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Press Statement

by Lim Guan Eng

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(Petaling Jaya, Tuesday): Prime Minister Datuk Seri Abdullah Ahmad Badawi must come clean and say how much the government will spend on the RM 24 billion 310 km crude oil pipeline project traversing Kedah, Perak and Kelantan as well as whether the EIA study has been approved. Even though TRANS-Peninsula Petroleum Sdn Bhd (TPP), the developer of the 310km crude oil pipeline across northern Peninsular Malaysia says that financing will come from raising equity in Bursa Malaysia and borrowings, it is likely that the government will put in money. 

Such doubts about TPP relying on private sources to finance the project is due to press reports that the pipeline project is being developed by a small, loss-making company owned by two little-known Malaysian businessmen. Stretching from both ends of Yan in Kedah and Bachok in Kelantan, the project will take 7 years to complete and involve land acquisition issues in the three states of Perak, Kedah and Kelantan. As many landowners are involved and forest reserves will be affected,  an EIA is necessary 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. Is the approval for the project a fait accompli given by the Prime Minister for purely political reasons where the EIA report is a mere academic exercise? 

Section 34A(2) of the Environmental Quality Act 1974 states, “Any person intending to carry out any of the prescribed activities shall, before any approval for the carrying out of such activity is granted by the relevant approving authority, submit a report to the Director General. The report shall be in accordance with the guidelines prescribed by the Director General and shall concern an assessment of the impact such activity will have or is likely to have on the environment and the proposed measures that shall be undertaken to prevent, reduce or control the adverse impact on the environment.” 

Section 34A(6) of the Environmental Quality Act 1974 also 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.” 

These 19 “prescribed activities” are defined under the Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order 1987.  In schedule 12, petroleum activities is a prescribed activity that covers:-

1.  Oil and gas fields development.

2.  Construction of off-shore and on-shore pipelines in excess of 50 kilometres in length.

3.  Construction of oil and gas separation, processing, handling, and storage facilities.

4.  Construction of oil refineries.

5.  Construction of product depots for the storage of petrol, gas or diesel (excluding service stations ) which are located within 3 kilometres of any commercial , industrial or residential areas and which have a combined storage capacity of 60,000 barrels or more. 

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. In developed countries, the EIA report has a decisive role in influencing the approval process. 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. 

DAP reiterates that 5 questions must be addressed by the Prime Minister. 

1. As a democratic country, why there is no public participation in the process of decision-making of such an important project?  Have the interest of the ordinary citizens being taken into account.

2. Will the government be transparent and accountable to ensure that the rakyat understands the impact of this mega project, particularly on their livelihood, personal safety and their health?

3. Has the impact of the loss of the environmental degradation been calculated?  For example, what will the impact be for the fishing industry along the coastal areas where the seabed will be deepened artificially?

4. Has the government taken initiative to set up 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?

5. These development projects also involve the construction of two new oil refineries. SKS Development Sdn Bhd, owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary, and Merapoh Resources Sdn Bhd will build these refineries. What is the basis for the approval these projects to these companies?

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, social and environment, particularly the basic right of the people to live in a safe and healthy environment. DAP urges the government to make public the EIA report of oil pipeline project immediately, especially in the 3 states above to allow public discussion and participation.