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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2015-09-09 Daily Xml
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Motions

Sarawak Rainforest

The Hon. M.C. PARNELL (16:16): I move:

1. That this council notes—

(a) the ongoing international concern over the destruction of 90 per cent of Sarawak's primary rainforest over the last three decades in what former United Kingdom prime minister Gordon Brown described as 'probably the biggest environmental crime of our times';

(b) the central role of the Governor and former chief minister of Sarawak, Taib Mahmud, in that destruction;

(c) the links between Taib Mahmud and South Australia, including—

(i) the awarding to him of an honorary doctorate by the University of Adelaide and naming part of the university's North Terrace campus in his honour as the 'Taib Mahmud, Chief Minister of Sarawak Court' in response to significant donations to the university;

(ii) the ownership of the Adelaide Hilton Hotel by members of Taib Mahmud's family;

2. That this council calls on the South Australian government to—

(a) investigate alleged money laundering activity in South Australia as identified in the report entitled 'The Adelaide Hilton case: how a Malaysian politician's family laundered $30 million in South Australia', produced by a Swiss-based environmental organisation, the Bruno Manser Fund, and launched in Adelaide on 9 September 2015;

(b) freeze all assets owned by Taib family members in South Australia, consistent with South Australia's unexplained wealth legislation, where no credible explanation for the lawful origin of that wealth can be given, with a view to providing restitution to the people of Sarawak;

(c) refer this matter to appropriate federal government and law enforcement agencies; and

3. That this council calls on the University of Adelaide to—

(a) fully disclose all donations received from Taib Mahmud or his family and all contractual obligations arising from those donations;

(b) rename the 'Taib Mahmud, Chief Minister of Sarawak Court' and bestow naming honours on a more appropriate and worthy university alumnus.

Twenty-five years ago, in 1990, whilst working for the Wilderness Society, I received an invitation to attend a briefing in Adelaide by a group of Penan tribespeople from the Malaysian state of Sarawak on the island of Borneo. The briefing was part of a world tour organised by conservation groups to expose the massive level of destruction that was underway in the primary tropical rainforests of South-East Asia. I understand that this world tour visited 25 cities in 13 countries in 1990.

I have to say that at that time I knew very little about Sarawak. I knew where it was and I knew a little about the dynastic reign of the White Rajahs, because in our treasure box at home we have an old medal which was awarded by Charles Viner Brooke to my uncle during the Second World War. So, we knew a little about Sarawak.

Back in 1990, it was the days before PowerPoint presentations, so it was an old-fashioned slide show. I have to say that the beauty and diversity of this primary tropical rainforest was remarkable. In fact, I understand that one hectare of Sarawak rainforest has a similar number of tree species to the entire continent of Europe.

The slides also showed the growing destruction of that rainforest by timber companies. The impact of that destruction was homelessness, loss of livelihood, and a loss of the traditional way of life of the Penan people. I do recall thinking at the time that it was a good thing that the local people and their international environmental supporters had got onto this issue in good time, because there was still time to turn the situation around and to protect these magnificent forests. The reality, however, was that it was to get a whole lot worse.

Let us fast-forward 25 years to today. We now have a new generation of human rights and environmental campaigners taking up the challenge of raising awareness and seeking justice for the rainforest and the people who call it home. At this point, I would like to acknowledge and congratulate Mr Lukas Straumann, Executive Director of the Bruno Manser Fund—a Swiss-based human rights and environmental organisation. Lukas is also the author of a new book, entitled Money Logging: on the Trail of the Asian Timber Mafia.

I acknowledge the presence of Lukas Straumann in the gallery today. He has come from Europe, via Malaysia, to bring this issue to the attention of South Australia. I welcome him to our state and our parliament, and I wish him a productive trip as he travels to other states and territories.

If any member would like a copy of the book Money Logging: on the Trail of the Asian Timber Mafia, my commitment to you is I will buy you a copy today and I will arrange for Mr Straumann to sign it before he leaves Adelaide tonight. It is often said that the best way to guarantee book sales is for a book to be banned. Whilst this book has not quite been banned, this year in May the home ministry in Malaysia seized copies of the book during the Kuala Lumpur International Book Fair, but I am offering to buy one today for any member who wants one.

Secondly, I wish to acknowledge the advocacy on this issue by my former colleague and federal Greens parliamentary leader, Bob Brown. In his busy retirement, Bob has established the Bob Brown Foundation, which vows to use ecological reality and optimism to promote real environmental wins. The Bob Brown Foundation aims to help campaigns and activists who show real pluck and intelligence in protecting ecosystems, species, and wild and scenic heritage. I am delighted that the Bob Brown Foundation is represented here in the gallery today by its campaign manager, Jenny Weber from Tasmania.

That brings me to the first part of the motion: that this council notes the ongoing international concern over the destruction of 90 per cent of Sarawak's primary rainforest over the last three decades, in what former UK prime minister Gordon Brown described as 'probably the biggest environmental crime of our times'.

It is clearly a crime against the planet, what has happened to the rainforests of South-East Asia and Sarawak in particular. It is a crime against humanity as well, but more particularly, and at a practical level, it is a crime against international, national and even South Australian state law. It is the criminal nature of this destruction that I will refer to shortly, but it is firstly important to identify the key players, which brings me to the second part of the motion: that this council notes the central role of the Governor and former chief minister of Sarawak, Taib Mahmud, in that destruction.

Abdul Taib Mahmud was born on 21 May 1936 in Sarawak. He was appointed governor of Sarawak in 2014, but before this he was chief minister of Sarawak from 1981 to 2014. Taib Mahmud entered politics in Malaysia in 1963, becoming a minister in the first cabinet of the Malaysian state of Sarawak, largely thanks to his uncle Rahman Ya'kub, whom he would later succeed as chief minister.

Leaked documents suggest that Mr Taib and his family amassed enormous amounts of land at a fraction of their market value, while authorising the destruction of hundreds of thousands of hectares of rainforest. Much of that rainforest has now been clear felled for palm oil plantation.

Taib Mahmud has denied allegations of corruption. He says that he has been framed by human rights organisations. British investigative journalist Clare Rewcastle-Brown, who has spent years following Sarawak politics, said there is evidence Mr Mahmud privatised large chunks of state businesses into CMS Berhad, a company whose largest shareholders are his family, including his late wife.

The Malaysian Anti-Corruption Commission opened an investigation into allegations of corruption in June 2011, but in February 2014 the Malaysian Anti-Corruption Commission declared, just before Taib Mahmud assumed the office of governor, that they were unable to find evidence of corruption. This is despite the British NGO Global Witness compelling expose a year earlier which used an undercover investigator to identify the mechanisms used by Taib Mahmud and his family and his cronies to sell off native lands worth millions of dollars to foreign investors and to avoid tax. I understand that new inquiries in Malaysia are now underway.

One of his many ministerial roles included heading up the ministry of resource planning and environment, which controls all land classification, timber and plantation licensing in the state. Leaked Sarawak land registry documents suggest that members of Taib's family have interests in companies holding land leases totalling nearly 200,000 hectares, conservatively valued at over $US0.5 billion.

During his 30 years in power, much of the primary rainforest in Sarawak has been cleared for logging and, as I said, much of it has been replaced now with palm oil plantations. This deforestation has marginalised the wildlife, such as the now endangered orangutan, and destroyed traditional lifestyles of the indigenous people who live in the forest. Sarawak's indigenous population depends upon access to farmland and healthy forests for their livelihood, and their rights are protected, ostensibly, under Malaysian law. However, these rights have been systematically ignored by the Sarawak government, resulting in widespread environmental degradation, social disenfranchisement and economic deprivation.

What is the relevance of a corrupt South-East Asian politician to South Australia? That brings me to the third part of the motion, that this council notes:

(c) The links between Taib Mahmud and South Australia, including—

(i) the awarding to him of an honorary doctorate by the University of Adelaide and naming part of the university's North Terrace campus in his honour as the 'Taib Mahmud, Chief Minister of Sarawak Court' in response to significant donations to the university;

In 1958, Taib Mahmud was awarded the Malaysian Colombo Plan Scholarship allowing him to study at the University of Adelaide. He graduated with a Bachelor of Laws from Adelaide University in 1961, and after graduation he was appointed as an associate to then Justice of the Supreme Court of South Australia, Sir Herbert Mayo, before returning to Malaysia the next year. He was the first lawyer of Asian descent to be admitted to practise by the Supreme Court of South Australia.

However, despite his moral banditry, and because Taib Mahmud has given generous donations—we do not know exactly how much, but estimate up to $7 million—over the years to the University of Adelaide, they have named what I call a plaza outside the Law School after him, and they did that in 2008. The Taib Mahmud, Chief Minister of Sarawak Court is on North Terrace outside the Law School and in front of the Napier building and it was named after him after a multimillion-dollar donation.

The University of Adelaide also awarded him an honorary doctorate in 1994. However, Adelaide University is not the only Australian institution to have honoured this corrupt, environmental vandal. In December 2001, he was appointed an Honorary Officer of the Order of Australia 'for service to Australian-Malaysian bilateral relations'. The second link between Taib Mahmud and South Australia set out in the motion is the ownership of the Adelaide Hilton Hotel by members of Taib Mahmud's family.

I will go into a little detail about this shortly, but the Adelaide Hilton is by no means the only piece of real estate owned by Taib Mahmud and his family. They have stakes in over 400 companies in 25 countries around the world, and in fact they even count the Federal Bureau of Investigation (the FBI) in the United States as one of their tenants. Sulaiman Taib, one of Taib Mahmud's sons, is the owner of the current premises of the FBI's north-west headquarters, the Abraham Lincoln Building, in the centre of Seattle.

The motion before us notes these things and then goes on to call for action to address them. The motion calls on the South Australian government to:

(a) investigate alleged money laundering activity in South Australia as identified in the report, entitled 'The Adelaide Hilton Case: how a Malaysian politician's family laundered $30 million in South Australia', produced by Swiss-based environmental organisation, the Bruno Manser Fund, and launched in Adelaide on 9 September 2015;

In fact, the report was launched in the Hilton Hotel today. The Bruno Manser Fund and the Bob Brown Foundation booked a room in the Hilton Hotel and invited the media along to launch this report. I would also refer members to today's copy of the Sydney Morning Herald. There is quite an extensive article about this report in the business pages, and I recommend it to honourable members. It is a good summary, and it is available online as well.

I will refer at some little length to the words of the report itself. This report investigates the finances of Sitehost Pty Ltd, which is an Australian company controlled by what are known as politically exposed persons (PEPs) from Malaysia, and the best-known asset of Sitehost Pty Ltd is the Adelaide Hilton Hotel. Sitehost was founded by the family of Malaysian business tycoon, Ting Pek Khiing, in November 1993.

Today, Sitehost is owned and directed by the family of Taib Mahmud—as I said, the Governor today and formerly the chief minister of the Malaysian state of Sarawak. Taib Mahmud's deceased wife and their four children became major shareholders of Sitehost when they acquired shares worth $A9.5 million on 31 January 1994. At the time, Taib Mahmud was chief minister of Sarawak and earning a moderate salary of around $A209,000 per year. It is unclear how Taib Mahmud's closest family members could have legally earned the money needed to purchase their Sitehost shares.

On 23 February 1994, when Sitehost Pty Ltd acquired the property of the Hilton Hotel, the company also took up an unsecured loan of $A20.75 million from a non-bank lender whose identity remained undisclosed for over 10 years. The fact that no security was given for the loan suggests a co-equivalence of interest and ownership between the lender and the shareholders of Sitehost Pty Ltd—the Taib family. You only have to ask yourself: does anyone lend unsecured $20 million other than to themselves or to people closely related to them?

In 2007, Sitehost finally disclosed its lender—a company called Golborne Pty Ltd, which is based in Victoria and known as Golborne Australia. Golborne Australia was then named as a related party, although it remains unclear how Golborne Australia is exactly related to Sitehost. In around 2011, the loan was transferred to another proprietary company in Queensland; this time the company was Fordland Pty Ltd, known as Fordland Australia.

There is strong circumstantial evidence, including a shadow structure on the Isle of Man, that Golborne Australia and Fordland Australia represent the same beneficial owners—that is, that they are also controlled by the Taib family. When I refer to 'shadow structures on the Isle of Man', there are companies with the same names in that tax haven jurisdiction.

A comparison of Sitehost's financial statements with AUSTRAC's recently published indicators for money laundering shows that seven AUSTRAC indicators for money laundering are met, including transactions involving large unexplained amounts of money and the use of offshore trusts by PEPs from a country with poor governance. Just to remind members, AUSTRAC is the Australian Transaction Reports and Analysis Centre: it is our money-laundering watchdog. In particular, it is noteworthy that Sarawak Governor, Taib Mahmud, the strongman of the Taib family, was being investigated, and I think investigations are being renewed by the Malaysian Anti-Corruption Commission.

The Bruno Manser Fund alleges that Sitehost, as well as Golborne Australia, Fordland Australia and related companies on the Isle of Man and the British Virgin Islands, have been used by the Taib family and their Australian business partners as vehicles for laundering the proceeds of corruption from Sarawak, Malaysia. The facts laid out in this report amount to prima facie evidence of money laundering and should suffice to trigger criminal proceedings in Australia and other official investigations against the corporate entities and the individuals named in the report.

The second call on the South Australian government in the motion before us is as follows: consistent with South Australia's unexplained wealth legislation, that the government freeze all assets owned by Taib family members in South Australia, where no credible explanation for the lawful origin of that wealth can be given, with a view to providing restitution to the people of Sarawak.

I remind members that in this state we have laws, very clearly, that cover the proceeds of crime or the proceeds of corruption. However, we go further: we also have laws in relation to unexplained wealth, where the origin of the wealth cannot be explained by credible means. Under our laws, that money can be taken from the holder as part of criminal proceedings. In fact, we are even going further in this parliament and we are even taking lawfully acquired assets in relation to certain offences, and that is a bill that is currently before us.

The motion also calls on the government to refer this matter to appropriate federal government and law enforcement agencies. In relation to the University of Adelaide, the motion calls for two things: it first of all calls on the University of Adelaide to fully disclose all donations received from Taib Mahmud, or his family, and all contractual obligations arising from those donations.

As I have said, the best estimate that I have seen is that Taib Mahmud has given around $7 million to the University of Adelaide, but we do not know for sure. The university has never come clean with the records of donations. They also have not come clean with any contractual or other obligations that relate to that money, and that relates to the second call on the University of Adelaide which is to rename the 'Taib Mahmud, Chief Minister of Sarawak Court', and to bestow naming honours on a more appropriate and worthy university alumnus.

What we do not know is whether part of the deal of the donations was the naming and whether that naming is for a period of years or in perpetuity. My advice to the University of Adelaide is that they should undertake a naming competition and that they should invite students and staff, and past students and staff, to nominate a former student or staff member of the university who they believe is more worthy of having this key part of the campus named in their honour.

In conclusion, I go back to our money-laundering watchdog AUSTRAC and it shows that of all the indicators that are provided for money laundering—indicators of the potential for money laundering—then at least seven of these are met in the case of Sitehost, and that means that there are very reasonable grounds for suspecting that Sitehost has been used by the Taib family as a vehicle for laundering the proceeds of corruption from Sarawak.

I maintain that the facts laid out in this report amount to prima facie evidence of money laundering and it should be enough to trigger an official investigation. The report concludes that the Bruno Manser Fund calls on Australian authorities to take action, open criminal proceedings against Sitehost and freeze Taib family assets in Australia for later restitution to Sarawak.

I think it is time to end the embarrassment and to do the right thing by the planet and the right thing by the people of Sarawak. I table the report.

Debate adjourned on motion of Hon. T.T. Ngo.

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