A Tale of Two Ministries: How Malaysia’s Experience with Ministerial Mergers Can Reduce Pitfalls and Enhance Synergies

While the loss of two highly capable ministers from the cabinet would be a blow for any country, developed or developing. The resignation of the Minister of Natural Resources and Sustainability, together with the Minister of Economy comes at a very inopportune time for Malaysia – with the nation poised to embark on a number of highly transformational initiatives and programmes, including but not limited to, the Long-term Low Emissions Development Strategy (LT-LEDS), the National Energy Transition Roadmap (NETR), the National Adaptation Plan (NAP) and the tabling of the Climate Change Act in Parliament.

Nonetheless, the subsequent decision by the prime minister and his cabinet to move the portfolio of the Minister of Natural Resources and Sustainability (NRES) under the Minister of Plantation Industries and Commodities (MPIC) was not entirely unforeseeable, as Ministers have been moved between these portfolios in the past. Perhaps by examining and comparing these portfolios, we might be able to uncover potential weaknesses and pitfalls of this ministerial melding so that we can focus our preventive and risk-reduction efforts.

A Tale of Two Ministries

The Ministry of Natural Resources and Sustainability (NRES) is charged with safeguarding Malaysia’s environment, managing water and mineral resources, and steering the nation toward sustainability and climate resilience, guided by the Environmental Quality Act 1974, which serves as the framework for pollution control and environmental protection; the Access to Biological Resources and Benefit‑Sharing Act 2020, which regulates use of genetic resources and mandates equitable benefit sharing; the Roadmap to Carbon Neutrality 2050, which targets net‑zero emissions via renewables, energy efficiency, afforestation; the National Minerals Policy & Minerals Development Act 1994, which governs exploration, extraction, utilization of mineral resources, and the National Policy on Biological Diversity, which provides guidance on the conservation and sustainable use of biodiversity.

On the other hand, the Ministry of Plantation Industries and Commodities (MPIC) oversees the development and regulation of Malaysia’s key agricultural commodities—palm oil, rubber, timber, cocoa, pepper, kenaf and tobacco—spanning cultivation, processing, marketing and export promotion. Governing these commodity sectors are the National Agro-commodity Policy, which guides commodity‑sector growth and value‑added processing; the Malaysian Sustainable Palm Oil (MSPO) Standard, requiring Mandatory certification to ensure sustainable palm practices; the National Rubber Policy, which promotes diversification of rubber‑based products; the Malaysian Criteria for Sustainable Forest Management (via the Malaysian Timber Certification Council), which provides benchmarks for responsible timber harvesting, and the Kenaf and Tobacco Development Policy, which supports niche‑crop cultivation and downstream industries. 

Given the potential jurisdictional overlap and the ever-present danger of policy incoherence, including competition for finite public resources, a lack of clear consensus between stakeholder constituencies on the way forward, and competing private sector interests, we should examine areas where Competition or Antagonism could impact ongoing policy development and implementation, notably as the administration is about to table the next five-year national development plan.

Potential Challenges

Land use jurisdiction is an area of lingering difficulty as state governments have authorised the temporary expansion of oil‑palm, encroaching on forest reserves under the authority and protection of state forest management departments. While this has, in the past, led to disputes over permit approvals and conservation priorities, current and future occurrences could have much more dire consequences, causing Malaysia to run afoul of international regulatory frameworks such as the European Union Deforestation (EUDR).

Water Allocation is another area for concern, exacerbated by the foreign investment-driven decisions to host water and energy consuming date centres. These plans, coupled with intensive plantation irrigation demands (particularly under climate-change-amplified el niño dry spells) can strain water resources managed by NRES, together with the ministry of energy transition and water transformation (PETRA), prompting tension over abstraction licenses and environmental flow guarantees.

As the climate change act takes shape and interest grows in the carbon market space, so does the risk of overlapping programmes, methodologies, registries and claims on carbon‑sequestration projects. Although the Carbon Capture and Storage (CCUS) Act was tabled by the ministry of economy, MPIC’s small‑holder and by-product initiatives (including biomass, and biochar), and biofuel (notably Used Cooking Oil – UCO) initiatives could run up against NRES’s national REDD+ programs in competing for international funding and potentially feeding back by impacting carbon market prices. In general, the concepts of carbon credits, offsets and carbon trading continue to be some of the climate agenda’s most often misunderstood concepts, adding an additional layer of risk.

There is also a concern surrounding Agency Overlap and Duplication. Although both ministries have their respective research and development institutes, regulatory, certification and enforcement bodies, the continued evolution of the commodity, biomass, biofuels, and carbon capture and storage ecosystems could see the development of technologies and initiatives that fall into grey areas, resulting in overlapping functions between agencies and risking jurisdictional turf battles and inefficiencies.

Finally, there could be mismatches in environmental and social regulatory standards between the ministries that would result in confusion (e.g. airborne emissions or effluent limits, biodiversity‑offset requirements) that might drive commodity producers and project proponents to cherry-pick between regulations in an effort to reduce regulatory compliance costs, perhaps not realizing that they may, in trying to improve economic competitiveness, be instead inching closer to losing access to stringent international markets.

Lessons from the past

Fortunately for Malaysia, this is a path we have walked previously when key components of not two, but three ministries were integrated into a gargantuan portfolio with an equally lengthy name; the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC). Employing a hands-on and pro-active approach, the minister charged with managing this chimeric entity was able to assess the strong points and relative advantages of each component ministry and, with strong governance controls,  forge a level of policy integration that brought the energy sector (then poised to plant up additional coal-fired power plants and lock-in emissions beyond mid-century) and greenhouse gas mitigation targets into closer alignment. With this shift, MESTECC was able to increase Malaysia’s renewable energy targets out of the single digit realm and radically shift the prospects for the growth of the renewable energy industry in the country. The minister was also able to make huge inroads into high-resolution environmental monitoring and management by strengthening collaboration with local government, while securing the cooperation of additional ministries to fundamentally shift Malaysia away from serving as a global destination for plastic and other mixed or otherwise, low-grade recyclable waste.

Potential Synergies

A similar,  potentially game-changing opportunity presented by this amalgamation is the potential for long-term, joint land‑use planning between the Department of Environment, the respective State Forest Departments, and the Malaysian Palm Oil and Rubber Boards, together with federal and state biodiversity conservation entities (PERHILITAN, Sabah Parks and the Sarawak Biodiversity Centre), together with district and local governments and city councils to engage in holistic planning, to balance human settlement, and plantation, and industrial development with urban and rural conservation corridors to enhance ecosystem services (e.g. water, biodiversity, and carbon sequestration) while sustaining, and even improving (through regenerative agriculture) commodity yields.

In the areas of Carbon and Biodiversity Financing, there is now a golden opportunity to align NRES’s carbon‑credit frameworks (e.g. REDD+) with MPIC’s reforestation or peatland restoration initiatives, and even new growth areas involving biomass, biofuels and biochar, to initially, build awareness and capacity, and thereafter, develop effective implementation frameworks in the area of emissions quantification and management, low-emission development, and carbon sequestration projects for smallholders, SMEs, at the very least to the level of awareness of PLCs and MNCs.

Water‑Resources Management could benefit from tighter collaboration between the JPS’s (water quantity) and DOE’s (water quality) watershed management with MPIC’s plantation irrigation schemes to optimize water allocation during both periods of water excess and water scarcity, potentially reducing the impact of floods while safeguarding ecosystems and reducing conflicts by ensuring adequacy during dry periods.

The merger could facilitate closer R&D collaboration in key areas such as risk reduction and resilience, while catalysing technology transfer between agroforestry research fields (FRIM), climate‑risk modelling (MET-Malaysia), and biomass, bioenergy and post-consumer fuel feedstocks (MPOB/MRB) to develop climate‑resilient crops and second-generation biofuels, while optimizing resource allocation through appropriate technologies and best management practices.

Finally, integrating the functionality of the two ministries could boost Benefit‑Sharing Compliance, which has become an essential requirement under social sustainability to maintain access to international markets. The potential to harmonize MPIC’s commodity‑export incentives with NRES’s Access to Biological Resources Act requirements could enable a tighter integration of regulations and standards, ensuring equitable sharing of genetic‑resource profits and global acceptance and competitiveness of Malaysian products and services.

Conclusion

The consolidation of two distinct but related portfolios under a single minister has obvious disadvantages. An essential doubling of areas requiring urgent attention clearly dilutes the minister’s ability to adequately address hot button issues and chronic and recurring problems. But there are also synergies that can be realised by considering these two portfolios in a more integrated fashion. Addressing the Natural Resources and Environmental Sustainability portfolio in concert with the Plantation Industries and Commodities portfolio can result in greater coordination between NRES and MPIC—through joint planning bodies, shared data platforms, and co‑funded R&D—can yield win‑win outcomes, maintaining Malaysia’s status as a leading commodity exporter while preserving its rich natural heritage and meeting sustainability commitments.