Malaysia has pledged to achieve net zero greenhouse gas emissions by 2050. To this end there are significant upcoming changes in environmental law. The Energy Efficiency and Conservation Bill 2023 was passed and awaits approval of the Dewan Negara and the Environmental Quality (Amendment) Bill 2023 is currently before the Dewan Rakyat. In combination these laws will – if passed – constitute a significant advancement of the Malaysian promotion of environmental sustainability.
- Energy Efficiency and Conservation Bill 2023
The Energy Efficiency and Conservation Bill 2023 seeks to increase energy efficiency and avoid wastage of energy. For the purposes of the Bill, energy refers to the energy specified in the Second Schedule, namely electricity, chilled water, steam, and hot water. The Bill will apply to the following entities:- Energy consumers: Companies whose energy consumption for a period of 12 consecutive months exceeds a prescribed threshold, which the Ministry of Natural Resources, Environment and Climate Change has indicated to be 21,600 gigajoules per year, will be classified as an “energy consumer” within the meaning of the Bill. Any energy consumer is required to appoint a registered energy manager who must develop and implement an energy management system in accordance with the Energy Commission’s guidelines. An energy efficiency and conservation report must be submitted to the Energy Commission and the energy consumer must allow energy audits by an energy auditor registered with the Energy Commission.
- Office buildings: The person in charge of any buildings under the third schedule to the Bill, which currently lists only office buildings, must apply for an energy intensity label with the Energy Commission, which indicates the energy efficiency of the building and is to be displayed in a conspicuous part of the building. It is to be ensured that the building complies with the energy efficiency rating prescribed by the Energy Commission. Failure may result in the obligation to submit an energy audit report to the Energy Commission.
- Energy-using products: The Bill defines an energy-using product as any equipment, device, appliance, or article which uses energy or energy resources. Any such product must be affixed with an energy efficiency rating label issued by the Energy Commission so it may lawfully be sold, distributed, displayed, or advertised. Minimum energy efficiency standards must be met for the label to be issued. Manufacturers or importers must register with the Energy Commission before manufacturing or importing energy-using products.
- Environmental Quality (Amendment) Bill 2023
The content of the Environmental Quality (Amendment) Bill 2023 corresponds to that of the 2022 Bill of the same name, which was passed by the Dewan Rakyat but not approved by the Dewan Negara due to the dissolution of the Malaysian Parliament on 10 October 2022. The Bill increases the fines stipulated under the Environmental Quality Act and introduces a minimum fine to be imposed for each offence. Most significantly, mandatory imprisonment and a fine will be introduced for four offences, namely pollution of inland waters, non-compliance with environmental assessment reports, breach of prohibition order relating to industrial plants and stop work orders relating to prescribed activities.
The prospectively introduced fines or terms of imprisonment will be as follows:
| 1) Non-compliance with licensing requirements | Minimum fine: RM 25,000 Maximum fine: RM 250,000 Maximum term of imprisonment: five years |
| 2) Causing vehicle, ship or premises to become a prescribed conveyance or prescribed premises | Minimum fine: RM 25,000 Maximum fine: RM 250,000 Maximum term of imprisonment: five years |
| 3) Pollution of the atmosphere | Minimum fine: RM 10,000 Maximum fine: RM 1 million Maximum term of imprisonment: five years |
| 4) Noise pollution | Minimum fine: RM 10,000 Maximum fine: RM 250,000 Daily default penalty: RM 1,000 Maximum term of imprisonment: five years |
| 5) Soil pollution | Minimum fine: RM 50,000 Maximum fine: RM 500,000 Maximum term of imprisonment: five years |
| 6) Pollution of inland waters | Mandatory term of imprisonment not exceeding five years and a fine (minimum fine: RM 50,000, maximum fine: RM 10.0 million) |
| 7) Discharge of oil into Malaysian waters | Minimum fine: RM 100,000 Maximum fine: RM 10 million Maximum term of imprisonment: five years |
| 8) Discharge of waste into Malaysian waters | Minimum fine: RM 50,000 Maximum fine: RM 10 million Maximum term of imprisonment: five years |
| 9) Open burning | Minimum fine: RM 25,000 Maximum fine: RM 1 million Daily fine after notice: RM 5,000 Maximum term of imprisonment: five years |
| 10) Non-compliance with orders regarding environmental labelling under Sec. 30A | Minimum fine: RM 25,000 Maximum fine: RM 250,000 Maximum term of imprisonment: five years |
| 11) Non-compliance with notice requiring measures under Sec. 31 | Minimum fine: RM 50,000 Maximum fine: RM 1 million Maximum term of imprisonment: five years |
| 12) Non-compliance with prohibition order under Sec. 31A | Mandatory term of imprisonment not exceeding five years and a fine (minimum fine: RM 50,000, maximum fine: RM 1.0 million) |
| 13) Failure to maintain and operate control equipment | Minimum fine: RM 5,000 Maximum fine: RM 100,000 Daily fine after notice: RM 1,000 Maximum term of imprisonment: five years |
| 14) Non-compliance with notice under Sec. 33 | Minimum fine: RM 50,000 Maximum fine: RM 1 million Maximum term of imprisonment: five years |
| 15) Failure to prepare environmental impact assessment report under Sec. 34A | Mandatory term of imprisonment not exceeding five years and a fine (minimum fine: RM 100,000, maximum fine: RM 1 million) |
| 16) Non-compliance with prohibition order or stop work order under Sec. 34AA | Mandatory term of imprisonment not exceeding five years and a fine (minimum fine: RM 100,000, maximum fine: RM 1 million) |
| 17) Improper dealings with scheduled wastes | Mandatory term of imprisonment not exceeding five years and a fine (minimum fine: RM 100,000, maximum fine: RM 10 million) |
| 18) Refusal to provide requested information under Sec. 37 | Minimum fine: RM 5,000 Maximum fine: RM 50,000 Maximum term of imprisonment: two years |
| 19) Moving a detained vehicle or ship before release | Minimum fine: RM 50,000 Maximum fine: RM 250,000 Maximum term of imprisonment: five years |
| 20) Non-compliance with order pertaining to vehicle | Minimum fine: RM 5,000 Maximum fine: RM 50,000 Maximum term of imprisonment: one year |
| 21) Obstruction of Director General or any authorized officer | Minimum fine: RM 5,000 Maximum fine: RM 100,000 Maximum term of imprisonment: five years |
| 22) General penalty | Minimum fine: RM 5,000 Maximum fine: RM 250,000 Maximum term of imprisonment: two years |