Sarawak Energy awarded RM680m in contracts to Taib’s family-linked firms

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All the contracts were allegedly granted during the tenure of the Norwegian CEO of Sarawak Energy, which is wholly owned by the state of Sarawak, claims the Bruno Manser Fund.

Torstein Sjotveit with Taib Mahmud (seated)
Torstein Sjotveit with Taib Mahmud (seated) – Photograph: Bernama

Torstein Dale Sjøtveit, the Norwegian CEO of state-owned Malaysian power supplier, Sarawak Energy, is in the middle of a new controversy about corruption in the East Malaysian state of Sarawak. According to a report released today by Swiss NGO, Bruno Manser Fund, Sarawak Energy awarded contracts worth RM680m (US$226m) to three companies closely linked to the family of Sarawak Chief Minister Abdul Taib Mahmud.

All the contracts were allegedly granted during Sjøtveit’s tenure as CEO of Sarawak Energy, a company that is wholly owned by the state of Sarawak. The alleged beneficiaries of the contracts are Sarawak Cable, Cahya Mata Sarawak (CMS) and Naim Holdings.

Sarawak Cable, a cable and wire manufacturer, is chaired by Taib’s son Mahmud Abu Bekir Taib, who is also the company’s largest shareholder. It received three contracts for power transmission lines linked to Sarawak Energy’s hydropower projects, worth RM237m (US$79m). In 2010, Sarawak Energy sold its profitable subsidiary, Sarwaja Timur, to Sarawak Cable, securing the Chief Minister’s son another RM13m (US$4.3m) in public contracts.

Cahya Mata Sarawak (CMS) is the flagship of the Taib family business empire. 42.7 per cent of CMS shares are held by Taib’s late wife and his four children, and another 8.4 per cent of shares are controlled by Taib through the state-owned Sarawak Economic Development Corporation. In 2012, CMS received a contract worth RM23m (US$7.7m) from Sarawak Energy for the construction of a resettlement site for indigenous Penan communities displaced by the Murum Dam project.

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Naim Holdings is chaired by Hamed Sepawi, the Chief Minister’s cousin, who is also the chairman of Sarawak Energy and, as such, Sjøtveit’s direct superior. Hamed Sepawi is also one of Naim’s largest shareholders. In 2009, Naim was granted a contract worth RM209m (US$70m) for a power transmission line linked to the building of the Bakun Dam. In March 2012, Sarawak Energy commissioned Naim to construct the resettlement site for indigenous Penan communities displaced by the Murum Dam for a total of 197-million-Ringgit (US$ 65.9 million).

“The extent of conflict of interest in Sarawak’s energy sector is shocking”, said Bruno Manser Fund director, Lukas Straumann. “It is particularly disturbing that the Taib family is directly benefiting from the displacement of indigenous communities.”

“Mr. Sjøtveit should step down immediately for unduly favouring the Taib family and also his superior, the Chief Minister’s cousin. We are calling on the Malaysian Anti Corruption Commission, MACC, and on Norway’s Økokrim to investigate these contracts and expect prosecutors to implement the relevant anti-corruption legislation.”

Taib Mahmud has been Chief Minister of Sarawak, Malaysia’s largest state, since 1981. For over three decades, he has systematically abused his public office to enrich his family, whose global assets are estimated at US$20bn. In June 2011, Malaysia’s Anti Corruption Commission opened an investigation into Taib over allegations of corruption and abuse of office. The investigation is still ongoing.

Torstein Dale Sjøtveit has been CEO of Sarawak Energy since November 2009, when he succeeded the Chief Minister’s brother-in-law at the helm of the Malaysian power provider. Last week, 600 Penan natives of Sarawak appealed to the Norwegian King to call Sjøtveit home to Norway.

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Sjøtveit is a board member of the International Hydropower Association whose World Congress is being held in Kuching, Malaysia, from 21 to 24 May 2013.

The Bruno Manser Fund’s report “Complicit in Corruption. Taib Mahmud’s Norwegian Power Man” is available for download here.

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