Federal Territory of Labuan

Federal Territory of Labuan

Just off the coast of Sabah, Labuan and its accompanying islands collectively represent the second Federal Territory of Malaysia.

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The Federal Territory of Labuan, established in 1984 to become Malaysia's international offshore financial centre and free trade zone, encompasses seven islands, including the main island of Labuan. Famed as a beautiful world class diving site, Labuan has been dubbed the Pearl of Borneo. The island itself has a rich history dating back to the mid 19th century, when it was first established as a British Crown colony.

For an island of its size, Labuan boasts a sizeable mix of tourist attractions, most notably the Labuan Marine Park, with its wreck diving sites and coral reefs. Labuan is also the final resting place for nearly four thousand allied soldiers, who are interned at the island's World War II Memorial. The island hosts a yearly Rememberance Day, a military ceremony to honour the fallen soldiers. There are also several other landmarks associated to World War II, including a memorial indicating the Japanese surrender, a museum with wartime exhibits, and a peace park promoting the ideal of peace and harmony.

Being an island, Labuan has a number of lovely sandy beaches spread around its shores and also quaint water villages, the traditional homes of the local fisherfolk. Finally, there is a peculiar 106 feet high brick structure on the island known as the Chimney. There are no records indicating the reason behind its construction, and any purpose that it was to serve has been obscured by the sands of time.

One of the three Federal Territories of Malaysia, Labuan is an archipelago of islands, made up of one main island and six other islets located at the northwest coast of Borneo, facing the South China Sea, encompassing a total of 92 square kilometres.

It may be hard to believe that this unassuming group of islands were initially intended be a base for British operations to fight against piracy in the South China Sea in the 1840s. Consequently, the island was ceded to Britain by the Brunei Sultanate in 1846 and within two years, the island was made a British Crown colony. The first commander-in-chief and Governor elected for this territory was James Brooke, the White Rajah of nearby Sarawak. Labuan would subsequently become part of North Borneo in 1890, and sixteen years later it joined the Straits Settlements.

Labuan was invaded by the Japanese during the World War II, who then renamed the island Maida Island. It was governed by the Japanese 37th Army from December 1941 till June 1945 when Australian forces retook control of Labuan in June 1945 after launching Operation Oboe Six. Labuan assumed its former name and came under the rule of the British military administration. It became a part of the British North Borneo on July 15 1946 which subsequently became a part of Malaysia as the state of Sabah in 1963.

Sabah ceded Labuan to the Malaysian federal government in April 1984 when it was made Malaysia's second federal territory. In 1990, Labuan was declared as a free trade zone and an international offshore financial centre, with the formation of the Labuan International Business and Financial Centre.