 On 3 January 1942 , Japanese forces captured Labuan unopposed during the Battle of Borneo . The Japanese developed two airfields ( Labuan and Timbalai ) on the island , which were built by labourers who had been conscripted from the Lawas and Terusan regions of mainland Borneo . The island population was also subjected to harsh occupation policies . After Japanese forces suppressed a revolt at the town of Jesselton in late 1943 , which was led by Chinese @-@ ethnic civilians , 131 of the rebels were held on Labuan . Only nine rebels survived to be liberated by Australian forces in 1944 . Until mid @-@ 1944 , few Japanese combat units were stationed in Borneo . 
