Labuan is one of the historically stranger pieces of the Bornean jigsaw. Originally part of the Sultanate of Brunei, the 92-sq-km island, 8 km off the coast of Sabah, was ceded in 1846 to the British who were enticed to take it on by the discovery of rich coal deposits. It joined the Malaysian Federation in 1963, along with Sabah and Sarawak. In 1984 it was declared a tax-free haven - or an 'International offshore financial centre' - and hence this small tropical island with just 80,000-odd inhabitants has a plethora of name-plate banks and investment companies. For the casual visitor - rather than someone wanting to salt away their million - it offers some attractions, but not many. There are good hotels, lots of duty-free shopping, a golf course, sport fishing and diving, plus a handful of historic and cultural sights.
Ins and outs
Getting there and around
The airport is 5 km from town. There is a reasonable island bus network, a few car hire firms and a small number of taxis.
Tourist Information Office
With a superb deep-water harbour, Labuan promised an excellent location from which the British could engage the pirates who were terrorizing the northwest Borneo coast. Labuan also had coal, which could be used to service steamships. Sarawak's Rajah James Brooke became the island's first governor in 1846 and two years later it was declared a free port. It also became a penal colony: long-sentence convicts from Hong Kong were put to work on the coal face and in the jungle, clearing roads. The island was little more than a malarial swamp and its inept colonial administration was perpetually plagued by fever and liver disorders. Its nine drunken civil servants provided a gold mine of eccentricity for novelists Joseph Conrad and Somerset Maugham. In
, Maugham describes the desperate attempt by Resident Mr Warburton to keep a grip on civilization in the wilds of Malaysia: “The only concession he made to the climate was to wear a white dinner jacket; but otherwise, in a boiled shirt and high collar, silk socks and patent leather shoes, he dressed as formally as though he was dining at his club in Pall Mall...”
By the 1880s ships were already bypassing the island and the tiny colony began to disintegrate. In 1881 William Hood Treacher moved the capital of the new territory of British North Borneo from Labuan to Kudat and eight years later the Chartered Company was asked to take over the administration of the island. In 1907 it became part of the Straits Settlements, along with Singapore, Malacca (Melaka) and Penang.
In 1946 Labuan became a part of British North Borneo and was later incorporated into Sabah as part of the Federation of Malaysia in 1963. Datuk Harris is thought to own half the island (including the
). As chief minister, he offered the island as a gift to the federal government in 1984 in exchange for a government undertaking to bail out his industrial projects and build up the island's flagging economy. The election of a Christian government in Sabah in 1986, making it Malaysia's only non-Muslim-ruled state, proved an embarrassment to the then prime minister Doctor Mahathir Mohamad. Labuan has strategic importance as a federal territory, wedged between Sabah and Sarawak. It is used by garrisons of the Malaysian army, navy and air force.
In declaring Labuan a tax haven the Malaysian government set out its vision of Labuan becoming the Bermuda of the Asia-Pacific for the 21st century; 4065 offshore firms had set up on the island by the end of 2003, and in 2000, the
Labuan International Financial Exchange
(LFX), a wholly owned subsidiary of the Kuala Lumpur Stock Exchange, was established on the island. This, together with several five-star hotels, makes it seem that Labuan's days of being a sleepy rural backwater are over.
Included in the island's population of about 80,000 are 10,000 Filipino refugees, with about 21 different ethnic groups. The island is the centre of a booming 'barter' trade with the South Philippines; Labuan is home to a clutch of so-called string vest millionaires, who have grown rich on the trade. In Labuan, 'barter' is the name given to smuggling. The Filipino traders leaving the Philippines simply over-declare their exports (usually copra, hardwood, rotan and San Miguel beer) and under-declare the imports (Shogun jeeps, Japanese hi-fi and motorbikes), all ordered through duty-free Labuan. With such valuable cargoes, the traders are at the mercy of pirates in the South China Sea. To get round this, they arm themselves with M-16s, bazookas and shoulder-launched missiles. This ammunition is confiscated on their arrival in Labuan, stored in a marine police warehouse, and given back to them for the return trip.
Away from the busy barter jetty, Labuan Town, a name largely superseded by its name of
, is a dozy, seedy and unremarkable Chinese-Malaysian mix of shophouses, coffee shops, sleazy karaoke bars and cheap booze shops. The
Labuan An'Nur Jamek State Mosque
is an impressive site, whilst the manicured
is popular with businessmen. Illegal cockfights are staged every Sunday afternoon. There is an old brick
at Tanjung Kubong, believed to have been built as a ventilation shaft for the short-lived coal mining industry established by the British in 1947 to provide fuel for their steamships on the Far Eastern trade route. Remnants of the industry, which had petered out by 1911, are to be found in a maze of
in this area. Near Tanjung Kubong is a
On the west coast there are pleasant beaches, mostly lined with kampongs. There is a large
on the east coast and a vast, well-tended,
between the town and the airport with over 3000 graves, most of which are unknown soldiers. The
at Layang Layangan marks the Japanese surrender point on 9 September 1945, which brought the Second World War to an end in Borneo.
Boat trips can be made to the small islands around Labuan, although only by chartering a fishing vessel. The main islands are
(an uninspiring island between Labuan and the mainland),
(known locally as the floating lady) and
(floating man). These last three have good beaches and coral reefs but none have any facilities.
Off the south coast of the island is the
; a great place to dive, especially as there are four shipwrecks scattered in these waters. The park has 20 dive sites.
This is edited copy from Footprint Handbooks. For comprehensive details (incl address, tel no, directions, opening times and prices) please refer to book or individual chapter PDF