On a Tuesday morning in June last year, Sarawak land rights activist and opposition politician Bill Kayong pulled up at a set of traffic lights in the coastal city of Miri, and was shot dead through the driver’s window of his Toyota pickup.

The alleged “mastermind” of the assassination was Stephen Lee Chee Kiang, the director and key shareholder of an oil palm company, which had for years been locked in legal battles with indigenous landowners who Kayong campaigned for.

Lee’s father and co-director of the company, Lee Sie Tong, is the government-appointed administrative head of Miri.

Lee initially fled to Australia after the attack but was arrested in China.

According to online news reports, his plantation company had been implicated in threats and violent attacks against villagers, local leaders and campaigners going back years but police had done nothing about complaints they received.

The events highlight an in-practice indifference of authorities on both the Malaysian and Indonesian sides of the island of Borneo to native land rights and forest protection, and an underlying culture of corruption and impunity.

[‘God made this land for us, the devil has taken it’: Sarawak dams its people]

Whistleblower website Sarawak Report wrote that the case “perfectly illustrated” a “criminal nexus between land grabbing timber/plantation companies and top politicians, who hold undue influence over the forces of the law” in the Malaysian state.

While many Westerners are aware that rampant deforestation over decades has threatened the survival of the orangutan and other jungle species in Borneo, far less attention has been paid internationally to the impacts of logging and industrial agriculture on the island’s 4 to 6 million indigenous people, whose lives are often disastrously affected by commercial projects like palm oil plantations, mines and dams.

According to financial sector watchdog organisations, which have recently released reports on the subject, forest destruction and land loss have resulted in a “far-reaching human rights disaster” for Borneo’s indigenous peoples, and banks and investors need to be accountable for the operations they are involved with.

The reports — one from Swedish NGO Swedwatch and Fair Finance Guide, Silent Approval, and another by Norwegian NGO The Future in our Hands — draw a stark contrast between the rights outlined in international instruments like the United Nations Declaration on the Rights of Indigenous Peoples and companies’ practices on the ground.

According to Swedwatch researcher Frida Arounsavath, the UN Guiding Principles on Business and Human Rights “tie companies to following international conventions on human rights regardless of where they operate in the world” and make clear that banks can be considered “linked” to any violations of rights by companies or projects they invest in.

One of the reports’ case studies, of a joint-venture palm oil plantation in Sarawak between Malaysian palm oil giant IOI and state-owned company Pelita, describes the company’s bulldozing of 4000 hectares, much of it community land, without consultation in 1997, its failure to offer adequate compensation and its fight in the courts ever since to deny the rights of the former landholders.

Another case study assesses the impacts on a small village in Central Kalimantan, Indonesia, of Australian miner BHP Billiton’s Indomet coal project, which, like the IOI plantation, has deprived the community of cultivation land and access to forest for hunting and gathering.

The local nurse at the village of Maruwei told researchers that mines in the area — of which Indomet is one of several — are impacting the health of community members by decreasing their access to wild foods.

“I see from their checkup every month that the weight of children under five is below the standard for their age and sometimes the lack of healthy foods makes them sick,” the nurse was quoted as saying.

BHP Billiton, which pulled out of Indomet in October last year, denies contributing to malnutrition in the area and has defended itself against various allegations relating to land acquisition for the Haju mine in Central Kalimantan — including of bribery, police threats and trickery — by insisting that the company at all times followed Indonesian law.

According to Swedwatch, however, national laws don’t exempt companies from meeting international rights standards.

“The United Nations Guiding Principles on Business and Human Rights (UNGPs) require that companies respect indigenous rights throughout all their global operations, including cases in which national legislation and state action fall short,” the Swedwatch report states.

The report found that BHP’s exit from Borneo without re-engaging with the villagers of Maruwei was in breach of the UN guiding principles.

“You can’t leave a project if you haven’t acknowledged and addressed the impacts,” Swedwatch researcher Frida Arounsavath told Crikey.

“In this case we see that there hasn’t been adequate compensation for the land inside the mining concession and then the community can’t access the area outside the concession anymore, which was a key forest area for their livelihood. Those two impacts should be acknowledged and remediated and compensated. It hasn’t happened.”

[The great escape: a slow release to the wild in Malaysia]

Arounsavath, who interviewed representatives from seven of Sweden’s biggest banks for the Silent Approval report, said she was shocked by the banks’ low level of awareness of the situation in Borneo for indigenous people, and by said banks’ uncritical acceptance of companies’ versions of events and reference to disputed land as “state land”.

“Saying ‘this is state land’ is a contradiction of the international convention, and they don’t pick up on it,” she said.

Overall, banks and other investors need to understand the issues better, and put more resources into establishing what’s going on, Arounsavath says.

“These are very difficult operating environments. It is difficult for a bank far away but they need to ensure that they don’t just listen to the companies telling them that everything is fine. They need to look at what is the situation on the ground, what is the true voice of the community, to put pressure on companies to respect indigenous people’s rights,” she told Crikey.

Dr Kate Macdonald from the School of Social and Political Sciences at the University of Melbourne says the Swedwatch report raised an important issue.

“International norms increasingly emphasise the need for due diligence with regard to human rights impacts of global business operations, even where such impacts are quite indirect, as in the case of financing links,” the academic said. “Such expectations can unquestionably be very challenging for companies to realise, particularly for those that have previously paid little attention to such issues, and for those with highly diffuse investment portfolios. In many cases there is therefore a need for companies to build new internal capacities to discharge these responsibilities.”

In Sarawak, the trial of those accused of Bill Kayong’s murder continues.