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. 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. Anglo Bruni Treaty 1844.jpg|Anglo Bruneian Treaty 23 Oct 1844 Treaty_of_Labuan1846_dec18_outside.jpg|Marines stationed outside the Sultan's palace during the signing of the 1846 Treaty of Labuan Treaty_of_Labuan1846.jpg|Signing of the Treaty of Labuan 18 Dec 1846 The island served as the administrative centre for the Japanese forces. During the occupation, the Japanese Government changed the island name to
Maida Island ( [
Maeda-shima]) on 9 December 1942 after
Marquis Toshinari Maeda, as a remembrance to the first Japanese commander in northern Borneo. Maeda was killed in an
air crash at
Bintulu, Sarawak when en route to the island to open the airfield there. Soon, the
9th Division of the Australian Army launched the attack with support from airstrikes and sea bombardments until the capture of the Labuan airstrip. Most of the Labuan island area including the main town of
Victoria was under the control of Allied forces within four days of the
landing on 10 June. The name of Labuan was later restored by the British and the island was administered under the
British Military Administration together with the rest of the Straits Settlements. Labuan then on 15 July 1946 joined the
North Borneo Crown Colony, which in turn became the state of Sabah and
Malaysia in 1963. In 1984, the Government of Sabah ceded Labuan to the
federal government and later was admitted as a
federal territory. This was done so that it could become an offshore financial centre. It was declared an international offshore financial centre and
free trade zone in 1990. ==Geography==