19-07-2025
Vulnerable to pollution, industrial waste issues
Published on: Saturday, July 19, 2025
Published on: Sat, Jul 19, 2025
By: Sisca Humphrey Text Size: Clive said liability limits commonly purchased by companies are often insufficient to cover potential environmental claims. Kota Kinabalu: Many Malaysian businesses may lack adequate insurance protection against pollution and industrial waste incidents, according to a briefing by SP&G Gallagher Insurance Brokers Sdn Bhd (SP&G) Environmental Specialist Clive Goddard. Clive said liability limits commonly purchased by companies are often insufficient to cover potential environmental claims.
Advertisement 'It is not unusual to see liability cover capped at RM10 million or less. In some cases, this may not reflect the scale of possible losses,' he said at the Marim Conference 2025 in here on Tuesday. He stated the 1982 Bukit Merah rare earth processing case as an example of long-term environmental damage. 'The incident involved radiation exposure in a Perak town, with cleanup efforts still ongoing decades later,' Clive said. Clive also noted that the costs of decontamination have exceeded RM300 million and most of the burden did not fall under insurance coverage. More recently, the Puchong pipeline fire raised concerns about the state of underground infrastructure and the potential consequences of ground subsidence. He cited that similar issues have occurred with a gas pipeline between Sabah and Sarawak, which experienced several structural failures due to shifting soil. 'Some of these cases have not been widely reported, but they are known within the industry,' he added. Another emerging issue mentioned during the session was the presence of PFAS chemicals in consumer and industrial products. Known for their resistance to breakdown, these substances are increasingly found in water sources and human blood samples globally. Clive said they present regulatory and liability challenges that are still being assessed. He also emphasised on carbon capture and storage (CCS), referencing Petronas' Kasawari project in Sarawak, which aims to store carbon dioxide extracted from offshore gas operations. The initiative is one of several being explored to manage emissions from oil and gas production. Despite these developments, he said there is still limited uptake of comprehensive environmental liability insurance among local firms. 'Policy wordings are often narrow. They may exclude gradual pollution, statutory clean-up costs and other exposures that companies assume are covered,' he said. SP&G Gallagher, part of the global Gallagher insurance group, is encouraging businesses to review their coverage in light of current industrial and legislative changes. This includes recent amendments to the Environmental Quality Act and proposals under public consultation that may place more responsibility on site owners. 'Companies need to be clear on what their policies do and do not cover. This is especially relevant as industrial activity increases under national development plans,' he said. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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