The interplay between race and religion is a sensitive issue in Malaysia, where ethnic Malay Muslims form about 60 per cent of the population and Buddhists, Christians, Hindus and Sikhs make up the bulk of the ethnic Indian and Chinese minorities. Islam is the official state religion and people of non-Islamic faiths – about 40 per cent of the population – continue to report problems in 2007.

Friction between ethnic communities led to the filing of a lawsuit in London in August 2007 by Malaysian lawyers backed by the Hindu Rights Action Force. The suit, on behalf of Malaysia's 2 million ethnic Indians, is against the current British government and demands that the court hold the British colonial authority liable for shipping millions of Tamil-speaking South Indians to Malaya and later abandoning them without adequate safeguards for their rights. The lawyers are calling for compensation for every minority Indian in Malaysia for their 'pain, suffering, humiliation, discrimination and continuous colonization'.

In November 2007 the ethnic Indian community staged its biggest ever anti-government street protest in Kuala Lumpur, when more than 10,000 protesters faced riot police to voice complaints of racial discrimination. Ethnic Indians claim that the government's affirmative action policy in favour of majority ethnic Malays has marginalized them. The protest was politically significant ahead of the coming elections.

According to the independent news organization, The Irrawaddy, decisions in Malaysia in 2007 that effectively compelled Malaysians born as Muslims to stay Muslim have led leaders of the state's minority religions to appeal to the government to allow people to choose their faith. In her March 2007 report, the UN Special Representative on the Situation of Human Rights Defenders highlighted the case of a lawyer representing Lina Joy in the Federal Court of Malaysia. Ms Joy is a Malay woman who has renounced her Muslim faith and embraced Christianity. The case relates to whether she can renounce Islam and have the religious affiliation on her identity card deleted. The lawyer has received death threats from an unknown group, denouncing him as a betrayer of Islam because of his involvement in the case.

According to current legislation, Orang Asli (aboriginal tribal groupings whose existence on peninsular Malaysia predates the arrival of the Malay peoples and who number about 110,000) can use ancestral land as well as the timber and other resources on it. However, Malaysian state governments claim legal ownership of the land and insist that they need not pay compensation for acquiring it. Under the constitution, native customary rights must be shown to have existed before the formation of Malaysia in 1958. Most indigenous peoples do not have access to colonial or government documents demarcating their areas before this date, or such documents simply do not exist for some areas. According to a February 2007 study carried out by the Malaysia National Human Rights Commission, throughout the country Orang Asli communities are facing a bleak future marked by institutional discrimination and the greed of private enterprise. The study said loss of land, sudden eviction and paltry cash compensation has seriously injured the Orang Asli community.

Disenfranchisement from the legislative system has led some indigenous communities to take the law into their own hands. In April 2007, the Penan, a nomadic indigenous people in Sarawak, re-established a blockade to stop the logging company Samling taking over their lands. According to Survival International, the Penan have been fighting back against logging for two decades but only now are their actions having results – some of the companies are now agreeing to stop logging in the area. However the Penan need to stay vigilant as many such promises have been broken.

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