Sarawak Energy awarded US$ 226 million in contracts to Malaysian Chief Minister’s family

The Norwegian CEO of Sarawak Energy, a state-owned power company in Malaysia, Torstein Dale Sjtveit, is at the centre of a fresh scandal involving corruption in the country’s East Malaysian province of Sarawak. The Sarawak Chief Minister Abdul Taib Mahmud (“Taib”family-affiliated )’s enterprises received contracts for 680 million Malaysian Ringgit (US$ 226 million), according to a report published today by the Swiss NGO Bruno Manser Fund.

All the contracts were signed while Mr. Sjtveit was the CEO of Sarawak Energy, a firm that belonged to the state of Sarawak exclusively. The contracts’ recipients are Naim Holdings, Cahya Mata Sarawak (CMS), and Sarawak Cable.

Mahmud Abu Bekir Taib, Taib’s son and the major shareholder in Sarawak Cable, a maker of cables and wires, serves as the company’s chairman. It was awarded three contracts totaling 237 million Ringgit (US$ 79 million) for electricity transmission lines connected to hydropower projects owned by Sarawak Energy. A further 13 million Ringgit (US$ 4.3 million) in governmental contracts were obtained for the Chief Minister’s son in 2010 when Sarawak Energy sold its lucrative subsidiary, Sarwaja Timur, to Sarawak Cable.

The cornerstone of the Taib family business empire is Cahya Mata Sarawak (CMS). The deceased wife and four children of Taib hold 42.7% of the company’s shares, and Taib himself owns 8.4% of the remaining shares through the government-owned Sarawak Economic Development Corporation. Sarawak Energy awarded CMS a contract for the development of a relocation facility for the indigenous Penan communities uprooted by the Murum dam project in 2012 for 23 million Ringgit (US$ 7.7 million).

Hamed Sepawi, the Chief Minister’s cousin and the head of Sarawak Energy, is in charge of Naim Holdings (“Naim”) and is thus Mr. Sjtveit’s immediate superior. One of the biggest stockholders in Naim is also Hamed Sepawi. A 209 million Ringgit (US$ 70 million) contract for a power transmission line associated with the construction of the Bakun dam was given to Naim in 2009. For a total of 197 million Ringgit (US$ 65.9 million), Sarawak Energy contracted Naim to build the relocation site for the native Penan communities uprooted by the Murum project in March 2012.

Director of the Bruno Manser Fund Lukas Straumann declared that the degree of conflict of interest in Sarawak’s energy sector was frightening. The fact that the Taib family personally benefits from the eviction of indigenous villages “is extremely distressing.”

“Mr. Sjtveit should resign right away for favouring the Taib family and also his supervisor, the cousin of the Chief Minister. We request an investigation into these contracts from the MACC in Malaysia and kokrim in Norway, and we anticipate that the appropriate anti-corruption laws will be used by the prosecutors.

Since 1981, Taib Mahmud has served as Chief Minister of Sarawak, the largest state in Malaysia. He has consistently misused his position of authority for more than three decades to benefit his family, whose total assets are believed to be over $20 billion. Taib was the subject of a corruption and misuse of office inquiry by Malaysia’s Anti Corruption Commission in June 2011. The inquiry is still being conducted.

Since taking over for the Chief Minister’s brother-in-law as CEO of the Malaysian power company in November 2009, Torstein Dale Sjtveit has served as Sarawak Energy’s chief executive officer. 600 Sarawakian Penan people made a request to the Norwegian King last week to have Mr. Sjtveit returned to Norway.

The International Hydropower Association’s World Congress will take place in Kuching, Malaysia, from May 21 to 24, 2013, and Mr. Sjtveit serves on its board of directors.

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Alex Jones

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