The Journey of Life: Labuan, The Pearl of Borneo

The Federal Territory of Labuan comprises Labuan Island (75 km²) and six other smaller islands (Pulau Burung, Pulau Daat, Pulau Kuraman, Pulau Papan, Pulau Rusukan Kecil, and Pulau Rusukan Besar), which have a combined total area of 92 km². The islands lie 8 km off the coast of Borneo, adjacent to the Malaysian state of Sabah and the independent state of Brunei Darussalam, on the northern edge of Brunei Bay facing the South China Sea. Labuan Island is mainly flat and undulating and the highest point is only 85 meters. Over 70% of the island is still covered with vegetation. Bandar Labuan, formerly known as Victoria, is the major town and faces Brunei Bay; access is via ferry service to Brunei and Kota Kinabalu, as well as Labuan Airport. According to Labuan Corporation, ethnic composition in 2005 in Labuan was: Malay mainly Brunei Malay and Kedayan (30,300), Ethnic Chinese (10,300), Kadazan Dusun (5,500), Bajau (4,800), Murut (700), other races (13,300) and foreigner (18,600).

Labuan was a part of the Brunei Sultanate.

In the 1840s the previously-uninhabited island was proposed as a base for British operations against piracy in the South China Sea. The Sultan of Brunei ceded Labuan to Britain in 1846, and the island became a Crown Colony in 1848[1]. The first White Rajah of Sarawak, James Brooke was appointed first commander-in-chief and Governor of the territory. In 1849 the Eastern Archipelago Company became the first of many companies trying to exploit its coal deposits and establish it as a coaling station for the China trade. It later became a station for the submarine cable between Singapore and Hong Kong.

It was made a part of North Borneo on 1 January 1890, then on 30 October 1906 joined to the Straits Settlements.

During World War II, Labuan was occupied by Japan from December 1941 to June 1945 and governed as part of the Northern Borneo military unit by the Japanese 37th Army. Labuan was renamed Maida Island (Pulau Maida, 前田島 [Maeda-shima]) after Marquis Toshinari Maeda, the first commander of Japanese forces in northern Borneo. The island was retaken by Australian forces in Operation Oboe Six, in June 1945. Labuan assumed its former name and was under British military administration (along with the rest of the Straits Settlements), then joined to British North Borneo, on 15 July 1946, which in turn became a part of Malaysia as the state of Sabah in 1963.

In 1984, Labuan was ceded by Sabah to the federal government and made a federal territory. In 1990, it was declared an international offshore financial centre and free trade zone. The Labuan International Business and Financial Centre (Labuan IBFC) was created as Malaysia’s only offshore financial hub on October 1990 and was operating under the name of Labuan International Offshore Financial Centre (IOFC).