PETALING JAYA: A think tank has warned that any review of investment in Malaysia by the new government must be industry-specific and should not appear as though Putrajaya is picking on certain companies or projects, especially those which meet international standards.
Firdaos Rosli from the Institute of Strategic and International Studies (Isis) said this was important to maintain investor confidence, especially given that a number of planned and ongoing mega projects have been under scrutiny of late.
The economist also questioned whether Putrajaya would review investments that had already been in operation for years.
Commenting on the government review of the Lynas rare earths plant, Firdaos told FMT it was “perplexing” that the review committee would be headed by deputy minister and Kuantan MP Fuziah Salleh, a long-time critic of the project.
“This matter comes under the energy, technology, science, climate change and environment ministry, yet Fuziah, who is the deputy minister for religious affairs, is heading the committee.
“The terms of reference for this committee will give us clues on the deliverables. Although Fuziah is a stakeholder, I would imagine that the committee would be headed by the relevant minister or deputy minister.
“Is this going to be a norm where there will be crisscrossing between portfolios and ministries?”
If this was the case, he added, questions would arise over who decides on the establishments of such committees, ministries or the Cabinet.
“There needs to be clarity in how the government operates or it will just complicate bureaucratic processes,” said Firdaos, who is economics, trade and regional integration director at Isis.
He also noted that the United Nations’ International Atomic Energy Agency had conducted two reviews of the Lynas plant, asking if the latest government review would cast doubts on international standards.
“Big companies benchmark themselves to international standards because they want to avoid disruptions which can cause losses. If we cast doubts on international standards, it might then create doubt in investors, and we want to ensure a predictable and stable investment climate.”
Universiti Tun Abdul Razak economist Barjoyai Bardai meanwhile recommended that the government review include a cost-benefit analysis.
“There is no doubt that the plant benefits the economy to some extent, but is this negated by the 12-year tax exemption given to Lynas?
“In any case, I believe the concern is how the company will deal with solid residue in the long run.”
Barjoyai said these were questions that a cost-benefit analysis should answer. He added that the review committee should be objective and include those from independent bodies. Lynas representatives should also be allowed to argue their case and share relevant data, he said.
Fuziah previously said she would lead the 10-member committee comprising lawyers, environmentalists and chemical engineers, among others.
The plant in Gebeng, Kuantan, has long been opposed by green groups over concerns that it produces dangerous radioactive waste.