Did someone say foreign policy coherence?

Sarawak Malysia Holz
In the hinterland of Miri (province of Sarawak, Malaysia) timber is being loaded for transportation.
Article as analysis
Switzerland is negotiating a free trade agreement with Malaysia in the framework of the EFTA. The topics should also include the rights of indigenous people, environmental degradation and rampant corruption.

«Swiss free trade agreements are based mainly on economic criteria. The Federal Council's considerations regarding a coherent foreign policy also include social, environmental and human rights standards. The latter are mentioned in the preamble to the treaty, though without being binding. Human rights must be discussed mainly in the framework of the UN Human Rights Council, which is the most appropriate body for such issues». Those were the words of Didier Chambovey, Head of the Word Trade Division of the State Secretariat for the Economy (SECO) at a meeting with Malaysian NGOs, the Bruno Manser Fund, the Society for Threatened Peoples and Alliance Sud.

In 2009, Switzerland had, amongst other things, called on Kuala Lumpur to guarantee the rights of its indigenous people. That occurred in the framework of the UN Human Rights Council's four-yearly review of all UN Member States. In 2012, the National Council's Foreign Affairs Committee (FAC) gave approval for the start of negotiations on a free trade agreement with Malaysia. In so doing it underscored that the Parliament expected Malaysia first to ratify the International Covenant on Economic, Social and Cultural Rights, the International Covenant on Civil and Political Rights, as well as the eight fundamental conventions of the International Labour Organization (ILO). The FAC also called for the agreement with Malaysia to include a chapter on sustainable development. These are conditions, in other words, that go further than the mandates for negotiating with several other developing countries.

Discriminatory economic policy

«Malaysia wants to be an industrialized country by 2020. It has made considerable headway, but in the realm of human rights, still has much catching up to do as pertains to the indigenous population and minorities,» says Bala Chelliah of the Malaysian NGO SUARAM in Geneva. He pointed to the new economic policy launched in 1971, which expressly favours ethnic Malay and over the years has become a tool for discriminating against Chinese and Indian Malaysians. In Chelliah's view, the ordinary people will not benefit from this agreement, unlike the elites – that is to say, Malays and their allies – who are in power and who own companies. Malays are preferred on government procurements, investments are made to their benefit and «even Swiss companies will be discriminated against, as they are not allowed to recruit the best workers. Discrimination ultimately prevents everyone from getting the fair share of the cake to which they are entitled,» he adds.

Record number of lawsuits over land rights

Land rights are another major concern of Malaysian civil society. Peter Kallang of SAVE Rivers points to the over 50 dams being planned in the east of the country, to be built by 2030. «Nowhere else in the world are there so many pending lawsuits over land rights as in our country – there are currently 300. We have won 20 cases, yet the Government and local people interpret land rights differently. The problem is that the people cannot give their free prior and informed consent. Everything takes place in the greatest secrecy.»

Swiss firms too are a focus of attention. ABB has supplied generators worth US$6 million for the building of the controversial Murum dam in Sarawak, a part of Malaysia that lies on Borneo. According to the Bruno Manser Fund, this dam is the first of 12 altogether, and tens of thousands of people have allegedly had to make way for it, with hundreds of square kilometres of tropical rainforest being flooded. On 15 May ABB announced that it was reviewing its business in Malaysia, after the Fund demanded that the corporation withdraw from Sarawak and pay compensation of US$1.5 million to the affected people.

The Federal State of Sarawak arouses the greed of foreign investors in particular. According to NGOs, some 90% of the original rainforest has already been destroyed. The local people refuse to work for starvation wages in their own country, with the result that 90% of the workforce comes from China, Indonesia or Bangladesh. «Once the forest is cleared, plantations will be created and will destroy people's livelihoods. Sarawak is rich in petroleum and natural gas, timber and palm oil, yet the local people are not benefiting from any of this. The companies are driving people out, and the only purpose of the roads is to facilitate the exportation of natural resources,» says Peter Kallang.

Didier Chambovey gives the assurance that Switzerland is aware of the risks of palm oil production and that it supports the Roundtable on Sustainable Palm Oil (RSPO). Besides, several Swiss companies have undertaken, over the long-term, to import only palm oil from RSPO-certified production. For her part, Annina Aeberli of the Bruno Manser Fund stresses that Malaysian palm oil producers are planning to leave the RSPO and set up their own certification system – one that would have even lower standards.

Trail of corruption leads to Switzerland

Malaysia is one of the world's most corrupt countries and occupies fourth place in the current report by Global Financial Integrity on illegal financial flows (US$370 million). For 30 years, Taib Mahmud, Governor of Sarawak, has controlled concessions and export licenses for the use of the rainforest and has been under investigation by the anticorruption commission (MACC) since 2011. Musa Aman, Head of Government in the neighbouring Federal State of Sabah, is believed to have accepted over US$90 million in bribes to facilitate forest clearance in Borneo. That money was laundered through the UBS branch in Hong Kong and is now believed to be deposited in Swiss bank accounts. The Federal Public Prosecutor is now conducting a criminal investigation into UBS.

«Corruption is not mentioned directly in the free trade agreement», says Didier Chambovey, «but indeed indirectly via the reference to the Ruggie Principles and the OECD Guidelines for Multinational Corporations.»

There is no doubt that much remains for Switzerland to do to ensure foreign policy coherence in the case of Malaysia. For if, as the Swiss chief negotiator says, «the UN Human Rights Council is the proper place for dealing with human rights issues,» then it is the view of Alliance Sud that the free trade agreement is the right means by which to ensure respect for human rights. The fact is that international law has no means of compelling States to respect human rights. The situation is quite different when it comes to trade agreements. If they are infringed, sanctions will follow.

This article has been published in Alliance Sud News No. 78 / Summer 2014.