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Malaysia Sun
3 days ago
- Business
- Malaysia Sun
Can ASEAN build a sustainable data centre future? Malaysian legal lessons may offer a wake-up call
Southeast Asia is embracing a digital revolution. With the meteoric rise of artificial intelligence, e-commerce, and cloud computing, the region is now home to some of the most ambitious data centre developments in the world. But while digital technology is transforming Southeast Asia's economy, ASEAN's legal and regulatory systems remain stuck in the pre-digital era. This raises a critical question: Can ASEAN truly build a sustainable, resilient data centre industry without modernising its laws? Malaysia offers a vivid case in point. In 2024, Malaysia attracted more than US$23.3 billion in data centre investments from Microsoft, Google, and Amazon Web Services. These investments are seen as driving Malaysia's modern digital economy. This new development is set to place Malaysia firmly in place as Southeast Asia's tech hub. However, while the infrastructure may be cutting-edge, the laws behind it are far from ready. Here where the problems lie: 1. Malaysia's National Land Code (Revised 2020)-which governs zoning, land use planning, land administration and registration, was drafted in a time when the concept of data centres didn't even exist - The law gives state and land authorities greater power than the planning authority over conditions and restrictions. 2. The Town and Country Planning Act 1976 (Act 172) gives local planning authorities wide control, even over the technical professional agencies such as the Department of Environment, Department of Public Works, Department of Irrigation and Drainage and Department of Mineral and Geoscience creating approval bottlenecks and confusion for developers. Bypassing the process can result in fines or demolition. This law needs a revision to better reflect today's planning priorities and public needs. Today, investors may encounter regulatory challenges in Johor, as evidenced by the state's recent rejection of nearly 30% of data centre applications to conserve water and electricity. 3. Environmental Impact Assessments (EIA), as required under the Environmental Quality Act 1974 (Act 127), are critical for large-scale developments, including data centres which have potential environmental impact. While enforcement is generally consistent, challenges can arise in ensuring compliance across all projects due to weak oversight and different standards or interpretations from one state to another in Malaysia. 4. Data centres must also meet 1974 and 1984 rules on street, drainage, building and fire safety to be sustainable and operationally safe. Ongoing commitments to modernise these regulations cater to the evolving needs of contemporary infrastructure, public needs and national aspirations. 5. The Planning Guidelines for Data Centres introduced in 2024 to address the environmental shortcomings, provide clearer direction on land use, energy, and water requirements- but they remain advisory and are not legally binding. Worse still, it cannot overcome the country's dual governance structure, where federal and state authorities often work in silos-especially on administrative matters-due to how powers are divided under the Federal Constitution. The conflicting legal environment has caused uncertainty for investors, bottlenecks for regulators and developers, and extra economic costs. For the public, this can mean slower progress in building digital infrastructure, which affects internet speed, access to services, and job opportunities in the tech industry. Other ASEAN countries face similar problems. Indonesia, Thailand, and the Philippines struggle with fragmented regulations, outdated zoning laws, and weak environmental oversight. This concern is highlighted in the ASEAN Digital Masterplan 2025, which warns that without legal and regulatory reform, ASEAN could fall behind in the global digital race. Similarly, the ASEAN Economic Community Blueprint 2025 calls for predictable, transparent, and harmonised regulations to attract infrastructure investments. Yet progress has been glacial. The ASEAN Smart Cities Framework also calls for more sustainable digital infrastructure. It urges member states to break down bureaucratic silos by adopting cross-sector governance models. The ASEAN Environmental Rights Framework is starting to promote environmental fairness in infrastructure planning-including data centres. But these regional policies will only work if member states are fully committed to enforcing them. Without this, they remain aspirational rather than actionable. Singapore has enforced sustainability through its Code for Environmental Sustainability of Buildings, adapting cooling systems to tropical climates. Meanwhile, Abu Dhabi uses the Estidama Pearl Rating System, ensuring high energy and water efficiency in all large-scale developments. These examples show that sustainable data centres are possible-but only with clear rules, strong enforcement, and cooperation across all levels of government. So, what can ASEAN do? First, ASEAN should align its laws on land administration, planning, environment, and construction to make it easier for data systems to connect across borders and attract international investment. This would help ASEAN move closer to the goals set in the ASEAN Digital Masterplan 2025 and the ASEAN Economic Community Blueprint. Second, countries like Malaysia and Indonesia need better coordination between federal/central, state and local governments to accelerate land approvals and give investors more clarity. Third, ASEAN could create shared sustainability standards for data centres, linking them to its land use planning and environmental rights goals and aligning them with global ESG benchmarks. Data centres are fast becoming the beating heart of ASEAN's digital economy. But this heart cannot be supported by legal frameworks that belong to a bygone era. If ASEAN wants a truly sustainable digital future, it needs laws that balance growth, environmental concerns, and public interests. If ASEAN learns from Malaysia's experience, it could become a global model for smart, sustainable digital infrastructure. But ignoring these lessons could lead to long-term costs-for its people, investors, and the environment.
New Straits Times
30-05-2025
- New Straits Times
Illegal chalet development raises alarm over Behrang River ecosystem in Perak
TANJONG MALIM: Several cases of unauthorised commercial development on government land are raising environmental concerns in Perak, as illegal chalet construction threatens the ecosystem along Sungai Behrang in Muallim. What began as a trend of encroachment for agricultural and residential purposes has now shifted towards commercial ventures. In this latest case, permanent structures — including a two-storey bungalow-style building — have been erected near the river, believed to be without planning approval, a visit by Berita Harian to the site revealed. Located near Kampung Sungai Dara, the riverside area is a popular spot for nature enthusiasts, particularly hikers and swimmers. The illegal development poses a risk to the integrity of the river reserve, which plays a vital role in protecting water quality and biodiversity. The structure is believed to have been built over an area of 500 square metres, encroaching on approximately half an acre of government-owned land, including part of the protected river reserve. According to a source, the chalet construction has exceeded the boundaries of private land and intruded into both government land and the river buffer zone. "The construction of the permanent structure goes beyond private land and is found to encroach on government land and the river reserve," the source said. Under environmental regulations, developments near rivers must maintain a buffer zone of between 20 and 40 metres. However, the structure in question was found to be less than 20 metres from Sungai Behrang, in direct violation of these guidelines. "We found that the structure was erected about two months ago before a canvas fence was put up to hide the activity from villagers and authorities," the source added. Authorities had already issued two eviction notices under Section 425 of the National Land Code (Act 828), dated February 2025. The notices confirmed that the party involved was occupying government land in the Sungai Dara region without permission. "The developer is requested to vacate the site within 14 days from the date of the notice," the document stated. "If you fail to do so, the Muallim land administrator or any officer authorised by them has the right to take legal action to ensure the site is vacated." "If necessary, destruction, demolition, seizure, or removal of any property belonging to you will be carried out without reference to any party," the notice warned. Despite the deadline having passed, the structure remains standing, and the residence is believed to be occupied by foreign workers linked to the chalet project. A site inspection revealed gas cylinders and clothing, indicating recent activity inside the premises. "This is the second time the operator has built on the same site," a source said, referencing a previous attempt in 2018 involving piling work, which was later dismantled by authorities. Monitoring of the site began earlier this year, culminating in the issuance of the February notices. Still, the operator has failed to comply. "We identified at least five workers at the site, but they have stopped work since February," the source noted. The case highlights not only a legal violation but also a growing pattern of disregard for environmental safeguards. Experts warn that illegal development in river reserves accelerates erosion, pollutes water sources, and damages habitats. Officials stress that any construction must follow the proper procedures. "For any development, the operator must obtain planning permission from the local authority before land ownership can be requested from the district land office," the source explained. Muallim district is a natural gem, surrounded by the Titiwangsa Range and home to nine scenic mountains, including Mount Behrang, and Mount Sanggul. The area also features popular waterfalls like Strata Falls, Warin Falls, and Ulu Slim, drawing both local and international tourists seeking outdoor adventure and relaxation. Meanwhile, officials in Muallim have moved swiftly to curb illegal land encroachment, as unauthorised chalet developments threaten sensitive river ecosystems. The Muallim District and Land Office has taken action in at least five cases of encroachment on government land and river reserves, all involving construction for commercial purposes. Investigations into other affected areas are currently under way. Assistant District Officer from the Technical and Enforcement Unit, Sarina Omar, said the authorities have been proactive in demolishing structures built without approval. A recent operation involved dismantling a concrete structure in the Sungai Dara river reserve, believed to be intended for commercial use. "Following investigations, we launched the operation in coordination with multiple departments and agencies, under the oversight of the Muallim District and Land Office and the Perak State Land and Mines Office," Sarina. Notices were issued in advance under Section 425 of the National Land Code (Act 828). Sarina said that those found guilty of encroaching on government land face fines of up to RM500,000 or imprisonment for up to five years. She said that the operations aim to stop illegal expansion, protect river access, and preserve the area's natural environment. River reserves serve as vital buffer zones, safeguarding ecosystems and nearby land from natural disasters, she explained. "This initiative is aligned with the Perak Sejahtera 2030 agenda, which places environmental sustainability at the heart of state development," Sarina added.
Barnama
23-05-2025
- Business
- Barnama
Selangor To Begin Enforcement Against 68 Illegal Factories In July
GENERAL SHAH ALAM, May 23 (Bernama) -- The Selangor government will carry out enforcement action against 68 illegal factories operating for over 20 years on state-owned land in the Klang and Petaling districts, said State Local Government and Tourism Committee chairman Datuk Ng Suee Lim. He said that the committee decided to conduct enforcement against operators of these illegal factories as they continue to encroach on state land, including road reserves, despite having been issued relocation orders. He said it is high time the state government took more decisive action to clear the area, as the operations of these factories also contribute to environmental pollution. "Of the total, 17 premises are classified as unauthorised factories operating in Klang, while the remainder are located in Shah Alam and Petaling, involving various types of businesses, including household glass manufacturing, furniture production, welding, workshops, and heavy machinery storage. "They have encroached on state land and set up factories without any Temporary Occupation Licence (TOL)," he told reporters after chairing today's meeting of the Selangor Unauthorised Factories standing committee, attended by representatives from local authorities here. Ng said the state government would not grant ownership status to the factories involved, adding that the operators must vacate the sites for the land to be rehabilitated. He said that investigations found that none of the factories involved were engaged in illegal waste processing, including electronic waste, and have never faced legal action for environmental pollution. Meanwhile, Ng said 90 notices under Section 7A of the National Land Code were issued to factory operators for the misuse of agricultural land, adding that approximately 500 more would be issued by July as part of a land regularisation effort with local authorities. "Although the number of unauthorised factories has shown a downward trend from over 6,000 to 4,170 so far, the state government will not compromise with those who encroach on state land," he added.
The Star
23-05-2025
- Business
- The Star
Selangor to begin enforcement against 68 illegal factories in July, says exco
SHAH ALAM: The Selangor government will carry out enforcement action against 68 illegal factories operating for over 20 years on state-owned land in the Klang and Petaling districts, says State Local Government and Tourism Committee chairman Datuk Ng Suee Lim. He said that the committee decided to conduct enforcement against operators of these illegal factories as they continue to encroach on state land, including road reserves, despite having been issued relocation orders. He said it is high time the state government took more decisive action to clear the area, as the operations of these factories also contribute to environmental pollution. "Of the total, 17 premises are classified as unauthorised factories operating in Klang, while the remainder are located in Shah Alam and Petaling, involving various types of businesses, including household glass manufacturing, furniture production, welding, workshops, and heavy machinery storage "They have encroached on state land and set up factories without any Temporary Occupation Licence (TOL)," he told reporters after chairing today's meeting of the Selangor Unauthorised Factories standing committee, attended by representatives from local authorities here. Ng said the state government would not grant ownership status to the factories involved, adding that the operators must vacate the sites for the land to be rehabilitated. He said that investigations found that none of the factories involved were engaged in illegal waste processing, including electronic waste, and have never faced legal action for environmental pollution. Meanwhile, Ng said 90 notices under Section 7A of the National Land Code were issued to factory operators for the misuse of agricultural land, adding that approximately 500 more would be issued by July as part of a land regularisation effort with local authorities. "Although the number of unauthorised factories has shown a downward trend from over 6,000 to 4,170 so far, the state government will not compromise with those who encroach on state land," he added. - Bernama
The Sun
22-05-2025
- Business
- The Sun
Penang does not sell land to meet state expenditure
GEORGE TOWN: Penang does not sell land to meet the state's financial expenditure, instead the disposal of state land is carried out through the method of expropriation (via ownership grants), leasing, alienation or other mechanisms permitted under the National Land Code (1965). Chief Minister Chow Kon Yeow said that therefore, the term 'land sale' is not used in the context of state government land administration and emphasised that it is not merely for generating revenue, but also to drive development, create job opportunities, and add economic value to the local area. 'For land disposal matters, the state government will consider current land valuation based on the Valuation and Property Services Department (JPPH). If the land involves strategic projects, including housing construction, the state will use the Request for Proposal (RFP) approach to dispose of the land. 'This allows the state government to obtain a higher premium income than the current land valuation,' he said during his winding-up speech on the opening address by the Penang Yang di-Pertua Negeri, Tun Ramli Ngah Talib, at today's state legislative assembly. He said that land disposal methods do not reduce state holdings or solely aim to increase state revenue, as a limited resource like land is used for development and to enhance socioeconomic conditions of affected areas. If the approach adopted is not to develop the land, Chow explained that it would become a burden on the state as it would then incur costs of maintenance. Additionally, the people would not be able to enjoy the benefits of developing the site, such as the construction of roads, playgrounds and other facilities. He also stated that Penang should not be ashamed of developing land for the state's progress and the welfare of the people. 'We (Penang) don't have gold mines, we don't have timber -- why should we be ashamed if land is our (only) asset? There are no other sources of revenue, so why be evasive about relying on land development to generate income? 'This (land sale) is to drive socioeconomic development in our state. Over the past 50 years, this has been Penang's generic formula,' he said. Meanwhile, Chow mentioned that the State Finance Department has conducted a review of state revenue from two perspectives: first, by increasing the collection of existing state revenue, including tax arrears, through data cleansing methods and reviewing irrelevant rates. The second perspective, he said, is through identifying new sources and methods for generating state revenue, including reviewing land tax rates, reclassifying rural areas into urban and strengthening state statutory bodies to enable the implementation of new revenue collection.
