Malaysia has one of Asia’s longest coastlines, but despite having around 5,000km of coast, the country has several reclamation projects that are ecologically-economics controversial.
1. The Forest City project by a China-based real estate entity - comprising four artificial islands - is a development failure. Only a mere fraction (less than 5% of the expected number of residents) of the 700,000 people envisaged would live in the zone by 2035, when it is scheduled to be completed. As of 2019, only around 500 people lived in the estate, (insider; foreign policy, 2019).
Forest City was envisioned as an integrated residential development and private town to be located on the slopes of Gelang Patah, Johor Bahru District, Johor, Malaysia. It is a twenty-year project pitched under China's Belt and Road Initiative.
Forest City spreads across 1,740 hectares, or four times the size of city-state Monaco, along the Johor Straits facing Singapore island.
This giant coastline metropolis development project costing US$100 billion by reconstructing the coastline - through dredging and sedimentation with consequential degrading local marine habitat - was once fashioned as Malaysia’s answer to China’s Shenzhen.
2. Then, there is the Maharani Energy Gateway near Johor’s town of Muar where environmentalists and socioeconomic analysts question on who are the wealthy backers’ and whether transparency is available. Also, another question as to why new energy storage facility is needed at all.
Sahabat Alam Malaysia (SAM) has called for the rejection of the Maharani Energy Gateway project after claiming the quality of its environmental impact assessment (EIA) report is poor and cannot be approved.
Among the reasons cited was the EIA’s failure to take into account rising sea-level projections for Malaysia in accordance with climate change.
In fact, the sea reclamation project off the coast of Muar in Johor is owned by Johor ruler Sultan Ibrahim Sultan Iskandar, but has impacted adverse effects on the livelihoods of some 1,000 fisherfolk who live in the constituency.
The size of the venture will be similar to that of the Forest City project which the Johore state ruler has a stake in.
3. The Penang South Reclamation (PSR) project, dubbed the BiodiverCity, has pitted the government and businesses against fishermen and environmentalists who say it will wreck the lives of residents, and damage the coast.
On this northwest coast of Peninsular Malaysia, environmentalists have been battling with the authorities for years over a multibillion-dollar island-building scheme they believe will irreversibly damage marine life.
“The area is rich in prawns and fish. If you build islands, what we will see is permanent environmental degradation,” said Mahadi Md Rodzi, chairman of the Penang Fishermen’s Association that represents about 6,000 fisherman.
Many fishermen have rejected the 20,000-ringitt (US$4,950) compensation offered, as well as the Environmental Impact Assessment report, which conservationists say does not reflect the potential damage or propose adequate mitigation measures.
This obsession with artificial islands affecting environment and fisherfolk is a model of financialization capitalism extracting from FIRE (finance, insurance and real estates) inappropriate returns.
In fact, the scale of the dredging and reclamation work over more than a decade will cause massive and long-term ecological environmental destruction. In totality, fifteen years of land reclamation would become a prolong onslaught to any marine ecology and the fishery industry that depends on it. Indeed, the reclaimed islands will likely bury existing fishing areas while deteriorating the surrounding marine water quality.
One has to say that coastal communities relying on the marine and coastal area for their livelihood will experience an irreversible negative socio-economic impact.
Though large-scale reclamation allows more flexibility in city planning, but it enables ruling elites and capital to engage more "ambitiously and aggressively with the business of land-banking,” said Keng-Khoon Ng, a lecturer at UCSI University Kuala Lumpur.
One must say that these island-making projects are often designed to boost state revenue but they are definitely massive misappropriation of resources at a time of intensifying housing unaffordability and social injustice.
4. The Pengerang Integrated Complex (PIC), in the southern state of Johor, is supposedly to transform the country’s footprint in oil refining and petrochemical production as part of the Petronas’ US$16 billion RAPID (or Refinery and Petrochemical Integrated Development) refinery. It will add 300,000 barrels per day of refining capacity to Malaysia, almost half of the existing capacity of six plants.
While Malaysia is embracing shifts bringing forth more renewables and electric vehicles, it is also opening Big Oil facilities, says Renato Lima-de-Oliveira, Assistant Professor of Business and Society at the Asia School of Business.
Spread across 2,550 ha. and the result of a US$27 billion investment in partnership with Saudi Aramco, PIC will house a new site of downstream oil operations.
However, at a time when the world is increasingly stressing the importance of green development and phasing out fossil fuels, are Malaysia and Petronas making the right bet or mere collusion with Big Oil since oil was discovered, and exploited, by transnational corporations in the 1970s.
There are already signs oil is now in a decline. The sudden demand destruction caused by the pandemic, when oil consumption fell by a record of 8.6 million barrels per day (bpd) according to the International Energy Agency, accelerated the plans by key oil and gas (O&G) companies to wean off fossil fuels.
Unsurprisingly, the financial results of O&G companies showed record losses for 2020, including Exxon (US$22.4 billion), Shell (US$21.7 billion), Petronas (US$5 billion) and many Big Oil others.
Many agencies and companies now believe oil has reached peak demand or will do so in the next few years. Since the 2014 price crash.
A 2021 report from the Malaysia Petroleum Resource Corporation shows revenue from Malaysia’s O&G services and equipment industry has been declining, registering RM$65.1 billion (US$15.5 billion) in 2019, down from over RM$80 billion in 2013.
Profit before tax has been declining and was barely positive in 2019, at RM1.1 billion. Malaysia’s O&G production has been stable since 2008, with about 1.7 million barrels of oil equivalent, but capital investments have been going down: From the peak of US$10 billion in 2013 to just US$4.5 billion last year, according to Rystad Energy.
Though at the heart of RAPID is strategically sited in a major trade route and can turn Malaysia into a net exporter of refined fuels, meeting stringent low-sulphur standards but the country is making a gamble given present Global climate change agenda.
Another threat to the oil industry comes from concerted political action. As societies become increasingly conscious of the negative effects greenhouse gas emissions have on the planet, there is greater public pressure in favour of more sustainable development.
Governments nowadays are promoting renewables through feed-in-tariff or solar auctions and discourage fossil fuels by imposing tighter regulations and taxes on carbon emissions.
Like many countries, Malaysia has adopted policies to promote renewables – and there is a growing business ecosystem of green energy developers in the country - but has yet to adopt a carbon tax or a hard policy to phase out coal from its energy matrix with initiatives like The Climate Pledge, in which companies commit to achieving net zero emissions by 2040.
Though RAPID is strategically sited in a major trade route and may possibly turn Malaysia into a net exporter of refined fuels, meeting stringent low-sulphur standards could be a challenge.
Given its design to maximise naphtha (used as a feedstock for petrochemical production), it will be less exposed to the demand destruction EVs will bring to refineries focused on transportation fuels.
Scale and integration are critical competitive factors in the refining sector. PIC meets these criteria with its production volume and design. However, refining is an activity that traditionally requires high investment and has low margins, so operational excellence is critical.
In this regard, the RAPID project has been plagued by delays and major incidents, including a fire at the Diesel Hydro Treating Unit (DHT) within the Pengerang Refinery Complex in March 2020.
Five men died.
Petronas said the incident occurred at 1.25am at the Pengerang Integrated Complex. Bernama reported that more than 10 houses in Kampung Lepau near Pengerang were believed to have been damaged. Other media reports suggested that the explosion was triggered by a leaking gas tank.
Comments on social media have suggested that the blast caused tremors that could be felt by residents of nearby residential areas and as far off as Pasir Gudang, located about 50km away.
5. Manjung Coal Fired Power Plant is a 2,100MW coal fired power project. It is located in the state of Perak, peninsular Malaysia. The project is currently active. It has been developed in multiple phases; post completion of construction, the project got commissioned in April 2004.
It is developed by TNC GE Power and is currently owned by TNB Janamanjung Sdn with a stake of 100%.
It is a steam turbine power plant that is used for Baseload. The power plant run on dual-fuel. The primary fuel being used to power the plant is subbituminous. In case of shortage of subbituminous the plant can also run on Bituminous. The fuel is procured from the Lekir Bulk Terminal Jetty.
The project cost is RM$1,800m where power generated from the project is sold to Tenaga Nasional under a power purchase agreement.
GE Power and Peremba Construction Sdn were selected to render EPC services for the coal fired power project. GE Power was selected as the turbine supplier for the Coal fired project. The company provided 3 steam turbines, each with 700MW nameplate capacity. GE Power supplied Two-pole GIGATOP electric generator for the project. Also, GE Power supplied steam boiler for the project.
The controversial surrounding this project, not only contracted to a Global North monopoly-capital, but the destruction of mangroves where the jetty was sited. Upon completion, the pollution emission as a consequence affects the coastline near to the resort island of Pangkor, even though equipped with advanced environmental control technologies including the Flue Gas Desulfurization (FGD) system, the Manjung four power plants emit 70% lesser SO2 and NOx compared to the conventional generating units of the plant.
6. The Melaka Gateway is where the Melaka government had terminated its three-year concession for land reclamation of islands that would form the foundation of the multi-billion ringgit Melaka Gateway project, which would involve a mega port and free trade economic zone.
The company had entered into an agreement on Oct 4, 2017, to reclaim 1,358 acres of sea land surrounding four islands to be called the Melaka Gateway project for a period of 10 years.
Supposedly, it was for a mixed commercial development that would comprise an integrated deep sea port, cruise terminal jetty, marina, tourism, entertainment, commercial properties and a free trade zone - that would likely be following the Forest City approach to an ecological destruction accompanied with financialization capitalism in economics extraction.
The sole pursuit in capitalism is of profit and growth, contributing externalities to deforestation, pollution and biodiversity loss. More importantly, it is the small minority of the human population - the top 1% of households globally own 43% of all personal wealth while the bottom 50% have only 1% - who are causing the vast majority of the damage upon the effects of climate calamity and consequential biodiversity collapse that are overwhelming felt by the poorest people on Planet Earth.