electronic journal of contemporary japanese studies
Article 1 in 2005
Japanese Multinational Corporations and the Export of Pollution
The Case of Bukit Merah1
The importance of foreign investment for developing countries striving to industrialize their economies is undeniable. The flow of foreign investment into the manufacturing sector is often accompanied by a much needed transfer of technology. It also creates business opportunities for local business-people and offers additional employment to the local communities. However, there are also negative consequences from the economic development spurred by foreign investment. The increase in industrial pollution is one of these.
When a country begins implementing its industrial development plans, the government would normally introduce a new set of laws to control industrial pollution. However, it is often the case in developing countries that, though regulations set strict punishment for the companies causing the environmental degradation, in reality the culprits are rarely prosecuted. Besides, policymakers become aware of the shortcomings and flaws in the environment-related regulations only after the actual environmental accidents have occurred.
Japan is the first Asian country that faced serious pollution problems in the 1950s and 1960s. After the end of World War II, Japan was in ruins. The country rehabilitated its economy rapidly in order to catch up with other developed countries. The toll of rapid economic reconstruction on the environment had been very high. Eventually, the need for laws setting environmental norms became obvious and the Japanese government enacted several stringent environmental laws aimed at controlling and abating environmental pollution. These new stringent environmental standards acted as a 'push factor' that drove some Japanese companies to relocate their factories to developing countries with more lax environmental laws.
Many developing countries have a strong orientation towards economic development and industrialization. In order to achieve high economic growth the governments normally welcome foreign investments. Also, multinational corporations (MNCs) are seen by the governments of developing countries as an important source of employment opportunities and provider of advanced technologies. The facts that rapid economic development is often accompanied by the deterioration of the environment and that some MNCs make use of the often relatively lenient standards of environmental control in the host countries are often overlooked. Developing countries' strong developmental orientation and the ruthless pursuit of industrialization act as 'pull factors' that cause environmental deterioration in those countries and unwittingly open the doors for the 'export of pollution'.
This paper looks at Japan's and Malaysia's experiences of industrialization. It also discusses the 'push factors' that made Japanese companies relocate their factories abroad and reviews the 'pull factors' that contributed to Malaysia's becoming one of the destinations for the 'export of pollution'. A brief account is given of some widely publicized pollution accidents that took place in Japan and Malaysia and their consequences are highlighted.
Balancing Economic Development and Environmental Preservation
One of the bigger challenges for policymakers in developing countries is finding an appropriate balance between economic development and environmental preservation. The concept of 'sustainable development' may offer a viable solution as to how such a balance could be achieved. The World Commission on Environment and Development (WCED) defines 'sustainable development' as development that meets present needs without compromising the ability of future generations to meet their own needs. The WCED stresses that sustainable development is not a fixed state of harmony, but rather a process of change in which the utilization of resources, the direction of investments, and the orientation of technological development and institutional change are made consistent with present, as well as future, needs. Sustainability requires that the responsibility for the impact of decisions be shared and calls for a greater public participation in policy making2.
Although the WCED's definition of 'sustainable development' had been widely accepted by development economists and specialists in environmental studies, the debate over the exact meaning of 'sustainability' continued well into the 1990s. The focus of the argument shifted to the distinction between the environment and economic sustainability. Daly suggests that sustainability could be achieved only if the use of all resources is sharply reduced3.
Some economists, however, argue that the 'export of pollution' to developing countries is in fact quite acceptable. For example, former vice-president of the World Bank Lawrence Summers supports the idea of relocating of polluting factories to developing countries4. Summers' main arguments are as follows:
One of the leading international media sources, The Economist, lends support to Summers' line of reasoning. As the magazine states, the issue of utmost importance to developing countries is poverty. Therefore, 'Most poor countries will rightly want to tolerate more pollution than rich countries do, in return for more growth'. Migration of industries, including 'dirty industries', to the third world was described as 'indeed desirable'5.
Condoning the 'export of pollution' is a highly controversial stance and it attracts severe criticism from many quarters. A prominent leader of the South American environmental movement, Jose Lutzenberger, found Summers' reasoning logical but 'totally insane'. Lutzenberger described Summers' ideas as a good example of 'the unbelievable alienation, reductionist thinking, social ruthlessness, and arrogant ignorance of many conventional economists concerning the nature of the world we live in'6.
Leaving this debate aside, the fact remains that governments in developing countries have been facing a dilemma on how they could combine the much needed economic development with environmental preservation. Policymakers are often unable to foresee the whole range of possible negative consequences that rapid industrialization entails. Only in the aftermath of serious environmental disasters comes the realization of the magnitude of the environmental damage and the need for an effective control over industrial pollution. In other words, the occurrences of serious pollution episodes become a catalyst for the search for a balance between economic development and the preservation of nature.
The following sub-sections will review the 'push factors' that have driven a number of Japanese multinational corporations to relocate their factories to other countries. It will also discuss the 'pull factors' that made Malaysia one of the destinations for the 'export of pollution'.
Japan is the first instance of the East Asian economic 'miracle'. It has to be noted, however, that the country's impressive economic development was achieved at the expense of the environment. While Japan's ruling elite pursued industrialization at any cost, it disregarded the consequences that rapid industrialization would have for the environmental. Japan's ruling elite is often described as the 'Iron Triangle' that consists of three main actors, i.e., (1) powerful politicians from the Liberal Democratic Party (LDP), (2) national bureaucrats, especially those within the Ministry of Finance and the Ministry of International Trade and Industry (now known as the Ministry of Economy, Trade and Industry), and (3) large Japanese corporations. This system has been dominating Japanese state capitalism for the last half century7. By its nature, the 'Iron Triangle' precludes ordinary members of the public, who are the major stakeholders in the environmental protection movement, from participating in the policymaking process regarding the country's economic development.
The single-minded pursuit of economic development led by the 'Iron Triangle' has prompted Mason to describe Japan as a 'construction state' (doken kokka), where the dominating interests of the country's construction sector have led to numerous environmental problems. In this way, a 'vast public works empire' has been built by the 'Iron Triangle' of business interests, politicians, and national bureaucrats8.
Before stringent environmental laws were introduced, Japan underwent a painful experience of the 'pollution era' in the 1950s and 1960s. The more notorious among the pollution cases took place in Minamata, Yokkaichi, Niigata, and Toyama. Each of those accidents received wide mass media coverage. Combined they came to be known in Japan as 'the big four pollution cases'.
In Minamata (Kumamoto prefecture), the victims were local inhabitants who had eaten fish and shellfish. They suffered from neurological disorders caused by mercury compounds discharged into the sea by Chisso Corporation. In the Niigata pollution case (Niigata prefecture), the health of people living downstream of the Agano River was damaged as a result of mercury compounds, discharged into the river by Showa Denko. In Yokkaichi (Mie prefecture), people living nearby the Yokkaichi petrochemical complex suffered from asthma attacks and lung diseases. Finally, in the Toyama pollution case (Toyama prefecture), the victims were inhabitants living along the Jinzu River who suffered from cadmium poisoning.
There had been a prolonged time lag between the time of the emergence of the pollution cases and the time when the sources of pollution were identified. In the case of Minamata disease, Chisso Corporation that caused the pollution was established in Minamata in 1909. It began to emit hazardous industrial waste in the 1930s9. This means that by the 1950s, when Minamata disease was first identified, the residents of Minamata had been living in a seriously polluted area for twenty years.
Numerous obstacles prevented the identification of pollution cases in Japan. One of them was that the culprit companies had often had very strong political connections that they used against people who accused the company of wrongdoings. In Minamata, city mayors and council members included many of Chisso's managers and union members10. Besides political connections to its advantage, Chisso Corporation was a major economic player in the area, employing one-third of Minamata's residents and accounting for 60 percent of the local tax revenues.
Even when the pollution and its source had been identified, the government and the culprit companies would usually deny the existence of environmental issues. Chisso Corporation, for example, used its vast political connections to prevent further investigation. As a result, the Ministry of International Trade and Industry (MITI) discontinued funding the Kumamoto researchers who had been investigating Minamata disease and disbanded two public units that had helped with the investigation. Furthermore, the Japan Chemical Industry Association aided Chisso Corporation by providing its own scientists and research teams to find an alternative explanation for the outbreak of the disease.
Timothy George identifies two stages in the development of the Minamata pollution case. In the first stage, from the middle of the 1950s to the end of the 1950s, nameless victims of pollution were powerless in their struggle against the culprit company. In the second stage, from the middle of the 1960s to the middle of the 1970s, citizen participation in politics became more evident and there occurred a change in the relationship between the state and citizens.
According to George, it was only in 1968 when the Minamata pollution case became a national issue. Two factors were important in making the nameless victims' voices heard, These were (1) the grassroots organizations' collective actions, (2) mass media's sympathetic coverage. All the while, the culprit company tried to hide its wrongdoings. Response from the bureaucrats had been very slow and they used a conservative approach to deal with the pollution case11. As George maintains,
Vosse emphasizes the importance of organized protests by the victims of pollution and the role of mass media. As a means of appeal to the government the victims of pollution in Minamata staged organized protests and demonstrations. The protests were covered by all major mass media in Japan. Vosse observes that, initially, the victims were reluctant to speak out in order to preserve social harmony. Only when the number of people whose health conditions had deteriorated as a result of pollution increased did the victims of pollution resort to action. Soon the protests and demonstrations attracted the attention of the mass media; the severity of the pollution's negative effects caused a nationwide outrage13.
Collective action has been considered by a number of scholars and researchers as a powerful tool of appeal. A prominent Japanese environmental activist and scholar, Jun Ui, identifies collective action as the most critical determining factor in Japan's environmental reform14. In a similar vein, Broadbent asserts that the environmental movement was indispensable in bringing about Japan's environmental reform15.
The victims of the pollution cases initiated court proceedings to get the government and culprit companies to fully concede to their demands. Usually, the court would rule in favour of the victims. As Almeida and Stearns observe, 'With the Big Four pollution cases occurring during a widespread national anti-pollution social movement, there was public pressure for favourable verdicts, with little time for industrialists to manipulate the legal system. In March 1973, the court ruled in favour of the Minamata plaintiffs'16.
By the end of the 1970s, Japanese policymakers came to realize that a certain balance between economic development and protection of the environment was needed. By that time 'many Japanese citizens ・felt that the battle was over: ・the state had moved to eradicate and respond to the most egregious pollution outbreaks; and the victims of the Big Four court cases had been compensated'17.
Taking lessons from past experiences the Japanese government embarked on introducing new environmental laws or amending existing regulations. The government enacted the 'Basic Law for Pollution Control' in 1967 and passed a series of 13 new environmental laws in 1970. An indication of the growing awareness within the Japanese government regarding the importance of balancing economic development and the environment was 'the unanimous vote of the Diet (in 1970) to eliminate the 'harmonisation' clause in the Basic Law for Environmental Pollution Control of 1967 that limited environmental regulation to that consistent with economic growth'18.
New environmental regulations placed Japan among the advanced countries in terms of environmental conservation. The Organisation for Economic Cooperation and Development (OECD) praised the new regulations that 'established Japan as an innovator in environmental policy and a leader in the pollution control'19.
To summarize, in the decades of a rapid industrialization of the Japanese economy in the 1950s and 1960s, systematic environmental regulations were lacking. Despite the fact that degradation of the environment was taking its toll on the health of population in some areas of Japan, some time had elapsed before the companies responsible for pollution were identified and named. Even then, the culprit companies denied being the source of pollution. Only massive public campaigns and highly publicized court proceedings forced the authorities to take matters regarding environmental protection and protection of the health of citizens more seriously. This enhanced public awareness as well as new environmental regulations were important 'push factors' that compelled some Japanese MNCs to relocate their 'dirty factories' abroad.
Malaysia is an emerging manufacturing centre in the Asia-Pacific region. It has also been described as an East Asian 'miracle' economy. Indeed, the country's pace of industrialization and its economic achievements have been impressive. However, there is no denying that such a rapid economic transformation takes its toll on the environment.
Malaysia's strong orientation towards industrialization caused environmental deterioration and opened the passage for the 'export of pollution'. Some MNCs were aware of a strong developmental drive on the part of Malaysian policymakers and took advantage of this single-minded pursuit of economic development. In this sense, Malaysia's strong industrialization drive has been a 'pull factor' for the 'export of pollution'. The export of 'dirty industries' has been a part of a wider process of environmental deterioration during the period of rapid economic development in Malaysia.
As Malaysian policymakers assign top priority to the country's economic development the negative consequences of industrialization are often overlooked. In other words, the Malaysian government's strong developmental orientation draws its attention away from the issues of environmental conservation. Various types of environmental damage that occurred during the years of Malaysia's impressive economic development can be considered a negative by-product of the country's rapid industrialization. As Sham Sani observed, 'While developmental achievements (in Malaysia) since independence have been more than creditable, these have not been without their detrimental effects on the environment ... A great deal has been achieved since then, but a great deal more needs to be done. The greatest challenge in the 1990s will be actual implementation of the sustainable development principle'20.
Concerned scholars point out that various types of environmental deterioration have been taking place in Malaysia as a result of economic expansion. Among them are deforestation, air pollution and water pollution. The rate of forest depletion in Malaysia is especially high. According to Othman, in Peninsular Malaysia, the percentage of forest area in the total land area declined from 69% in 1966 to 47% in 1990. With regard to water pollution, a report by the Department of Environment (DOE) showed that four rivers in Peninsular Malaysia were seriously polluted due to industrial and domestic discharge21.
In addition, over the last ten years, air pollution has become more serious. Residents in urban areas, especially the Klang Valley (near the capital city Kuala Lumpur) have been suffering from unusual heat. Research conducted by Sham revealed that commercial areas in the Klang Valley are usually several degrees warmer than the surrounding countryside22. Of course, it needs to be said that both Malaysian firms and foreign investors are responsible for this state of affairs.
Flaws and shortcomings in current Malaysian environmental laws need to be redressed. As a report by DOE reveals, though the maximum fine for breaking environmental law is high in Malaysia, the actual amount paid for non-compliance is very low. On average, total fines for all environment-related court cases in Malaysia per year have been less than RM100023. More importantly, the Environmental Audit (EA) procedure is flawed. According to Gurmit, in Malaysia, EA is only practiced by a few industries and on a voluntary basis24.
In addition, Malaysia's development strategy to stimulate economic development and promote industrialization through foreign direct investment (FDI) has apparently led to other environmental problems. Some foreign companies decided to invest in Malaysia because they could take advantage of the country's single-minded pursuit of economic growth. Environmental damage caused by 'dirty industries' from Japan is a part of a wider process of environmental deterioration that took place during the heyday of Malaysia's industrialization drive.
Besides industrial pollution, another negative side of Malaysia's single-minded pursuit of economic development is that the authorities have been unable to assign fair treatment to the local grassroots organizations, or non-governmental organizations (NGOs), that protested against the 'export of pollution' or criticised the government's economic policy. Such NGOs were labelled 'trouble makers' who opposed economic development much needed by the country25.
To summarize, the need for economic development, the industrialization drive and the lack of stringent environmental regulations have been the root cause of various environmental problems that cropped up during the period of Malaysia's rapid economic development. Especially, some MNCs have apparently taken advantage of Malaysia's strong industrialization drive and began exporting 'dirty industries' to the country. Another negative side of Malaysia's strong developmental orientation is that while the Malaysian policymakers had been preoccupied with the implementation of various economic development projects they did not pay attention to the issues related to environmental preservation that the grassroots organizations were raising.
Chronology of the Bukit Merah Case
In the following sections a chronological account of the Bukit Merah pollution case will be given. Developments in Bukit Merah were similar to the course of events in Japan's 'Big Four' pollution cases and could be divided into eight phases:
In Stage 1, an environmental issue arises. At this stage, people are often not aware of the fact of pollution, and the victims of pollution receive treatment for 'unknown' diseases. In Stage 2, as the number of patients increases, people start to look for the source of the disease. In Stage 3, the source of pollution is identified but the government and the culprit companies deny the existence of any environmental issue. In Stage 4, victims stage organized protests or demonstrations as a means of appeal to the government. In Stage 5, protests and demonstrations receive wide mass media coverage; as a consequence, more people are aware of the environmental issue. In Stage 6, rising public concern compels the government and companies to make gestures of reconciliation; those are usually symbolic and minor. In Stage 7, victims of pollution initiate court proceedings to get the government and companies to fully concede to their demands. In Stage 8, courts rule whether environmental pollution has been the cause of the problem. Usually, courts are in favour of the victims due to strong public support for them. The victims then receive compensation and the government introduces new laws to regulate environmental pollution.
Identification of the Problem
The Malay word 'amang' means 'foreign elements or by-products in tin'. Amang, which is sand-like, is processed in amang factories to recover residual tin ore and various types of minerals such as ilmenite, monazite, xenotime and zircon. These elements will then undergo further processing, such as the cracking of monazite (which is what the Asian Rare Earth factory was doing) to extract useful materials, so-called 'rare earth' elements such as yttrium and cerium26.
In 1979, Mitsubishi Chemical, or Mitsubishi Kasei, set up a joint venture company called Asian Rare Earth (ARE) in Malaysia. The company was attracted to Malaysia by, among other things, being given a special tax-free status - 'pioneer industry' status - that the Malaysian government reserves to attract preferred foreign investors. Mitsubishi jointly with a Malaysian company BEH Minerals were the majority shareholders (70 percent), Lembaga Urusan dan Tabung Haji, the state-owned Pilgrims' Management Fund Board, had a 20 percent interest, while the rest of the shares were distributed amongst several local businessmen. ARE's purpose was to extract rare earth from monazite in the town of Bukit Merah, in the state of Perak, which used to be a tin mining and farming area. In 1982, and before ARE began production, a contract was drawn up whereby it was agreed that the radioactive waste generated would become the property of the Perak State Government.
Mitsubishi Chemical, Japan's largest chemical producer, has wide engineering expertise and experience in the handling of dangerous chemicals and radioactive materials. It provided the ARE factory with the necessary technological and managerial expertise for its operation. The factory yielded tin concentrates and monazite. From the extract of monazite, a rare earth called yttrium oxide is extracted for commercial use to manufacture incandescent gaslight mantels, refractors, chemical catalysts, and pigments, which can be used for colour TV screens and nuclear fuels. The problem is that the process leaves a sludge containing significant amounts of 'naturally occurring radioactive materials' (NORMs), such as uranium and thorium. NORMs are harmless in nature as they are mixed with soil and therefore are in low concentrations. However, once dug up, they become concentrated and are known as 'technologically enhanced naturally occurring materials' (TENORMs), which have higher levels of radioactivity and must be properly disposed27.
Apparently, since ARE had been established, the well-being and health of Bukit Merah residents, who were not aware of the potentially hazardous nature of the operation that the company was involved in, had deteriorated. Since its opening, ARE had not carried out an environmental impact assessment. Furthermore, for four years, it operated without a permanent, or a temporary, dump site for the waste. Pending the construction of a waste disposal building, the ARE factory was shut down for 2 years by the decision of the Ipoh High Court. In 1987, the factory resumed its operations. After the resumption of factory operations in 1987 Bukit Merah children were tested for total blood count. The tests were done again a year later in 1988. Some deterioration in the children's health conditions was detected as about 39 percent of them suffered from a triad of mild lymphadenopathy, congestion turbinates and recurrent rhinitis. In 1989, two children in Bukit Merah, 5 and 7 years old, were diagnosed with acute lymphoblastic leukaemia. According to Bertell, among a limited number of children in such a small village, occurrence of two leukaemia cases is considerably higher than Malaysia's average rate28.
Another survey on the health condition of Bukit Merah residents was carried out by Dr. Jayabalan29. It revealed that problems associated with pregnancy and childbirth in Bukit Merah had been 7.5 percent, a considerably higher rate than the national average30. In 1986, Professor Sadao Ichikawa of Saitama University, Japan, carried out a radiation dosimetry test near the ARE factory's waste storage site, in which five out of seven points revealed radiation levels far exceeding the 100 mrem/yr ICRP dose limit31.
Protests, Demonstrations, Court Trial
In February 1985, eight residents of Bukit Merah New Village filed a complaint against ARE with the High Court of Ipoh, Perak, Malaysia alleging that exposure to ARE's radioactive materials and waste were harmful to their health. They demanded the cessation of the plant's operation, clean-up of the radioactive materials and payment for damages (without specifying any amount). An injunction was obtained in November 1985 ordering ARE to cease its operation.
In February 1987, a licence was granted to ARE by a five-member Atomic Energy Licensing Board (AELB), representatives from the Tun Ismail Atomic Research Centre (PUSPATI), the Ministry of Health, and the Ministry of Science, Technology and the Environment. ARE interpreted it as the green light to resume its operations even though the legal action was still in process.
Meanwhile, the campaign to stop ARE's operations was started in Japan. In April 1990, a collective group of Japanese unions and non-governmental organizations calling themselves the Japan, Asia, Africa and Latin America Solidarity Committee with over 4 million members started a signature campaign calling for the shutdown of ARE. Due to mounting public pressure in Japan, ARE was forced to close its operation in Bukit Merah. All the while, the company denied the accusations of wrongdoing, claiming the lack of scientific proof as to the harmful nature of its operations32. To add a new twist to the developments, on 23 December 1993, by the ruling of the Supreme Court of Malaysia ARE was allowed to reopen the factory since, apparently, its operation had been considered by the Court as lawful and in compliance with regulations. It was also deemed that neither established facts nor scientific rationale had been produced to support the claims that the alleged health injuries of Bukit Merah residents were related to the operation of ARE.
The case of Bukit Merah was brought to public attention and highlighted by the major Malaysian newspapers. This helped to secure support from the general public, scientists and environmentalists both in Malaysia and abroad. The mounting public pressure led the Perak state Government to issue an order that all areas of suspected contamination surrounding the ARE factory be sealed.
In January 1994, ARE decided to cease its operations33. The factory was having difficulties in obtaining monazite locally because of a decline in tin ore mining activities. Also it was facing competition from rare earth producers incorporated in neighbouring countries, such as China, which is the world's largest producer of rare earth. As a result, it was neither viable nor profitable to continue business in Malaysia.
Solutions, Compensation and the Present Situation in Bukit Merah
No final solution has been reached thus far in the Bukit Merah case. The residents did not receive any compensation on the basis of ARE's claim that there had been no conclusive evidence showing the cause of the deterioration of Bukit Merah residents' health. However, despite the fact that the Atomic Energy Licensing Board of Malaysia - the competent authority controlling the operations of ARE - was satisfied that ARE had complied with all the licensing conditions laid upon it, ARE has not resumed its operations.
After the cessation of the ARE factory operations in 1994, some minor changes have taken place in Bukit Merah. There has been industrial development around the area. More commercial buildings and shops have been built in the township of Bukit Merah. New houses have been constructed near the ARE plant, as there is still no conclusive report substantiated by scientific data regarding the levels of danger from radioactive waste in Bukit Merah.
The ARE factory is in a bad condition. Its metal structures and machineries have rusted, and the office block is in a state of near collapse. Security guards patrol the permanent dumping site and the public is denied access to the site. Reportedly, a group of concerned citizens visit the site monthly to monitor the situation. The younger generations of Bukit Merah residents prefer to leave the area as new townships with better job opportunities developed nearby.
Apparently, in the case of Bukit Merah, there has been no solution to the problem of the 'export of pollution'. On the other hand, in Japan, victims of pollution had been able to claim substantial victories and won several prominent court battles. What factors account for this difference in the results? There are obvious similarities between Japan's and Malaysia's drives towards industrialization. Both countries had a strong developmental orientation and gave top priority to achieving high economic growth. As a consequence, both countries have experienced a number of pollution-related problems. Compared to Malaysia, Japan went through a more severe deterioration of the environment. This is partially because Malaysia as a 'new comer' to industrialization could learn some lessons from other countries' experiences and take at least some preventive measures to control the environmental deterioration. Japan, as a forerunner, had to undergo a painful process of 'trial and error' to achieve a delicate balance between economic development and environmental conservation.
The difference between Malaysia and Japan is that in the case of Japan, there has occurred a 'structural change' in the relationship between the state and civil society. As Timothy George observed, a lot can be learned about society through analyzing the ways it chooses to deal with environmental disasters34. Changes in approaches to the management of environmental issues reflect political, economic and social changes that take place within society. Thus, in the early stage of economic development process (in the 1950s) the Japanese government regarded the grassroots environmental movement as a bunch of 'trouble makers'. However, it changed this perception in the following decades. Two institutions had greatly contributed to this 'structural change' and played an important role in bringing a solution to pollution cases in Japan, (1) a fair and sympathetic mass media and (2) an independent and impartial judicial system35.
Unlike in Japan, no 'structural change' in the relationship between the state and civil society has taken place in Malaysia. The state and civil society remain unequal partners in negotiations; this obstructs a way to forming an acceptable strategy for both sides that could bring a solution to pollution cases. Unequal status of the parties involved in negotiations poses a lack of pre-condition for a 'structural change' to take place.
This paper reviewed the socio-economic background of one of the 'export of pollution' cases involving a Japanese company in Malaysia. In this study, Japan's own experiences during the 'pollution era' and the enactments of stringent environmental regulations were identified as the main 'push factors' for the 'export of dirty industries'. Among other 'push factors' are the successful campaigning by the victims of pollution in asserting their rights and a nationwide mass media crusade against the pollution and its perpetrators. Malaysia's drive for industrialization and the country's pursuit of development programs combined with flaws in its environmental laws acted as 'pull factors' that attracted Japanese firms and opened the way for the export of 'dirty industries' to the country.
The future will present more challenges to developing nations including Malaysia. Malaysia with its various tax incentives, cheap labour and political stability is an attractive destination for foreign investors. The importance of foreign investments for a developing country striving to become a fully industrialized nation cannot be denied. New factories and plants give job opportunities for its workforce and also provide venues for the transfer of technology and knowledge. However, it is no less important to find a balance between economic development and preservation of the environment. Especially, there is a need to find effective ways to contain and process toxic wastes and emissions from 'dirty industries' and factories to ensure that the health of people ・a country's most valuable resource ・is not jeopardized.
As the case of Bukit Merah revealed, stringent toxic waste disposal standards on a par with industrialised countries have to be in place and strictly enforced to protect public health and well-being. There is an urgent need to reduce the differences in legal norms between developed countries and developing nations with regards to the protection of the environment. Heavy fines and the suspension of operating licenses of the companies that violate the standards should be imposed. The role of non-governmental organizations, as well as local communities, associations and trade unions should be consolidated in conjunction with the efforts by governmental authorities to effectively control the movement and elimination of toxic waste. Besides, more studies on the effects of toxic waste on health of local residents should be encouraged and be given wide media coverage to increase public awareness of current environmental issues.
For future research, there is a need for a more detailed study on Malaysia's political and societal institutions. Such a study may help to ascertain on a more fundamental level the reasons why it has been so difficult to bring a meaningful solution to the pollution cases in Malaysia.
1. An earlier draft of this research paper was
presented at the Third International Conference on Disaster Management which
was held in Kuching, Malaysia in May 2002.
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Fumitaka Furuoka is Lecturer in the School of Business and Economics, the Universiti Malaysia Sabah, and Lo May Chiun is Lecturer in the Faculty of Economics and Business at the University Malaysia Sarawak.
Furuoka and Lo May Chiun
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