Malaysia moves to reap the benefits of processing global plastic waste

After China shut its doors to the world's plastic waste, Malaysia became a go-to destination for some countries looking to get rid of their trash.
Aqil Haziq Mahmud Channel NewsAsia 30 Dec 18;

KUALA LUMPUR: In a bright yellow terraced house near the intersection of a small but busy highway, Ngoo Kwi Hong stood up abruptly from her cushioned stool.

Her living room was losing light as dark clouds gathered over the sleepy town of Jenjarom, a 40-minute drive southwest of the Malaysian capital Kuala Lumpur. But Ngoo was determined to show the bags under her eyes.

She flicked on the light switch and pointed at her face. “I’ve not been able to sleep for days,” the 46-year-old told Channel NewsAsia in Malay. “At night I cannot breathe. I feel like dying.”

Since early last year, Ngoo said the air on most nights would reek of burning plastic. Her coughing would start at midnight and last through the next day, sometimes producing blood.

She’s visited more than five clinics and been admitted to hospital twice, racking up bills of at least RM10,000 (US$2,405), not including the expensive inhalers doctors suggested she buy.

But Ngoo said she’s never fully recovered, blaming it on the incessant burning of plastic waste at four sites scattered across Jenjarom. Local activists said this illicit activity is ongoing.

Ngoo, a housewife who lives with her husband and three children aged 17, 20 and 22, said her family complains about the odour every time they return from work or school. She said the problem has been there for so long, she has almost gotten used to it.

“My neighbours have also gotten sick and went to the doctor thinking it is a common illness,” she added.

THE CHINA BAN

The burning which has affected those like Ngoo can likely be traced to events far from their homes.

Last year, China announced it was going to stop taking in the world’s recyclable plastic trash from Jan 1, citing environmental concerns and rising levels of domestic waste.

As developed countries scrambled to find alternative destinations, with plastic waste piling up in their ports and recycling yards, Chinese recycling firms descended on Malaysia in search of new opportunities.

The Malaysian government is cognisant of the lucrative nature of the plastic recycling industry. However, due to environmental and health considerations, Putrajaya has subsequently imposed tighter rules on the industry and even put in place a temporary freeze on plastic imports.

But in the early days of China's ban, some recycling companies from there partnered Malaysian recyclers in joint ventures, while others set up shop illegally. A few went down the legitimate route and registered with the Malaysian Investment Development Authority.

But industry insiders said all of them had eyes on the same gold mine: Importing and processing mountains of foreign plastic waste, then selling the recycled pellets to manufacturing industries hungry for cheap raw material.

The obstacle, however, was getting an Approved Permit (AP) used to import plastic waste.

So some of the Chinese recyclers entered an arrangement to buy tonnes of imported waste from Malaysian partners who had existing APs. To make this possible, the latter would declare dramatic but unjustified increases in their operating capacity.

Some unscrupulous recyclers also disguised their imports under a different customs code – HS 3915 is the code for plastic waste – in an attempt to deceive customs officers who are unable to check each of the thousands of containers that pass through Malaysian ports every day.

The official numbers are staggering. Between January and July, Malaysia's plastic waste imports from its 10 biggest source-countries jumped to 456,000 tonnes, from 316,600 tonnes in the whole of 2017 and 168,500 tonnes in 2016.

In the same period, the country imported 195,444 tonnes of plastic waste from the US alone, its biggest exporter. This is double the 97,544 tonnes it took in for almost the whole of last year.

Singapore exported about 19,000 tonnes of plastic waste to Malaysia last year.

As word spread in the industry that Malaysia was quickly becoming a top destination for the world’s plastic waste, more recyclers started jumping in.

INCREASING SCRUTINY

This was when numerous dubious-looking recycling factories – many lacking signs and proper infrastructure like shelters for the waste – sprouted in districts like Kuala Langat where Jenjarom is located, and the nearby port district of Klang, industry players said.

But recyclers were also finding out that not all of the imported mixed plastics could be processed.

While clean industrial waste was gobbled up, dirty household waste which couldn't be recycled was dumped in vast, messy sites containing 2m-tall piles of plastic. Some was also burnt openly by the side of remote industrial roads, often in the dead of the night to avoid detection, residents said.

Residents of Kuala Langat, realising that the polluted air they were breathing in every day was not from the seasonal haze, organised themselves into an activist group and set out to investigate and collect evidence.

They searched day and night, confronted workers at the factories and flew drones over the dumpsites. The results were damning.

The Kuala Langat activists, together with environmental group Greenpeace, discovered 45 sites with plastic waste, including one active burning site in Pulau Indah in Klang.

At the dumpsites, Greenpeace said it found waste from at least 19 countries, including the US, UK, Germany, France, Switzerland, Australia and New Zealand. This was based on an analysis of packaging labels and checks with its offices in these countries.

HEALTH AND BUSINESSES AFFECTED

At the suspected burn site in Pulau Indah, Klang resident activist Chiam Yan Tuan, 48, stood on the charred soil and surveyed the slightly smouldering waste before him, a pungent smell lingering in the air. Burning had probably taken place the night before.

Greenpeace had also documented active burning of plastic waste at this site in a report published in November. However, it is unclear if the burning that is going on now only comprises plastic waste, or if it's part of a wider practice in rural areas of Malaysia to illegally burn all types of trash.

“The burning is still going on, especially in Westports,” Chiam, a director at the Centre for Malaysian Chinese Studies, told Channel NewsAsia earlier, referring to the port area in Pulau Indah. “It’s a remote area so nobody goes there. They’re very active there.”

So when the same investigative faces kept turning up in these areas, the recyclers were not happy.

Chiam said that in October, workers blocked his car and snatched his keys as he showed a foreign journalist around the area.

“I told them we’re just doing inspections,” he said. “But the boss warned me never to go there again, saying that the next time he sees me, I will see what he will do.”

At a plot of vacant shophouses in Pulau Indah, where sacks of plastic waste filled the graffitied lots and spilled into the streets, there were also what appeared to be a few workers out and about. Some were using trucks and forklifts.

One of them, realising that filming and interviews were going on, asked if people had complained about the activities there. When asked if he was working there, he did not respond and returned to a makeshift factory across the street, where waste was strewn across the floor and machines stood idle.

Still, Malaysia programme manager at Greenpeace Southeast Asia Reuben Muni said the recycling facilities in Klang look more legitimate than those in Kuala Langat.

“Probably, the ones in Klang are more like transshipment points for the waste to be transported somewhere else,” he told Channel NewsAsia at the group’s office in Kuala Lumpur.

Muni said Greenpeace was not against the legitimate plastic recycling industry, especially as it is held to certain environmental standards, but there is a problem with illegal recyclers which dump and burn the plastic they cannot process.

Local communities have complained of respiratory illnesses, Muni said, while toxic run-off from a dumpsite had seeped into an adjacent prawn farm and killed the prawns there, according to farmers.

“Once the plastic is burnt, they just leave it there and the remains mix with water and flow into the ditches,” he added. “It’s not only human health that has been affected, but local businesses as well.”

AUTHORITIES RESPOND

With activists furiously complaining to state and federal authorities, and foreign media shining a global spotlight on the issue, the Malaysian government took action.

The Housing and Local Government Ministry (KPKT), together with local authorities, raided and shut down 34 out of 40 illegal plastic recycling factories in Kuala Langat, cutting off their electricity and water supply.

“The remaining six factories are in the process of complying with regulations so they can operate their business legally,” KPKT, which is in charge of waste and recycling, told Channel NewsAsia in an email interview.

READ: Swamped with plastic waste: Malaysia struggles as global scrap piles up
In late July, the government also imposed a three-month freeze on existing APs for plastic waste imports, following feedback regarding their improper usage and air pollution caused by illicit plastic recycling factories. A total of 114 recyclers with APs were affected.

Three months later, the ministry lifted the ban, citing a fear of losing out on economic benefits. But it also introduced tighter regulations: Recyclers had to fulfill 18 new conditions before getting APs, and pay a levy of RM15 per tonne of imported plastic waste.

The conditions include limiting imports to “clean and homogeneous” industrial and post-consumer plastic waste, banning imports from developing countries, and capping waste imports at 70 per cent of companies’ operating capacity.

Companies also have to get an accredited third party to verify their processing machines’ operating capacity, produce photos of their waste imports, and apply for a letter of recommendation from the Department of Environment.

According to KPKT, only eight recyclers have fulfilled all the conditions, with the ministry receiving 32 AP applications as of Dec 14.

“The KPKT, through the Solid Waste Management and Public Cleansing Corporation, will conduct enforcement at company premises and ports or points of entry to ensure compliance with these conditions,” it added.

Addressing concerns that recyclers were importing plastic waste even before getting their APs, something officials were told was a “normal situation”, KPKT stressed that companies must apply for permits before shipments leave for Malaysia.

“KPKT through the National Solid Waste Management Department has informed port operators to check that only containers with APs should be allowed into the ports,” the ministry said.

“Shipping agents have also been advised to get a copy of the valid AP from the importer before receiving containers to avoid the issue of abandoned containers at the ports.”

BENEFITS OF RECYCLING

Nevertheless, the government acknowledged the lucrative nature of the plastic recycling industry. KPKT said it is worth RM3.5 billion a year to the economy, creating some 3,000 jobs and attracting foreign direct investment.

“The industry can create business opportunities in sectors like logistics, legal, accounts and insurance,” KPKT said. “It also generates revenue from customs fees.”

And if done right, KPKT added that the industry brings environmental benefits, like reducing the waste that goes to landfills and the energy used in manufacturing.

During the freeze, legitimate recyclers with APs had suffered, said Sri Umeswara, an industry insider who leads a firm specialising in resource recovery and has worked with the government on the issue of foreign recyclers.

For instance, those which had contracts to supply big brands that include a percentage of recycled material in their products had to pay fines, Umeswara said, because their customers didn’t have enough raw material and couldn’t deliver on time.

“If the ban had gone on, some of them would have gone bankrupt,” he told Channel NewsAsia. “Before considering a ban, you have to consider the alternatives. Are there excess local materials?”

Umeswara said the illegal foreign recyclers and a few bad eggs have given the recycling industry a bad name.

“The public’s perception was that all recyclers, particularly plastic recyclers, were polluting the environment, which is not true,” he added.

“Because they are actually saving the environment and contributing towards the Malaysian economy.”

LEGITIMATE RECYCLERS CONCERNED

One recycler definitely playing its part is Lim Seng Plastic, based in Ipoh, which is two-and-a-half hours north of Kuala Lumpur.

From one modest factory in Ipoh’s southern industrial district of Pengkalan, the firm now operates more than 10 factories in the area, and produces 1,000 tonnes of recycled pellets a month.

Founder Beh Ah Lek, who started the firm in 1996 after working as a waste truck driver, said its main business is supplying these pellets to a local manufacturer of trash bags used in places like Europe and Japan.

Beh said almost three-quarters of his raw material comprises clean industrial and household waste sourced locally, while the remainder is usually high-grade industrial waste imported from Japan. The latter comes from an AP recycler which has engaged his firm to process some of its foreign waste.

The firm tries to produce as little waste as possible, with Beh pointing out that even low-grade plastic can be recycled, by mixing small amounts of it in better quality plastic during the recycling process.

“So I tell my workers, don’t throw it away,” he told Channel NewsAsia in halting English from the third floor of his four-storey office, reserved for guests and brimming with expensive art. “Think, we are recyclers. The things we buy, we cannot throw.”

Any discharge or exhaust is compliant with environmental standards, he stated, while whatever waste that’s produced is properly disposed in a government landfill.

Beyond the environmental benefits of recycling, Beh said his firm provides business for the informal recycling sector.

This sector includes dumpster divers who use small lorries and even motorcycles to scour industrial areas and landfills for recyclable plastic waste. Each day, about 30 of them sort and clean the waste before selling it to Beh.

“They know what can and cannot be used,” he said. “Some of them might not have work and they know these can sell. It allows them to earn some money; not a lot but still enough to put food on the table.”

All this is why Beh is worried that the public will blame the entire recycling industry because of what happened in Klang and Kuala Langat. “I’m very scared that they will spoil the environment,” he said. “I’m an Ipoh guy, I cannot run. But they (illegitimate recyclers) can run.”

MALAYSIA WINNING ITS BATTLE?

In all, there are encouraging signs in Malaysia’s battle against foreign trash. The government ministry KPKT said there are ongoing efforts to clear the waste, including transferring plastic products in illegal facilities to legal ones.

When Channel NewsAsia visited one of the more popular dumpsites in Kuala Langat, tall fences had been erected, with all the waste inside seemingly cleared. This was also the case for another such site in Klang, although smoke could be seen rising from a small structure inside.

The industry insider Umeswara said he is confident that the government has shut down all illegal recyclers, although he called for the authorities to be more consistent in their enforcement efforts.

“They cannot take it lightly,” he added. “They cannot say after a few months, it has settled down, so they can relax. No way.”

Despite that, Greenpeace's Muni said a lot of illegal recyclers continue to operate even after being raided. Some simply move to another location or state, while others operate behind the front of a factory that has been shut down.

“In November, we received reports that there are new facilities mushrooming out of those areas, like in Shah Alam,” he said. “So, the estimate in Selangor only is that there are 500 of these facilities. One local activist estimates there are about 1,000 in Malaysia.”

In response, KPKT said enforcement concerning the opening of new business premises and industrial zoning falls under the purview of local authorities based on approved urban plans.

“Furthermore, if a recycler processes plastic sourced locally, it does not require a permit from KPKT, only a licence from the local authorities and a compliance recommendation from the Department of Environment,” it stated.

“In general, the local authorities are fully responsible for continued monitoring and enforcement against factories that operate without a licence or through illegal means.”

STEP IN THE RIGHT DIRECTION

As for the government’s move to tighten the AP conditions, Umeswara welcomed it as a way of keeping the industry under control. "This kind of situation can happen in any industry, so the mechanism and system have to be right," he said.

While Muni also called the move “a step in the right direction”, he wanted the government to clearly define “clean and homogeneous” waste. “We’re awaiting the implementing rules and regulations of the ban,” he said.

The affected residents, however, are less convinced. Chiam and Ngoo want a full ban on imports of plastic waste.

Chiam said the plastic waste levy amount is too insignificant, while illegal recyclers hungry for a slice of the pie will continue to find ways to circumvent the other conditions.

Ngoo said the lack of a full ban would mean illegal recyclers could still operate in areas where enforcement was more lax. “I want all these activities to stop,” she added. “So everyone can be healthy, not just me.”

Before making its next move, Muni said the government should have consulted local communities “to strike a balance between business interests and environmental interests”. “Because, they’re the ones who suffer,” he said.

In response to residents’ concerns, KPKT said its decision to lift the freeze was based on the new conditions and compliance with the Environmental Quality Act 1974, both of which it said would help prevent pollution and disturbances to their surroundings.

“Recyclers which have complied with environmental standards have brought many economic benefits to Malaysia, while creating job opportunities and generating revenue for the government,” it added.

Umeswara said the government has also opened up whistleblowing hotlines for the public and industry to give feedback on the issue. “So as soon as they know illegal things are happening, they can just call and provide some information,” he said.

NATIONS HAVE PART TO PLAY

In the bigger picture, Muni said the issue was a systemic one, as he urged countries around the world to take charge of the plastic waste they export.

“The reason why you have a lot of these plastic waste coming to countries like Malaysia is because the global recycling system is broken,” he said. “It’s also overwhelmed by a lot of plastic waste.”

According to a 2018 study on plastic pollution published on Our World in Data, approximately 6.3 billion tonnes of plastic waste had been produced by 2015, of which only 9 per cent was recycled. The amount generated is expected to hit a cumulative 25 billion tonnes by 2050.

“So, the most important point is the reduction of non-essential single-use plastics,” Muni added. “We also need to find better ways of doing our recycling.”

KPKT said imports of plastic waste will be better regulated if authorities in source countries exercise a “collective responsibility” to check these containers before they leave for Malaysia.

“Authorities in these countries should inspect and ensure that only shipments with valid APs are allowed to leave their ports of origin,” it added. “However, this requires agreement and collaboration at the international level through platforms like the Basel Convention or United Nations.”

​​​​​​​Umeswara said it is good that the issue blew up the way it did. “The relevant authorities, including the industry, are now being more responsible in how they handle this situation," he added.

Source: CNA/hz