October 16, 2015

200 Cheated Farmers Give Malaysia a Chance to Reform Bauxite Regulation

200 Cheated Farmers Give Malaysia a Chance to Reform Bauxite Regulation

Poorly regulated Bauxite mining in Bukit Goh is taking over forests and neighborhoods. Photo credit DRONE Pahang

Residents of Bukit Goh, a city near Kuantan in Eastern Peninsular Malaysia, were given a jolt of excitement late last year when bauxite mining companies offered them between RM300,000 and RM800,000 (US$72,000 – $193,000) for every four hectares of their land that contained bauxite.  After mulling it over, about 200 of these farmers took the offers, cut down their oil palms and dug up their land to facilitate bauxite mining.  About a year after the offers were made, only 10 of them have received payment.

The fiasco is one among many inherent to Malaysia’s bauxite mining industry.  Ever since Indonesia backed out as China’s main supplier of bauxite (the raw ore used to create aluminum), Malaysia’s bauxite extraction and export business has exploded.  Compare Malaysia’s 105,000 tons exported in the first nine months of 2013 to the 1.27 million tons exported during that same period last year and one only begins to understand the boom.  Export levels for this year were predicted to reach 10 million tons, but recent admissions of activity from Malaysian contractors revealed that total 2015 exports could shoot well past 20 million tons.

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Bauxite residue being washed directly into Kuantan Port. Photo Credit GERAM

Largely unregulated mining activity has created environmental catastrophe, contaminating soil, water, air and any city or village near bauxite mining or transportation routes with a deluge of carcinogenic and irradiated dust.  The dust causes serious health problems if breathed in (long-term effects yet unknown), it seeps into rivers and obliterates fish and marine life, and it contaminates soils and oceans, turning them a rusty red color and taking a toll on the environment that scientists are yet to fully estimate.

The Malaysian government has downplayed the problem, even blatantly misleading the public about the pollution’s harmful effects, but the detriment to public and environmental health is clear.  With Malaysia’s struggling economy depending on bauxite income and China’s demand for third-party bauxite expected to increase 50 percent by 2019, the industry is going nowhere.  The answer, then, lies in bauxite regulation.  So far, Malaysia has struggled to instate and/or enforce safety laws.

What’s happening right now in Bukit Goh could have a big influence on this situation.  Quite a proceeding has developed during the unfolding of events, and it all started with a delay of payment.

Most of the victims of the defunct bauxite deals in Bukit Goh are Felda settlers.  This means they are one-time members of Malaysia’s rural poor who were allocated plots of land by FELDA (the Federal Land Development Agency) in a government scheme to leverage them out of poverty.  Felda settlers originally get their land on government loan, but once they pay the loan back, they own their plot of land outright.  As part of the agreement, they are required by law to focus on farming for the duration of their payback period.

Now with no oil palms to farm and none of the fortune promised them by bauxite contractors, the settlers are in trouble.  Reasons for the delay in pay are likely varied, but it seems that at least some contractors are willingly cheating – or at least bullying – the farmers.  Felda settler Husin Ahamd, 78, said he lost his farming income of RM5,000 (US$1,200) per month after contractors cut down nearly 500 of his oil palm trees.

“They did pay RM50,000 (US$12,000) as deposit, then they cut down my trees without informing me,” said Husin.  “When asked, they said the bauxite on my land was not of the quality they required and my land was only suitable as a route to transport bauxite,” he lamented.

Industrial callousness aside, it can be assumed that the reason many contractors didn’t pay is that they weren’t able to get proper mining licenses or had theirs revoked.  The Malaysian government has frozen all bauxite mining activity in Bukit Goh.  No licenses, no mining, no payment.

This clamp-down on mining activity is a huge victory for public health and the environment.  The port town of Kuantan, about 15km southeast of Bukit Goh, provides an example of just why the mining must be regulated.  A major hub for bauxite exports, Kuantan has been absolutely inundated with bauxite dust and slurry.  It’s in the air, it’s in the food, it’s turning the very oceans red and destroying the livelihood of this fishing town – it even builds up on roads like poisonous snowdrifts.

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Bauxite slurry is covering some Kuantan highways so thickly that they are barely driveable.
Photo Credit GERAM

The money might be good, but where will Malaysia be when its fish are floating dead in tainted waters, its forests are empty red pits where bauxite ore was extracted, and its people are suffering from ailments caused by exposure to heavy metals and radiation?  Any slow-down of bauxite mining could be considered a good thing.

However, the farmers in Bukit Goh are still out of luck.  In mid-July, the cheated settlers were urged by their state (Pahang) to sue bauxite companies themselves.  When this stretch of a solution didn’t work, the Pahang government was urged to issue bauxite mining licenses to 32 of the contractors who made deals with Bukit Goh farmers.  Most recently, some 33 contractors and 263 residents and Felda settlers in Bukit Goh have submitted application letters for bauxite mining licenses.

The government has yet to approve these applications.  Livelihoods dwindle in the proceedings, but what the authorities decide to do with licensing could be huge for bauxite mining in Malaysia.

“Through these applications, the land owners and 33 contractors involved have agreed to whatever conditions in the regulations set by the state government for bauxite mining activities,” said Abd Wahid, Committee Chairman of the Bukit Goh Bauxite Problems Coordinating Committee (an organization created specially to oversee this and other bauxite issues).

After receiving the applications, Pahang’s Menteri Basar (the head of executive government in Pahang) Adnan Yaakob said the state government would study the applications, and take public interest and environmental issues into consideration before approving them.

“The applications are not a problem, but we will seek approval from the Department of Environment and Felda before approving their applications,” said Adnan.

For the first time, it seems that the issue of bauxite rests firmly, directly and accountably in government hands.

The Malaysian government must of course be held responsible for all the harm bauxite mining has done to its country – and the Pahang government especially has faltered in responding to public cries of distress about social and environmental strife due to mining operations – but mining companies themselves have also been responsible for much of the damage.  Many bauxite-transporting lorry drivers ignore a recent law decreeing they have to avoid main roads when ferrying the dusty stuff, running it right through town anyway.  And many bauxite contractors operate illegally, totally unlicensed and unregulated by the government.  The government has cited economic necessity for most of its failure to shut down or regulate bauxite mining, but this situation appears to be different.

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Overworked or reckless lorry drivers cause frequent crashes and spills on transport routes. Photo Credit GERAM

The contractors and residents in Bukit Goh are completely beholden to whatever terms the Pahang state government requires of them.  There appears to be no rush here, and as Adnan said, Pahang will seek approval of the Department of Environment before approving the Bukit Goh license requests.

What transpires next will be a true test of Pahang’s standing on community and environmental health where bauxite is concerned.  There’s always the chance that corruption could come into play or that, once given the go-ahead to mine, contractors will ignore regulations – but the conditions of approval on these licenses will speak volumes about Malaysia’s commitment to solving the bauxite problem.  Depending on how the situation goes, it could even prove a turning point for this entire misadventure.  Whatever happens, the ball is in the government’s court, and the next play will be a big one.

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