MACC probing into shortfall in bauxite royalties to Pahang government

The Malaysian Anti-Corruption Commission (MACC) says royalties for bauxite mining collected last year should have been five times higher than what was collected. – The Malaysian Insider pic by Afif Abd Halim, January 7, 2016.The Malaysian Anti-Corruption Commission (MACC) is investigating shortfalls in the amount of royalties received by the Pahang government for bauxite mining, investigations director Datuk Azam Baki said.

Royalties amounted to RM47 million last year, when it should have been five times higher, he said.

"The poor collection could have been contributed by corruption practices as well as mismanagement in handling the royalty.

"We are investigating," said Azam in a press conference held at MACC Pahang headquarters today.

Pahang Menteri Besar Datuk Seri Adnan Yaakob yesterday said the state government had earned RM46.7 million in royalty from bauxite mining activities last year, compared with RM2.4 million in 2014.

"We cannot reveal how the calculations were made but our investigations showed that it should be more," Azam said today.

He added that the anti-graft body's probe into royalty collection began two-and-a-half months ago.

"We will not hesitate to launch investigations against government officials if need be. We are aware of what is happening. This involves public interest." 

Pahang and Putrajaya yesterday announced a three-month freeze on all bauxite mining in the state from January 15.

The suspension was to give time to address pollution caused by the mining, which besides polluting the air, has also turned rivers and the seafront at Kuantan red.

Natural Resources and Environment Minister Datuk Dr Wan Junaidi Tuanku Jaafar said the moratorium would be extended indefinitely if the industry failed to contain the pollution problem within three months.

Wan Junaidi said he expected all bauxite stockpiles to be cleared and moved to an integrated stockpile centre within the three months, while new terms and conditions would be imposed for approved permits (APs).

The government would not be issuing new APs within the moratorium period unless the companies had existing contracts in the industry, he added.

He said companies that refused to clear their stockpiles within the moratorium period would have their APs withdrawn.

Since Kuantan ramped up its mining of bauxite for export to China last year, residents in the area have complained about pollution, caused by red dust from the mining activities and leakage from lorries transporting bauxite to the Kuantan port.

It was reported that in the first 11 months of 2015, Malaysia exported more than 20 million tonnes of bauxite to China, up nearly 700% from the previous year. In 2013, it only shipped around 162,000 tonnes. – January 7, 2016.