Smoking out e-waste culprits
THERE is a crisis of illegal processing of e-waste billowing in the country. Raids conducted on such facilities have been highly publicised, but there are concerns that many more such operations have yet to be detected.
The perpetrators continue to build their makeshift facilities in every nook and corner of the country for one simple reason: it is a hugely lucrative venture.
E-waste refers to discarded electronic devices such as personal computers, mobile phones, television sets, printers and other electronic equipment.
They contain valuable materials that can be recovered and sold such as gold, silver, platinum, lithium and some rare earth metals like indium whose demand has been increasing.
With the prices of gold and other metals having risen, coupled with huge amounts of cheap e-waste from abroad, the business plan is set.
Execution requires these dodgy setups to bring in the e-waste illegally, rent a non-descript remote premise and use the cheapest available or assembled equipment to incinerate and chemically treat the waste to extract the precious metals.
The operators of many of the facilities are foreign nationals with knowledge of how to process such materials.
Some of them are from China, which used to have huge unregulated processing centres for e-waste. It has since clamped down on e-waste processing, implementing high standards and weeding out the illegal operators.
Many other countries from the West also have strict regulations on how such waste is dealt with. That, in turn, is fuelling the crisis which is spilling into Malaysia.
“The cost of disposal in developed countries is very expensive. Some unscrupulous parties from rich countries are stuffing the e-waste into containers and shipping it out to any location that will take it,” quips a port official.
According to some industry players, illegal operators can recoup their capital within three months and enjoy pure profits after that.
Such activity is not only illegal but its contribution to environmental pollution is extremely high.
As the fly-by-night operators do not have safety features such as filters and the remnants of the waste are being disposed of illegally, it has led to poisonous gases and chemicals being emitted or leached into the country’s river basins.
This is why this crisis has attracted the attention of the Royal Malaysian Customs Department, a key government agency responsible for managing and enforcing laws related to import and export regulations, the collection of revenue and border control.
The second agency is the Department of Environment (DoE) which is responsible for the protection, conservation and management of the country’s environment under the natural resources and environmental sustainability ministry.
Have there been some weaknesses in these two agencies in the past that have led to the crisis?
It is noteworthy that there has been a concerted effort among the authorities to conduct raids on these e-waste syndicates. This week, the police, working with the DoE and local authorities, seized e-waste worth nearly RM1.37bil in Perak and Johor.
This is one of the largest seizures in recent years. Almost RM3.8bil worth of e-waste materials and items have been seized from January 2024 to Feb 17 this year.
The DoE revealed on Thursday that more than 500 imported e-waste containers were detained at ports nationwide between 2023 and 2024. About 140 of the seized containers have since been sent back with the rest in the midst of being sent to their countries of origin.
A standard 20-ft shipping container can hold around 20 to 25 tonnes of e-waste, according to estimates. The syndicates involved use false documentation to import the e-waste for recycling purposes.
Could this be the tip of the iceberg of what is out there still running?
One problem in the past was that the Customs Department had sometimes found it difficult to detect e-waste in containers due to mislabelling and false documentation.
Often, the illegal contents are only detected during random checks or when containers are left at the port for an extended period of time.
Moreover, it has been reported that it was a difficult task to scan each container that leaves the port due to time and manpower constraints.
That excuse, however, does not seem to be acceptable by some.
As an industry player quips: “If you put 50 bottles of undeclared alcohol in a container mixed with other things, there is almost a 100% chance that the bottles would be seized. So, how come it is so difficult to pick out e-waste?”
Industry players say enforcement has also not been consistent.
A Jan 6, 2025 news report highlighted that the Enforcement Agency Integrity Commission (EAIC) confirmed that attempts were made by the DoE officials to release containers filled with e-waste from Westports, Port Klang, “without clear authority and reasonable justification”.
These findings came following an investigation by the EAIC, which is a federal statutory body that oversees enforcement agencies, addressing misconduct and promoting integrity.
Investigation found that there were leakages of information regarding the transfer of directors and officers and that the newly-appointed directors and officers would release the said containers.
“The investigations also found that the DoE failed to take action regarding the information leak.
“It also found delays by the DoE in the completion of investigation papers involving the containers in question which stemmed from supervisory weaknesses,” it said, adding that “the extreme delays over the handling of the case could cause losses for the government as well as environmental pollution,” the EAIC said in the statement.
No doubt, Customs have also become more strict over the past six months or so, says a port official.
Should Malaysia become a dumping ground?
Unfortunately, Malaysia was also the global dumping ground for plastic waste (and still is), especially after China closed its doors to all solid waste imports in 2021. China began partially imposing this ban in 2018 and its scope was expanded over the years.
As a result, developed countries diverted their waste shipments to Malaysia, as well as the Philippines, Thailand, Cambodia and India.
To tackle this, former Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin made plastic pollution a key policy focus during her tenure.
In October 2018, Yeo banned the import of all non-recyclable solid waste, particularly plastic.
She also implemented a freeze on the issuance of licences to establish plastic waste recycling factories. Yeo had introduced a 12-year roadmap towards eliminating single-use plastics by 2030, which saw the introduction of a 20 sen charge for plastic bags in the first phase.
Now, Malaysia has also become a dumping ground for illegal e-waste.
Under the Environmental Quality Act 1974 (Act 127), which is enforced by the NRES, e-waste is not allowed into the country.
Meanwhile, the DoE is tasked with regulating the import and export of hazardous waste under the Basel Convention.
Malaysia is one of the 53 signatories of this international treaty to address the global movement of hazardous waste, including e-waste.
Industry players are of the opinion that the importation of e-waste is permissible with the proper documentation from the company generating the waste, and not from third-party collectors. Any non-compliant e-waste must be returned to the exporting country.
Legal players
E-waste is a subset of metal recycling. There is too much e-waste being created and by 2025, Malaysia is projected to generate about 24.5 million units of various devices of e-waste.
On a global level, about 82 million tonnes of e-waste will be generated globally by 2030, up by one-third from the 2022 figure and can fill 1.55 million 40-tonne trucks enough for a bumper-to-bumper line encircling the equator, according to the Global e-Waste Monitor.
Notably, Malaysia has been a hub of metal recycling in the past. The big difference between traditional metal recycling and e-waste is that the latter is more damaging to the environment.
Licensed waste recycling companies do process e-waste, but it typically makes up a smaller portion of their operations.
There are 156 licensed e-waste recovery facilities according to the DoE, but only 45 are full recovery facilities.
They include Cenviro Sdn Bhd, Metahub Industries Sdn Bhd and Meridian World Sdn Bhd. All of them conduct various types of recycling.
This business does seem to be attracting corporate interest.
Khazanah Nasional Bhd had invested in Cenviro in 2014.
Via wholly-owned Shan Poornam Metals Sdn Bhd, Cenviro is one of the largest players in the e-waste space with a capacity of 5,000 tonnes a month.
Meanwhile, Metahub and Meridian are being acquired by Paragon Union Bhd and Tex Cycle Technology (M) Bhd, respectively.
Licensed operators processing e-waste do not make as much profit compared with the illegal operators, because they have to run more expensive systems and abide by stricter regulations.
Due to the hazardous components, specialised equipment and strict safety protocols are needed to prevent contamination, which adds to cost.
Cenviro chairman Tan Sri Azmil Khalid explains that the business requires advanced technology and the initial investment is high.
“The cost of compliance is high, given the various safety protocols.
“Also e-waste is often generated in smaller quantities because of the complex elements where every metal has a different melting point, which requires different extraction methods,” Azmil tells StarBiz 7.
He adds that volume is important to make the business economically viable.
E-waste contributes 15% to Cenviro’s group revenue and is profitable, according to Azmil.
Improvements taking place
On a positive note, the e-waste crisis is being tackled by the authorities.
Customs has pledged that it “will not compromise or protect any party involved in smuggling or breaking the laws”.
Natural Resources and Environmental Sustainability Minister Nik Nazmi Nik Ahmad has said that if an illegal e-waste importer was a phantom entity, the authorities would extend liability to other parties involved, including shipping liners, freight forwarders and logistics providers.
According to Nik Nazmi, the government is also looking at making it mandatory for producers of electronics goods to be accountable for the entire lifecycle of their products, particularly at the post-consumer stage.
While the initiatives will help, to a certain extent, in addressing the e-waste situation, there is still the possibility of illegal processing of such waste, especially from syndicates operating from abroad.
Cenviro’s Azmil calls for a change in perception towards “waste”.
If managed correctly, it can be a valuable economic resource rather than a burden.
“Successful companies in Norway, Denmark, Finland and the United States have built thriving industries around e-waste recycling.” However, he contends these countries do not import e-waste.
“Proper e-waste management can actually benefit our economy in terms of tax revenue. Smuggling happens when there are no proper parameters and structured guidelines in place,” he says.
For example, Azmil says the country could establish a centralised collection system like a dedicated e-waste port for collection before being distributed to licensed operators.
Increasingly, more companies are being proactive by encouraging customers to return their devices at the end of its usefulness.
However, a challenge remains in the household segment, where collection of e-waste is fragmented and inefficient.
ERTH founder Mohamed Tarek El-Fatatry notes that household e-waste exists in small quantities at individual locations, but adds up to a sizeable total.
“The widespread distribution of e-waste across millions of households creates a logistical nightmare,” he says.
ERTH is involved in the collection of e-waste such as old mobile phones, computers and other electronics. It has a platform where customers can request for collection of the electronic items they want to discard.
Currently, the firm collects about 500 tonnes of e-waste and plans to double that this year.