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DAP will support the RM 24 billion 310 km crude oil pipeline project traversing Kedah, Perak and Kelantan as long as the requirements for Environmental Impact Assessment (EIA) study has been approved



Press Conference (2)

by Lim Guan Eng



(Petaling Jaya, Saturday): DAP is willing to support the RM 24 billion 310 km crude oil pipeline project built by TRANS-Peninsula Petroleum Sdn Bhd (TPP) as long as the requirements for the EIA study has been approved. This is consistent with DAP’s position of giving both economic development and environmental protection equal importance.  

The oil pipeline project traversing Kedah, Perak and Kelantan will enable oil to be supplied to major oil importers like China and Japan by completely by-passing Malacca Straits. Doubts about the ability of TPP to finance a RM 24 billion project when it has only RM 1 million in paid-up capital, is a loss-making company owned by two little-known Malaysian businessmen has led to speculation that the government will put in money.  

However such considerations appears to be secondary to the national and regional interests of promoting energy security in ensuring the continuous supply of crude oil to sustain economic growth in the region. Energy security is a crucial to major oil importers like China and Japan who wished to reduce its dependence on energy supplies passing through Malacca straits.  

Stretching from both ends of Yan in Kedah and Bachok in Kelantan and taking 7 years to complete, the main challenge involves land acquisition and compensation estimated at US$ 100 million in the three states of Perak, Kedah and Kelantan. Any project involving construction of pipelines more than 50 kilometers in length and affecting forest reserves is deemed to be a “prescribed activity” requiring an EIA under Section 34A(2) of the Environmental Quality Act 1974 before approval can be given. Any failure to obtain approval of the EIA would make the project still-born by reason of illegality due to non-compliance of statutory requirements. 

This pipeline project was approved by the Cabinet Committee on Investments, chaired by Deputy Prime Minister Datuk Seri Najib Tun Razak in December 2006, and reaffirmed on January 12 2007. The Prime Minister confirmed the approval on May 7 2007. How can the approval be given even before the EIA is submitted for approval by the Department of Environment (DOE)? 

I had written both to the DOE and was informed that the detailed EIA report has not even been sent. When the EIA is sent, it will be put up for public viewing and comment.  The whole process for a detailed EIA requires a minimal period of 5 months. Clearly talk of work starting in August this year is impractical when the EIA report has not even been submitted. 

The objectives of Detailed Assessment for prescribed activities with potentially significant residual environmental impact include :

1.       to describe the significant residual environmental impacts predicted from the final project plan; 

2.       to specify mitigating and abatement measures in the final project plan; and 

3.       to identify the environmental costs and benefits of the project to the community.   

Section 34A (6) of the Environmental Quality Act 1974 clearly states that ”Any person intending to carry out a prescribed activity shall not carry out such activity until the report required under this section to be submitted to the Director General has been submitted and approved.” Failure to comply to comply with the EIA requirement would be an offence under this section Section 34A(8) liable to a fine not exceeding one hundred thousand ringgit or to imprisonment for a period not exceeding five years or to both and to a further fine of one thousand ringgit for every day that the offence is continued.  

Hence, the RM 24 billion oil pipeline project which will transport up to 6 million barrels of oil a day clearly requires statutory approval of a EIA from the authorities. Generally, if there is any evidence showing that the project poses health and environmental risk to the local people or can cause severe environmental degradation, the project would be rejected. However, in Malaysia, EIA reports are known more by its breach rather than its compliance of environmental standards. 

Has the government taken initiative to set up a Environmental Risk Management system to prevent, reduce or control the likely accidents? What are the steps taken to ensure that the oil pipelines leakages and explosive accidents seen in other countries will not be repeated in Malaysia? Barisan Nasional government’s pursuit of economic growth has neglected the balanced development that would find a happy state of equilibrium in the fields of economics and environment, particularly the basic right of the people to live in a safe and healthy environment.


* Lim Guan Eng, Secretary-General of DAP

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