The naïve chairman of Lynas

With a population of 28 million, Curtis only just realised that the country’s 12.4 million Facebook users are a formidable force.

COMMENT

For someone who heads a technology-intensive company, and who has pumped several hundred million ringgits into a boggy area on the east coast of Malaysia, Nicholas Curtis, the chairman of Lynas Corporation, appears to have underestimated the power of the Internet and social media websites. Most of all, he miscalculated Malaysia’s most potent resource – its people.

Curtis thought that with the help of Malaysian politicians, he could face up to the might of China and end its monopoly of the production of rare earths. He did not bargain on the might of the Malaysian people who are interested in protecting their lives, their families, future generations and the environment.

Where has Curtis been all this time? Has he not heard of the Internet revolution which toppled the governments of Tunisia and Egypt? Internet activism is not just for challenging governments. Perhaps, it is time Curtis listened to the voices of the ordinary people rather than the few in the Barisan Nasional government.

Curtis and his advisers should have known that politics, be it in Malaysia or Australia, is not about improving people’s lives. It never was, and it never will be.

If anything, the poor handling of the Lynas issue has shown the Malaysian people that big businesses, even if they were to bring in billions of ringgits in investment, cannot be trusted.

The public was not consulted, issues were not properly addressed and base-line studies were not conducted, to evaluate and assess the feasibility of the project.

Why was no Detailed Environmental Impact Assessment (DEIA) done? Why is the provision for treating the radioactive waste being addressed only after the plant has been constructed?

In an interview with Bloomberg, Curtis warned Putrajaya that foreign companies were having doubts about investing in Malaysia. He expressed regret that he had not placed more emphasis on the power of social networking sites like Facebook and Twitter, to oppose the setting up of the Lynas Advanced Materials Plant (LAMP) in Gebeng.

He said, “I’d have dealt with the emerging community debate by the social media a little bit more intensely, a little bit earlier. We probably didn’t recognise the power of the social media to create an issue.”

With a population of 28 million, Curtis only just realised that the country’s 12.4 million Facebook users are a formidable force.

Was he assured that any potential problems and opposition to his project could be “smoothed over” by the application of suitable emollients?

Lesson for investors

With Lynas having to accept further conditions, its operational start-up has been delayed, incurring losses of RM32 million per month, which has affected customer confidence. Over the past year, shares in Lynas dropped 51%, in Sydney.

Curtis claimed that the plant in Gebeng is Lynas’ sole means of refining the ore. So, the delays caused by waiting for the “promised refining permit”, have resulted in thousands of tonnes of unprocessed raw materials piling up at its Mount Weld mine, in Western Australia.

Lynas now has to submit plans, which incorporate two additional changes, to the Atomic Energy Licensing Board (AELB), before the Temporary Operating Licence (TOL) will be issued.

These measures were initiated by the Ministry of Science and Technology (Mosti), probably to appease the growing opposition to Lynas and the calls for the plant to be scrapped.

The parliamentary select committee (PSC) has also ordered the AELB to ensure that Lynas’ waste would be shipped out of the country.

The Lynas experience should be a lesson for potential investors to Malaysia not to see everything in monetary terms.

Curtis said: “The destabilising of our licensing has in fact destabilised their [foreign investors'] commitment to investing downstream in Malaysia. That’s bad for the Malaysian economy in the longer term.”

He is not the only one worried about “the longer term”. The fishermen, farmers and others who live and work in the area, are also worried about their future health prospects, and the environment.

The residents are angry that many questions remain unanswered. Lynas will receive a 12-year tax-free exemption status but the people will be saddled with potential health risks. They have seen the value of their property plummet and people whose livelihoods are derived from the sea, such as the keropok lekor sellers, are noticing a drastic drop in sales.

Curtis told Bloomberg that he had no alternative plan to the Gebeng plant. This is itself suspicious. A company always has a plan B up its sleeve. So who promised Curtis that Gebeng would be a shoe-in?

Curtis must have been given a cast-iron assurance that the operation at Gebeng would experience no delays. The Lynas deal has been shrouded in secrecy from the beginning.

In a June 2011 report, The New York Times alleges that there were short-cuts in construction, shoddy work practices and use of low grade materials leading to structural defects. It also alleges that companies had withdrawn from Gebeng.

Last year, Curtis wrote to the opposition politician, Fuziah Salleh, and said that “Lynas chose to build in Malaysia where the highest international standards for rare earths processing exist today”.

He also said, “We chose Malaysia for its transparent and rigid regulatory environment…”

With statements like these, Curtis made himself a laughing stock and reduced public confidence in him, in one fell swoop.

Malaysia is not known for its high standards, transparency and enforcement. Ordinary Malaysians reaped painful lessons from the Mitsubishi Asian Rare Earths (ARE) disaster, outside Ipoh; but our politicians never learn. They are still trading lives for money.

Mariam Mokhtar is a FMT columnist.