Corporate Environmental Responsibility in Singapore and Malaysia

The neighbouring Southeast Asian countries of Singapore and Malaysia have contrasting environmental reputations. The small city-state of Singapore, with a population of 4 million and a population density of around 6,150 per square kilometre, is often seen as a model green city. That reputation rests partly on its efforts to control urban congestion and pollution, as well as the retention of green landscapes within the built environment. Malaysia, on the other hand, with a total population of around 20 million distributed between the comparatively urbanized peninsula and the less developed states of Sabah and Sarawak, has a poor environmental image. Deforestation, loss of biodiversity and the marginalization of indigenous populations in resource management decisions account for much of that negative image.

The real comparative environmental performance is a good deal harder to judge than immediate impressions suggest, not least because Malaysia’s GDP per capita is a third of Singapore’s. On current income, Singapore ranks among the world’s top 10 richest countries. Its elevation to this group has been rapid, but Singapore has yet officially to accept the status of a developed country. That mantle would bring economic implications and international obligations, potentially including responsibilities under the United Nations Framework Convention on Climate Change. Government reticence aside, Singapore’s affluence arguably makes Western expectations of environmental responsibility a relevant performance benchmark, particularly as its economy is built on the investment of foreign transnational corporations. Malaysia, on the other hand, is still managing the transition to an industrial society. Around a quarter of the workforce is employed in agriculture, and nearly half the population lives outside urban areas. Malaysian lawmakers have demonstrated a willingness to strengthen environmental protection, and high-income status may yet be achieved with a greater proportion of the country’s land area designated as protected natural environment than in many older industrial nations. This may be a reasonable expectation, given the ecological significance of tropical forests.

Advocacy of corporate voluntary environmental initiatives—understood as actions taken to reduce environmental impacts, and promote awareness thereof, that have not been required by government regulation—to strengthen environmental management can be justified in Singapore and Malaysia, although for different reasons.

Singapore is the regional headquarters of many transnational corporations with branch establishments across Southeast Asia. Demands to demonstrate a strong environmental commitment in Singapore, especially where this extends to the ecological footprint of business organizations, may accelerate the potential environmental leadership role that transnational corporations can play. As a “developmental state”, the priority in Singapore has been to maximize immediate economic opportunities while protecting business organizations from scrutiny by NGOs or the wider community. Consequently, although per capita incomes now exceed those of many older industrial countries, interest in environmental responsibility lags behind that which might be expected on the basis of Western experience.

Malaysia has experienced a greater growth of environmental concern than Singapore, judging by the activity of environmental NGOs that seek to apply informal pressure on corporate and regulator behaviour. Surveillance by international pressure groups is also significant for resource-based industry, and this adds to pressure for voluntary environmental initiatives. Rising incomes, a significant presence of transnational corporations and official acceptance of local environmental pressure groups provide indications that voluntary initiatives are poised to play an increasing role in Malaysia. The likelihood is further increased by the World Bank’s efforts to promote “informal” regulation, involving community pressure on business to improve environmental performance, and other new ways of making environmental policy.

The influences that encourage voluntary environmental initiatives, the types of action taken and the extent to which these may substitute for other forms of environmental regulation form the basis for the discussion in this paper. It begins with a review of the motivations thought to encourage voluntary initiatives over other ways of promoting environmental improvement. The extent to which voluntary action should be seen as an alternative to governmental regulation is then discussed, noting, among other issues, that such action is often closely related to regulatory enforcement. The discussion then turns to a review of corporate voluntary environmental initiatives in Singapore and Malaysia, which is based on original survey results from a sample of foreign-owned transnational corporations in both countries. The concluding section comments on the significance of voluntary action observed in Singapore and Malaysia.