Labuan, Malaysia

🇲🇾 Labuan, officially the Federal Territory of Labuan (Wilayah Persekutuan Labuan), is an island federal territory of Malaysia. It includes Labuan Island and six smaller islands off the coast of the state of Sabah in East Malaysia. Labuan's capital is Victoria, which is best known as an offshore financial centre offering international financial and business services via Labuan IBFC since 1990, as well as being an offshore support hub for deepwater oil and gas activities in the region. It is also a tourist destination for people travelling through Sabah, nearby Bruneians, and scuba divers. The name Labuan derives from the Malay word labuhan, which means "harbour".

History For three centuries from the 15th century, the north and west coast of Borneo including the island of Labuan was part of the Sultanate of Brunei. In 1775, Labuan was temporarily occupied by the British East India Company after the failure of the company's station at Balambangan Island. The Sultan of Brunei, Omar Ali Saifuddin I tried to secure the British East India Company's support against the Sulu raiders by offering Labuan as an alternative to Balambangan but, instead the company made a second but failed attempt to set up a station on Balambangan. The Sultan's subsequent reoffering of Labuan to the company did not result in the establishment of a permanent British settlement on the island either.

British policy changed in the 19th century, when Labuan started to attract British interest again. Captain Rodney Mundy acquired the island for Britain through the Treaty of Labuan with the Sultan of Brunei, Omar Ali Saifuddin II on 18 December 1846. Mundy took Pengiran Mumin to witness the island's accession to the British Crown on 24 December 1846. Some sources state that during the signing of the treaty, the Sultan had been threatened by a British navy warship ready to fire on the Sultan's palace if he refused to sign the treaty while another source says the island was ceded to Britain as a reward for assistance in combating pirates.

The main reason why the British acquired the island was to establish a naval station to protect their commercial interest in the region and to suppress piracy in the South China Sea. The British also believed the island could be the next Singapore. Following the Anglo-Brunei Treaty of Friendship in 1847, which distilled the aforementioned events into a single document - Labuan was ceded to the British in perpetuity. The island became a Crown Colony in 1848 with James Brooke appointed as the first governor and commander-in-chief, with William Napier as his lieutenant-governor. In 1849, the Eastern Archipelago Company became the first of several British companies to try to exploit Labuan coal deposits. The company was formed to exploit coal deposits on the island and adjacent coast of Borneo but soon became involved in a dispute with James Brooke. Not proving itself a great commercial or strategic asset, administration of Labuan was handed to the British North Borneo Company in 1890. The North Borneo Company did not prove that effective a manager either, and in 1904 Malcolm Stewart Hannibal McArthur even proposed handing the island back to Brunei. In 1894, a submarine communications cable was built by the British to link the island's communications with North Borneo, Singapore and Hong Kong for the first time. By 30 October 1906, the British Government proposed to extend the boundaries of the Straits Settlements to include Labuan. The proposal took effect from 1 January 1907.