Environmental Technologies Industries

Environmental Technologies Industries

Market Plans

Malaysia Environmental Export Market Plan

Chapter 6 - Hazardous Waste Management

Overview

Hazardous waste management is an emerging market with significant opportunities for waste minimization, waste recovery, and other preventive measures. The Environmental Quality (Amendments) Act of 1996 regulates hazardous waste discharges and makes owners or occupiers of vehicles, ships, or premises liable, not only for controlling discharges, but also for measuring, analyzing, and reporting them. The new law also controls the exportation of wastes to third-world countries for treatment, recycling, or disposal.

The EQA amendments also prohibit discharge of hazardous substances and pollutants into Malaysian waters. The maximum fine for pollution offenses has been increased from RM10,000 to RM50,000 ($3,000 to $15,000 at RM3.3 to $1), and the jail term from two to five years. However, given the limited enforcement resources and the lack of adequate treatment and disposal technologies available to industry, the government has not enforced the laws, except in high profile cases such as oil spills or other illegal toxic waste dumping.

Environmental Laws and Regulations Affecting Hazardous Waste Management

Environmental Quality (Scheduled Wastes) Regulations 1989.
Environmental Quality (Prescribed Premises) (Scheduled Wastes Treatment and Disposal Facilities) Order, 1989.
Environmental Quality (Prescribed Premises) (Scheduled Wastes Treatment and Disposal Facilities) Regulations, 1989.
Promotion of Investments (Promoted Activities and Products) (Amendment No. 10) Order, 1990 (made under the Promotion of Investments Act, 1986).
Customs (Prohibition of Import) (Amendment) (No. 2) Order, 1993.
Customs (Prohibition of Export) (Amendment) (No. 3) Order, 1993.

Malaysia produced an estimated 635,521 tons of hazardous waste in 1996, up 30 percent from 1995 (487,100 tons) and up 52 percent from 1994 (417,413 tons). Further increases are anticipated, particularly on the west coast of peninsular Malaysia.

DOE has identified 107 categories of scheduled waste. Industrial processes generate most of them. Other sources of hazardous waste include medical, transportation, and commercial sectors. The primary hazardous waste generators are metal finishing, chemical, petrochemical, electronics, electrical, printing, and packaging industries. The number of waste generators that were compliant with regulations more than doubled in 1996, to 2,252, from 1,061 in 1995.

At present, there are limited means of handling such wastes in the country. For the most part, existing domestic landfills are not suitable to receive scheduled waste. Some multinational corporations and large industries have installed facilities to treat scheduled waste on their premises. Many of the new industrial estates come equipped with some wastewater treatment facilities, but the technology is usually inaccessible to small and medium-sized companies. Compliance with the regulations shown in the text box on this page is still woefully inadequate. Hazardous wastes are being stored in drums on-site or are being dumped into surface drains or unsecured treatment sites. Illegal dumping is prevalent. In addition, DOE reported that some large industries were avoiding regulations by subcontracting waste-generating work to smaller companies that cannot adequately treat or dispose of hazardous waste. Some scheduled wastes are exported to countries with adequate treatment technologies.

Under the Environmental Quality (Sewage and Industrial Effluents Regulations) 1979, industries generating toxic industrial effluents are required to treat the wastes at in-house plants. Such effluent treatment yields toxic sludge that requires further treatment and disposal. Without adequate treatment facilities, the safest option for waste generators is to store the waste on their premises or in licensed waste storage facilities.

The government has encouraged the use of on-site and off-site waste treatment and recovery facilities. As 1996 ended, 165 such facilities had been established and licensed. These include 78 transportation, 23 incinerators, 22 solid waste landfill (contravention licenses), 19 off-site recovery, 12 off-site storage, 7 land farming, 2 off-site treatment, and 2 secure landfill sites. An estimated 331,000 tons of scheduled wastes were handled by these facilities in 1996, less than half of the country's total hazardous waste volume.

The extent of illegal oil sludge dumping is unknown, but the problem is widespread. Malaysia produces approximately 630,000 barrels of crude oil per day from about 30 oilfields in peninsular Malaysia, Sabah, and Sarawak. Oil spills and sludge dumping in Malaysia's territorial waters rose dramatically in 1995 (90 incidents in 1995 and 60 in 1996, from 17 in 1994). In March 1996, 4,530 barrels of oil were spilled into the sea at Bintulu Crude Oil Terminal in offshore Bintulu Sarawak. Since then, the government has tightened oil spill response measures and oil pollution regulations. The country also has begun several initiatives for responding to regional and bilateral oil spills. The government needs to further beef up enforcement, by means such as a proposed privatizing of environmental air surveillance and monitoring.

Enforcement Initiatives and Incentives

DOE has focused on a multipronged strategy for managing scheduled waste. It has pursued a cradle-to-grave strategy (the concept that waste should be properly managed or controlled from generation to disposal) to ensure safe management of scheduled waste. The 1989 Environmental Quality Regulations define the procedures for compulsory notification of the generation of scheduled wastes. Prescribed information on its storage, transportation, and safe disposal must be given. Penalties are imposed on violators. DOE believes that if waste generators are forced to bear the cost of waste treatment, they are more likely to minimize, recycle, and reuse wastes.

Tax Incentives for Safe Disposal

Pioneer status incentives for five years, available to companies that are principally engaged in an integrated operation of the storage, treatment, and disposal of toxic and hazardous waste.

Companies that generate toxic and hazardous waste and intend to set up facilities to store, treat, and dispose of these wastes, either on-site or off-site, are eligible for a special capital allowance. This allowance is at an initial rate of 40 percent and an annual rate of 20 percent for all capital expenditure incurred in waste treatment and disposal.

The government will also extend the current import duty and sales tax exemption scheme for machinery, equipment, raw materials, and components to these companies.

DOE has initiated several programs to change corporate attitudes on accountability and safe waste management (see text box above). In addition, it offers advice, research and development, and public education. DOE also holds training workshops to promote new technology and waste management systems. In April 1996, DOE launched the MAWAR (Malaysian Agenda for Waste Reduction) program. Its objective is to encourage industries to formulate a strategy for waste reduction. However, the initial response from industries has been discouraging, and follow-up began in 1997.

A National Contingency Plan for transportation, storage, and disposal of toxic and hazardous wastes was developed to deal with accidents and spills. The plan is in line with the establishment of the Integrated Waste Management Center.

In 1996, DOE tightened up the licensing process for scheduled waste facilities, transportation, and export. The department is also investigating the operations of scheduled waste transporters and alleged unlawful practices by recovering operators.

In addition, DOE is reviewing provisions of the Environmental Quality (Scheduled Wastes) Regulations, 1989 in collaboration with consultants from the U.S. Argonne National Laboratory and the Institute for Strategic and International Studies. The project, funded by the United Nations Development Program, is aimed at improving: (1) waste definition and categorization, (2) for waste sampling analysis, and (3) guidelines for waste minimization.

Internationally, the Malaysian Government has been active in implementing the Basel Convention. It has taken a key role with the Group of 7 and China in developing a proposal to protect vulnerable developing countries from illegal transbondary movement of hazardous waste. As required by the Basel Convention, Malaysia implemented more stringent controls for the import and export of hazardous waste. DOE also plans to introduce remote sensing technologies to track domestic movement of hazardous wastes.

Competitive Situation and Market Opportunities

Demand for hazardous waste management technologies is at an all-time high, particularly by multinational firms. Waste generators are resisting the high prices of the monopoly concession holder, Kualiti Alam. Nonetheless, illegal dumping appears to have declined. While the integrated facility is still under construction, incidents of dumping have declined. Once the Integrated Waste Management Center is fully operational, DOE is expected to impose the full sanctions on noncomplying manufacturers and waste generators. DOE’s strong enforcement stance will create some opportunities in the near to mid-term for providing hazardous waste treatment and disposal systems, including bioremediation, source reduction, waste minimization, and recovery.

To combat desludging and waste oil dumping in Malaysian waters, the government plans to privatize environmental air surveillance and monitoring. DOE contracted with a Swedish-Malaysian group for a feasibility study on the program. There are also opportunities for recycling land-based industrial oil wastes. Demand exists for recovery of low-grade crudes and used hydraulic and lubricating oils for re-use as fuels in power station boilers. U.S. equipment is generally preferred in Malaysia because of its superior quality and advanced capabilities. However, U.S. companies enjoy a relatively small percentage of the oil spill technologies market, which is dominated by British, Norwegian, and Swedish firms. The Japanese Government also has provided development assistance, influencing the local market toward Japanese equipment.

Waste minimization systems and recovery technologies are in demand from the electronics, electroplating, food processing, wood-based, and crude palm oil industries. For example, re-use and recycling technologies are needed to convert wastes from palm oil fibers into other materials.

Overall, the technologies in demand are for incinerators, on-site and off-site, and for toxic metal and low radioactive sludge treatment and disposal facilities. The more immediate need is for advanced oil spill treatment technologies and techniques for recovering used oils from industries and oil sludge from ships.

Treatment of medical or clinical waste has been included in the privatization of the Hospital Support Services project (see text box below).

Hazardous Waste Facility Operational in 1998

Of all major environmental projects in the country, the Integrated Waste Treatment Facility, to be built at Bukit Nanas, near Port Dickson, has had the most trouble. The project was awarded in 1992 to the Danish-Malaysian group Kualiti Alam Sdn. Bhd. The Danish partners are Danish Wastetreatment Services A/S and the government-owned Industrialization Fund for Developing Countries, with Chemcontrol A/S as the hazardous waste consultants. The Malaysian partners are United Engineers Malaysia (UE Construction Sdn. Bhd.) and Arab-Malaysian Development Bhd.

The main stumbling blocks in the project have been site location, land prices, resistance from industrial users to pay the anticipated tariffs, and disagreements over projected waste volume. Evidently, the government was not prepared to guarantee the volume of waste that the treatment center will receive, and there are concerns about the high rates. After innumerable delays caused by unresolved contractual problems and requests for government loans, the project finally began site work in mid-1995 on renegotiated terms, including an extension of the concession's original exclusive right from 10 to 15 years.

The plant will be Malaysia's first integrated hazardous waste management facility, based on the Danish Kommunikemi treatment system. According to initial estimates, the plant will cost a total of RM350 million ($106 million at RM3.3 to $1) and accept about 80,000 tons of waste annually. Annual capacity will include incineration (30,000 tons), physical-chemical treatment plant (10,000 tons), solidification (30,000 tons) and secure landfill (10,000 tons). In addition to the direct landfill, the plant will deposit its own treatment residues on site.

The facility, to be managed by Kualiti Alam, received its initial load on October 8, 1996. The first load was nine tons of metal hydroxide sludge from an electroplating plant in the Teluk Panglima Garang Industrial Estate in Selangor. The company will be making arrangements with other customers for selective collection of scheduled wastes. At present, however, the group will accept only wastes that can be directly disposed of in its secured landfill for storage. The plant is in its final phase of construction.