The Sabah Forestry Department (SFD), along with Sarawak and the Peninsular States have been in negotiations with the European Union (EU) regarding the FLEGT Voluntary Partnership Agreement on the subject of legality of timber production and Timber Legality Assurance System (TLAS)-based trade to the EU market. The Implementation of FLEGT TLAS has begun since 2009 and the commitment to comply with the proposed international EU agreements regarding the initiation and development of FLEGT was reflected through the proactive application of TLAS auditing in Sustainable Forest Management License Agreement (SFMLA) and Long Term Licence Agreement (LTL) areas throughout Sabah.
At the national level, SFD has been actively involved in the Joint Expert Meetings on FLEGT- VPA, headed by the Ministry of Plantation And Commodities Malaysia. The meeting serves as a platform where comments and responses of Malaysia and the EU regarding TLAS are systematically examined and discussed. Sabah has vigorously participated in the FLEGT-VPA negotiation and the progress thus far has been the formulation of an auditing system that is based on the evaluation and revision of the Sabah TLAS standard and Audit Checklist conducted by NepCon in 2014.
Sabah recognized the importance to address international concerns in tropical timber trade which is deemed as high risk by European countries and other countries with legal timber procurement regulations. The Sabah TLAS was developed in part through the EU negotation process and is now considered as the main timber legality standard and system to determine timber legality compliance for Sabah. The legality standard which incorporates Chain of Custody (CoC), ensures that trees are legally harvested and that the timber is traceable to the final products and point of export. The Sabah TLAS also amongst others emphasize company's system sourcing procedures, implementation and records.
The Sabah TLAS has since been improved with several revisions and is currently being used to facilitate in the due diligence process and verification of timber legality produced and exported from Sabah. To further strengthen the legality claims of Sabah's timber, the Sabah TLAS Principles 5-6 checklist have incorporated additional elements on Risk Assessment and Chain of Custody (CoC). The CoC implementation has been made mandatory to all wood processing mills in Sabah in September 2016, while the Removal Passes of all timber harvested from areas that have been awarded with Sabah TLAS Compliance Certificate are stamped with "Sabah TLAS Compliant" effective 1st January 2017, to facilitate CoC implementation and monitoring. In August 2016, the Sabah TLAS has been certified under ISO 9001:2018 by Bureau Veritas.
Timber products that comply with the Sabah TLAS standard are generally accepted in the markets as having complied with the due diligence requirements for legal timber. Compliance Certificates for Principles 1 to 4 are awarded to logging companies who have complied with the Sabah TLAS standard while Compliance Certificates for Principles 5 to 6 are awarded to manufacturers and exporters who have complied with the Sabah TLAS standard, upon recommendation by the third party auditor appointed by the Sabah Forestry Department. The appointment of a third party auditor to conduct transparent audits of Sabah TLAS implementation is part of the Sabah Forestry Department's efforts to ensure transparency and credibility in the system. In addition to the third party audit, the implementation of the Sabah TLAS is also assessed and monitored through internal monitoring conducted by other government implementing agencies which form the Implementing Agency Coordination Committee (IACC).