golden Ecosystems Sdn Bhd, the consultant company hired to produce the EIA report, told Macaranga that it is bound by a non-disclosure agreement.
AA Sawit’s new plantation site in Endau, Johor; mid-July 2022
Company directors, landowners, and loggers
AA Sawit is 51% owned by Johor’s ruler Sultan Ibrahim and his son Tunku Ismail, through their holding company IBZI Holdings Sdn Bhd. Tunku Ismail is also a director of AA Sawit. Fellow director Chow Chuin Hai owns the other 49% of AA Sawit.
The 3,775 ha site comprises 6 lots. Four lots, totalling 2,732 ha, have been owned by Sultan Ibrahim under freehold titles since April 2018, including lots PTD 4882, PTD 4963, and the formerly forested PTD 4085 and PTD 4118.
Land title documents show that Sultan Ibrahim has leased these 4 lots to AA Agriculture Sdn Bhd for the years 2020—2049. AA Agriculture Sdn Bhd is a company owned by Chow and Ng Li Li, who share the same address in Johor.
However, Macaranga could not verify who owns or is leasing the remaining 2 lots of 1,043 ha. Our enquiry with the Johor Land Office reveals that these lots were initially leased to Yayasan Pelajaran Johor for the years 2014—2113 for planting oil palm but were returned (“serahbalik”) in August 2018. Further searches were unsuccessful because the land title numbers stated in the EIA report had been terminated (“batal”).
In terms of logging, while AA Sawit’s EIA report addresses logging, it is vague on the identity of the logger(s).
While one part of the report says that AA Sawit received logging licenses (JT 04/5/20 and JT 04/2/20) from the Johor state forestry department, another part says that AA Sawit is merely contracted to plant.
The logging license attachments—and the land titles—in the report are missing and replaced with a line: “restricted only for Department of Environment.”
According to the EIA, the consultants began visiting the site in September 2020. However, satellite images show that clearing had already started months before. Between January and June 2020, lot PTD 4118 had lost at least 300 ha of forests. Forest which locals said once housed elephants, barking deer, gibbons, and hornbills.
Loggers continued to fell trees even as the consultants came in months later to survey wildlife and sample groundwater.
By mid-2021, when the consultants finished their field study, the site had lost at least 636 ha of forest and 700 ha of shrubland.
And when the EIA report was published for public review on 7 July, new oil palm had been planted on the eastern border with the Gunung Arong forest reserve.
An EIA report that “cannot be relied upon”
The DOE guidelines specify that EIA reports must use accurate and updated data. The developer and the EIA consultant must declare that they “have not withheld or distorted any material facts.”
But AA Sawit’s EIA report contains incoherent descriptions.
For example, it uses Google Earth images dated 2018 that show standing forests (Chapter 1); presents a table titled “Existing Land Use” that lists 1,150 ha of forest on the site (page 5-2); and shows a photo of the forests in parcel PTD 4118 (page 5-2).
Then, a few pages later (page 5-4), the report says that all the forests had been logged during the EIA study.
Furthermore, satellite images show that the logging and drains extend more than 650 ha beyond the indicated borders of the project – a point not mentioned in the report. Whether this extension is legal or approved by the state is uncertain.
“It is indeed most shocking that the EIA [report] has not disclosed the reality on the ground and provides misleading information,” says Meenakshi Raman, president of environmental NGO Sahabat Alam Malaysia.
Macaranga shared its findings with her following which she says the EIA report “cannot be relied upon.”
Finally, since it appears that development had started before the EIA study, some of the report’s recommendations seem impossible. For example, the report encourages the developer to attempt RSPO sustainable palm oil certification, but that prohibits deforestation.
Another recommendation is to gradually clear and plant the site in plots of 200 ha each to give the nearly 300 species of mammals and birds on-site “time to escape.”
Cynthia Gabriel, executive director of C4, a non-profit organisation that champions good governance in Malaysia, says that work without EIA report approval must stop immediately, and the rights of affected villagers respected and protected.
Lim and Meenakshi Raman, who is the president of environmental NGO Sahabat Alam Malaysia, call for the DOE to reject the EIA report.
The DOE told Macaranga that they would approve the EIA report only if they are satisfied that the report meets all the requirements and that the project proponent has addressed issues raised in the review process.
Meenakshi further implores the authorities to investigate and prosecute wrongdoers with “very serious penalties.”
However, the company directors can escape liability if they can prove that they did not consent or connive in the offence, and that they had tried to prevent the offence.
“Jail terms must be imposed on the directors of the company if it is found that they have flouted the law,” says Meenakshi. Otherwise, companies could get away with paying a small fine.
“This makes a mockery of the law.”