JIM MIDDLETON, PRESENTER: With a snap election widely expected in Malaysia in the next few months, a rare earths plant built by an Australian company is emerging as a hot political issue. Street protests against the refinery are growing and the opposition has vowed to close it down if it wins office.
In addition, local residents have gone to the high court in Kuala Lumpur to try to stop the country firing up its operations.
Kate Arnott reports.
(Footage of protests)
MALE PROTESTER 1(Translation): In my opinion, the radiation will affect the next generation and the environment.
MALE PROTESTER 2 (Translation): I don't have another choice. If the plant is going to threaten the health of local residents and my family, we are going to move.
KATE ARNOTT, REPORTER: Protests against the rare earths plant near the eastern Malaysian city of Kuantan are growing, as the project has become a hot political issue.
In the last year, demonstrations have spread to the capital Kuala Lumpur and beyond.
FUZIAH SALLEH, MALAYSIAN MP FOR KUANTAN: The people of Malaysia have awakened to the fact that such a thing can not only happen in Kuantan but it can happen anywhere else in Malaysia.
KATE ARNOTT: There is increasing speculation that prime minister, Najib Razak, will call a snap election in the next few months, but in any case a poll is due by May next year.
The rare earths plant is being built in Mr Najib's home state of Pahang and critics say he is getting nervous.
LIM CHEE WEE, PRESIDENT, MALAYSIAN BAR: Certainly there is no denying that this issue, if not satisfactorily resolved by the honourable prime minister, would have a negative impact so far as the voting pattern is concerned against the ruling coalition. And so far as the property tests go, I think it can only grow stronger and louder.
(Footage of protest)
KATE ARNOTT: Activists, residents and members of the opposition claim the potential health and environmental risks of the project are too great. They are worried radioactive waste from the plant could leak into the ground and water.
The rare earths plant refinery is located 260km north east of Kuala Lumpur and sits in the Gebeng industrial estate near the port of Kuantan.
LIM CHEE WEE: Kuantan which is Malaysia's nineth largest city and only 25km from the plant and the nearest neighbourhood is a mere 2km away. Hardly the sort of circumstances which would lend itself to any welcome of such a dangerous project.
KATE ARNOTT: Australian company, Lynas Corporation, has nearly finished building the $230 million plant. It will process rare earths from the company's mine in Western Australia.
Rare earths are used in hi tech equipment, from smart phones, TVs and wind turbines to night vision goggles and missiles.
(Excerpt from Lynas Corporation corporate video)
VOICEOVER: We will be the first new producer of rare earths in the world outside of the Chinese producers. We will have a very long term mine life. And we will capture a significant market share of the modern China market.
KATE ARNOTT: Last month, Malaysia's atomic energy licensing board granted Lynas a licence to begin operations for an initial two year period.
And in June last year, a review of the project by the international atomic energy agency found no breaches of radiation safety standards.
CRAIG EMERSON, AUSTRALIAN TRADE MINISTER (February 2, 2012): An independent assessment has said the environmental impacts are well and truly manageable, so long as the company abides by the standards and safeguards that have been set. Which the company will do.
KATE ARNOTT:Lynas insists any radioactive waste it produces will only be low level and not harmful to human health. But residents and the opposition are unconvinced. They point to a rare earths plant refinery in Perak State which was shut down in 1992, after claims it caused birth defects and leukaemia.
As well, activists are especially concerned about what Lynas intends to do with its waste. And despite approving the project, the International Atomic Energy Agency also found Lynas lacked a comprehensive long term waste management strategy.
LEE CHEE WEE:Certainly in Malaysia, there is nowhere for this residue to be stored, either temporarily or on a permanent basis. In fact, Lynas itself, to date, has failed to identify what its permanent disposal facility proposal is about.
RAJA ABDUL AZIZ RAJA ADNAN, DIRECTOR-GENERAL, ATOMIC ENERGY LICENSING BOARD:If necessary, that Lynas will undertake or give a letter of undertaking that they will accept the return of the waste during the temporary operating licence, if necessary.
KATE ARNOTT: The problem is, under Australian law, waste produced offshore cannot be sent back to Australia.
Lynas did not make anyone available to Asia Pacific Focus for an interview on camera, but in a statement, a spokesman said.
"Lynas is absolutely confident that any residues from the plant will have commercial applications so will not require long terms storage.
In the event that commercial applications cannot be found ... the stringent rules and standards for the design, construction and operation of a permanent residue storage facility are quite clear and Lynas has every confidence it will meet those stringent standards."
The Malaysian prime minister, Najib Razak, says while the location of the waste disposal site is still being determined, it will be far away. He says that does not mean the project is not safe, rather he has taken into consideration the psychological and emotional effects on the community.
FUZIAH SALLEH: It is a move by the Prime Minister to pacify the emotions of the public. He is making a mockery of the people of Malaysia and the people of Kuantan.
DR NAJIB RAZAK, MALAYSIAN PRIME MINISTER (Translation): We will not issue a permanent operating licence unless the local residents agree this project is not a health hazard.
But if people deliberately oppose the project because of political reasons, then there's nothing that we can do.
(Footage of protesters)
KATE ARNOTT: The Prime Minister has accused the opposition in particular of using the rare earths plant to gain political mileage. Lynas too says it is concerned statements made by certain political figures, media outlets and other groups "are false, misleading and inflammatory, raising fear and uncertainty within the community."
FUZIAH SALLEH: I've spoken up about this issue as early as November 2008 and I have continued to speak about the issue since then.
We have been very consistent about saying that the Lynas plant is unsafe, and shouldn't be there.
(Footage of protesters)
KATE ARNOTT: Lim Chee Wee is the President of the Malaysian bar. Because of his position, he is banned from being affiliated with a political party.
Mr Lim says Malaysia's Atomic Energy Licensing Board should not have approved the Lynas plant because the environmental impact assessment and the public consultation processes were deeply flawed.
He is watching with interest a case in the high court in which Kuantan residents are trying to get the temporary operating licence quashed.
LIM CHEE WEE: I think they certainly have an arguable case, probably bordering on one which has more than an even chance of success.
KATE ARNOTT: Lynas, though, says it is confident there is no basis to the legal claims. If the residents aren't successful, opposition parties say they have the will to stop the plant.
FUZIAH SALLEH: I believe that once we get into power, the opposition leader and all of us are committed to ensure that the licence will be revoked. And we will look into ways and means, through legal methods, through legal means, to actually put the plant to a stop.