/ENVIRONMENT BULLETIN 1/ UNITED STATES: California Computer Firms Replace Malaysian Loggers

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

SAN FRANCISCO, Apr 20 1996 (IPS) - A Californian computer company has begun what it hopes will spark an economic revolution in the Malaysian states of Sarawak and Sabah on the island of Borneo.

Komag, one of the largest makers of computer disk drives, last week began production of components from a new, 100-million-dollar factory in the town of Kuching in Sarawak. Komag is to be followed by Zycon, which expects to start production of multi-layered, printed circuit boards in Kuching by year’s end.

Both companies are based in ‘Silicon Valley’ just south of here. Two Japanese electronics companies are also establishing production plants in the area.

Business in Sarawak and the adjoining state of Sabah had previously been dominated by the timber industry which has profitted from some of the world’s last tropical forests that cover the island. But many agree it would be difficult for Sarawak and Sabah to sustain their timber-dependent economic activities.

“We know very well that we cannot sustain growth based only on commodities,” says Abang Johari Abang Openg, Sarawak’s industrial development minister. He hopes Komag will lead the way in an industrial revolution in the state.

In 1993, Sarawak produced 18 million cubic metres of timber. Most was felled on land belonging to the 20 indigenous tribes that comprise half the state’s population of 700,000. Scientists project the total depletion of the forests by early in the next century.

Seven million of the 9.2 million hectares of Sabah’s forests, which cover two-thirds of the land area, had been felled by 1991. Environmentalists now fear the state would be deforested before the year 2000.

Partly due to the impending loss of all the forest cover in the state, Sarawak’s timber companies have already begun to set up operations in neighbouring Papua New Guineau and the Solomon islands. Some are even planning operations in countries as the Central African Republic and Guyana in South America.

But the computer processing production may not provide a viable alternative to environmental damage as hoped, some analysts say.

Studies from California suggest that computer industries may also have a negative impact on the environment and workers if the chemicals used in manufacturing processes are released into the local air, soil or water.

Studies conducted by the Semiconductor Industry Association of San Jose’ show that women in semiconductor jobs are 1.45 times as likely to have spontaneous abortions as are women working in non- manufacturing jobs. The potential for accidents during transportation of hazardous materials is another significant risk.

Komag, however, assured IPS they would do everything to protect the environment.

“We are a very socially responsible company,” said David Allen, the public relations officer for Komag. “You have to understand that manufacturing hard disks uses a lot less toxic chemicals than manufacturing semi-conductors.”

Malaysian authorities are continuing an aggressive drive to attract foreign companies to establish business in these two states.

Rafidah Aziz, the Malaysian national trade and industry minister, conducted a quick investment promotion tour last week, speaking to computer company executives in California. Accompanying her was Tham Nyip Shen, Sabah’s industrial development minister.

Ranking high among the incentives in Sarawak is a tax holiday for new industries and wage rates estimated to range between 2.80 and 5.20 dollars a day. This represents almost half the rates in Penang, where much of Malaysia’s computer industry is currently based.

The Sarawak government has also spent 100 million ringitt (39 million dollars) in developing the Sama Jaya Free Industrial Zone in Kuching, site of Komag’s new facilities. Regular supplies of water, electricity, and frequent flights to Penang are other incentives.

These additional efforts have raised significant red flags among environmental groups both here and in Malaysia. They assert that the new industries may have a negative impact on the island.

For one thing, the government is proceeding with a massive, six- billion-dollar Bakun dam project to supply power to the new industries in Sarawak and in peninsular Malaysia. The dam will flood 70,000 hectares of land, forcing the relocation of 10,000 indigenous peoples from the Kayan, Kenyah, Penan, Lahanan and Ukit tribes.

Citizen groups like Institut Pengajaran Komuniti (Institute for Community Education) have asked that the project’s environmental impact assessments be made available for public examination. But Malaysia’s energy minister Leo Moggie recently told journalists that the assessments would not be published, because this was not standard practice in any country.

In fact, the government is now cracking down on the citizen groups that question the dam. The government shut down the Institute for Community Education less than a month ago.

The registrar of business names issued a notice cancelling the Institute’s business license March 19, charging that the group had conducted a seminar in Kuala Lumpur, thereby violating its permit to work only in the Sibu district of Sarawak.

The Institute’s Wong Meng Chuo, however, contends that the group was merely attending a seminar organised by another group in Kuala Lumpur last December.

Groups here in California who have been tracking the Bakun dam developments are unhappy with the developments.

“We certainly hope that companies in California have no intention of taking advantage of Sarawak’s authoritarian tactics and refusal to accept challenges to their development policies,” said Patrick McCully, campaigns director for the California-based International Rivers Network.