In January 2010, Vale SA, a Brazilian mining giant, formally announced the “Malaysia Project” for which a distribution centre and palletising plant would be constructed in Perak with an initial capital investment of US$900 million (RM3 billion). Construction work on the controversial iron ore project at Teluk Rubiah in Manjung is underway. Large quantities of iron ore will be imported from Brazil, before it is converted into pellets and distributed to customers in South East Asia, China and the Asia Pacific region. A dedicated jetty will also be built to import raw materials and to export finished products. Perakeans, desperate for investment and development, gave their tacit consent. Others took no notice of the announcement which was carried in the mainstream papers. The majority were oblivious of this project whilst some have only just realised the magnitude of the proposal by the Brazilian company.
The “Malaysia Project” will involve a seaport terminal deep enough to accommodate ships of 400,000 dead weight tonnes (dwt). Initially, it will have the capacity for moving up to 30 million tonnes of iron ore. Future developments will include an option to expand facilities to handle a further 90 million tonnes. The plant is expected to commence operations in June 2014.
Work on the project started in the middle of 2011. According to Marcello Figueiredo, director of Vale’s Malaysian operations said that there would be “no environmental impact” during the current phase of the project as they were only building a distribution centre. The current phase needs a new jetty, extending 2km off shore with a 1.6km wharf, capable of handling large bulk carriers and barges, and would consist of a number of dedicated import and export wharfs.
State investment committee chairman, Dato’ Hamidah Osman, said that Vale was committed to the iron ore processing project and the state government has sent teams to study Vale’s facilities in Brazil. She said that Vale would invest between RM9 billion and RM14 billion.
Hamidah confirmed that the Vale plant in Lumut was located in a tourism zone and said, “… the Vale management is confident that it will be able to fulfil the detailed environmental impact assessment requirement for the project in Lumut.”
“Development Catalyst” – Zambry
At the ground-breaking ceremony, Menteri Besar Dato’ Seri DiRaja Dr Zambry Abdul Kadir allayed public fears and said that green technology was utilised in this “development catalyst”.
“The state has put forward a condition whereby Vale is to follow the environmental impact assessment procedures stringently…I would not tolerate anything that would lead to environmental problems.”
Vale executive director Jose Carlos Martins Antonio reassured Perakeans that Vale would take all precautions to protect the environment. “It is our commitment to this country, authorities of this country and to the people of Perak. We are here to improve the people’s livelihood.”
Despite this, the Coalition of Concerned Citizens of Perak (CCCP) representing over 180 individuals – “anak jati Perak”, criticised Vale for building a jetty in Teluk Rubiah. They blamed the MB in “allowing Vale a free hand in owning the jetty”.
CCCP chairman Zainal Abidin Osman told The Edge Financial Daily of their concerns regarding security issues. They wanted the state government to refuse Vale rights to build and operate an enormous jetty in Teluk Rubiah.
In December 2011, Zainal said, “National assets should be under the administration of the government and cannot be sold to any party, especially foreign companies.”
“The government cannot and should not allow an asset of such magnitude and importance to be fully controlled by foreigners, especially on the Lumut coast, where Malaysia’s naval base is situated.” “We tried to get an audience with Zambry, but we couldn’t, so we wrote in. We wrote in a few times, since February this year but he did not reply.”
Fears expressed by civic groups and local residents concern the destruction of the environment, the livelihood of locals, particularly fishermen, and beach-side tourism.
Countering these fears, Vale said: “We adhere to strict low-impact shipping practices. Vale’s ships will not pollute or cause other environmental damage.”
Nevertheless, the nearby Outward Bound School has alleged that part of the jungle is inaccessible to its teams. Other education and training institutions are also barred from entering the area.
Consumer and environmental groups have joined in the condemnations with claims that the ecosystem of the area, formerly gazetted as a forest reserve, would be destabilised.
The plant is located on a 450-acre site which was originally a Permanent Forest Reserve but the state government re-gazetted it to an ‘Industrial Zone’. Meor Razak Meor Abdul Rahman, Secretary of the Perak Environmental Association, said that the area is classified as an ‘Environmentally Sensitive Area Class 11’ and is only suitable for small eco-tourism projects but not for industrial use. He questioned why the plant had not been sited at the Manjong Industrial Park.
The Perak Department of Wildlife and National Parks said that the area is rich in flora and fauna and protected under the Wildlife Protection Act 1972. The site is surrounded by mature and regenerating natural primary forest whilst the bird life and mammals are protected by national and international laws. The area is also home to leopards, white-bellied eagles and the endangered palm plant, Phoenix paladosa.
Meor Razak criticised the state government, alleging that the state “went against all the laws of the land” during the process of converting the land from tourism to industrial use.
“Until today, the state government has not dared to answer us. Why did they do this re-zoning? If there’s no profit, then we don’t need to follow laws? We might as well be lawless.”
Effects on Ecosystem and Health
Penang (CAP) research officer S. Mageswari alleged that Vale had not fully addressed concerns about the ecosystem. “They claim there would be no problems but these ships that are coming in are huge vessels. Their movement would definitely affect the fisheries and coral reef.”
“We are not convinced and assured. What are they going to do about the dust pollution, the health hazards to nearby residents? The dust, which will have sulphur and nitrogen oxides in it, affects the respiratory system.”
She voiced concerns over dredging activities and asked how this would be enforced. She raised issues to do with water quality, marine life and the contamination of ground and underground water through leaching.
Teluk Rubiah, where the Vale plant is sited, was once a traditional Malay fishing village and Malay reserve land. Questions about the Environmental Impact Assessment (EIA) report for the project have also been asked.
In a public hearing organised by the state government in November 2009, Abdul Rahman Said Alli, President, Perak Environment Association said that the authorities had conveniently turned a blind eye to the objections raised by the local community. He dismissed the claim that the factory would provide jobs for the local community and said that the highly mechanised nature of the industry would require only a few professionals.
He said that the main livelihood of the people living in the area is fishing and that their livelihood would be lost forever as the movement of big ships in the sea lanes would prove dangerous for their fishing vessels.
Pollution would affect the water quality of the seas, with disastrous consequences for the popular Teluk Batik beach and Pangkor, which are located about 500m and 5km respectively from the plant. The effect on hotels and associated businesses would negatively impact the tourist trade.
CCCP chairman, Zainal Abidin, warned of the security threat to the Naval Base which is located close to the plant and stressed that the jetty should remain a national asset.
Perak Fisheries Department when contacted, said that the impact to the fishermen at the project site will be temporary. Once all project start-up work is completed, the environment should return to normal. The Department also stated that Vale would be creating artificial reefs later to stimulate marine life in the area and also confirmed that the aquaculture farms along Sg Manjung will not be affected in any way by the Vale project.
Vale No Response
A questionnaire requesting information about the project was sent to the Vale publicity officer in mid December last year. A reminder was sent in early January 2012. To date, Vale has failed to respond and William Sarayedin, the Communication Manager for Vale has not been available for comment.
One resident of Lumut said, “I can understand the need for job creation and regeneration of the area but I disagree with how the needs and concerns of the locals are brushed aside.”
The son of a fisherman when contacted said, “Is it morally right to sacrifice the environment and the original designated land use in the name of industrialisation?”