Shafie shocked over huge losses suffered by Sabah Foundation subsidiary

The chief minister orders review after being told that 'exclusive operators' take the bulk of timber profits.

Chief Minister Shafie Apdal says profits from logging activities should benefit the people. (Bernama pic)

KOTA KINABALU: Chief Minister Shafie Apdal was shocked to learn that Sabah Foundation’s wholly-owned subsidiary Rakyat Berjaya Sdn Bhd (RBJ) had been in the red for the past four years.

The Parti Warisan Sabah president was told in a briefing by the Sabah Foundation Group’s forestry division on Monday that RBJ, the operator of the foundation’s timber resources, faced a bleak future unless drastic steps were taken to reform it.

From a lucrative subsidiary earning billions of ringgit for the foundation, RBJ was now an ailing company, Shafie was told.

Following the shocking news, Shafie, who is also Sabah Foundation chairman, ordered RBJ’s operations to be reviewed after it was disclosed that “exclusive operators” held a monopoly and took the bulk of the profits.

A statement issued today by the chief minister’s office explained that “exclusive operators” were companies which were given special privileges by the previous government and former chief minister.

Among others, they were allowed to extract logs, buy them and export them at the best prices while RBJ gets a fraction of the profits.

RBJ’s operations also seem to indicate that the company can make better profits if logs are processed into sawn timber. RBJ will also be able to earn better profits if it sells the logs itself.

Shafie said such policies must stop as whatever business deals the government or its agencies were involved in should be productive and bring maximum benefit, not for the leaders, but to the people.

“Now it looks like the well-connected ‘exclusive contractors’ are reaping in fat profits out of logging activities while Sabah Foundation is paid pittance and, in some cases, even incurring debts.

“It is obvious that only a handful of people are benefiting from the logging operations while Sabah Foundation is forced to downsize as there is very little money for its operations.

“There is an urgent need to put matters right and I will pave the way for Sabah Foundation to regain its glory days and be able to finance its core activities of providing education and free medical services to the needy,” Shafie said.

Meanwhile, he said there will be no exceptions made on the ban of the export of round logs, adding the ban will remain in place till certain issues are settled.

He said he would not entertain any lobbying and that the decision to impose a temporary ban on the export of logs was endorsed at the state Cabinet meeting on Monday.

“There are serious decisions to be made concerning the logging industry in Sabah and I have to put my foot down in the best interests of the people,” he said, adding that it was a tough decision but had to be done.

“As a matter of fact, it should have been implemented a long time ago.”

Shafie said the ban could be long-term if necessary.

“I am all for our logs to be processed locally so that legal sawmills can operate and provide sawn timber and other value-added products, which in turn will create more job opportunities,” he said.

As such, he said the Sabah Forestry Department would be directed to inform all players – concessionaires as well as operators of forest management units (FMUs) – of the Cabinet’s decision and for them to comply with immediate effect. -FMT