Commentary: Meet B.C.’s new LNG dance partner Malaysia

by Dermod Travis,


What’s being called the “Scandal that ate Malaysia” has been in the news a lot recently in B.C. In Malaysia, it’s been in the news too, but for about a year now.

Broad strokes to the scandal: Malaysian investigators are looking into allegations that US$700 million was siphoned off from state-owned 1Malaysia Development Berhad (1MDB) and somehow ended up in the personal accounts of Malaysia’s Prime Minister Najib Razak.

Malaysia’s Petronas – the proponent behind Pacific Northwest LNG – is also “state-owned” or a Crown corporation, as we would say in B.C.

And it seems in its headlong rush to the altar with any ready and willing LNG proponent, the B.C. government may have skipped over a few best practices, one of them being due diligence.

So what exactly was unfolding in Malaysia, as photo-ops were being staged in B.C.?

On the very day Premier Christy Clark was signing a memorandum of understanding with Pacific Northwest LNG in Vancouver, Zulkiflee Anwar Haque was in a Malaysian courtroom facing nine charges of sedition.

The charges stem from a series of comments Zulkiflee tweeted following the sentencing of opposition leader Anwar Ibrahim to a five-year prison term.

Zulkiflee is Malaysia’s Raeside, an editorial cartoonist who signs his work Zumar. If convicted on all counts, he faces up to 43-years in jail.

And while most Canadians won’t recognize opposition leader Anwar Ibrahim‘s name, in 1998, he was Malaysia’s deputy prime minister and finance minister until he was sacked and charged with corruption and sodomy.

It might have passed unnoticed in Canada had it not been for then finance minister Paul Martin.

Martin knows Anwar well and was forthright in his 1999 appraisal: “Mr. Anwar is a respected colleague and a man of integrity…An erosion of confidence in the rule of law in Malaysia not only threatens democracy in that country but also raises questions about the current government’s respect for human rights and good governance.”

Despite Martin’s intervention, Anwar was convicted.

In 2004, Malaysia’s Supreme Court overturned the convictions and released Anwar from jail. In 2008, he was charged with sodomy again.

This time, Martin teamed up with former International Monetary Fund chair Michel Camdessus and former World Bank president James Wolfensohn in releasing a joint statement: “We would like to reiterate our full confidence in (Anwar’s) moral integrity, as a man who has demonstrated, in the discharge of his national and international responsibilities, the highest ethical standards of leadership, fighting for international justice, peace and development.”

Although acquitted in 2012 on what The Economist called “trumped-up charges,” the Malaysian government appealed and won. This past February, Anwar was sentenced to a five-year prison term.

In a statement following the conviction, the U.S. State department said: “The decision to prosecute Mr. Anwar, and his trial, have raised serious concerns regarding the rule of law and the independence of the courts.”

Malaysians tweeting their disapproval, however, risked charges of sedition, as Zulkiflee Anwar Haque can attest to.

A few weeks after signing that MOU with Pacific Northwest LNG, the B.C. government released its first LNG project development agreement on the same day that (part of Moody’s Investors Service) published an article headlined: “Corruption Plagues Malaysia’s Government.”

And when the B.C. legislature was passing the Liquefied Natural Gas Project Agreements Act, Singapore police were freezing two bank accounts linked to that investigation into 1MDB funds being transferred to Prime Minister Najib’s personal accounts.

So why should any of this matter to B.C.?

To put it in a local context: the B.C. government is providing unprecedented tax breaks to what is effectively a foreign Crown corporation, where the prime minister is suspected of siphoning off US$700 million from one of its other Crown corporations to his personal bank accounts. Doesn’t inspire confidence.

And there’s the tiny matter of who’s actually benefiting from B.C.’s largesse.

In 2014, the dividend from Petronas accounted for 12.8 per cent of the Malaysian government’s revenue. And B.C. was supposed to be the winner in the deal.

Commenting recently on another LNG proponent – Woodfibre LNG’s Sukanto Tanoto – B.C. Liberal MLA Jordan Sturdy said: “The government tends not to get into the business of vetting ownership.”

No kidding. It might want to start.

Latest explanation for that US$700 million by the way is that it was a political donation to the prime minister.


Dermod Travis is the executive director of IntegrityBC.


August 7, 2015