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The case for evidence-based decision making

  • Evidence-based decision making is practically the definition of good economic governance. In the eyes of the international investment community, it is what separates safe investment destinations from risky ones.

By H.E. Andrew Goledzinowski

Democratic governments should be judged on how they manage the difficult decisions – not the easy ones.

Take for example the Malaysian Government’s decision on Lynas announced on 15 August. It has been one of the most politicised issues on the government’s agenda. And yet, its handling of the matter deserves respect.

Instead of making a political decision, the government appointed an independent scientific panel to conduct a transparent and rigorous review. This review (like all previous reviews) found that Lynas is intrinsically low risk and well managed. This conclusion did not please everyone. But the government decided to act in accordance with the evidence and will allow the company to continue to operate – in accordance with Malaysia’s strict laws and regulations.

What does this decision tell us about how government works in Malaysia?

Evidence-based decision making is practically the definition of good economic governance. In the eyes of the international investment community, it is what separates safe investment destinations from risky ones.

Given the international attention that the Lynas issue has attracted, this pro-science decision is a green light, signalling that Malaysia is a safe destination for serious investment in advanced manufacturing.

Because of the special properties of rare earths, the ongoing presence of Lynas puts Malaysia at the heart of a global supply chain on which a variety of hi-tech, low-emission industries depend.

This announcement is not just about saving a great many high quality jobs in Pahang (97 per cent of staff are Malaysian and 99 per cent of jobs are middle or high income). It’s about using Malaysia’s first-mover advantage to create an eco-system of new industries – from electric motors and lasers, to satellite components and wind turbines.

But what of the safety concerns? Doesn’t Lynas produce radioactive waste? Malaysians are right to ask questions and are entitled to honest answers.

It is true that the rare earths ore, and the residues of processing, have a low level of radioactivity. But it is very low. In fact, the Lynas materials have an equivalent low level of naturally occurring radiation to the rock phosphate that is imported into Malaysia every year for use in agricultural fertilizer!

The levels of radiation are so low that the material does not require any special handling when it transits Australia and Singapore. Only when it reaches Malaysia’s border is it required to be labelled as radioactive. Contrary to popular opinion, Malaysia’s laws are stricter, not weaker, than in most developed countries.

There are literally dozens of industrial operations, including some in Kuantan, that produce and safely manage higher levels of radioactive residue than Lynas. In fact there are parts of KL (old tin mines) that have higher background radiation than the Lynas plant.

All industries produce some waste. And dealing safely with those wastes is something all industrial economies, including Malaysia, know how to do.

But Lynas is indeed special in one respect.

It is one of the most sophisticated chemical plants in Asia and the only significant processor of rare earths outside of China. This makes it strategically important. And it has left many international observers puzzled about the anti-Lynas lobby.

I have spoken to a number of people opposed to rare earths processing in Malaysia. I believe this opposition started as part of the “peoples’ movement” against the previous BN government.

This distrust was further fuelled by the Fukushima tragedy which led some to describe Lynas as a nuclear plant that could “explode”. Others distributed videos of two-headed chickens (made of rubber). There were so many false claims that ordinary people did not know what to believe.

But by the time of GE14, with years of safe operation behind it, Lynas was no longer a major issue. It was not even mentioned in the PH national election manifesto.

But, for some, Lynas has taken on a symbolic importance – and perhaps always will.

With this most recent announcement, that period of confusion is now at an end – to Malaysia’s benefit. Other countries (including Australia and the U.S.) have announced plans to begin their own rare earths processing. But for now Malaysia has a big head start, which it should take advantage of.

Those who still have questions about Lynas should feel free to engage with the company directly. If they wish to, they should visit to plant themselves, as many thousands of Malaysians have done already. In time, I hope that the Minister of Energy, Science, Technology, Environment and Climate Change may visit the plant, so she can see it for herself, speak to the Malaysian engineers and scientists who run it, and understand its potential for Malaysia.

Trust, on all sides, must be earned. That process begins today.

(H.E. Andrew Goledzinowski is the Australian High Commissioner to Malaysia. Follow him on Twitter: www.twitter.com/AusHCMalaysia.)

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