• YB Wong Chen

The Holistic Case Against Lynas

MEDIA STATEMENT: THE HOLISTIC CASE AGAINST LYNAS We would like to explore the case against Lynas in Kuantan, Pahang and examine its impact on five different levels: health, economic, political, legal and financial recourse, and national sovereignty. Lynas Corporation is an Australian rare earths mining and refining company, founded in 1983 and listed on the Australian Securities Exchange. Lynas Corp incorporated Lynas Malaysia Sdn Bhd in 2006 as a fully-owned entity, which built the 100-hectare Lynas Advanced Materials Plant (LAMP) in Gebeng, sited in a low-lying peat swamp only a short distance from the South China Sea, with between 500,000-700,000 Malaysians living within its 30km radius. It may seem logical for the rare earth refinery plant to be sited close to the mines, as to minimise logistical challenges. The reasons provided for shipping the unrefined ore to Malaysian are that Australia cannot provide the adequate highly-skilled manpower, chemical reagents, and utilities such as water supply and natural gas that are needed to process rare earth minerals. Beyond that, strategic geographic location, efficient government agencies and legal framework are among other factors that drove the decision setting up its operation here. In addition, Malaysia’s government also provided a 12-year tax exemption to Lynas. In truth, there could be another two important reasons for locating the refinery in Malaysia, not Australia: the more relaxed regulatory and legal standards, and the cheaper and less-unionized workforce. This plant commenced operations in 2012 and is expected to be operational for at least 20 years. At the moment, the plant only employs 631 Malaysians. The unrefined rare earth ores arrive by ship at Kuantan Port from mines in Western Australia, and are subsequently transported by trucks to LAMP. LAMP was designed to process 65,000 tonnes of rare earth concentrates and will produce 22,000 tons of high purity REE. To accomplish this, 500 cubic meters/hour of water; 110,000 tons of sulfuric acid, 150,000 tons of hydrochloric acid and 110,000 tons of lime will be consumed every year. Three distinctive categories of waste have been generated from the plant, i.e. 3 gypsum type wastes, waste water and flue gas, the latter two are being purged to the environment at approximately 500 cubic meters/hour of wastewater and 100,000 cubic meters/hour waste gas. Whilst the solid waste, include the Water Leached Purification (WLP), totalling about 0.45 million metric tonnes, approximate 1.1 million metric tonnes of Neutralisation Underflow Residue (NUF) and copious amont of flue gas desulphurization (FGD) residues to date. It is true that WLP is considered “low level radioactive material”, but there are still 256 Olympic-sized swimming pools worth of WLP stockpiled at the temporary storage sites in Gebeng. Lynas claims that their monitoring shows radiation and chemical risks within limits, partially explaining their reluctance to create a Permanent Disposal Facility (PDF) for the WLP. The Ministry of Environment, Science, Technology and Climate Change (MESTECC) have announced that the wastes from LAMP must be removed from Malaysia prior to the expiration of Lynas’ temporary storage license (TOL) on the 2nd Sept 2019. If Lynas’ claims of safety are true, then Australia will be willing to accept the waste product back. However, it is damning that Australian MPs have clearly refused any “importation of waste back onto Australian soil”, and also previously expressed “grave concern” about the Malaysian government’s initial approval of a license to Lynas. The factual overview above sets the stage for Lynas’ first impact, on health. We believe that it is immoral to put the onus upon the Kuantan-Kemaman community “to prove that Lynas [LAMP] is unsafe’, i.e. to be lab rats (tikus makmal) in a natural experiment. We believe that the onus to prove unquestionable safety must lie with Lynas; we also believe that no one has any responsibility to prove unquestionable danger before LAMP must be shut down. Currently, no one knows how safe (or how hazardous) is the plant itself, the unrefined ore, the transport process, and the waste itself (including volume, temporary storage, and permanent disposal). An expert panel convened by the UK government (CERRIE) concluded in 2004 that there was no scientific consensus on the health risks of chronic low-level exposure to ionising radiation from ingested radioactive particulates. Any assertions that all elements of LAMP are “unquestionably safe” are false and misleading. Even if we adopt a higher burden of proof for danger, there is still a presence of danger that is non-negligible. Therefore, the “precautionary principle” in public health is paramount in the case of Lynas, and can be demonstrated in two ways. Firstly, if the waste from LAMP is safe, why is Australia refusing to accept it? Secondly, there are lessons from Mitsubishi’s rare earth factory in Bukit Merah in the 1980s and China’s refusal in 2019 to accept the plastic waste of the West, both of which indicate that public health is more important than any short-term and small economic impact. This is to say nothing about the reduction of fresh water supply for Malaysians, the risk of leakage of the temporary storage facilities, the airborne pollution of dust and particles during transport, or the possibility of a natural disasters such as flooding or man-made accidents. The second case against Lynas is Kuantan is the one with false economic benefits. In Lynas’ Annual Report 2018, they claim to contribute RM500 million to Malaysia’s economy in 2018. That grand total is probably inflated, and probably includes the RM10.7 million annual salary of Lynas Malaysia CEO and the cost of building the entire refinery, rather than actual benefits directly received by Malaysians (online data shows that a Maintenance Supervisor receives a RM2000 monthly salary). It is not surprising that most of the profits and revenues will be channelled back to Australia. Even if that grand total is absolutely accurate, it is only a negligible 1% of the RM41 billion Foreign Direct Investment that Malaysia received in 2017; it is better that we open semiconductor factories than manage the waste from refining rare earths. The third case against Lynas in Kuantan is the political one. There is now some Malaysian Cabinet-level disagreement on the instruction to Lynas to remove their waste before 2 Sept 2019. The disagreement comes from a desire for Malaysia to be friendly to business, and because Lynas’ operations are “too big to ignore”. The signatories of this letter are not hostile to commercial ventures; we are pro-justice and pro-common sense. While Malaysia being “open to business” is a sensible stance, being “open to potentially toxic and radioactive waste” is not smart. Not all jobs are created equal, and not all FDI will be considered ideal. Issues of human rights come into play here too, especially when considering the vocal opposition to Lynas from various concerned citizens, civil society organizations, scientists, and residents near Lynas.

The fourth case against Lynas in Kuantan is the legal and financial recourse available to Malaysia if an accident happens, or if Lynas Malaysia or Lynas Corp are dissolved. To obtain a Temporary Operating License, Lynas will pay USD50 million as financial security to Malaysia’s government, and have signed a Letter of Undertaking promising to manage the waste in the long-term. They have thus far paid USD34 million of the financial security. Lynas is not Fukushima, but a USD50 million financial security is nowhere near equal to the expected USD180 billion Fukushima clean-up cost either. As comparison, the permanent dumpsite at Bukit Kledang, Ipoh for Mitsubishi’s radioactive waste costed approximately USD100 million. There is also a distinct lack of public transparency about the insurance (if any) that Lynas has taken out to manage their risks. Lynas’ Letter of Undertaking is helpful, but its applicability is in question if Lynas Malaysia is dissolved. There is a theoretical possibility that Lynas Corp will be held responsible, but it is doubtful if the Malaysian government will prosecute Lynas Corp as the Australian government’s stance will probably be a protective one.

Finally, there is a case for Malaysia’s national sovereignty to be defended. Even without deploying slogans like colonialism, neo-colonialism or “waste-dumping”, we can still make a powerful case for the consideration and respect due to Malaysia and to its citizens. No one disputes the benefits of rare earths in humanity’s daily lives. What is in dispute is Country A mining the stuff and pocketing the vast majority of profits, while outsourcing the refining, waste management and risks to Country B. The signatories of this letter are against the “internationalization of Not-In-My-Backyard nimby-ism”. Tun Dr Mahathir Mohamed was famously accused of being “recalcitrant” in the 1990s; Malaysian citizens should emulate this recalcitrant spirit in rejecting double standards and any attempts at turning our country into a dumping ground for toxic processing waste.

We believe that the terms of the contractual agreement with Lynas must still be respected, and the Attorney-General and relevant legal practitioners will play their roles in arguing the Government’s position in this matter. However, the over-arching and long-term principles are clear: any possible benefits of Lynas are not worth the highly-probable risks in the five areas mentioned above. Malaysia must never be a dumping ground. Prepared by the following Academics and Civil Society Activists:

  • Dr Khor Swee Kheng

  • Dr Chan Chee Khoon

  • Dr Lee Chee Hong

  • Dr RS McCoy

  • Save Malaysia Stop Lynas

  • Pertubuhan Solidariti Hijau Kuantan

Supported by the following Members of Parliament:

  • YB Wong Chen, MP for Subang

  • YB Hassan Karim, MP for Pasir Gudang

  • YB Chang Lih Kang, MP for Tanjong Malim

  • YB Nor Azrina binti Surip, MP for Merbok

  • YB Nik Nazmi Nik Ahmad, MP for Setiawangsa

  • YB Akmal Nasrullah Mohd Nasir, MP for Johor Bahru

  • YB Larry Sng Wei Shien, MP for Julau

  • YB Syed Ibrahim Syed Noh, MP for Ledang

9 April 2019