One purpose of the Forest Stewardship Council (FSC) is to recognize and respect indigenous people's rights in forest management. In this paper, the author examined the application of the FSC principles and criteria that are supposed to recognized indigenous people's rights in D Forest Reserve (DFR), located in the mid stream of Kinabatangan, Sabah, Malaysia. After the Sabah Forestry Department (SFD) achieved the FSC certification in DFR, the certification body issued a Major Corrective Action Request, and the SFD enforced the boundary control. As a result, some customary forest uses of the indigenous people was also restricted. The reason why this happened was that the forestry law had been applied strictly, and on the other hand, the customary forest use was not secured by the land laws, so it was difficult to recognize the indigenous people's rights within the FSC. In the area where the indigenous people's rights are not fully recognized by the conventional laws and systems, conflicts may be actualized by applying the strict forest law enforcement. It is important for forest managers and certification bodies to understand customary forest uses and conflict over resources in the forest reserve when they apply the forest certification.
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