The only really fine natural harbour in the island of which any use has been made is that of Sandakan, the principal settlement of the North Borneo Company on the north coast.
In 1872 the Labuan Trading Company was established in Sandakan, the fine harbour on the northern coast which was subsequently the capital of the North Borneo Company's territory.
Sandakan Harbour, on the north-east coast (5° 40' N., 118° To' E.), runs inland for some 17 m.
The principal town in the territory, and the seat of government (though an attempt has been unsuccessfully made to transfer this to Jesselton on the west coast), is Sandakan, situated just inside the mouth of the Sarwaka inlet.
The shade temperature at Sandakan ordinarily ranges from 72° to 94° F.