KUALA LUMPUR, July 26 — High-level corruption involving multiple government agencies is suspected in illegal Chinese plastic recycling companies’ seeming ability to bypass regulations to operate here with worrying environmental impact.

It is learned that many errant recycling firms, many of which are from China and operating without permits, are also using Malaysian landfills to illegally dump toxic plastic waste.

Selangor officials disclosed this week that a census of 35 such firms in the state led to the discovery that just three were licensed.

Industry sources told Malay Mail of strong suspicion that the operators of the illegal plants bribed Malaysian officials at both federal and state levels to turn a blind eye to their operations, at the expense of the country’s environmental and waste management laws.

"The major problem about plastic recycling is not so much coming from local companies, but mostly from illegal Chinese recycling plants that set up shop here,” a source with an experienced plastic recycling company told Malay Mail.

"The question is, how were they allowed to set up shops here? Corruption? Most likely,” said the source who requested anonymity due the sensitivity of the allegations.

The issue was first brought to public attention following foreign media reports about Malaysia topping the list of destination for plastic waste exports from the United Kingdom this year.

The reports, citing an audit by public spending watchdog National Audit Office’s (NAO) latest, showed that a fifth of some 250,000 tonnes of plastic — used as product packaging — were exported by the UK to Malaysia in the first quarter alone.

China had been the single biggest market for UK’s exports of recyclable packaging material, the NAO noted in its report, but said the communist republic in January banned imports of various waste materials over pollution fears.

Industry sources told Malay Mail the ban forced Chinese plastic recycling companies to look to Malaysia as a potential base for relocation, firstly because shipping wastes from China to Malaysia would have been easier and cheaper due to their geographical locations.

But crucially, many of the Chinese plastic recycling operators also felt they could manipulate Malaysia’s "loose regulation”.

"It’s likely that whispers within the industry gave them the impression that Malaysia was like China a bit, where you can just bribe officials to get things sorted out,” another source from a waste recycling company asserted.

Cash in trash

Malaysia has stringent waste management laws. Recycling companies must meet strict environmental safety standards to obtain approved permits and licences to operate, and are subject to approval from multiple federal, state and local government agencies.

APs are issued by the Housing and Local Government Ministry (KPKT) if the plants pass the evaluation, which will then allow local authorities to issue an operating licence for the premises. — Picture by Ahmad Zamzahuri

Because of the potential impact plastic waste recycling has on the environment, operators must observe waste management regulations including compliance with standard operating procedures on plastic waste disposal in line with recommendations from the Solid Waste management and Public Cleansing Corporation (SWCorp).

The Department of Environment, which has the sole power to issue an environmental impact assessment for these plants, is tasked with ensuring companies comply with regulations.

APs are issued by the Housing and Local Government Ministry (KPKT) if the plants pass the evaluation, which will then allow local authorities to issue an operating licence for the premises.

Most plastic recycling companies are required to import segregated or homogeneous and clean plastic waste, which are then rendered into plastic resins to be sold as raw material for reuse.

The recycling companies must also show proof that imported plastic waste is not scheduled or unsegregated waste.

However, segregated waste contains large amounts of plastics that can be potentially recycled and sold, and this has driven many Chinese-based recycling firms to import these indiscriminately.

Distilling and recycling scheduled waste produces higher amount of debris. The excess debris, often highly contaminated, are then either surreptitiously dumped into local landfills or incinerated in open holes dug near them, one industry source said.

"What they do is they hire private contractors or trucks and just dump all the excess waste in our landfills or just dig a hole and burn it to hide them,” the source said.

Bribes?

Malay Mail could not ascertain as to how many of these illegal foreign companies are operating here, or for how long, but industry players familiar with their activities say the existence of illegal recycling plants and companies itself raised serious questions about the lapse in oversight.

Attempts to obtain the DoE and KPKT’s comments were unsuccessful at the time of writing.

It is also unclear if local companies are involved, but statements made by two ministers from the new Pakatan Harapan federal government point to possible collusion.

Water, Land and Natural Resources Minister and Kuala Langat MP Xavier Jayakumar told Malay Mail in an interview recently that he believed the crux of the plastic waste recycling issue was lax enforcement made possible by potential corruption by the previous administration.

The problem also affected several states, he said, noting that illegal plastic recycling plants were found in Kedah, Johor and possibly Penang. The PKR leader said he has since ordered an investigation.

Zuraida announced that it revoked the APs for 114 recycling companies and factories nationwide, banning the importation of the HS Code 3915 plastic waste for three months effective yesterday. — Picture by Ahmad Zamzahuri

"It is shocking to find that Malaysia is one of the destination for plastic waste and I think it is happening because KPKT has given out too many APs,” he told Malay Mail during an interview held on Tuesday.

"I have brought this up with the Cabinet and I have instructed my ministry to come out with list of APs given to whom and so APs to import plastic waste from coming into the country can be stopped.

"This needs to be stopped, period.”

Yesterday, Housing and Local Government Minister Zuraida Kamarudin announced that it revoked the APs for 114 recycling companies and factories nationwide, banning the importation of the HS Code 3915 plastic waste for three months effective yesterday.

Zuraida said the move followed newspaper reports on the serious pollution in Jayakumar’s constituency, Kuala Langat, Selangor, purportedly caused by these illegal plastic recycling factories.

Just hours before she made the announcement, Selangor authorities ordered three plastic factories in Kuala Langat to close due to pollution and revealed in a media briefing that only three of the 35 plants inspected were found to be licensed.

State executive councillor in charge of local authorities, Ng Sze Han, in the same media conference claimed many of the plants were granted APs by the Barisan Nasional government before it lost in the 14th general election, implying corruption.

Ng also made a damning revelation about a purported attempt by representatives from the plants to bribe him at a meeting held the night before the raids were conducted. He said he would lodge a formal complaint with the Malaysian Anti-Corruption Commission.