Rare Earth – What is that? That would be the normal response by most people as rare earth, unlike gold, tin, silver, copper and other popular metals is not within common knowledge, let alone the fact that it is used in are used in the manufacture of a wide variety of products including Cathode ray tube (CRT) and plasma televisions, computer monitors, IPod, MP3 Players, Hard Disc Drives, CD-Roms and DVDs, automotive catalytic converter and hybrid vehicles.

An Extraction Industry – High Environmental Cost and Health Risk

The extraction of rare earth was dubbed as being ‘one of mining's dirtiest industries – whereby the United States, who was once the world's largest supplier, slowly moved away from it . This industry has been blamed to have poisoned rivers with acid, and generates radioactive waste - an environmental cost that many would not be interested in taking. Studies done in both New Jersey and China shows that thorium radiation emitted during the refining process and by plant waste can cause cancer, leukaemia, birth defects and chronic lung diseases.(Reuters, 19/3/2012, Pollution the big barrier to freer trade in rare earths).

Today, China is the source of more than 90% of the global demand, but things are changing and the demand is increasing and prices have been going up, and so ‘environmental cost’ and health risks now takes a back seat to profit. Better still, would be a solution to transfer the ‘environmental cost’ and health risk to some third world nation, by moving the extraction process and the storage of the waste there.

Lynas’s Rare Earth Extraction Plant in Malaysia and Public Opposition

This seems to have been what happened with Lynas Corporation Limited, the Australian TNC, who decided to ship rare earths ore from its mine in Mount Weld to Malaysia, where it was to be processed into highly sought after rare earths metals at its facility in Gebeng Industrial Zone, in Pahang, Malaysia. Lynas, however, states that the reason for doing so is different – better infrastructure and facilities.

Somehow, this plan and the construction of the factory in Malaysia, did not receive public attention when it was being formulated, and partly to blame would also be the mainstream media, that is controlled and owned by persons or parties close to political powers. The Malaysian government also saw it fit not to highlight this plan, possibly knowing that it would result in public outcry and protest especially so since Malaysians still remember Bukit Merah.

Plagued by the Bukit Merah case – Clean-Up Exercise Still Ongoing after Plant Closure in 1994

The Asian Rare Earth Sdn Bhd (ARE), whose shareholders included Mitsubishi Chemical Industries Ltd (35%), Beh Minerals (35%), the state-owned Pilgrims' Management Fund Board (LUTH) (20%) and other businessmen (10%), began operation of the rare earth extraction plant in 1982. Protests continued, and finally in 1994 the closure of the plant was announced.  Within a few years, villagers began noticing physical defects in their newborns, and at least eight leukemia cases were confirmed. Medical examinations on children in the area found that nearly 40% of them suffered from lymph node diseases, turbinate congestion and recurrent rhinitis. Seven of the leukaemia victims have since died. The decommissioning and decontamination exercise only started in 2003 and 2005, and until today is still ongoing, and is estimated to have cost almost RM300 million.

The memory of Bukit Merah, irrespective of whether what is being extracted is different or safety standards have improved would most likely have resulted in public protest from the very beginning. In any event, the protests did start and are escalating. On 29/2/2012, over 8,000 persons came out against the Lynas plant in Kuantan, and recently on 28/4/2012 the anti-Lynas protestor came out together with those calling for electoral reforms, and the numbers across the country may have exceeded 200,000.

What happened in the Fukushima Nuclear Power Plant, following the Tōhoku earthquake and tsunami on 11 March 2011 also has do have an impact on public perception and fears. No matter how perfect your buildings and safety measures are, the possibility of accidents resulting in impact to environment and health maybe not today, but in the future is very real. More so,  when it involves waste from a rare earth extraction facility, which may also be radioactive. In these cases, the risks become very long term risks, and accidents may happen after Lynas has left Malaysia and present government is no more. Most people would rather take the ‘better be safe than sorry’ attitude.

Silencing Human Rights Defenders, Media and the public – an unacceptable reaction by a TNC to opposing views

To possibly retaliate against the protests, this Australian Transnational Company, involved in the extraction industry, is now trying to use the courts.  On 19/4/2012, Lynas Corporation Limited and Lynas Malaysia Sdn Bhd filed suits against the operator of online news portal 'Free Malaysia Today' (FMT) and the anti-Lynas group known as 'Save Malaysia, Stop Lynas', over defamatory articles on Lynas.[1]

In the first suit, Lynas Corporation of Sydney, Australia, and Lynas Malaysia named MToday News Sdn Bhd as defendant, while in the second suit; they named SMSL Sdn Bhd (Save Malaysia, Stop Lynas) and its two directors, Tan Bun Teet and Lim Sow Teow, as defendants. The first suit is again a free alternative online media, and the second is against a civil society organization (CSO) and human rights defenders.

In the suit, Lynas claimed that FMT had published a defamatory article on its website on March 6, while SMSL had published a defamatory article dated March 22, on its blogsite. That ‘defamatory article dated March 22’, is I believe a joint statement of 40 over Malaysian civil society groups  to the Malaysian Prime Minister imploring him  “… to immediately suspend the licenseissued to Lynas and to stop any shipment of rare earth ore concentrate into Malaysia…”. Lynas is seeking general damages and aggravated damages, costs and an injunction restraining the defendants from further publishing defamatory articles on Lynas.  They are also asking for an interim injunction to stop the defendants from publishing defamatory statements or articles from now until the decision of the trial.

The suits come at a time when the Malaysian government is considering whether the said factory be permitted to operate or not. A Parliamentary Select Committee on the Lynas project has been formed, and is now conducting public hearings to listen to Malaysians, and, as such, Lynas attempt to ‘gag’ its critics is even more wrong. These suits are a gross infringement of the rights of Malaysians, including the media, to effectively participate in this process initiated by the government to get the views of people in Malaysia which will impact a final decision of the Malaysian government. 

Using court actions and ‘gag orders’ to suppress opposition views by transnational corporations is deplorable. It is a violation of one’s freedom of expression, freedom of opinion and freedom of protest. It also goes against the UN Declaration on Human Rights Defenders, and also UN Guiding Principles for Business and Human Rights. 

Rather than taking court actions, Lynas should have just made a statement to counter the points made. In fact, being a TNC, they also would have the required resources of putting full page adverts in national dailies to get their views across to the public. What Lynas have done already have a negative impact on persons, and even groups, in Malaysia.

UN Declaration on Human Rights Defenders

It is time for TNCs to also study this declaration, which is most clear about what a person is entitled to do in the promotion of human rights. A sampling of some relevant quotes is as follows:-

“Everyone has the right, individually and in association with others… freely to publish, impart or disseminate to others views, information and knowledge...To study, discuss, form and hold opinionson the observance, both in law and in practice, of all human rights and fundamental freedoms and, through these and other appropriate means, to draw public attention to those matters.

Everyone has the right, individually and in association with others, to have effective access, on a non discriminatory basis, to participation in the government of his or her country and in the conduct of public affairs…. This includes, inter alia, the right, individually and in association with others, to submit to governmental bodies and agencies and organizations concerned with public affairs criticism and proposals for improving their functioning and to draw attention to any aspect of their work that may hinder or impede the promotion, protection and realization of human rights and fundamental freedoms.

The Declaration also shouts out against ‘retaliations’, which in my opinion, what Lynas is doing now through these legal suits clearly goes against this principle in the Declaration.

The State shall take all necessary measures to ensure the protection by the competent authorities of everyone, individually and in association with others, against any violence, threats, retaliation,de facto or de jure adverse discrimination, pressure or any other arbitrary actionas a consequence of his or her legitimate exercise of the rights referred to in the present Declaration.

In fact, this concern about retaliation against Human Rights Defenders is re-emphasizedin the 2010 Resolution adopted by the Human Rights Council - A/HRC/RES/13/13 entitled ‘Protectionof human rights defenders’.

Now, Lynas and other TNCs, do have the right to take legal actions based on defamation and libel, seek ‘gag orders’ and even claim large sums of monies as damages. These suits, after all, can turn out to be an effective means of silencing current critics, and may even deter future opposition to the rare earth plant. 

The commencement of a legal suit would naturally cause much stress, loss of  time and resources and suffering on human rights defenders – many of whom who did what they did not by reason of some self-interest or financial benefit, but a genuine selfless concern for human rights – in this case a concern for the environment, health and well-being of the people in the immediate vicinity of the intended plant and/or storage facility of the waste produced, and the people in Malaysia in general.

So, TNCs need to consider whether they will be driven by a commitment to the principles and values of human rights and environmental concerns, or alternatively be just driven by pure business concerns of opportunities and profits. I hope Lynas will do the right thing and immediately discontinue these legal suits, hence demonstrating a commitment to human rights.

Is the Opposition to Lynas Baseless?

Well, for one there is the concern about the waste, which even the Health Minister of Malaysia, Datuk Seri Liow Tiong Lai,  had once been reported saying that Lynas must find a way to ship the waste back to Australia, failing which no temporary operating licence (TOL) will be issued. Then, we hear that the Western Australia Minister for Mines and Petroleum Norman Moore told the state’s legislative council that it would not allow the residue, which Lynas says it can treat to reduce its radioactivity, to be returned to its source. This lends credence to the current concerns of Malaysians, especially those living near the proposed factory and/or dumpsite.

It must be noted that when it comes to protest and objections raised by civil society, it will be a folly to expect that it would be comprehensively researched or analyzed. The perception, language and resources available to ordinary people must be considered. Lack of transparency and cooperation by corporations, governments and other bodies also is a factor. Further, there are always differing opinions and views.

Lynas should have resorted to responding to assertion with their ‘counter-arguments’, maybe even publicly, rather than trying to silence dissenting views and voices through  court actions, where an interim gag order until the end of trial Is also being sought – which, if they get, would be most unjust.

When Brands/Corporation That Have Lynas in their Supply Chain remain ‘hidden’ and silent

According to the Lynas website,[2] rare earth is used for Cathode ray tube (CRT) and plasma televisions, computer monitors, IPod, MP3 Players, Hard Disc Drives, CD-Roms and DVDs, automotive catalytic converter and hybrid vehicle, and this means that many of the Electronic, Home Consumer Appliances and Automotive brands and companies may have Lynas in their supply chain – and as such, it is time that they do the needful to ensure their proclaimed commitment and obligation to human rights, and also the environment, which generally also applies to their supply chain be followed. Lynas, too being in the supply chains of other companies and brands is obliged to adhere to these Corporate Social Responsibility commitments.

OECD Guidelines for Multinational Enterprises

Australia is a member of the OECD, and such the OECD Guidelines is relevant in this case. The guidelines clearly is for the respect of human rights including also freedom of expression, whereby, amongst others, it is stated

“Respect the internationally recognised human rights of those affected by their activities…”

“..Support, as appropriate to their circumstances, cooperative efforts in the appropriate fora to promote Internet Freedomthrough respect of freedom of expression, assembly and association online…”

and clearly the suing of an alternative online media, a civil society group and human rights defenders would be actions inconsistent with the spirit, principles and content of this Guidelines.

Use of Cyanide by Raub Australian Gold Mining Sdn Bhd (RAGM)Briefly, we will look at another Australian TNC involved in gold extraction.

About 500 villagers of Bukit Koman gathered in March 2009 protesting the use of cyanide by Raub Australian Gold Mining Sdn Bhd (RAGM). The community complained of foul smell since mid-February and alleged that many villagers are falling sick. They believed the company had started using cyanide in its gold extraction.

The claim was that the residents were not aware of the project or that cyanide was being used in the extraction process. “The residents do not know that this toxic was being used and we are extremely upset that the company has been allowed to use it in close proximity to our village…This is also a danger as the project is located near the Sungai Koman river with the possibility that the toxic may seep into the waterways…Since the project had commenced in February, the residents’ health deteriorated due to the effects of cyanide”. They were of the opinion that the authorities should have consulted and briefed the residents on the potential health risks involved…” [3]

The Environment Director-General approved the PEIA report on Jan 13, 1997. Via a letter dated Feb 21, 2008, the DG declined to accede to the residents' request to review the preliminary environmental impact assessment (PEIA) and require the company to provide a detailed one. On March 21, 2008, four representatives of the residents, filed for leave to initiate a judicial review proceeding naming the Environment Director-General and RAGMSB. On 1/6/2009, Kuala Lumpur High Court judge dismissed their application on the grounds that the application was made out of time. The Court of Appeal, on 2/8/2011 also dismissed the resident’s appeal, but the good news is that on 11/1/2012, the Federal Court granted them leave to appeal to the Federal Court. Now we have to wait for the appeal to the Federal Court.

Speed and Openness Are Essential When Dealing With Environment & Public Health Concerns

Now, the serious concern here is the failure of the Malaysian government to pro-actively and effectively bring to the notice of the residents information about the project, and also the possible risk to the environment and public health, and the proposed steps taken to reduce or eliminate these risk by the company.

They raised their concerns and complaints in 2008, and after more than 4 years the issue is still in the courts. This process is just too slow and ineffective – when it should have been speedily done given the fact that people’s allegation is about health risks and environmental impact arising by the activity of the company that is on-going.

It is also disturbing that the government also failed to act on this speedily. The use of technicalities, like being out of time, to not re-visit government decisions or for courts not to hear the case on its merits for a case like this is also shocking.

A better response, in cases where health risks and environmental impact is raised, would have been for the government to immediately issue a ‘stop-work order’ and re-visit the case. It is also absurd to use ‘out of time’ arguments to avoid re-visiting approvals given when naturally new issues, new points, new arguments and/or new evidence can crop up at any time – and there must be procedure and/or mechanisms that enable the re-visiting of permits/approvals granted or rejected when this happens, for this is essential to ensure not only that justice is done, but is also seen to be done.

Extractive Industries - Worker and Trade Union Concerns

Generally, when it comes to TNCs involved in the extractive industry, the concerns are with regard to environmental issues, health risks to the surrounding community, and issues of land grabbing, but let us not forget there is always an issue about worker rights and welfare, and their families including also issues about occupation health and safety. The changing trend from permanent employment to short term employment and now to merely using workers without direct employment relationship with the principal resulted in the weakening of trade unions and worker collective bargaining powers, and this would also impede the disclosure of worker-related issues. Recent trends of terminating workers and union leaders who voiced public criticisms about their employer is also disturbing, and helps keep hidden worker related issues from the public eye. These matters require a more elaborate discussion, which space does not permit here.

The Way Forward

Some believe that the way forward is through having more Declarations, Conventions and Instruments addressing worker right and human rights concerns at the level of the United Nations, International Labour Organizations (ILO), ASEAN, etc – but alas the flaw is that this are seldom binding on nation states, and many a good Conventions and instruments are never ratified or committed to by many nation states. At the end of the day, what we really need is highlight real cases and support workers and people in their struggle for justice – but then, this trend of TNCs suing opponents is disturbing, and will eventually have the effect of deterring opposition. This is something that needs to be addressed, for human rights and worker rights is not just the concern of victims, perpetrators and governments, but is a concern of all justice loving human persons in our global community.

Endnotes

1) New Straits Times, 2/5/2012, Lynas sues FMT, anti-Lynas group over articles

2) http://www.lynascorp.com/applicationList.asp?category_id=1&page_id=7

3) Malaysiakini, 1/6/2009