A decade ago the Bornean territories of Indonesia and Malaysia were described as resource frontier regions (Brookfield et al. 1995). In such regions, ‘development’ was concerned with economic growth through the export of basic commodities, and the export level had to be maintained even if the commodities changed. In the Bornean context, the export commodities were those that were dependent on the exploitation of natural resources. Timber was produced mainly for export and, once exhausted, was replaced by oil palm. The markets for raw logs and plywood were mainly those of East Asia: Japan, South Korea and Taiwan. In the last decade additional demand for timber came from China and, to a smaller extent, Thailand. Unlike the markets of Europe and, to a lesser extent, the United States, the Asian markets are not pressured into taking account of issues of sustainability, given the relative absence of a strong NGO watchdog movement that the former countries have to contend with.

From the 1970s to the mid-1990s all three regions experienced a period of ‘resource boom’ (Ross 2001). Booms are characterised by windfall profits during shifts in market price, and because of cheap supply sources (free-standing trees at nominal charges as well as cheap labour) it was possible to capture high ‘rents’, which represent the margin of profit over and above normal business profit (ibid.). Commodity booms produce a ‘get rich quick’ mentality among businessmen and a ‘boom and bust’ psychology among policy makers.

The boom period can be gauged by examining statistics for tropical hardwood production, especially for raw logs. In 1975 Sabah produced 10.1 million cubic metres (mcm) of raw logs, Sarawak only 2.6 mcm and Kalimantan 12.4 mcm. By 1979, which was the peak production year before Kalimantan began its switch to plywood, the four Kalimantan provinces (East Kalimantan being the most important) produced 17.1 mcm, with Sabah and Sarawak producing 9.5 and 7.5 mcm respectively. Sarawak’s annual production in the late 1980s averaged 18.8 mcm (ITTO 1990), while raw log production in Sabah stood at 11 and 9.5 mcm in 1988 and 1989 respectively (Chala 2000). In terms of exports of raw logs, Sabah’s peak seems to have been in 1977 and 1978 (12.3 and 12.4 mcm respectively). These  were  also  the  years  of  peak  production  in Kalimantan (13.7 and 14.9 mcm respectively). Sarawak lagged behind and only exceeded Sabah in 1984, with 9.2 mcm produced in that year. By that time Kalimantan no longer exported raw logs, but converted them into plywood. During the 1980s, Indonesia, especially Kalimantan, became the world’s leading exporter of tropical plywood (Brookfield and Byron 1990). The boom, which continued into the 1990s, had severe effects on the forest resource base.

There are two indicators that are often used for gauging the environmental viability or otherwise of forestry practices. The first indicator is the volume produced by specific forest patches according to the standards set by a ‘sustained yield management’ formula, usually expressed as an ‘annual allowable cut’. Calculations of annual allowable cut are based either on volume or ‘area regulation’. Since reliable growth data are missing in much of Borneo, calculations using either method are educated guesses at best. Moreover, even these guesses are not adhered to. By many accounts, timber production in all three regions consistently exceeded the maximum annual allowable cut many times over (ITTO 1990; Chala 2000; Khan 2001). The second indicator of environmental viability is the condition of the forest after logging. This is a more difficult indicator to work with since it requires knowledge, not only of growth rates, but also of the potential regeneration of species, local soil and weather conditions, and a range of information concerning species tolerance to disturbance at local, landscape and ecosystem levels. Reliable information was largely unavailable or patchy, so management principles were at best only estimates (Majid Cooke 1999; Chala 2000). In Sarawak, Sabah and Kalimantan a ‘get rich quick mentality’ often meant predatory logging, quick entry without heed to management plans, and complete harvesting of a concession before the licence period expired. The emphasis on speed, together with inadequate data and site surveillance, also affected vulnerable areas such as steep slopes, not normally zoned for logging, and logging beyond the stipulated boundaries was common (Potter 1991; Majid Cooke 1999; Chala 2000; Ross 2001).

A major effect of such predatory logging was forest degradation. Today, more than two thirds of the commercial forest reserves in Sabah consist of degraded logged-over forests, with damage to soil and water quality (as well as loss of fish) so extensive that urgent measures have been required to rehabilitate them (Kollert et al. 2003). Canopy disturbance after logging in Sabah has been estimated at 70 per cent (Chala 2000: 134, citing Nicholson 1979 and Nussbaum 1995). In Kalimantan, logging opened up 80 per cent of the forest canopy (Curran 1999), damaging up to 50 per cent of timber stands in most instances (Tinal and Palenewen 1978: 91, cited in Potter 2005a). Given the ad hoc allocation of licences across the three regions, the question of how much unlogged forest is now left can be difficult to answer. However, an indication can be glimpsed from data on Sabah, where in 1970 it was estimated that there were still 2.7 million hectares unlogged, but by 1996 the unlogged area was only 430 000 hectares (Mannan 1998).

Land conversion for agricultural development, especially oil palm estates, has been an additional factor in forest loss. In three decades approximately one million hectares of forest in Sabah were felled for conversion to oil palm, cocoa and rubber plantations (Chala 2000). In Kalimantan, between 1985 and 1997 approximately 8.5 million hectares were lost, of which half a million hectares were converted to smallholder plantations and 1.7 million to large-scale estates. The balance of 6.3 million hectares was variously accounted for as grassland, scrub and forest regrowth, or as fallow for shifting cultivation (Potter 2005a: Table 4).

Rent seizing through rampant production was made possible by the removal of legal obstacles that could have partially obstructed the process. The centralisation of authority placed the exclusive power to allocate or benefit from logging rights in the hands of individuals or ruling political parties (as in the case of Sabah and Sarawak), or among members of the Suharto family and their cronies, military officials or technocrats (as in Kalimantan) (Peluso 1992; Majid Cooke 1999; Ross 2001). The already limited access rights of indigenous peoples to land acquired through customary claims were further curtailed in 1974 when amendments to the Land Code in Sarawak gave individuals or institutions in government the right to extinguish land claimed under customary rights. Similarly, in Indonesia, the Basic Forestry Law of 1967, although loosely implemented, was strengthened a decade later through successive regulatory changes which further weakened customary access (Peluso 1992). The legislation gave the central government the authority to grant exploitation rights to private firms directly, bypassing the provincial governments including those of Kalimantan (Peluso 1992; Ross 2001). For Kalimantan, centralisation of the power to allocate concession rights had a major impact on its forests, especially since, in 1982, 67 per cent of Kalimantan’s land was classified as either protection/conservation or production forest through the establishment of the Agreed Forest Land Use Plan (Ross 1984: 45).

As mentioned earlier, the dynamics of frontier development require that the export economy be maintained. Since good quality logs are now scarce, and surviving timber and plywood mills need to be sustained, part of the supply has to come from elsewhere. Wadley (Chapter 6) refers to the illegal logging taking place at the West Kalimantan/Sarawak border. As well, raw logs from East Kalimantan move into the Sabah town of Tawau (Smith et al. 2003), being allowed into the state as part of an official ‘barter trade’ (Chala 2000), although the deals associated with the trade may not be officially sanctioned.

Uncertainties as to the future of the timber industry meant that another crop had to be promoted in order to maintain the export industry of the frontier. The crop that filled this need was oil palm. Similar to logging, speed is a characteristic of oil palm development, especially in Sabah and Sarawak. Table 1.1 suggests that areas opened for oil palm increased by an order of magnitude in slightly over a decade.

Note: figures for Sabah and Sarawak for 2004 were 1 165 412 hectares and 508 309 hectares respectively.

Sources: Casson 1999, Figure 1; Direktorat Jenderal Perkebunan 1990–2004; Kalimantan Barat 2003; Kalimantan Selatan 2003; Kalimantan Tengah 2003; Kalimantan Timur 2003; Malaysian Palm Oil Board 2004; Lesley Potter, personal communication.

Table 1.1 suggests that between 1990 and 2003, Borneo became an important area for oil palm in both Malaysia and Indonesia. For Malaysia, 30 per cent of the total land covered by oil palm in 2003 was located in Sabah, followed by 12 per cent in Sarawak. For Indonesia, Kalimantan is not as important as Sumatra, but the expansion in terms of area opened to oil palm has been phenomenal. In 2003, of the 5.25 million hectares of land under oil palm in Indonesia, approximately 19 per cent was located in Kalimantan compared to 72 per cent in Sumatra. However, amongst the three regions of Borneo, the biggest leap was made by Kalimantan with a 1056 per cent increase between 1990 and 2003. Although there was a certain amount of hesitancy in oil palm investment in Kalimantan up until 1998 (Casson 1999), the pace has recently quickened. However, there are still a large number of companies who are only interested in removing the timber from lands granted to them, rather than in planting crops (Potter 2005b).

Sabah and Sarawak also registered great expansion during the same period. Sabah’s oil palm area increased by approximately 311 per cent, and Sarawak by approximately 748 per cent. Sarawak has ambitions of doubling its area under oil palm to 1 million hectares by the year 2010 (Deputy Chief Minister of Sarawak cited in Daily Express, 14 May 2005; Majid Cooke, Chapter 2). In sum, the total area planted to oil palm in Borneo for 2003 was 2.61 million hectares — 43 per cent in Sabah, 39 per cent in Kalimantan, and 18 per cent in Sarawak.

Although palm oil prices fluctuate, periods of high prices more than compensate for the bad times, so that the crop is regarded as ‘green gold’ by many (Daily Express, 23 and 26 February 2005). One explanation for the push for rapid expansion is that yield per hectare of oil palm is not increasing, and may in fact be declining (Thomas Mielke cited in Daily Express, 8 April 2005),^[3] so that in order to make maximum profit, expanded hectarage is necessary.

If centres of decision making in the frontier regions of Indonesia and Malaysia, and in the capital cities of Jakarta or Kuala Lumpur, have acted against meaningful conservation in the 1990s (Curran 1999), they are similarly positioned in the 21^st century. In Sabah, so entrenched is oil palm in the development equation that a local opposition political party promised to open up more land for oil palm in order to win votes (Daily Express, 9 February 2004).^[4] In Sarawak, legal and administrative changes under Konsep Baru (New Concept)^[5] removed earlier obstacles to converting land claimed under customary access rights into oil palm plantation blocks (Majid Cooke, Chapter 2). In all three regions oil palm is regarded by many small farmers (though not NGOs) as an economic saviour, rather than the environmental vandal portrayed by international conservationists. Intensified localised development pushes the indigenous land movement throughout Borneo in novel directions. Under these circumstances, steering an alternative path has not been, and will not be, easy.