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Malaysia's deforestation rate is accelerating faster than that of any other tropical country in the world, according to data from the United Nations. Analysis of figures from the Food and Agriculture Organization of the United Nations (FAO) shows that Malaysia's annual deforestation rate jumped almost 86 percent between the 1990-2000 period and 2000-2005. In total, Malaysia lost an average of 140,200 hectares—0.65 percent of its forest area—per year since 2000. For comparison, the Southeast Asian country lost an average of 78,500 hectares, or 0.35 percent of its forests, annually during the 1990s.

 
The Malaysian government failed to provide FAO with figures showing the change in extent of primary forests during the period. Primary forests—forests with no visible signs of past or present human activities—are considered the most biologically diverse ecosystems on the planet.

Declining forest cover in Malaysia results primarily from urbanization, agricultural fires, and forest conversion for oil-palm plantations and other forms of agriculture. Logging, which is generally excluded in deforestation figures from FAO, is responsible for widespread forest degradation in the country, and green groups have blamed local timber companies for failing to practice sustainable forest management. In late 2005—despite photographic evidence suggesting otherwise—the Samling Group denied claims from NGOs accusing the timber giant of recklessly harvesting timber in one of its Sarawak concessions on the island of Borneo.

Forest cover has fallen dramatically in Malaysia since the 1970s. While FAO says that forests still cover more than 60 percent of the country, only 11.6 percent of these forests are considered pristine.

Logging

During the 1980s, rampant logging in the Bornean states of Sabah and Sarawak allowed Malaysia to temporarily outpace Indonesia and become the world's largest exporter of tropical wood.

On paper, Malaysia has probably one of the best rainforest protection policies in developing Asia, but in practice logging still carries on as it always has. The majority of Malaysia's remaining forests are managed for timber production, and each state is empowered to formulate forest policy independently. During the past two decades, sustainable forest management has been non-existent. While Malaysia has the policy framework for sustainable forest management in the form of the National Forestry Act of 1984, it has failed to enforce the legislation.

Peninsular Malaysia's primary forests are mostly gone, though some magnificent forest still exists in Taman Negara, a national park. Scientists believe that at 130 million years old, the rainforests of Taman Negara are the oldest in the world.

Most of Malaysia's remaining primary forest exists on the island of Borneo in the states of Sabah and Sarawak, but the majority of the forest area in Malaysian Borneo—especially the lowlands—has been selectively logged, resulting in reduced biodiversity. Loggers are now operating in more marginal areas on rugged mountain slopes, which increases the risk of soil erosion and mudslides. In Sabah (Northeastern Borneo), cutting has slowed over the years after a period of rapid deforestation. Timber production appears to have shifted to Sarawak (Northwestern Borneo), where about half the forest cover is slated for logging. About 8 percent of the land area in Sarawak is designated as reserves, but these protected areas are generally understaffed and threatened by illegal logging and encroachment by colonists who settle along logging roads.

In the 1980s, through roadblocks and sabotage of logging equipment, the indigenous Penan of Borneo attempted to stop logging in their traditional homeland. Their protests were ruthlessly and savagely put down by the Malaysian government, which blocked media access to the region until the unrest was settled and the forest dwellers cleared. The attacks on the Penan brought international attention to the logging of Borneo's forests but appear to have had relatively little long-term impact, since logging increased dramatically in the following years.

Mining

Decades of mining in peninsular Malaysia have left a heavy mark on the environment. Deforestation, pollution of rivers, and siltation have resulted in agricultural losses, and road projects have opened new areas to colonization.

Cronyism

Despite the government's pro-environment overtones, the heavy-handed Malaysian government tends to side with development more than conservation. As of 2004, no court had ever ruled favorably in a major case on behalf of the native forest peoples displaced by rainforest destruction. In the 1990s, the government overturned a High Court decision that would have prevented Bakun dam, a huge hydroelectric project that would flood 170,000 acres (69,000 hectares) of forest. The $2-billion-dollar project has since been plagued with cost overruns and delays. It now appears that the dam—scheduled for completion in 2003—will only be expected to begin generating electricity in late 2009. Further, the local Sarawak market has no need for the power, and undersea transmission lines that would have connected the dam to peninsular Malaysia will not even be laid. Some local commentators say the only purpose behind the project was to benefit Sarawak politicians and their cronies.

Cronyism extends into other industries as well, including palm oil. Malaysia is currently the world's largest producer of palm oil, and many of the largest producers have strong political ties. Promoted by incentives which give plantation owners a 100 percent tax exemption for 10 years, thousands of hectares of forest have been cleared for palm oil and other types of plantations. While plantations on cleared and degraded forest lands are ecologically and economically beneficial, clearing natural forest for plantations results in increased erosion and biodiversity loss.

Transmigration

Like Indonesia, the Malaysian government sponsored transmigration programs to open up rainforest for cash crop production. Between 1956 and the 1980s, Malaysia converted more than 15,000 square kilometers of forest for resettlement programs.

Fires

Periodic fires, usually coinciding with the el Niño events, burn thousands of hectares across Malaysia, especially on the island of Borneo. The haze from these fires and the fires in Kalimantan (Indonesia) cause serious pollution and health problems in Malaysia.

Back in the 1990s, the Malaysian government reacted to fires by ordering media blackouts to avoid spooking tourists and inciting panic over the health impact. Today this has changed as the government increasingly blames Indonesia for failing to control wildfires.

Biodiversity

Malaysia is home to some 15,500 species of higher plants, 746 birds, 300 mammals, 379 reptiles, 198 amphibians, and 368 species of fish.

On paper, more than 30% of Malaysia's land area is under some form of protection, although some "conservation" areas are specifically managed for logging.