According to Malaysian NGOs and Indigenous Peoples Organizations, much of the timber originating from Malaysia is of questionable legality. In recent decades, indigenous peoples have used Malaysian courts to claim the rights to their ancestral lands denied them by the government, and been largely successful. The courts accept indigenous customary land rights as a form of proprietary interest in the land, protected under the Federal Constitution. This goes beyond the right to use and benefit from resources found on their land. Yet to date Malaysian Federal and State governments have refused to reform relevant policy and law in conformity with the Constitution and jurisprudence. According to FERN, the current timber licenses issued under nonconforming legislation are of uncertain legality.

In addition, given high levels of corruption, lack of transparency in the chain of custody, and the highest rates of deforestation in the world,2 the situation raises broad doubts about the legality of current Malaysian timber imports. It is also unlikely that Malaysian timber meets the EUTR requirement for operators to ensure that companies have the right to harvest and that third parties are not harmed. The current reality casts a shadow on Malaysian negotiations towards a VPA with the EU, ongoing since 2006; there is a long way to go before an agreement can be concluded.

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