Implications of Trade Liberalisation to Malaysia’s Mining Industry

Mining operations are easily recognizable. By nature, the mining industry, just like oil and gas industries, leaves behind a `footprint’, an environmental, social and economic impact. As trade increases, the environmental impact is postulated as increasing. Each mining phases involves specific activities that have an effect on the environment. Trade and environment, as an issue, is by no means new. The link between trade and environmental protection, both the impact of environmental policies on trade and the impact of trade on the environment, was recognized as early as 1970. Under the current laws of Malaysia, the government allows a hundred percent equity participation from any foreign economy to undertake a mining operations in the country, subject to legislations under the relevant State Mineral Enactment. Current trade negotiations contain provisions in the environment and investment chapters which have serious implications for the domestic environmental policies and measures. The environmental rules and regulations taken by the Malaysian government to protect the environment may be challenged as `expropriation’, which is defined as leading to an obligation to compensate the foreign investors and/or change the Malaysian laws and regulations. On the other hand, Malaysia is bounded by our very own environmental rules and regulations. Should Malaysia failed to implement and enforce any of its legal environmental regulations, the country may be subjected to dispute as we are party and signatories to several Environnmental Laws and Treaties. This paper looks at the link between trade and the environment, outlined the environmental problems related to the mining industry and its implications to trade negotiations.