Seven reasons why Lynas shouldn’t be granted a permanent operating licence

Kuantan-born Phua Kai Lit, a public health professor, shares with us why Lynas Corp should not be granted an extension to its temporary operating licence for its rare earth refinery in Gebeng (full article below):

There has been much public and professional (public health experts) discussion about the threat posed by the Lynas rare earth metals extraction plant in Kuantan. These include threats – based on the documented bad experience in Baotou, China – to the health of the people of Kuantan and surrounding areas, and threats to the environment.

We should also look at some ethical reasons why the factory should not be granted an extension of its TOL (Temporary Operating License, due for expiry in September 2014) or be given a POL (Permanent Operating License).

1. The Lynas factory has failed to fulfil many important conditions and recommendations

The Lynas plant was granted a “temporary” operating licence (valid for TWO YEARS) by the Malaysian authorities although it had not carried out a Detailed Environmental Impact Assessment (DEIA) and a Health Impact Assessment (HIA).

Lynas Corporation, the company that owns the factory (called Lynas Advanced Materials Plant or LAMP) has no long term waste management plan in hand. The wastes include radioactive material such as thorium and uranium and the products of their decay.

No permanent disposal facility (PDF) has been built to store the wastes. The building of such a facility had been recommended by a panel of experts from the International Atomic Energy Agency.

No plan for eventual decommissioning of the factory exists. Such a plan was another recommendation of the IAEA team of experts.

2. Kuantan residents were not informed beforehand and had no say in the approval of the project

Local residents oppose the project partly because they were not informed about the project beforehand. The principle of “participatory justice”, i.e. the right to take part in collective decisions that affect one’s interests, has been violated here.

3. Overall costs and benefits – who benefits and who pays?

Supporters of the factory have argued that the technological spin-offs may be great.
This is a debatable claim as the factory does nothing more than extract rare earth metals from ore imported from Western Australia. Important questions include who will enjoy the benefits and who will pay the costs (direct as well as indirect costs), the distribution of costs and benefits across social groups and across the two countries (Malaysia and Australia), benefits arising now versus benefits arising later and so on.

The fact that the plant is foreign-owned and that it has been granted a 12-year tax holiday has led environmentalists and Kuantan residents to believe that Malaysians are getting the raw end of the deal, especially in terms of having to bear health and environmental costs that will arise from the toxic wastes that will be generated.

It appears that the Malaysian authorities have not learnt from the bad experience with the earlier and much smaller Asian Rare Earth factory. This factory operated from 1982 to 1994 in spite of protests from residents of Bukit Merah and nearby communities. Critics argue that there is a link between the waste produced by the factory and birth defects in newborn babies. Furthermore, eight cases of leukemia occurred over 5 years amongst a population of only 11,000 people. The work to decontaminate the area is still going on and it is estimated to cost RM300 million eventually!

4. Violation of the Proximity Principle

The Proximity Principle, i.e. disposal of dangerous waste should be as near to its place of origin as possible is violated by the “temporary storage” of wastes onsite in Malaysia. It should be remembered that the ore comes from Western Australia but the wastes generated will not be shipped back there.

5. Economic harm and psychological harm

Besides harm to the health of the people and damage to the environment, other harm that can occur include economic harm and psychological harm. There may be economic harm caused to people employed in the fishing industry and the tourist industry as toxic wastes accumulate in the environment. Psychological harm refers to any negative impact on the mental health of nearby residents, e.g. stress, worry etc. Future generations yet unborn would have to bear the environmental burden caused by radioactive wastes such as uranium and thorium that take an extremely long time to decay to much less harmful forms.

6. Externalities (damage caused to other people due to the actions of a particular individual or organisation)

The project may also generate “externalities” for neighboring countries in the form of significant pollution of the South China Sea. A vast amount of wastes will be produced and discharged into it over the long term. Possible health threats to residents of countries adjoining the South China Sea include airborne fine particulate wastes, lead contamination (since wastewater from cerium production will contain this material) and contamination – radioactive as well as non-radioactive – of seafood caught in the South China Sea. Other questions to be pondered include the possibility of significant damage to mangrove swamps, damage to coral and the possibility of eutrophication (algae blooms leading to oxygen depletion and death of sea life).

7. No clear mechanisms for compensation to individuals negatively affected

If the health and welfare of residents are negatively affected, would they be adequately compensated? Another question is: compensation by whom? Will the funds paid by Lynas to the Atomic Energy Licensing Board (AELB – the main Malaysian government organisation regulating the project) be used to compensate those hurt by the project?

Phua Kai Lit, PhD was born in Kuantan and lived there until the age of 18. He is a public health professor.