Before the 16 century, Sabah was centered around the kingdom of Brunei. In this region the kingdom of Brunei was also the centre of trade with China. This region was controlled by two great empires of that period; first by the Sri Vijayan of Sumatra and then by the Majapahit of Java. However, early in the 15 century, the Malacca empire under Parameswara spread its influence and took over the trade of Brunei. Through its traders, Islam spread to Brunei by the end of the 15 century. Leadership of the Islamic faith passed to the Brunei Sultans after the fall of Malacca to the Portuguese in 1511. Under Sultan Bolkiah, the kingdom of Brunei extended its influence as far north as Luzon and Sulu, and south and west of Borneo.The Chinese appeared to have had trade and diplomatic ties with Bomeo as early as 600 A.D. The Brunei Annals recorded the existence of a Chinese province in the Kinabatangan area. Archaeological evidence from ceramics unearthed in Borneo revealed that for centuries the Chinese had barter-traded their ceramic wares for spices.
Except for the Europeans, other foreigners who have had dealings with Sabah or Borneo left no written records of their activities in the region. The indigenous peoples of Borneo have no written records except oral history and traditions. The first Europeans to arrive the Sabah waters were the Spaniards. Followed by Portuguese in 1527. The first Englishman to visit Sabah (North Borneo at that time) was Captain Cowley who visited the small island which lay near the northern end of Borneo in 1665. The East India Company founded a trading station on the Balambangan island in 1773 but was attacked by Pirates 2 years later and was destroyed.
British interest in North Borneo was revived 40 years later in Labuan, an island situated north west of Borneo. In 1844, James Brooke approached the Sultan of Brunei regarding the cession of Labuan island to be used by the British as a coaling base, to act against piracy and to increase trade.
On 18 December 1846, a treaty was signed in which the Sultan ceded in perpetuity Labuan and its islets to the British Crown. Brooke became the first Governor of Labuan and her Majesty’s Consul-General in Borneo. The Deputy Governor was William Napier, Hugh Low the Colonial Secretary and Spencer St. John, Brooke’s private secretary. Labuan did not live up to expectations as a mini-Singapore or Penang as the founders had hoped. An enervating climate, a malaria prone region and lack of basic amenities were not conducive for growth. Its chequered history can be seen in its administration which changed hands several times. In 1890, Labuan came to be administered by the British North Borneo Chartered Company, in 1907 it was placed under the government of the Straits Settlements. After the War, Labuan became part of the colony of North Borneo and most recently, Labuan became part of the Federal Territory of Malaysia on 16 April 1984.
After the disappointment with Labuan, British interest in North Borneo waned until 1881, when a commercial enterprise, the British North Borneo Chartered Company (BNBCC), began administering the country. Their presence was however preceded briefly by American influence and interest.
In 1865, the American Consul of Brunei, Claude Lee Moses obtained a 10-year lease from the Sultan of Brunei on North Borneo. He then sold it to the American Trading Company owned by J.W. Torrey, T.B. Harris and some Chinese merchants. Torrey chose Kimanis, an area south west of North Borneo as his base, and began a settlement there, naming it ‘Ellena’. Attempts to find financial backing for the settlement were futile and the settlement was thus abandoned.
With the imminent termination of the territorial lease at hand, Torrey managed to sell his rights to the Austrian Consul in Hong Kong, Baron Von Overbeck. Overbeck managed to get 10-year renewal of the lease from the Tumonggong (Temenggong) of Brunei. To finance his plan for North Borneo, Overbeck found financial backers in the Dent brothers (Alfred and Edward). Later he, together with Count Montgelas of the Austro-Hungarian Embassy in London and A.B. Mitford, a politician transferred their rights to Alfred Dent.
In 1881, Dent formed the British North Borneo Provisional Association Ltd. On the 1 November, the British Crown officially granted a Royal Charter to the Association. In 1882, the British North Borneo Chartered Company was formed. It took over all the rights of the Provisional Association. Sir Rutherford Alcock became the first President and Alfred Dent the Managing Director.
In 1888, North Borneo became a British protectorate, that is, British would defend it if it were attacked, making North Borneo a British sphere of influence. The Company’s rule in North Borneo had the greatest impact on the development of the region. A system of indirect rule was established in the administration of North Borneo. The rule was generally peaceful except for small pockets of resistance, the most serious being the Mat Salleh War from 1894-1900 and the Rundum resistance by the Muruts in 1915.
The BNBCC effectively ruled up to 1942, after more than 60 years in Sabah, when the Second World War rudely interrupted on peaceful North Borneo. Japanese forces landed in Labuan on 1 January and occupied Sabah until she was liberated by the Ninth Division Australian Imperial Forces (A.I.F) in 1945. After the Second World War, North Borneo was administered by the British Military Administration until civil government was restored on July 15, 1946. In 1946, Sabah was placed under the British Crown as the BNBCC could not afford to rebuild Sabah, after the devastation of the War. The destruction of the capital Sandakan by allied bombing was so complete that Jesselton was chosen as the alternative post-war capital – it has remained so to this day. The colonial system of administration after the War was not dissimilar to the Chartered Company era. The rule was generally peaceful. Reconstruction and development of the country were the main focus of the administrators.
The population was generally placid and it was not until the 1960s that political consciousness emerged. The winds of change – the tide of independence being experienced by other countries had arrived in Sabah. It began with an announcement in 1961 by the Prime Minister of Malaya, Tunku Abdul Rahman, regarding the formation of the Federation of Malaysia which were to include Malaya, Sabah, Sarawak, Brunei and Singapore. Malaysia was formally established, without Brunei, on 16 September 1963 and North Borneo’s name was changed to Sabah. Preceding this, North Borneo obtained self-government from the British on 31 August 1963. However by 1965, Singapore was out of the Federation.
As a state within a Federation many changes occurred, administratively, politically, socially, etc. The pace of development was hastened and Sabah entered a new and challenging era when she became part of the Federation of Malaysia
Source : www.sabah.org.my and Stephen R. Evans’ Sabah (North Borneo) Under The Rising Sun Government