In a landmark move to strengthen environmental and human rights protections, Malaysia is set to introduce a new Malaysian development law that mandates the full consent of local communities before any new development projects can proceed.
The proposed Malaysian development law is part of a draft national action plan on business and human rights, published last February by the legal affairs division of the Prime Minister’s Department. The plan spans from 2025 to 2030 and aims to develop national guidelines for Free, Prior, and Informed Consent (FPIC) and enact legislation to standardize its implementation. This initiative marks Malaysia’s first comprehensive effort to align development practices with international human rights standards, particularly for indigenous and local communities.
The FPIC is a principle rooted in international human rights law. It ensures that Indigenous and local communities have the right to give or withhold consent to projects that affect their lands, resources, or livelihoods. Under the new Malaysian development law, companies and state authorities must engage communities in meaningful consultations, provide transparent information, and obtain consent before proceeding with projects such as renewable energy installations, hydropower dams, or agricultural expansions.
The lack of robust FPIC practices has been a recurring issue in Malaysia and Southeast Asia. For example, large hydropower dams in Sarawak and forest-based carbon projects have faced criticism for excluding local communities from decision-making processes. Similarly, the expansion of sugarcane and palm oil plantations in Indonesia has often bypassed the consent of affected communities.
The draft national action plan acknowledges this issue and proposes the development of voluntary community protocols or native engagement plans based on international best practices. These protocols would ensure that FPIC processes are inclusive, transparent, and aligned with Malaysia’s legislative and policy frameworks.
Malaysia’s push for renewable energy is critical to its energy transition strategy. However, a recent Klima Action Malaysia (KAMY) report found that current frameworks lack FPIC considerations. For instance, the government’s RM305.9 million (US $ 69.02 million) budget for renewable energy under the National Energy Transition Facility Fund does not require local community consent.
Similarly, financial institutions like Malaysia’s central bank, which offers RM600 million (US$69.02 million) for a Low-Carbon Transition Facility under the clean energy incentives, fail to protect rights to consent, excluding indigenous and local communities from the decision-making processes.
The KAMY report emphasized that renewable energy initiatives without FPIC risk excluding indigenous peoples from meaningful participation, perpetuating displacement and marginalization. Integrating FPIC into these projects is crucial to aligning Malaysia’s energy transition with international human rights standards, ensuring inclusivity and equity for all affected communities.
The government is also planning legislation to prevent Strategic Lawsuits Against Public Participation (SLAPPs), which are often used to intimidate or silence environmental advocates and journalists. Under the proposed Malaysian development law, anti-SLAPP legislation will be introduced to prevent companies or powerful entities from using frivolous lawsuits to suppress free speech or discourage public participation.
This move comes in response to cases like the lawsuit filed by timber giant Samling against the nonprofit environmental group Save Rivers in 2023. The lawsuit, which was later withdrawn following international backlash, was widely criticized as a SLAPP aimed at silencing critics.
Another significant proposal in the draft action plan is to reverse the burden of proof for the ownership of native ancestral lands. Currently, indigenous communities must prove their rights to the land, which is often costly and time-consuming. Under the new law, the burden will shift to the state and businesses, requiring them to demonstrate that their projects do not infringe on native customary rights.
The draft highlighted that shifting the burden of proof aligns with constitutional protections for native customary rights. This change would require parties seeking to displace or harm indigenous communities to demonstrate compliance with these rights, ensuring stronger safeguards for affected groups.
While the new Malaysian development law is still in the works, the draft action plan urges businesses to take proactive steps to respect human rights. Companies are encouraged to engage indigenous communities in the FPIC process, consult them during due diligence, and provide platforms for their voices to influence corporate decisions. Special attention should be given to indigenous women, youth, and children, who are often disproportionately affected by development projects.
Businesses are encouraged to create accessible, transparent, and accountable grievance mechanisms for stakeholders, especially environmental human rights defenders and indigenous peoples. The draft emphasized that a meaningful business and human rights framework must explicitly recognize and respect the rights of these groups to ensure fairness and equity.
Introducing the Malaysian development law represents a significant step forward in Malaysia’s commitment to sustainable and inclusive development. By prioritizing FPIC, combating SLAPPs, and shifting the burden of proof, the government aims to protect the rights of indigenous and local communities while advancing its renewable energy goals.
As Malaysia moves toward a cleaner energy future, the success of these initiatives will depend on their implementation and the willingness of all stakeholders to embrace a human rights-based approach. The new law challenges outdated development practices and sets a precedent for other nations to follow in balancing progress with equity and justice.
